Lean Value Stream Mapping (VSM) Training Module

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The Lean Value Stream Mapping (VSM) Training Module v8.0 includes:

1. MS PowerPoint Presentation including 154 slides covering History of Lean Manufacturing, Five Lean Principles, Seven Lean Wastes, A Step-by-Step Approach to Value Stream Mapping with Examples, Basic Lean Management Methods and Tools.

2. MS Excel Value Stream Mapping Team Charter Template

3. MS Excel Future State Transformation Plan Template

4. MS Excel Process Study Worksheet Template & Example, Work Chart Template, Work Combination Table Template & Example, and Process Capacity Worksheet Template & Example

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Lean Value Stream Mapping (VSM) Training Module

  1. 1. 1 August 1, 2016 – v8.0 Lean Value Stream Mapping by Operational Excellence Consulting LLC
  2. 2. 2 August 1, 2016 – v8.0 Some Facts about Lean Management – It Really Works Aberdeen’s March 2009 survey of 117 companies showed top performing companies are using Lean principles and software solutions as a long-term strategy for improving people, processes, and business results.  44% of Best-in-Class companies maintain a cash conversion cycle time of 22 to 31 days, versus 23% of Laggards.  Over the past two years, Best-in- Class companies decreased inventory write-offs by 2%, versus an increase of 2% for Laggards.  84% is the mean measure for Overall Equipment Effectiveness among Best-in-Class companies, versus 72% among Laggards.  61% of Best-in-Class companies rate their internal data accuracy as very good to excellent, versus 18% of Laggards.  Best-in-Class companies are 4.8- times more likely to utilize automated Lean Kanban execution to trigger the pull of inventory.
  3. 3. 3 August 1, 2016 – v8.0 Section 1: The History of Lean Management Section 2: The Five Lean Management Principle Section 3: The Seven Lean Wastes Section 4: Value Stream Mapping Definition & Benefits Section 5: Value Stream Mapping Development Process Section 6: Basic Lean Management Tool Box Value Stream Mapping (VSM) – Table of Content
  4. 4. 4 August 1, 2016 – v8.0 Value Stream Mapping (VSM) – Table of Content Section 1: The History of Lean Management Section 2: The Five Lean Management Principle Section 3: The Seven Lean Wastes Section 4: Value Stream Mapping Definition & Benefits Section 5: Value Stream Mapping Development Process Section 6: Basic Lean Management Tool Box
  5. 5. 5 August 1, 2016 – v8.0 Lean Management – Lean Thinking “One of the most noteworthy accomplishments in keeping the price of Ford products low is the gradual shortening of the production cycle. The longer an article is in the process of manufacture and the more it is moved about, the greater is its ultimate cost.” Henry Ford, 1863 – 1947 “All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. We are reducing the time line by reducing the non-value added activities.” Taiichi Ohno, 1912 – 1990
  6. 6. 6 August 1, 2016 – v8.0 Lean Management – A little Bit of History Eli Whitney developed the concept of interchangeable parts around 1799 when he accepted an order from the U.S. Army for the manufacture of 10,000 muskets at the unbelievably low price of $13.40 each. For the next 100 years manufacturers primarily concerned themselves with individual technologies. During this time engineering drawings developed, modern machine tools were perfected and large scale pro- cesses (e.g. the Bessemer process for making steel) held the center of attention. That changed in the late 1890s.
  7. 7. 7 August 1, 2016 – v8.0 Lean Management – A little Bit of History In the late 1890s, Frederick W. Taylor began to look at individual workers and work methods. The result was time study and standardized work. He called his ideas Scientific Manage- ment. The concept of applying science to management was sound but Taylor simply ignored the behavioral sciences. Frank Gilbreth added motion study and invented process charting. Process Charting focused attention on all work elements including those non-value added elements which occur between the "official" elements. Lillian Gilbreth brought psychology into the mix by studying the motivations of workers and how attitudes affected the outcome of a process.
  8. 8. 8 August 1, 2016 – v8.0 Lean Management – A little Bit of History Starting about 1910, Henry Ford fashioned the first comprehensive Manufacturing Strategy. He took all the elements of a manufacturing system -- people, machines, tooling, and products -- and arranged them in a continuous system for manufac- turing the Model T automobile. Ford is considered by many to be the first practitioner of Just-In-Time (JIT) and Lean Manufacturing. Ford's success inspired many others to copy his methods. But most of those who copied did not understand the fundamentals. Ford assembly lines were often employed for products and processes that were unsuitable for them.
  9. 9. 9 August 1, 2016 – v8.0 Lean Management – A little Bit of History After WW II, Japan started to study American production methods with particular attention to Ford practices and the Statistical Quality Control practices of Ishikawa, Edwards Deming, and Joseph Juran. At Toyota Motor Company, Taiichi Ohno and Shigeo Shingo, began to incorporate Ford production and other techniques into an approach called Toyota Production System (TPS) or Just-In-Time (JIT). Toyota also “discovered” that factory workers had far more to contribute than just muscle power and developed the concept of Quality Circles. All of this took place between about 1949 and 1975.
  10. 10. 10 August 1, 2016 – v8.0 Lean Management – A little Bit of History In 1990 James Womack wrote a book called "The Machine That Changed The World". Womack's book was a straight- forward account of the history of automobile manufacturing combined with a comparative study of Japa- nese, American, and European auto- motive assembly plants. What was new was a term - "Lean Manufacturing“.
  11. 11. 11 August 1, 2016 – v8.0 Lean Management – “Ford – Model T Video” Observations & Comments: Ford – Model T (Part 1 → 0:00 - 5:08) Link: https://www.youtube.com/watch?v=j Qwn2d5qhi0 Ford – Model T (Part 2 → 0:00 – 02:30) Link: https://www.youtube.com/watch?v=vM74 mPV80J8
  12. 12. 12 August 1, 2016 – v8.0 Lean Management – Action → Reflection The only way to actually learn Lean Management methods and tools is to apply the techniques yourself hands-on with a bit of coaching. The willingness to try, fail, and learn simply goes with the territory when implementing changes in long-established business processes & practices. Action may not always bring success, but there is no success without action. Benjamin Disraeli Action → Reflection → Action → Reflection
  13. 13. 13 August 1, 2016 – v8.0 Value Stream Mapping (VSM) – Table of Content Section 1: The History of Lean Management Section 2: The Five Lean Management Principle Section 3: The Seven Lean Wastes Section 4: Value Stream Mapping Definition & Benefits Section 5: Value Stream Mapping Development Process Section 6: Basic Lean Management Tool Box
  14. 14. 14 August 1, 2016 – v8.0 Lean Management – The Five Lean Principles Define Value - Specify value from the Customer perspective. Map Value Stream - Identify the value stream for each product or service and challenge all of the non-value adding steps (wastes) currently necessary to create and deliver this product or service. Add nothing than value. Create Flow - Make the product or service creation and delivery process flow through the remaining value-added steps. Establish Pull – Introduce pull between all process steps where continuous flow is possible. Pursuit Perfection – Manage toward perfection so that the number of steps and the amount of time and information needed to create and deliver this product or service is optimized.
  15. 15. 15 August 1, 2016 – v8.0 Lean Management – Three Types of Process Activities Non- Value Added Business- Value Added Value- Added Customer is not willing to pay for these activities and they should be eliminated, e.g. rework. Customer are willing to pay the organization for these activities, e.g. assembly. Customers are not willing to pay for these activities, but the organizations deems these activities as necessary, e.g. preventive maintenance. Many process have less than 20% value- added activities.
  16. 16. 16 August 1, 2016 – v8.0 Value-Added Work – A Definition Three criteria for Adding Value 1. Customer wants you to do it (or will pay for it) 2. The material / information is being processed or transformed into final products or services 3. It is done right the first time Key Lean Objectives: Reduce Lead Time → Eliminate or Reduce Non-Value-Added Activities
  17. 17. 17 August 1, 2016 – v8.0 How do you spend your time? • Value-Adding (VA) – increases worth of a product or service • Non-Value-Adding but Necessary (NVABN) – required to keep the organization operating, e.g. compliance • Non-Value-Adding (NVA) and Unnecessary – all other tasks not identified above • Lean Management reduces lead time through – Streamlining VA work – Minimizing NVABN work – Eliminating NVA work
  18. 18. 18 August 1, 2016 – v8.0 Value Stream Mapping (VSM) – Table of Content Section 1: The History of Lean Management Section 2: The Five Lean Management Principle Section 3: The Seven Lean Wastes Section 4: Value Stream Mapping Definition & Benefits Section 5: Value Stream Mapping Development Process Section 6: Basic Lean Management Tool Box
  19. 19. 19 August 1, 2016 – v8.0 Lean Management – The 7 Wastes The seven wastes originated in Japan, where waste is known as “muda.“ The elimination of non-value adding activities or waste is one of the most effective ways to improve customer satisfaction and increase the profitability of any business. Inventory Over-Processing Waiting Transportation Defects Motion Over-Production The 7 Wastes
  20. 20. 20 August 1, 2016 – v8.0 The 7 Wastes – Transportation Transportation Definition: Any material or information movement, mainly between processing steps, that does not directly support the creation of the product or service. Causes: Improper Facility Layout – Excessive Handoffs – Large Lot Processing – Large Lot Purchasing – Poor Workplace Organization – Large Buffers & Storage Locations – Offsite Storage Locations – Poor Scheduling – …
  21. 21. 21 August 1, 2016 – v8.0 The 7 Wastes – Inventory Inventory Definition: Any supply, i.e. raw material, work-in-process or finished good, in excess of processing requirements necessary to produce the product or service in a just-in-time manner. Causes: Inaccurate Forecasting Systems – Incapable Processes – Incapable Suppliers – Long Replenishment Lead Times – Local Optimization – Long Changeover Times – Poor Inventory Tracking – Poor Management of Work- in-Process – Unbalanced Processing Steps – …
  22. 22. 22 August 1, 2016 – v8.0 The 7 Wastes – Motion Motion Definition: Any movement, incl. searching, of people which does not contribute added value to the product or service. Causes: Ineffective Equipment, Office or Plant Layout – Lack of Visual Controls – Poor Workplace Organization – Lack of Standard Work – Poor IT System Design – Poor Process Documentation – Poor Storage Solutions – Unclear & Incomplete Instructions – …
  23. 23. 23 August 1, 2016 – v8.0 The 7 Wastes – Waiting Waiting Definition: Idle time that occurs when codependent processing steps or activities are not fully synchronized. Causes: Inconsistent Work Methods – Lack of Proper Equipment & Materials – Long Setup Times – Low Man & Machine Effectiveness – Poor Equipment Maintenance – Skills Monopolies – Unnecessary Handovers – Production Bottlenecks – Unnecessary Approvals – …
  24. 24. 24 August 1, 2016 – v8.0 The 7 Wastes – Over-Production Over-Production Definition: Producing more than is needed, faster than needed and before it is needed. Causes: Incapable Processes – Poor Planning & Scheduling – Low Uptime – Lengthy Setup Times – Local Optimization – Cost Accounting Practices – Lack of Communication – Unnecessary Reports – Duplicative Data Entry – …
  25. 25. 25 August 1, 2016 – v8.0 The 7 Wastes – Over-Processing Over-Processing Definition: Excessive or redundant effort of production and communication which adds no value to the final product or service. Causes: Decision Making at Inappropriate levels – Unclear Roles & Responsibilities – Too many Handoffs – Inefficient Policies & Procedures – Poor Configuration Controls – Spurious Quality Standards – Lack of Customer Input – Unclear Customer Requirements – Unproductive Meetings – Expediting – Firefighting – Changing Priorities – …
  26. 26. 26 August 1, 2016 – v8.0 The 7 Wastes – Defects Defects Definition: Repair or rework of a product or service to fulfill customer requirements, as well as scrap waste resulting from materials deemed to be un-repairable or un-reworkable. Causes: Excessive Process Variation – High Inventory Levels – Incapable Processes – Inadequate Tools & Equipment – Insufficient Training – Insufficient Mistake Proofing – Unnecessary Handing – Unclear & Incomplete Customer Requirements – …
  27. 27. 27 August 1, 2016 – v8.0 The 7 Wastes – Summary In the latest edition of the Lean Manufacturing classic Lean Thinking, Underutilization of Employees has been added as an eighth waste. Organizations employ their staff for their nimble fingers and strong muscles but forget they come to work everyday with a free brain. It is only by capitalizing on employees' creativity that organizations can eliminate the other seven wastes and continuously improve their performance. Many changes over recent years have driven organizations to become world class organizations or Lean Enterprises. The first step in achieving that goal is to identify and attack the seven wastes. As Toyota and other world-class organizations have come to realize, Customers will pay for value added work, but never for waste.
  28. 28. 28 August 1, 2016 – v8.0 Waste Typical Manufacturing Definitions Translation to Services Examples Defects / Rework Making products that are not suitable for sale, or require reprocessing to bring them up to standard Client billing errors, defective client-server systems, incorrect data entry, incomplete requirements Over Production Producing product that has not been ordered. This is the worst offender of all as it includes some elements of all of the other wastes. Duplicative data entry, making extra copies, producing data or reports that aren’t needed, starting projects that won’t be moved forward. Waiting People or product waiting for processes to finish or materials/tools to arrive. All inventory build up or delay between value adding steps for any product. Employee idle time, waiting on responses, approvals, or service, delays in processing (including client). All time between one value adding step and the next. Non-Value adding Processing Activities carried out on materials/products which do not add value (more commonly referred to as Over processing) Unnecessary extra steps, transactional activities, or approvals. Excessive reporting, unproductive meetings, expediting, firefighting, changing priorities Transport An activity that moves materials or products more than is required. Handoffs or reviews, interoffice movement of materials, offsite storage transport Inventory Product in storage or waiting for further actions to be carried out. All parts not immediately needed. Requirements, Documents, WIP, Assets sitting on the shelf (e.g. laptops, air cards, people), excess emails Movement Unnecessary movement of people, examples being long distances between workstations, double-handling of materials, poor tool placement. Unnecessary travel, hunting for information or people, manual workflow Employee Knowledge Ineffective employee utilization / engagement. No empowerment; people feel they should “check their brains at the door and do what they’re told”. Failing to capture ideas and knowledge, or ignoring input from the real experts. Retention issues. Employees used for repetitive or mundane tasks. The 7 + 1 Wastes – DOWNTIME
  29. 29. 29 August 1, 2016 – v8.0 The Three Lean Ms or the Lean Triad • Lean is often associated with the elimination of Waste, or Muda in Japanese • However, Lean Thinking also needs to considers two other problems: – Mura: Irregularity or Variation – Muri: Strenuous activity, or Overburden • Together these are sometimes called the “Three Ms” • In some cases, Waste or Muda may be eliminated temporarily but will keep coming back if the other two Ms are not addressed simultaneously • All three Ms must be attacked and substantially reduced to create a sustainable Lean process or value stream flow. M 3
  30. 30. 30 August 1, 2016 – v8.0 Value vs. Non-Value Added Work Work Time Wait Time Walking Time A Typical Process or Process Step  It is not uncommon, when analyzing a process or process step, to recognize that 60 to 70% of the total work time is actual non-value added work – waiting, transportation, walking, and unnecessary motions.  Organizations often focus on the value added activities to further improve productivity and efficiency, ignoring the often huge opportunities if they would focus on eliminating non-value added activities. Process Start Process End
  31. 31. 31 August 1, 2016 – v8.0 Value Stream Mapping (VSM) – Table of Content Section 1: The History of Lean Management Section 2: The Five Lean Management Principle Section 3: The Seven Lean Wastes Section 4: Value Stream Mapping Definition & Benefits Section 5: Value Stream Mapping Development Process Section 6: Basic Lean Management Tool Box
  32. 32. 32 August 1, 2016 – v8.0 Process Mapping – Types of Process Maps Process Mapping is an important tool in the “Define” and “Measure” Phase of the Lean Six Sigma Roadmap.  Process Variables Map – Focuses on the inputs and outputs of a process and its steps – Critical first step towards successful process improvement through identifying, reducing, and removing variation – Should be completed in 2 to 3 hours  Value Stream Map (VSM) – Focuses on the overall product/service and information flow – Critical first step towards successful process improvement through identifying, reducing, and removing waste – May be more complex, as it requires lead times, processing times, staffing levels, inventory levels, scheduling information, …
  33. 33. 33 August 1, 2016 – v8.0 Value Stream Mapping – Definition & Benefits • A Value Stream represents the sequence of activities required to design, produce, and deliver a product or service to a Customer, this includes the flow of material and information. • Value stream mapping is a Lean Management technique used to analyze the flow of materials and information currently required to bring a product or service to a Customer. • A sophisticated flow charting method that uses symbols, metrics, and arrows to help visualize processes and track performance. This method helps determine which steps add value and which do not. • A pencil-and-paper tool used: a) to follow a product or information (or both) activity path from beginning to end and draw a visual representation of every process (value and non-value) in the material and information flows. b) then to design a future state map which has waste removed and creates improved flow and c) to end up with a detailed transformation plan for the future state value stream map.
  34. 34. 34 August 1, 2016 – v8.0 Value Stream Mapping – Definition & Benefits • It is a business-planning tool. • It is a tool to manage the change process. • It forms the basis of a transformation plan. • It is a communication & socializing tool. • It provides a common language to talk about processes. • It shows the linkage between the material flow and the information flow. • It is a powerful tool in identifying waste, so it can be reduced or eliminated, contributing to improved profitability and customer satisfaction • It helps us see and focus on flow with a vision of an ideal or improved state. • Enabling broad participation in shaping the future state. “Value Stream Mapping is primarily a Management Responsibility.”
  35. 35. 35 August 1, 2016 – v8.0 Value Stream Mapping – From Function to Process Leadership Team Customer Requirements = INPUTS Customer Satisfaction = OUTPUTS F U N C T I O N 1 F U N C T I O N 2 F U N C T I O N 5 F U N C T I O N 6 F U N C T I O N 3 F U N C T I O N 4  The Focus is on the Customer & Value Creation Value Stream #1 Value Stream #2 Value Stream #3 Value Stream #4
  36. 36. 36 August 1, 2016 – v8.0 Value Stream Mapping – The Three Types • Full Value Stream Map – A good or service is requested by and delivered to an external Customer • Support Value Stream Map – Sometimes called value-enabling value stream – Examples include annual budgeting process; recruiting, hiring, and onboarding process; and performance review process • Value Stream Segment – In general a part of a Full Value Stream, e.g. product design, new product introduction, and service delivery.
  37. 37. 37 August 1, 2016 – v8.0 Value Stream Mapping – Common Failures Common Value Stream Mapping Failures include … • Using the Mapping Process solely as a Work Design Exercise • Creating Value Stream Maps during a Kaizen Event • Creating Maps but not taking Actions • Mapping with an inappropriate Team • Creating Maps with no Metrics
  38. 38. 38 August 1, 2016 – v8.0 Value Stream Mapping (VSM) – Table of Content Section 1: The History of Lean Management Section 2: The Five Lean Management Principle Section 3: The Seven Lean Wastes Section 4: Value Stream Mapping Definition & Benefits Section 5: Value Stream Mapping Development Process Section 6: Basic Lean Management Tool Box
  39. 39. 39 August 1, 2016 – v8.0 Value Stream Mapping – The Development Process 1. Develop a Charter & Establish the Team 2. Document Current State → Kick-off 3. Document Current State → First Value Stream Walk 4. Document Current State → Map Layout 5. Document Current State → Second Value Stream Walk 6. Document Current State → Map Details 7. Document Current State → Information Flow 8. Document Current State → Map Summary 9. Document Current State → Analyze Current State 10. Design Future State 11. Create Transformation Plan 12. Manage Execution
  40. 40. 40 August 1, 2016 – v8.0 Value Stream Mapping – The Development Process 1. Develop a Charter & Establish the Team 2. Document Current State → Kick-off 3. Document Current State → First Value Stream Walk 4. Document Current State → Map Layout 5. Document Current State → Second Value Stream Walk 6. Document Current State → Map Details 7. Document Current State → Information Flow 8. Document Current State → Map Summary 9. Document Current State → Analyze Current State 10. Design Future State 11. Create Transformation Plan 12. Manage Execution
  41. 41. 41 August 1, 2016 – v8.0 Value Stream Mapping – Develop a Charter The charter serves as planning, communication, alignment, and consensus building tool. Key element of a Value Stream Mapping Charter include: • Scope → Value Stream – Specific Conditions – Demand Rate – Trigger – First Step & Last Step – Boundaries & Limitations – Improvement Time Frame – … • Current State Issues & Business Needs • Measurable Target Conditions • Benefits to External Customers & Benefits to Business • Accountable Parties • Logistics • …
  42. 42. 42 August 1, 2016 – v8.0 Value Stream Mapping – Charter Template 1 Contact Information 2 1 3 2 4 3 4 1 5 2 6 3 7 4 8 1 Contact Information 2 1 3 2 4 3 1 Event Facilitator: 2 3 4 Date: Signature:Signature: Date: Signature: Executive Sponsor: Date: Agreement Value Stream Champion / Owner: Benefits to External Customers Benefits to Business On-Call Support Resources Function Name Measurable Target Conditions Value Stream Mapping Team Charter Briefing Dates & Times: List people to attend the briefings normally at the end of Briefing Attendees: Lunches & Breaks:Logistics Facilitator: Mapping Location:Event Facilitator: Value Stream Mapping Team Members Function Name Current State Issues & Business Needs Mapping Event Dates & Times: Value Stream: Executive Sponsor: Value Stream Last Step: Value Stream First Step: Value Stream Trigger: Value Stream Demand Rate: Specific Conditions: Value Stream Name: Boundaries & Limitations: Future State Time Frame: Please use your own charter if you have one, but we recommend that you consider including the elements above.
  43. 43. 43 August 1, 2016 – v8.0 Value Stream Mapping – Define Product/Service Family A product or service family is a group of products or services that pass through similar processing steps in the value stream, as thus can be analyzed using the same value stream map. 1 2 3 4 5 6 7 A X X X X B X X X X X C X X X X D X X X X E X X X X X F X X X X Processing Steps & Equipment Products Product/ Service Family 1 Product/ Service Family 2 ProductorService Process Step or Activity
  44. 44. 44 August 1, 2016 – v8.0 Value Stream Mapping – Establish the Team Value Stream Mapping teams must include leaders who can influence and authorize change along the value stream to be improved. • Executive Sponsor → An individual who oversees the entire value stream. May or may not participate in the event. • Value Stream Champion / Owner → An individual who oversees a significant part of the value stream and is accountable for the performance of the entire value stream. • Event Facilitator → An individual neither overseeing nor working in the value stream, serving as teacher, timekeeper, skilled change agent, provocateur, … . • Logistics Coordinator → An individual responsible for booking the room, ordering lunches, organizing supplies, … . • Briefing Attendees → Individuals (no more than 5 to 7) participating in the daily briefing sessions to ensure common understanding of the current state, and alignment of the organization around the future state value stream map and transformation plan. • Mapping Team Members → Individuals (no more than 10) from all key functions across the value stream participating in the event full-time.
  45. 45. 45 August 1, 2016 – v8.0 Value Stream Mapping – Rules of Engagement  The activity begins and ends on time; being on time is critical.  No interruptions; the team stays 100% committed, engaged and focused.  All wireless devices on silent or off. All laptops closed.  Finger-pointing and blame have no place.  Use creativity over capital; mind over money.  No silent objectors.  Respectful disagreement is encouraged; it is not acceptable to be disagreeable.  Eliminate “can’t” and “No, because …” from your vocabulary. Adopt a “Yes, if …” mindset.  Eliminate “this is the way we’ve always done it” thinking.  Ask “why?”, “why not?” and “what if?”.  One conversation at a time; avoid talking over each other.  Be bold.
  46. 46. 46 August 1, 2016 – v8.0 Value Stream Mapping – “Western Union Video” Observations & Comments: “New Agent Process - Current State” Link: https://www.youtube.com/watch?v=RMZs0j2BZSw (00:00 – 5:31)
  47. 47. 47 August 1, 2016 – v8.0 Value Stream Mapping – Document Current State A few Value Stream Mapping Rules: • Always collect current-state information while walking along the actual pathways of material and information flows yourself. • Begin with a quick walk along the entire end-to-end value stream, ... • Begin wit the product/service delivery and work upstream, ... • Bring your stopwatch and do not rely on standard times or information that you do not personally obtain. ... • Map the whole value stream yourself, ... • Always draw by hand in pencil, ...
  48. 48. 48 August 1, 2016 – v8.0 Value Stream Mapping – Some Guidelines  Start with as few symbols as possible and add other symbols over time as needed and as you become more experienced  Do not waste too much efforts and resources on mapping details before they are needed  It often helps to begin from the end of the process and trace the steps backwards  Begin with a quick walk along the entire door-to-door value stream  Bring your stopwatch and do not rely on standard times or information that you do not personally obtain  Always prepare the map based on real observations  Always verify your Value Stream Map by walking and observing the actual process  …
  49. 49. 49 August 1, 2016 – v8.0 Value Stream Mapping – The Development Process 1. Develop a Charter & Establish the Team 2. Document Current State → Kick-off 3. Document Current State → First Value Stream Walk 4. Document Current State → Map Layout 5. Document Current State → Second Value Stream Walk 6. Document Current State → Map Details 7. Document Current State → Information Flow 8. Document Current State → Map Summary 9. Document Current State → Analyze Current State 10. Design Future State 11. Create Transformation Plan 12. Manage Execution
  50. 50. 50 August 1, 2016 – v8.0 Value Stream Mapping – First Value Stream Walk The First Value Stream Walk focuses on obtaining basic information: • The processing steps & activities that form the value stream • The sequence of these processing steps & activities • The functions performing each processing step & activity • The key inputs and outputs of each processing step & activity  Talk with the people that perform the processing steps & activities to get first a high-level understanding of what is being done to transform an input to an output.  This is the time for learning, not judging.  Everyone participates in the interviewing process and takes notes. A critical step in creating a current state value stream map – “Going to the Gemba.”
  51. 51. 51 August 1, 2016 – v8.0 Value Stream Mapping – The Development Process 1. Develop a Charter & Establish the Team 2. Document Current State → Kick-off 3. Document Current State → First Value Stream Walk 4. Document Current State → Map Layout 5. Document Current State → Second Value Stream Walk 6. Document Current State → Map Details 7. Document Current State → Information Flow 8. Document Current State → Map Summary 9. Document Current State → Analyze Current State 10. Design Future State 11. Create Transformation Plan 12. Manage Execution
  52. 52. 52 August 1, 2016 – v8.0 Value Stream Mapping – The Building Blocks 5. Information Flow 6. Timeline & Metrics 2. Material Flow 1. Customer Requirements 3. Supplier Requirements 4. Process Data
  53. 53. 53 August 1, 2016 – v8.0 Value Stream Mapping – Map Layout The objective is to build a rudimentary view of the value stream. • Customers & Customer Requirements (TOP 3 – 5) • Suppliers & Supplier Constraints (TOP 3 – 5) • Processing Steps – “Verb-Plus-Noun” (5 – 15 Steps) • Function(s) performing each processing step • Sequence & Numbering of all Processing Steps Value Stream Mapping is as much art as it is science – as long as the art doesn’t interfere with the science!
  54. 54. 54 August 1, 2016 – v8.0 Value Stream Mapping – Process Icons
  55. 55. 55 August 1, 2016 – v8.0 Value Stream Mapping – May Layout Example Customer Function A 2 Process 1 Function B 4 Process 2 Function D 1 Process 3 Function E 2 Process 4 Supplier
  56. 56. 56 August 1, 2016 – v8.0 Value Stream Mapping – The Development Process 1. Develop a Charter & Establish the Team 2. Document Current State → Kick-off 3. Document Current State → First Value Stream Walk 4. Document Current State → Map Layout 5. Document Current State → Second Value Stream Walk 6. Document Current State → Map Details 7. Document Current State → Information Flow 8. Document Current State → Map Summary 9. Document Current State → Analyze Current State 10. Design Future State 11. Create Transformation Plan 12. Manage Execution
  57. 57. 57 August 1, 2016 – v8.0 Value Stream Mapping – Second Value Stream Walk The Second Value Stream Walk focuses on gaining a deeper understanding about how the value stream currently performs and identify significant barriers to flow: • Assess value stream performance in terms of TIME – Takt Time, Lead Time, Cycle Time, Processing Time, Available Time, Changeover Time, … • Assess value stream performance in terms of QUALITY – % Complete & Accurate (%C&A) • Assess value stream performance in terms of RESOURCES – # of People • Assess value stream performance in terms of INVENTORY – Raw Materials, Work-in-Process (WIP), Finished Goods • Assess Process Efficiency, e.g. Conversion Rates of RFPs, and Work Triggers • Identify Barriers to Flow !!!  Collect or verify your own data !!
  58. 58. 58 August 1, 2016 – v8.0 Value Stream Mapping – Metrics Definitions % Complete & Accurate • Percentage of the time a processing step provides work that is “usable as is” by the receiving processing step. Lead Time (LT) • The average time it takes for one item to go through the entire processing step, including time waiting before, during and after the processing step. Cycle Time (CT) • The average time between two consecutive items coming out of a processing step. Processing (or Touch) Time (PT) • The average time it takes to actually do the work from beginning to end in a processing step, if one is able to work on the item uninterrupted. Value-Add Time (VT) • The portion of the average processing time that actually transforms the item in a way that the Customer is willing to pay for.
  59. 59. 59 August 1, 2016 – v8.0 Value Stream Mapping – Takt Time Takt Time (TT) • Planning drumbeat. How often completed items NEED to come out of the process or processing step - as established by Customer demand. Takt Time is the “Production” Rate, in seconds, necessary to satisfy Customer demand. Amount of available “Production” Time per Interval Number of Units needed by the Customer per Interval 7.5 hrs/shift x 60 minutes/hr x 60 seconds/min 450 Units needed by the Customer/Shift 27,000 seconds/shift 450 Units = 60 Seconds
  60. 60. 60 August 1, 2016 – v8.0 Value Stream Mapping – Pitch For many transactional processes, it is not practical to perform the work according to the Takt Time, e.g. credit card application processing. In these situations work is been performed in batches and the concept of “Pitch” is being adopted. Pitch = Takt Time x Number of Units per “Pitch” Let us assume, on average, 5,500 credit card applications need to be processed in a day and the duration of the shift is eight hours with 30 minutes for breaks. Takt Time = _________ seconds Number of Units per “Pitch” = _________ units Let us assume that we decided to move application forms every 30 minutes from one process step to the next. So, the Pitch is set to 30 minutes.
  61. 61. 61 August 1, 2016 – v8.0 Value Stream Mapping – Metrics Definitions Changeover Time (CO) • The average time it takes to changeover (e.g. reset or change equipment) a processing step from one item to another (Change Over Matrix). Queue Time (QT) • The average time between processing steps that the item gets shuffled around or sits around waiting for someone to work on it. Up Time (UT) • The ratio of the actual available processing time of a processing step to the available working time. Expressed as a percentage, uptime is calculated by dividing actual available processing time by the available working time. Available or Working Time (WT) • To calculate Working Time - deduct breaks, meetings, beginning of shift set- up, end of shift clean-up, planned maintenance, and other planned non- working time. Do NOT deduct unplanned downtime or changeovers.
  62. 62. 62 August 1, 2016 – v8.0 Value Stream Mapping – Making Work Flow • Create Flow - Make the product or service creation and delivery process flow through the remaining value adding processing steps. • Ideally, the “work item” passing through the value stream never stops. It moves effortlessly from person to person, work team/station to work team/station, department to department, … without hang-ups, hiccups, or (unnecessary) delays. • Ask yourself – “What is preventing the lead time from being the same as the processing time for each and every processing step or activity?”
  63. 63. 63 August 1, 2016 – v8.0 Value Stream Mapping – Barriers to Flow Barriers to Flow include: 1. Quality Issues 2. Shared Resources & Inaccessible Staff 3. Task-switching 4. Large Batch Sizes – Raw Material Purchasing, Order Processing, … 5. System and Equipment Downtime & Performance Issues 6. Prioritization Rules 7. Searching & Waiting for Parts, Information, Requirements, … 8. Long Set-up & Changeover Times 9. Poor Work Area Layout → Excessive Motion & Transportation 10. …
  64. 64. 64 August 1, 2016 – v8.0 Value Stream Mapping – The Development Process 1. Develop a Charter & Establish the Team 2. Document Current State → Kick-off 3. Document Current State → First Value Stream Walk 4. Document Current State → Map Layout 5. Document Current State → Second Value Stream Walk 6. Document Current State → Map Details 7. Document Current State → Information Flow 8. Document Current State → Map Summary 9. Document Current State → Analyze Current State 10. Design Future State 11. Create Transformation Plan 12. Manage Execution
  65. 65. 65 August 1, 2016 – v8.0 Value Stream Mapping – Map Details The objective is to add now the information obtained from the second value stream walk to our value stream map. • Add performance in terms of TIME – Takt Time, Lead Time, Cycle Time, Processing Time, Available Time, Changeover Time, … • Add performance in terms of QUALITY – % Complete & Accurate (%C&A) • Add performance in terms of INVENTORY – Raw Materials, Work-in- Process (WIP), Finished Goods • Add RESOURCES – # of People • Add Barriers to Flow !!! • …
  66. 66. 66 August 1, 2016 – v8.0 Value Stream Mapping – Material Icons
  67. 67. 67 August 1, 2016 – v8.0 Value Stream Mapping – May Details Example Customer Function A 2 Process 1 Function B 4 Process 2 Function D 1 Process 3 Function E 2 Process 4 Supplier 45 Items LT = 16 Hours PT = 5 Minutes %C&A = 90% LT = 8 Hours PT = 10 Minutes %C&A = 75% LT = 12 Hours PT = 15 Minutes %C&A = 99% LT = 16 Hours PT = 25 Minutes %C&A = 90% 75 Items 65 Items 75 Items
  68. 68. 68 August 1, 2016 – v8.0 Value Stream Mapping – The Development Process 1. Develop a Charter & Establish the Team 2. Document Current State → Kick-off 3. Document Current State → First Value Stream Walk 4. Document Current State → Map Layout 5. Document Current State → Second Value Stream Walk 6. Document Current State → Map Details 7. Document Current State → Information Flow 8. Document Current State → Map Summary 9. Document Current State → Analyze Current State 10. Design Future State 11. Create Transformation Plan 12. Manage Execution
  69. 69. 69 August 1, 2016 – v8.0 Value Stream Mapping – Information Flow The objective is to visually demonstrate the technology-related disconnects, voids, and redundancies that exist in many value streams. • Identify all IT systems and applications in use across the value stream • Connect IT systems and processing steps with arrows – Arrow head indicates the direction of the information flow • Lightning bolt-type arrows indicate automated information flow from one IT system to another, e.g. auto-upload • Identify over-processing, errors, and operational complexity caused by system disconnects, gaps, and redundancies • …
  70. 70. 70 August 1, 2016 – v8.0 Value Stream Mapping – Information Icons
  71. 71. 71 August 1, 2016 – v8.0 Value Stream Mapping – Information Icons
  72. 72. 72 August 1, 2016 – v8.0 Value Stream Mapping – Information Flow Example Customer Function A 2 Process 1 Function B 4 Process 2 Function D 1 Process 3 Function E 2 Process 4 Supplier 45 Items LT = 16 Hours PT = 5 Minutes %C&A = 90% LT = 8 Hours PT = 10 Minutes %C&A = 75% LT = 12 Hours PT = 15 Minutes %C&A = 99% LT = 16 Hours PT = 25 Minutes %C&A = 90% IT - 1 IT - 2 IT - 3 75 Items 65 Items 75 Items
  73. 73. 73 August 1, 2016 – v8.0 Value Stream Mapping – The Development Process 1. Develop a Charter & Establish the Team 2. Document Current State → Kick-off 3. Document Current State → First Value Stream Walk 4. Document Current State → Map Layout 5. Document Current State → Second Value Stream Walk 6. Document Current State → Map Details 7. Document Current State → Information Flow 8. Document Current State → Map Summary 9. Document Current State → Analyze Current State 10. Design Future State 11. Create Transformation Plan 12. Manage Execution
  74. 74. 74 August 1, 2016 – v8.0 Value Stream Mapping – Metrics Definitions Total Lead Time (critical path only) • The average time it takes for one item to go through the entire process or value stream - from start to finish - including time waiting before, during and after the processing step. Total Processing Time (critical path only) • The average time it takes to actually perform the entire process or value stream - from start to finish - if one is able to work on an item uninterrupted. Total Value Adding Time (critical path only) • The average time it takes to actually perform the entire process - from start to finish - that actually transforms the item in a way that the Customer is willing to pay for. % Complete & Accurate • Percentage of the time a processing step receives work that is “usable as is”.
  75. 75. 75 August 1, 2016 – v8.0 Value Stream Mapping – Performance Indicators Process Efficiency Ratio (PE) Process Activity Ratio (AR) Rolled % Complete & Accurate where n is the number of processing steps. Total Labor Processing Time • The average time it takes to actually perform the entire process - from start to finish - if one is able to work on an item uninterrupted. 𝐴𝑅 = 𝑇𝑜𝑡𝑎𝑙 𝑃𝑟𝑜𝑐𝑒𝑠𝑠𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 𝑇𝑜𝑡𝑎𝑙 𝐿𝑒𝑎𝑑 𝑇𝑖𝑚𝑒 × 100% 𝑃𝐸 = 𝑇𝑜𝑡𝑎𝑙 𝑉𝑎𝑙𝑢𝑒 𝐴𝑑𝑑𝑒𝑑 𝑇𝑖𝑚𝑒 𝑇𝑜𝑡𝑎𝑙 𝐿𝑒𝑎𝑑 𝑇𝑖𝑚𝑒 × 100% 𝑅𝑜𝑙𝑙𝑒𝑑 %𝐶&𝐴 = %𝐶&𝐴1 × %𝐶&𝐴2 × ⋯ × %𝐶&𝐴 𝑛
  76. 76. 76 August 1, 2016 – v8.0 Value Stream Mapping – Process Efficiency Benchmarks
  77. 77. 77 August 1, 2016 – v8.0 Value Stream Mapping – Other Icons
  78. 78. 78 August 1, 2016 – v8.0 Value Stream Mapping – Map Summary Example Customer Function A 2 Process 1 Function B 4 Process 2 Function D 1 Process 3 Function E 2 Process 4 Supplier 45 Items LT = 16 Hours PT = 5 Minutes %C&A = 90% LT = 8 Hours PT = 10 Minutes %C&A = 75% LT = 12 Hours PT = 15 Minutes %C&A = 99% LT = 16 Hours PT = 25 Minutes %C&A = 90% 5 Minutes 16 Hours 10 Minutes 8 Hours 15 Minutes 12 Hours 25 Minutes 16 Hours Total Lead Time = 32 Hours Total Processing Time = 55 Minutes Total Value-Added Time = TBD Process Activity Ratio = 2.86% Process Efficiency Ratio = TBD Rolled %C&A = 60.1% Total Labor Processing Time = 55 Minutes IT - 1 IT - 2 IT - 3 75 Items 65 Items 75 Items
  79. 79. 79 August 1, 2016 – v8.0 Value Stream Mapping – Parallel Flow Example Critical Path is the Flow with the longest Lead Time. Time Line for the Critical Path. Demand: Once per Month Customer Function A 3 Process 2a Function C 1 Process 3a Function A 2 Process 1 Function B 4 Process 2b Function D 1 Process 3b Function E 2 Process 4 Supplier LT = 4 Hours PT = 20 Minutes %C&A = 50% 100 Items 45 Items LT = 24 Hours PT = 5 Minutes %C&A = 67% LT = 16 Hours PT = 5 Minutes %C&A = 90% LT = 8 Hours PT = 10 Minutes %C&A = 75% LT = 12 Hours PT = 15 Minutes %C&A = 99% LT = 16 Hours PT = 25 Minutes %C&A = 90% 5 Minutes 16 Hours 20 Minutes 4 Hours 5 Minutes 24 Hours 25 Minutes 16 Hours Total Lead Time = 60 Hours Total Processing Time = 55 Minutes Total Value-Added Time = TBD Process Activity Ratio = 1.5% Process Efficiency Ratio = TBD Rolled %C&A = 20.1% Total Labor Processing Time = 80 Minutes IT - 1 IT - 2 IT - 3 75 Items 65 Items 75 Items 25 Items
  80. 80. 80 August 1, 2016 – v8.0 Value Stream Mapping → Current State Map Example Raw Material Supplier Tues. + Thurs. 250 ft rolls TOP 1-3 Customer 7.5k pcs/day -- 2.5k red -- 5.0k green 25 pcs/box 1X Daily TOP 1-3 CUTTING C.T. – 1.5sec C.O – 0 Up-Time – 75% 2 shifts 25,200 sec avail. PRINTING C.T. – 2.5sec C.O – 65min Up-Time – 95% 2 shifts 25,200 sec avail X 3 BINDING C.T. – 4.0sec C.O – 25min Up-Time – 55% 2 shifts 25,200 sec avail X 4 SHIPPING Staging 4.5 days 0.8 days 0.2 day 2.0 days 60 s 25 s 45 s % PE = _____ %VA NVA Production Planning MRP 30-60-90 Days Forecast6-weeks Forecast Weekly Schedule Daily Ship Schedule Daily Orders I I II 4,500 R 1,500 G 600 R 900 G 8,500 R 6,500 G 3 Rolls 4.5 Days
  81. 81. 81 August 1, 2016 – v8.0 Value Stream Mapping – The Development Process 1. Develop a Charter & Establish the Team 2. Document Current State → Kick-off 3. Document Current State → First Value Stream Walk 4. Document Current State → Map Layout 5. Document Current State → Second Value Stream Walk 6. Document Current State → Map Details 7. Document Current State → Information Flow 8. Document Current State → Map Summary 9. Document Current State → Analyze Current State 10. Design Future State 11. Create Transformation Plan 12. Manage Execution
  82. 82. 82 August 1, 2016 – v8.0 Value Stream Mapping – Focus of the Future State During the current state analysis and future state development activities, the team shifts now from fact-finding (current state) to the discovery, innovation and creativity phase (future state). In terms of priorities, the mapping team should follow the following general rule: 1. Remove unnecessary non-value adding activities 2. Reduce the work effort (or need) to perform necessary non-value adding 3. Find ways to convert todays necessary non-value adding to unnecessary non-value adding in tomorrow's environment 4. Reduce the work effort to perform value adding activities Creativity before Capital !!!
  83. 83. 83 August 1, 2016 – v8.0 Value Stream Mapping – Common Findings Loopbacks No documented standard work Unnecessary handoffs Excessive inspection (review, approval, audits, …) Rework due to errors and lack of clarity Overspecialization of staff Batching Existing technology not fully leveraged Functions missing or getting involved too early or too late in the process Underutilization of skills Redundant activities Compliance overkill High variation in how work is performed Delays due to juggling multiple responsibilities Push and overburden … Based on our experiences in leading and facilitating Value Stream Mapping events and activities, common non-value adding activities and improvement opportunities include:
  84. 84. 84 August 1, 2016 – v8.0 Value Stream Mapping – Adding Work Effort • Improving an organization's value stream may sometimes mean adding new processing steps or activities to the existing value stream. For example: • To reduce the order-to-cash lead time it may be beneficial to add a customer credit check or some other screening process upstream into the value stream to reduce the time and resources currently consumed to collect outstanding payments from errant customers. • Value Stream Mapping improvements almost always requires a holistic approach and therefore the breakdown of silo-thinking in the organization. • Remember: if the end-to-end process lead time is reduced and the customer experience has improved, the value stream design phase has been successful – even if the time and effort of some departments increases.
  85. 85. 85 August 1, 2016 – v8.0 Value Stream Mapping – Analyze Current State The overall objective of Lean Management is the reduction of lead time of an organization’s processes and value streams. The goal of value stream mapping is to highlight sources of waste and eliminate them by building a chain of processing steps where the individual processing steps are linked to their customers either by continuous flow or by pull. Lead time and waste reduction is accomplish by deploying different Lean methods and tools, depending on the specific opportunity and objective. • Work Effort Analysis • Waste Reduction • Standard or Standardized Work • Work Effort Balancing • 5S Visual Workplace Organization • Kanban Scheduling Systems • Work Load Level Loading • Rapid or Quick Changeover
  86. 86. 86 August 1, 2016 – v8.0 Value Stream Mapping – Managing the Work • Another consideration that should drive the future state design and development focuses on the stabilization and sustainability of the implemented changes and improvements. • Continuous performance review and improvements need to be imbedded into the management of the value stream. • Many organizations fail with the transformation of a value stream because they don’t put a robust system and measures in place to address the above challenges. • Every value stream needs at least three to five relevant, accurate and precise Key Performance Indicators (KPIs) that are tracked on a regular basis. • Common indicators include Time, Cost, Quality, Safety, and Satisfaction/ Morale.
  87. 87. 87 August 1, 2016 – v8.0 Value Stream Mapping – Approach & Key Concepts Step 1 Produce at your Takt Time Step 2 Develop Continuous Flow wherever possible Step 3 Reduce Batch or Pitch Size Step 4 Balance the Cycle Time of each Processing Step Step 5 Use Kanbans and Supermarkets to control & schedule Work Step 6 Determine the Pacemaker Process Step 7 Level the Processing Mix Step 8 Level the Processing Volume (Paced Withdrawal) Step 9 Ability to make “Every Part Every Day”
  88. 88. 88 August 1, 2016 – v8.0 Value Stream Mapping – The 8 Basic Questions 1. What is the Takt Time ? 2. Will you build to a finished-goods Kanban or Supermarket from which the Customer pulls, or directly to shipping ? 3. Where can you use continuous flow processing ? 4. Where will you need to use a Kanban or Supermarket pull systems ? 5. At what single point in the production chain (the “pacemaker” process) will you schedule production ? 6. How will you level the production mix ? 7. What increments of work will you consistently release ? 8. What process improvements will be necessary ?
  89. 89. 89 August 1, 2016 – v8.0 Value Stream Mapping – Future Design Questions The Future State Design Questions include … • General Questions • What are the business issues we like to address? • What does the customer want? • How will we monitor value stream performance? • Which processing steps or activities add value or are necessary non-value adding? • How can we reduce delays between activities or processing steps? • How can we reduce work effort and other expenses across the value stream? • How can we improve the quality of incoming work at each activity or processing step? • … Think “What”, not “How”.
  90. 90. 90 August 1, 2016 – v8.0 Value Stream Mapping – Future Design Questions The Future State Design Questions include … • Specific Questions • Touch Points • Are there redundant or unnecessary processing steps that can be eliminated? • Are there redundant or unnecessary handoffs that can be eliminated or combined? • Are there processing steps or handoffs that need to be added? • … • Delays • Can we reduce batch sizes or eliminate batching completely? • Do we have adequate coverage and available resources to accommodate existing and future workloads? • How can we create more capacity or reduce the load of the bottleneck? • …
  91. 91. 91 August 1, 2016 – v8.0 Value Stream Mapping – Future Design Questions The Future State Design Questions include … • Specific Questions • Sequencing and Pacing • Are processing steps being performed too early or too late in the value stream? • Are key stakeholders engaged at the proper time? • Can processing steps be performed concurrently (in parallel)? • Would staggered starts improve flow? • Can we balance the workload to achieve greater flow (via combining or dividing activities)? • Do we need to consider segmenting the work by work type to achieve greater flow (with rotating but designated resources for defined periods of time)? • …
  92. 92. 92 August 1, 2016 – v8.0 Value Stream Mapping – Future Design Questions The Future State Design Questions include … • Specific Questions • Variation Management • Is there internally produced variation, e.g. end-of-quarter, sales incentives, …? • How can we level incoming workload along the value stream to reduce variation and achieve greater flow? • Can we reduce variation in customer or internal requirements? • How can necessary variation be addressed most effectively? • Are there common prioritization rules in place throughout the value stream? • …
  93. 93. 93 August 1, 2016 – v8.0 Value Stream Mapping – Future Design Questions The Future State Design Questions include … • Specific Questions • Technology • Is redundant or unnecessary technology involved? • Is the available technology fully utilized? • Are the systems interconnected to optimize data entry and movement? • Quality at the Source • How can higher-quality input be received by each processing step in the value stream? • Is there an opportunity to standardize or mistake proof activities? • Labor Effort • How can we eliminate unnecessary non- value adding work, reduce the labor effort in necessary non-value adding work, and optimize value adding work?
  94. 94. 94 August 1, 2016 – v8.0 Value Stream Mapping – Future Design Questions The Future State Design Questions include … • Specific Questions • Value Stream Management • Do policies need to be changed to enable improved performance? • Are there organization/departmental/reporting structures that can be changed to reduce conflicting goals or align resources? • Do existing performance metrics (if any) encourage behavior or discourage dysfunctional behavior? • What key performance indicators (KPIs) will we use to monitor value stream performance? • Who will monitor the KPIs? How frequently? Who else will results be communicated to? • What visual systems can be created to aid in managing and monitoring the value stream? • Are the key processes within the value stream clearly defined with their own KPIs, standard- ized appropriately, and improved regularly?
  95. 95. 95 August 1, 2016 – v8.0 Value Stream Mapping – Kaizen Events or “Bursts” Raw Material Supplier Tues. + Thurs. 250 ft rolls TOP 1-3 Customer 7.5k pcs/day -- 2.5k red -- 5.0k green 25 pcs/box 1X Daily TOP 1-3 CUTTING C.T. – 1.5sec C.O – 0 Up-Time – 75% 2 shifts 25,200 sec avail. PRINTING C.T. – 2.5sec C.O – 65min Up-Time – 95% 2 shifts 25,200 sec avail X 3 BINDING C.T. – 4.0sec C.O – 25min Up-Time – 55% 2 shifts 25,200 sec avail X 4 SHIPPING Staging 4.5 days 0.8 days 0.2 day 2.0 days 60 s 25 s 45 s % PE = 0.07 %VA NVA Production Planning MRP 30-60-90 Days Forecast6-weeks Forecast Weekly Schedule Daily Ship Schedule Daily Orders I I II 4,500 R 1,500 G 600 R 900 G 8,500 R 6,500 G 3 Rolls 4.5 Days Rapid Changeover Kanban Scheduling Kanban Scheduling Uptime Improvements Standard Work
  96. 96. 96 August 1, 2016 – v8.0 Value Stream Mapping – Performance Targets Key Performance Indicator (KPI) Current State Projected Future State Projected % Improvement Total Lead Time 30 Days 10 Days 66.7% Total Cycle Time 480 Minutes 440 Minutes 8.3% Total Processing Time 125 Minutes 100 Minutes 20.0% Total value adding Time 60 Minutes 80 Minutes 33.3% Process Efficiency 0.42% 1.25% 312.5% Rolled Throughput Yield 82.3% 92.0% 9.7% User defined ... … … Based on the decisions made during the “Design Future State” phase, the Value Stream Mapping Team should develop a transformation plan (next section) and calculate the projected future state performance metrics utilizing the performance matrix initially developed during the “Document Current State” phase (see above).
  97. 97. 97 August 1, 2016 – v8.0 Value Stream Mapping – Managing the Work • The third consideration that should drive the future state design and development focuses on the stabilization and sustainability of the implemented changes and improvements. • Continuous performance review and improvements need to be imbedded into the management of the value stream. • Many organizations fail with the transformation of a value stream because they don’t put a robust system and measures in place to address the above challenges. • Every value stream needs at least three to five relevant, accurate and precise Key Performance Indicators (KPIs) that are tracked on a regular basis. • Common indicators include Time, Cost, Quality, Safety, and Satisfaction/ Morale.
  98. 98. 98 August 1, 2016 – v8.0 Value Stream Mapping – Activity Prioritization Matrix Balanced Scorecard Project Selection Matrix KPI#1 KPI#2 KPI#3 KPI#4 KPI#5 KPI#6 KPI#7 KPI#8 Weights 20 10 15 10 5 20 10 10 100 50 30 20 100 70 30 100 Project Definition 1 Project #1 10 0 5 0 0 3 0 0 3.4 5 0 5 3.5 0 5 1.5 2 Project #2 0 3 0 5 0 0 0 0 0.8 0 5 0 1.5 3 0 2.1 3 Project #3 5 5 10 10 3 3 8 8 6.4 3 8 5 4.9 5 8 5.9 4 Project #4 0 0 10 5 0 0 5 0 2.5 0 0 10 2.0 3 3 3.0 5 Project #5 5 10 0 0 1 0 0 3 2.4 10 5 3 7.1 3 5 3.6 Ranking 0 = none Not Started 3 = low On Track 5 = medium At Risk 8= high Behind Schedule 10= very high CORRELATION MATRIX MANAGEMENTRISK TOTALRISK PROJECTSTATUS CAPITALRESOURCES DURATIONOFPROJECT TOTALEFFORT TECHNICALRISK EFFORT RISK PEOPLERESOURCES IMPACT FINANCIALS CUSTOMERS PROCESSES LEARNING& GROWTH TOTALIMPACT Linking Performance Management and Process Excellence through focused Project Prioritization & Selection
  99. 99. 99 August 1, 2016 – v8.0 Value Stream Mapping – Activity Ranking Matrix 10 9 8 7 6 5 4 3 2 1 0 0 1 2 3 4 5 6 7 8 9 10 EFFORT IMPACT Size of the Ball = Size of the Risk 1 2 3 4 5
  100. 100. 100 August 1, 2016 – v8.0 Value Stream Mapping → “Western Union Video” Observations & Comments: “New Agent Process – Future State” Link: https://www.youtube.com/watch?v=zgRRU_Ny4jY (00:00 – 1:20)
  101. 101. 101 August 1, 2016 – v8.0 Value Stream Mapping – The Development Process 1. Develop a Charter & Establish the Team 2. Document Current State → Kick-off 3. Document Current State → First Value Stream Walk 4. Document Current State → Map Layout 5. Document Current State → Second Value Stream Walk 6. Document Current State → Map Details 7. Document Current State → Information Flow 8. Document Current State → Map Summary 9. Document Current State → Analyze Current State 10. Design Future State 11. Create Transformation Plan 12. Manage Execution
  102. 102. 102 August 1, 2016 – v8.0 Value Stream Mapping – Transformation Plan 1 2 3 4 5 6 7 8 9 10 11 12 3 Reduce Changeover Time for Process X by 25% Perfrom series of Kaizen events to implement countermeasures KE Tim Ward Jesse Altadonna Agreement Value Stream Mapping Faciltator Date: Signature: Status (0 - 100%) Value Stream Transformation Plan Scheduled Review Dates July 3, 2015 Signature:Signature: Date: Date: Date Last Updated: January 21, 2015 Executive Sponsor Value Stream Owner/Champion May 29, 2015 May 1, 2015 March 27, 2015 February 27, 2015 January 30, 2015 Champion Execution Method Proposed CountermeasureMeasurable Target Planned Timeline for Execution November 17, 2014 Frank Adler (Operational Excellence Consulting) Tim Ward (EVP Supply Chain & Operations Management) Eva Martinez (Value Stream Manager) Order Management (from order entry to order delivery) Future State Value Stream Map Block # Project Leader Date Created: Value Stream Mapping Facilitator: Executive Sponsor: Value Stream Owner/Champion: Value Stream Name: The final step after the transformation plan has been developed, is the briefing to get buy-in from all relevant leaders about the path forward, the time and resources required to properly execute the plan, as well as the organization’s ability to absorb the planned changes.
  103. 103. 103 August 1, 2016 – v8.0 Value Stream Mapping – The Development Process 1. Develop a Charter & Establish the Team 2. Document Current State → Kick-off 3. Document Current State → First Value Stream Walk 4. Document Current State → Map Layout 5. Document Current State → Second Value Stream Walk 6. Document Current State → Map Details 7. Document Current State → Information Flow 8. Document Current State → Map Summary 9. Document Current State → Analyze Current State 10. Design Future State 11. Create Transformation Plan 12. Manage Execution
  104. 104. 104 August 1, 2016 – v8.0 Value Stream Mapping – Transformation Plan Execution • Final approval of Transformation Plan within one week of final briefing session • Executive Sponsor and Value Stream Champion/Owner lead the socializing of the Future State Map and the Transformation Plan • Value Stream Champion/Owner • drives overall implementation & change initiative, • support work teams working on realizing the future state map, • troubleshoots roadblocks & obstacles, and • runs scheduled review meetings. • Value Stream Champion/Owner also provides periodic updates to Executive Sponsor (more frequent than review meetings) • Executive Sponsor remains fully engaged, attends review meetings, monitors transformation progress, “goes to the gemba”, address policies, resolve political issues, … • No Execution – No Improvement !!!
  105. 105. 105 August 1, 2016 – v8.0 Value Stream Mapping Workshop – Example Agenda 1. Develop a Charter & Establish the Team 2. Document Current State → Kick-off 3. Document Current State → First Value Stream Walk 4. Document Current State → Map Layout 5. Document Current State → Second Value Stream Walk 6. Document Current State → Map Details 7. Document Current State → Information Flow 8. Document Current State → Map Summary 9. Document Current State → Analyze Current State 10. Design Future State 11. Create Transformation Plan 12. Manage Execution Day 1 Morning Day 1 Afternoon Day 2 Day 3 → Preparation
  106. 106. 106 August 1, 2016 – v8.0 Value Stream Mapping (VSM) – Table of Content Section 1: The History of Lean Management Section 2: The Five Lean Management Principle Section 3: The Seven Lean Wastes Section 4: Value Stream Mapping Definition & Benefits Section 5: Value Stream Mapping Development Process Section 6: Basic Lean Management Tool Box
  107. 107. 107 August 1, 2016 – v8.0 Value Stream Mapping – Basic Lean Management Tool Box Lean Standard Work Quick / Rapid Changeover Work Balancing Kanban Systems Level Loading 5S Visual Workplace
  108. 108. 108 August 1, 2016 – v8.0 Value Stream Mapping – Basic Lean Management Tool Box Lean Standard Work Quick / Rapid Changeover Work Balancing Kanban Systems Level Loading 5S Visual Workplace
  109. 109. 109 August 1, 2016 – v8.0  Lean Standard Work (often also called Standardized Work) is one of the building blocks or cornerstone of any Lean implementation.  Lean Standard Work is a tool centered around human movement that combines the elements of a job into the most effective sequence, without waste, to achieve the most efficient method of performing a specific task.  Lean Standard Work effectively combines people, product, and process under the current conditions to improve quality, cost, safety, ease of operations, etc.  Lean Standard Work is an excellent tool to introduce an organization to some basic Lean concepts such as value added vs. non-value added work, 7 Wastes, takt time, cycle time, work balancing, and Kanban methods.  When implemented successfully, Lean Standard Work leads naturally to the implementation of other Lean methods and tools, including 5S Visual Workplace, Value Stream Mapping, Level-Loading, Mistake-Proofing, or Total Productive Maintenance. Value Stream Mapping – Lean Standard Work
  110. 110. 110 August 1, 2016 – v8.0 Lean Standard Work – Definition & Objectives A definition of Lean Standard Work is "the most effective combination of manpower, materials and machinery to complete a specific task". Standard Work results in a formally defined and documented process to produce or perform a task at a specified pace. Standard Work consists of three elements or objectives:  First, does the rate at which the task is currently been performed meet Customer demand and requirements?  Second, does a precise work sequence exist in which an operator performs the tasks?  Third, are standard work-in-process inventory levels defined required to keep the process operating smoothly?
  111. 111. 111 August 1, 2016 – v8.0 Lean Standard Work – Benefits  Lean Standard Work enables an organization to ensure that improvement made are institutionalized and that best practices are identified, documented and implemented.  Documentation of the current process for all shifts results in  a predictable process through the reduction in variability,  easier training of new operators, and  reductions in injuries and strain.  It forms part of the base for Just-In-Time production by preventing over- production.  Standard work also adds discipline to the culture, an element that is frequently neglected but essential for Lean to take root.  A learning tool that supports audits, promotes problem solving, and involves team members in developing mistake-proofing solutions.
  112. 112. 112 August 1, 2016 – v8.0 Lean Standard Work – Three Basic Requirements  Work - It is most likely impossible to establish a standard if the task is not done the same way each time. If movements are different in each cycle, or if working conditions constantly change, the standard will no longer function as a basis for comparison. Since manufacturing often consists of repeating the same actions over and over, each action can be standardized.  Equipment - Since Standard Work functions best when in a repetitive cycle, it is critical that equipment be up and running nearly all the time. When equipment is down, it disrupts the natural flow of motion and destroys the normal pattern of the job sequence. To ensure that the maximum benefits from Standard Work are achieved, it is important to determine the root cause of machine stoppages and prevent them from recurring.  Quality - If defective parts are constantly stopping the line, it is extremely difficult to maintain a smooth repetitive job sequence. Defects created in the process, or parts and materials from outside the work area, can both play a very disruptive role and prevent the maximum benefits of Standard Work from being achieved. The causes of quality problems need to be researched and properly resolved when implementing Standard Work.
  113. 113. 113 August 1, 2016 – v8.0 Lean Standard Work – Implementation Process Identify Product or Part Identify Process or Process Step Identify Process Steps or Work Elements Determine Takt Time Determine Cycle Times for each Process Step or Work Element Create Standard Work Process Study Sheet Create Standard Work Process Capacity Sheet Identify & Implement Work Balancing Opportunities Identify & Implement Changeover Reduction Opportunities Create Standard Work Chart Determine Work Sequence Determine Standard Work-in- Process Inventory Identify & Implement Kanban Opportunities Create Standard Work Combination Table
  114. 114. 114 August 1, 2016 – v8.0 Lean Standard Work – Process Study Sheet v 2.0 Page: ____ / ____ Total MACHINE 1 2 3 4 5 6 7 8 9 10 Cycle Time Cycle Time 0 0Total Notes Observed Times Date & Time: _____________Observer: __________________Product: __________________ Lean Standard Work: Process Study Sheet OPERATOR: ________________________________________ Process Step Work Element Process: __________________ Enter the Process and Product Name Enter Name of the Process Observer Enter the Date & Time of the Process Study Enter the Page Number & Total Number of Pages Enter the Name of the Process Step being studied Enter all Work Elements or Tasks for each Process Step Perform 6 – 10 Time Studies of each Work Element for each Process Step and record the results Record the Cycle Time that can be repeatedly achieved by the Operator. Enter the Name of the Operator performing the Process Record and observations you have made during the Process Study, e.g. special incidences, improvement opportunities, …) Record the machine time for the Work Element
  115. 115. 115 August 1, 2016 – v8.0 Lean Standard Work – Process Study Sheet Time Study Tips  Collect the data real time observing the actual process  Position yourself so that you can see the operator's hand motions  Time each work element separately  Time several (6 to 10) cycles of each work element  Observe an operator who is qualified to perform the job  Always separate operator time and machine time  Select the lowest repeatable time for each element  Remember shop floor courtesy
  116. 116. 116 August 1, 2016 – v8.0 Value Stream Mapping – Basic Lean Management Tool Box Lean Standard Work Quick / Rapid Changeover Work Balancing Kanban Systems Level Loading 5S Visual Workplace
  117. 117. 117 August 1, 2016 – v8.0 Value Stream Mapping – Making Work Flow • Create Flow - Make the product or service creation and delivery process flow through the remaining value-added steps. • Ideally, the “work item” passing through the value stream never stops. It moves effortlessly from person to person, work team/station to work team/station, department to department, … without hang-ups, hiccups, or unnecessary delay. • Ask yourself – “What is preventing the lead time from being the same as the processing time for each and every process step or activity?”
  118. 118. 118 August 1, 2016 – v8.0 Value Stream Mapping – Takt Time vs. Cycle Time  If Takt Time and Cycle Time are not the same, an imbalance exist in the process or process step. A non-balanced process can result in idle time, excessive in-process inventory, quality issues, late orders, and therefore waste.  If Cycle Time is less than or equal to the Takt Time, the process will be able to satisfy Customer demand.  If the Cycle Time is greater than the Takt Time, the process cannot satisfy Customer demand. 0 5 10 15 20 25 30 1 2 3 4 5 Time(s) Operator Takt Time (20s) Step 1 Step 1 Step 1 Step 1 Step 1 Step 2 Step 2 Step 2 Step 2 Step 2 Step 3 Step 3 Step 3 Step 3 Step 4 Step 5 Step 4 Step 4 Process Flow
  119. 119. 119 August 1, 2016 – v8.0 Value Stream Mapping – Planned Cycle Time  Planned Cycle Time is the required production rate to satisfy the Customer demand allowing for scrap, rework, downtime, change-overs and other inefficiencies (wastes).  The objective of other Lean methods and tools is of course to minimize these losses and reduce the gap between Takt Time and Planned Cycle Time. 0 5 10 15 20 25 30 1 2 3 4 5 Time(s) Operator Takt Time (20s) Step 1 Step 1 Step 1 Step 1 Step 1 Step 2 Step 2 Step 2 Step 2 Step 2 Step 3 Step 3 Step 3 Step 3 Step 4 Step 5 Step 4 Step 4 Planned Cycle Time (18s) Process Flow
  120. 120. 120 August 1, 2016 – v8.0 Value Stream Mapping – Work Balancing Theoretical # of Workers = -------------------------------- = -------------------------------- = 3.75 = 4 Workers 0 2 4 6 8 10 12 14 16 18 20 22 1 2 3 4 5 Time(s) Process Step Takt Time (20s) 18s 12s 19s 12s 14s Total Work Time Takt Time 18 + 12 + 19 + 12 + 14 20  The objectives of Work Balancing are to  ensure that the cycle times for all process steps are similar  ensure that the cycle time of each process step is below the required takt time
  121. 121. 121 August 1, 2016 – v8.0 Value Stream Mapping – Work Balancing 0 5 10 15 20 25 30 1 2 3 4 5 Time(s) Operator Takt Time (20s) Step 1 Step 6 Step 10 Step 13 Step 17 Step 2 Step 7 Step 11 Step 14 Step 18 Step 3 Step 8 Step 12 Step 15 Step 4 Step 5 Step 9 Step 16 BeforeAfter 0 5 10 15 20 25 30 1 2 3 4 5 Time(s) Operator Takt Time (20s) Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Step 11 Step 12 Step 13 Step 14 Step 15Step 16 Step 17 Step 18 Work Balancing Work Balancing
  122. 122. 122 August 1, 2016 – v8.0 Value Stream Mapping – Basic Lean Management Tool Box Lean Standard Work Quick / Rapid Changeover Work Balancing Kanban Systems Level Loading 5S Visual Workplace
  123. 123. 123 August 1, 2016 – v8.0 Value Stream Mapping – 5S Visual Workplace Japanese Translation English Target Seiri Organization Sorting Space Seiton Neatness Simplify Access (Set in Order) (Straighten) Productivity Seiso Cleaning Sweeping (Shining) Facility Seiketsu Standardization Standardization Maintain Shitsuke Discipline Sustain (Self- Discipline) Culture
  124. 124. 124 August 1, 2016 – v8.0 SORT means clearly distinguishing between (1) what is needed and to be kept and (2) what is unneeded and to be discarded. SET-IN-ORDER means organizing the way needed things are kept so that anyone can find, use and return them easily. SHINE means thoroughly cleaning the work area and everything in it. The goal is (1) to turn the work area into a clean, bright place where people enjoy working, (2) to review the first two Ss, and (3) to find the source of dirt or litter and eliminate it. Shine should become so deeply ingrained as a daily work habit that tools are always kept in top condition and are ready for use at any time. STANDARDIZE means the development and implementation of a detailed plan to maintain SORT, SET- IN-ORDER, and SHINE. The plan should include the creation of procedures and simple daily checklists that are to be visibly posted in each work area; the checklist should serve as a visual to ensure that the daily 5S requirements are being met. Standardized cleanup integrates sort, set in order, and shine into a unified whole. 1. Sort (Seiri) 2. Set-in-Order (Seiton) 3. Shine (Seiso) 4. Standardize (Seiketsu) 5. Sustain (Shitsuke) Value Stream Mapping – 5S Visual Workplace SUSTAIN means always following specified (and standardized) procedures. Sustain requires self- discipline. Without discipline, it is impossible to maintain consistent standards of quality, safety, clean production, and process operation. SAFETY  Sometimes used as the 6th S. We believe that Safety is a natural consequence of the successful implementation of a 5S Visual Workplace initiative.
  125. 125. 125 August 1, 2016 – v8.0 1. Reduction of Waste (mainly defects, motion, waiting, & transportation) results in lower costs ! 2. Reduction in equipment breakdowns results in higher equipment availability ! 3. Reduction in delays results in a higher fill rate and on-time deliveries! 4. Reduction in defects results in less rework ! 5. Reduction in complaints results in greater Customer satisfaction ! 6. Reduction in injuries results in lower costs ! 7. Reduction in changeover time results in less downtime ! 8. A cleaner work environment results in higher employee satisfaction ! 5S Visual Workplace - The Benefits Ownership Moral Productivity Safety Shareholder Satisfaction 9. Lower costs and higher shareholder satisfaction result in improved profitability !!!
  126. 126. 126 August 1, 2016 – v8.0 1. Have an Implementation & Communication Plan !!! 2. Leadership – Drive it from the Top and Walk the Talk. 3. Employee Involvement & Empowerment – Provide adequate training, nominate 5S Leaders, and establish a 5S Action and Audit Teams. 4. Focus – Establish 5S focus areas with employee ownership. 5. No Scared Cows – 5S is not just about the production floor. Include shipping & receiving, warehouses, and offices. 5S Visual Workplace - Key Success Factors 6. Organize & Beautify – Paint is an inexpensive and terrific tool for supporting any 5S implementation. 7. Accountability – Hold leaders and teams accountable to the established work area requirements (discipline). 8. Evaluate & Improve – Perform weekly 5S audits with owners in each focus area. Measure progress and post scores. Make it fun and celebrate progress !!!
  127. 127. 127 August 1, 2016 – v8.0 5S Visual Workplace - Implementation Process Step 1 Establish a 5S Organization Step 2 Establish a 5S Implementation Plan Step 3 Create 5S Campaign Material Step 4 In-House 5S Education Step 6 5S Evaluation, Scoring and Follow-Up Step 5 5S Implementation SORT (Red-Tag Strategy) SHINE SET-IN-ORDER (Signboard Strategy) STANDARDIZE SUSTAIN
  128. 128. 128 August 1, 2016 – v8.0 Value Stream Mapping – Basic Lean Management Tool Box Lean Standard Work Quick / Rapid Changeover Work Balancing Kanban Systems Level Loading 5S Visual Workplace
  129. 129. 129 August 1, 2016 – v8.0 Value Stream Mapping – Kanban System Kanban is a Japanese word that means signboard or signal card. Kanban systems were first introduced by Toyota in the 1950s as a scheduling system to determine what to produce, when to produce it, and how much to produce. Kanban systems lead to an improved process flow, reduced scheduling activities and can result in significant inventory reduction. Kanban scheduling systems are useful when • lot sizes differ between process steps, • processes are unbalanced, or • when distance introduces time lag or variability
  130. 130. 130 August 1, 2016 – v8.0 Value Stream Mapping – Benefits of a Kanban System • Work in process between processes is always maintained and managed • Process materials are readily available and easily counted when necessary • Quicker quality feedback loop • Fewer errors as the feedback is done more efficiently • Work place is better organized, more comfortable, and safer • Over-production (waste) will be at minimum • Less Finished Goods Inventory is required • Makes the vision of Lean Management possible • Many more …
  131. 131. 131 August 1, 2016 – v8.0 Value Stream Mapping – Basic Kanban Concept The basic concept of a Kanban system can be easily observed in a supermarket. In a supermarket, every item has a defined inventory location that holds a specific quantity of the item. Customers select the required quantity of a specific item and proceed to the checkout counter. At the checkout counter, the cashier scans each item and a signal will be transmitted to the supermarket’s database, indicating the items part number and quantity that has been “consumed”. Once a certain quantity of a specific item has been consumed, a supermarket employee will take for example a carton of that item from the warehouse and refill the shelf-space in the store.
  132. 132. 132 August 1, 2016 – v8.0 Value Stream Mapping – Kanban Cards • Originally, Kanban systems utilized physical cards that move back and forth between the “customer” process and the “supplier” process, serving as a signaling to trigger the movement, production, or supply of material. Electronic or e-Kanban systems are nowadays more common, and are able to improve on some of the drawbacks of manual Kanban systems. • Kanban cards, which may be multicolored based on priority, show at a minimum the internal part number & description, supplier name, supplier part number & description, restocking location, and the re-ordering quantity. • The most commonly used Kanbans are: – “Withdrawal" or “Move” Kanbans – This Kanban is used to relocate items from one work area or sub-process to another. – “Production" Kanban – This Kanban is used to replace the items when they are consumed or sold. – “Signal” Kanban – This Kanban is used to initiate production or replenishment of a predetermined batch size of a specific item.
  133. 133. 133 August 1, 2016 – v8.0 Value Stream Mapping – Single-Card Kanban In a single-card or one-card Kanban scheduling system, a “Signal” Kanban card is taken from the Kanban location once a defined minimum stock quantity has been reached. The card is then for example placed on a Kanban board, signaling the need for a stock replenishment order. The “supplier” process responsible for the replenishment of the Kanban location schedules its production based on the Kanban board and replenishes the Kanban location. The minimum stock quantity that signals or triggers the replenishment request needs to assure that the remaining on hand inventory is sufficient until the replenishment stock arrives and is based on the average consumption, consumption fluctuation, and replenishment lead time.
  134. 134. 134 August 1, 2016 – v8.0 Value Stream Mapping – Single-Card Kanban Example The images below illustrate a simple example of a single-card Kanban system to prevent coffee stockouts in the office. The minimum stock has been determined as one box of “K-cups” and a Kanban card is attached to the last box. As soon as an employee opens the last box, he/she removes the Kanban card and orders a predefined number of “K-cups” boxes or places the card in a pre- defined location to trigger the replenishment process.
  135. 135. 135 August 1, 2016 – v8.0 Value Stream Mapping – Dual-Card Kanban A dual-card or two-card Kanban scheduling system uses "Withdrawal" and "Production" Kanban cards. One card is attached to each container holding a pre-defined quantity of items. To relocate or move a container from the “supplier” process to the “customer” process for consumption, the attached “Production” card is removed from the container and placed on the Kanban board. The “Withdrawal” card is then attached to that container and the container is moved to the “customer” process for consumption. The “supplier” process schedules production based on the cards on the Kanban board and pre-defined scheduling rules. Once a container of items has been produced, a “Production” card is removed from the Kanban board and attached to the container.
  136. 136. 136 August 1, 2016 – v8.0 Value Stream Mapping – Dual-Card Kanban – Summary “Supplier” Process “Customer” Process Kanban Board Phase 1: “Customer” process moves an empty container with a “Withdrawal” card to the “supplier” process. “Supplier” Process “Customer” Process Kanban Board Phase 2: “Customer” process places the “Production” card of a full container on the Kanban board and replaces it with the “Withdrawal” card from the empty container. “Supplier” Process “Customer” Process Kanban Board Phase 3: “Customer” process moves the full container with the “Withdrawal” card to the “Customer” process. “Supplier” Process “Customer” Process Kanban Board Phase 4: “Supplier” process produces new items and attaches the “Production” card from the Kanban board to the full container. Standard Container (full) Standard Container (empty) “Production” Card “Withdrawal” Card 1 2 3 4
  137. 137. 137 August 1, 2016 – v8.0 Value Stream Mapping – Dual-Card Kanban Example A very effective application for a dual-card Kanban scheduling system is the “decoupling” of two very different sub-processes, for example a machining process and an assembly process. A machining process is often fairly automated, resulting in high depreciation costs, and requires significant setup time to change over from one product to another, resulting in low utilization when producing small batches of different items. An assembly process is often less capital intense and requires no or very little changeover time.
  138. 138. 138 August 1, 2016 – v8.0 Kanban Systems – Kanban or Heijunka Board Empty containers at Supplier Process, but sufficient inventory at Customer Process → Production can wait. Empty containers at Supplier Process and insufficient inventory at Customer Process → Production required immediately.
  139. 139. 139 August 1, 2016 – v8.0 Value Stream Mapping – Supermarket • Customer Process goes to the Supermarket and withdraws what it needs when it needs it. Supplying Process produces to replenish what was withdrawn. • Purpose: Controls production at supplying process without trying to schedule. Controls production between flows. Supplying Process Customer Process "Production" Kanban "Withdrawal" Kanban SUPERMARKET Product ProductA B
  140. 140. 140 August 1, 2016 – v8.0 Value Stream Mapping – FIFO Lane • In some cases a FIFO Lane between two decoupled processes can be used to substitute for a Supermarket. A FIFO Lane is like a chute that can hold only a certain amount of inventory, with the supplying process as the chute entrance and the customer process at the exit. • If the FIFO Lane gets full, the supplying process must stop producing until the customer process has used up some of the inventory. Supplying Process Customer Process SUPERMARKET FIFO Lane max. 20 pieces A B FULL ? Kanban
  141. 141. 141 August 1, 2016 – v8.0 Value Stream Mapping – Sequenced Pull • Sometimes one can install a “Sequenced Pull” between 2 processes, instead of a complete Supermarket or a FIFO Lane. • Sequenced Pull means that the supplying process produces a predetermined quantity of parts (e.g. one subassembly) directly to the customer process’ order. This works if lead time in the supplying process is short enough for “production- or build-to-order”, and if the customer process follows strict “ordering” rules. • Sequenced Pull is sometimes called the “Golf Ball System” because colored balls or disks (that roll nicely down a chute to the supplying process) are sometimes used to provide production instruction.
  142. 142. 142 August 1, 2016 – v8.0 Value Stream Mapping – Pacemaker Process • Try to send the Customer schedule to only one production process, the pacemaker process. • A process is called the pacemaker process, because it is used to control production and sets the pace for all upstream processes. • Note, the material transfer from the pacemaker process downstream to finished goods need to occur as a flow. Supplying Process Supplying Process Customer Process Customer Process Pull max. 20 pieces DFIFO Lane CUSTOMERA max. 50 pieces FIFO LaneB C SCHEDULE = Pacemaker Process FLOW DownstreamUpstream
  143. 143. 143 August 1, 2016 – v8.0 Value Stream Mapping – Basic Lean Management Tool Box Lean Standard Work Quick / Rapid Changeover Work Balancing Kanban Systems Level Loading 5S Visual Workplace
  144. 144. 144 August 1, 2016 – v8.0 Value Stream Mapping – Level Production Volume • A tool that some organizations use to help level both the mix and the volume of production is a load-leveling box. • A load-leveling box has a column of Kanban slots for each pitch interval, and a row of Kanban slots for each product type. In this system Kanban indicate not only the quantity to be produced, but also how long it takes to produce that quantity (based on Takt Time). • Kanban are placed (loaded) into the leveling box in the desired mix sequence by product type. Supplying Process Customer Process Customer Process C max. 50 pieces FIFO LaneB max. 20 pieces DFIFO Lane CUSTOMER Schedule for Pacemaker Process
  145. 145. 145 August 1, 2016 – v8.0 Value Stream Mapping – Leveling Production Mix • Leveling the Product Mix means distributing the production of different products evenly over a time period. For example, instead of assembling all the “Type A” products in the morning and all the “Type B” products in the afternoon, leveling means alternating repeatedly between smaller batches of “A” and “B”. • The more you level the product mix at the pacemaker process, the more able you will be to respond to different Customer requirements with a short lead time while holding little finished-goods inventory. This also allows the upstream Supermarket to be smaller. Inventory & Customer Dissatisfaction COST Changeovers & Productivity COST
  146. 146. 146 August 1, 2016 – v8.0 Value Stream Mapping – Basic Lean Management Tool Box Lean Standard Work Quick / Rapid Changeover Work Balancing Kanban Systems Level Loading 5S Visual Workplace
  147. 147. 147 August 1, 2016 – v8.0 Value Stream Mapping – Quick Changeover or SMED  Quick Changeover or Single-Minute Exchange of Die (SMED) provides a rapid and efficient way of converting a manufacturing process from running the current product to running the next product.  Rapid changeovers are a key to reducing production lot sizes and improving flow.  The phrase "single minute" does not mean that all changeovers and startups should take only one minute, but that they should take less than 10 minutes (in other words, "single-digit minute").
  148. 148. 148 August 1, 2016 – v8.0 Value Stream Mapping – Quick Changeover Definitions  Changeover or setup activities can be classified using the following three categories.  Waste – Activities which do not add value to the changeover or setup  Internal - Activities that can only be performed while the equipment is shut down  External - Activities that can be performed without shutting down the equipment  Key strategies to reduce setup and changeover time are:  Eliminate the waste activities  Convert as many internal activities to external activities  Internal activities can be improved by:  Use specially designed cart to organize tools  Use quick-release fasteners instead of bolts and nuts  Use stoppers to quickly position the jigs.  Use overhang mechanisms to handle heavy jigs  Use locating pins and holes to eliminate the adjustment
  149. 149. 149 August 1, 2016 – v8.0 Value Stream Mapping – Quick Changeover Process There are seven basic steps to reducing changeover using the SMED system: 1. OBSERVE the current methodology (A) 2. Separate the INTERNAL and EXTERNAL activities (B). 3. CONVERT (where possible) internal activities into external ones (C) (pre-heating of tools is a good example of this). 4. STREAMLINE the remaining internal activities, by simplifying them (D). Focus on fixings – For example, it is only the last turn of a bolt that tightens it - the rest is just movement (waste). 5. STREAMLINE the external activities, so that they are of a similar scale to the internal ones (D). 6. DOCUMENT the new procedure, and actions that are yet to be completed. 7. DO IT ALL AGAIN: For each iteration of the above process, a 25-35% improvement in set-up times should be expected, so it may take several iterations to cross the ten minute line.
  150. 150. 150 August 1, 2016 – v8.0 Quick Changeover – 1. Observe Current Process 1. Observe the current Changeover Process  I find it often very helpful to start a Quick Changeover reduction initiative by actually videotaping the major activities currently performed during the changeover process and to review the video with the improvement team.  The key outputs of this first step are to document each step of the changeover process, as well as determine the cycle time of each step and for the entire changeover process. A simple Excel spreadsheet will normally be sufficient to document the results of this and the following steps.
  151. 151. 151 August 1, 2016 – v8.0 Quick Changeover – 2. Separate Activities 2. Separate the Internal and External Activities  Once the team has a clear understanding of the key activities involved in a changeover, each step needs to be classified using one of the following three categories.  Waste – Activities which do not add value to the changeover or setup  Internal - Activities that can only be performed while the equipment is shut down  External - Activities that can be performed without shutting down the equipment  The results will be documented in the same spreadsheet created in Step 1.
  152. 152. 152 August 1, 2016 – v8.0 Quick Changeover – 3. Convert Activities 3. Convert Internal Activities into External Activities (where possible)  During this step, the team identifies internal changeover activities, means activities that are currently performed while the equipment is shut down, that can be converted into external activities, means they can be performed before or after the equipment shutdown. This can include, organizing all the tools needed for the changeover or pre-assembling of tools prior to the equipment shutdown.
  153. 153. 153 August 1, 2016 – v8.0 Quick Changeover – 4. Internal Activities 4. Streamline and simplify the remaining Internal Activities  In Step 4 the team focuses on those activities that currently need to be performed during the equipment shut down, means the internal activities, and develops solutions to simplify or speed up those activities.  Examples include,  it is only the last turn of a bolt that tightens it - the rest is just movement (waste)  usage of quick-release fasteners instead of bolts and nuts  usage of stoppers to quickly position jigs  usage of locating pins and holes to eliminate time consuming adjustments
  154. 154. 154 August 1, 2016 – v8.0 Quick Changeover – 5. External Activities 5. Streamline and simplify the External Activities  In Step 5 the team focuses now on the external activities, means activities that can be performed before or after the equipment shut down, and develops solutions to simplify or speed up those activities.  Examples include  the usage of specially designed cart to organize tools,  the usage of overhang mechanisms to handle heavy jigs, or  the training of line operators to perform specific changeover tasks.
  155. 155. 155 August 1, 2016 – v8.0 Quick Changeover – 6. Document & Standardize 6. Document and implement the new Changeover Process  Once a new and improved Changeover Process has been established, it needs to be properly documented, all employees involved need to be trained, and a new baseline for the new reduced total changeover time needs to be established.
  156. 156. 156 August 1, 2016 – v8.0 Quick Changeover – 7. “Do it all again” 7. “Do it all again”  Based on our experience, it is not uncommon for an organization to reduce changeover time by 30 – 50% after a successful changeover reduction project or a series of smaller Kaizen events.
  157. 157. 157 August 1, 2016 – v8.0 The End … “Perfection is not attainable, but if we chase perfection we can catch excellence.” - Vince Lombardi
  158. 158. 158 August 1, 2016 – v8.0 Terms & Conditions After you have downloaded the training material to your own computer, you can change any part of the course material and remove all logos and references to Operational Excellence Consulting. You can share the material with your colleagues and re-use it as you need. The main restriction is that you cannot distribute, sell, rent or license the material as though it is your own. These training course materials are for your — and your organization's — usage only. Thank you.

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