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VALUE STREAM MAPPING Rahul Patil (121) Sankar T S (122) Mrunal Hadke (123) Subhrajyoti Parida(124)

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Agenda <ul><li>What is Value ? </li></ul><ul><li>Value Added v/s Non Value Added </li></ul><ul><li>VSM and The Lean Process </li></ul><ul><li>Process Mapping </li></ul><ul><li>Value Stream & VSM </li></ul><ul><li>Process Mapping v/s VSM </li></ul><ul><li>VSM Symbols and Measures </li></ul><ul><li>Value Stream Analysis </li></ul><ul><li>VSM in Manufacturing Industry </li></ul><ul><li>Case Study </li></ul>

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What Is Value? <ul><li>A capability provided to a customer </li></ul><ul><ul><li>of the highest quality, </li></ul></ul><ul><ul><li>at the right time, </li></ul></ul><ul><ul><li>at an appropriate price, </li></ul></ul><ul><li>as defined by the customer. </li></ul><ul><li>• &quot;Value&quot; is what the customer is willing to pay for. </li></ul>

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Value added vs. Non-Value added <ul><li>Not all the activities add value to the product </li></ul><ul><li>Only those which adds utility to the product/service from customer’s perspective are value added (VA) activities </li></ul><ul><li>Non value added activities (NVA) are to be eliminated, simplified, reduced or integrated. </li></ul>

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Value added vs. Non-value added Value added activities Non-Value added activities <ul><li>Over production </li></ul><ul><li>Defects </li></ul><ul><li>Waiting </li></ul><ul><li>Transportation </li></ul><ul><li>Unnecessary Motion </li></ul><ul><li>Over processing </li></ul><ul><li>Unnecessary Inventory </li></ul>95% 5% How to reduce the Non-value added activities ?

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<ul><li>Value Stream Mapping is the maiden step towards adoption of the Lean process </li></ul><ul><li>VSM is a tool to identify the waste and suggest steps to move to the future/lean state from the current state through Kaizen events. </li></ul>VSM and The Lean process

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Why to map the process ? <ul><li>Process maps bring clarity to the process </li></ul><ul><li>Allows to start the process of thinking about improvements </li></ul>

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Process Mapping <ul><li>The map lists every step that is involved in the delivery of the product or services. Process mapping involves developing a simple visual picture, or map, of a process. </li></ul><ul><li>Tracks workflow and provides information on resource allocation </li></ul>

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What is Value Stream? <ul><li>A Value Stream includes all elements (both value added and non-value added) that occur to a given product from its inception through delivery to the customer. </li></ul>Design Raw Materials Assembly Plants Distribution Customer Parts Manufacturing Requirements next

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What is Value Stream Mapping? <ul><li>A Value Stream is the flow of all of the activity, value added and otherwise, needed to fullfil a request. </li></ul><ul><li>Value Stream Maps are drawings that makes the flow of material and information visible. </li></ul><ul><li>Value Stream Mapping (VSM) is the name used to describe the activity of creating these drawings. </li></ul><ul><li>Current State Maps describe the process as it is today. </li></ul><ul><li>Future State Maps describe the ideal state based on applying Lean principles. </li></ul>

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Definition of VSM <ul><li>Value Stream Mapping (VSM) is a hands-on process to create a graphical representation of the process, material and information flows within a value stream. </li></ul><ul><li>Special type of flow chart that uses symbols known as “The language of Lean&quot; to depict and improve the flow of inventory and information. </li></ul><ul><li>Toyota refers to this process as “Material and Information Flow Mapping” </li></ul>

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Purpose of VSM <ul><li>Provide optimum value to the customer through a complete value creation process with minimum waste in: </li></ul><ul><ul><li>Design (concept to customer) </li></ul></ul><ul><ul><li>Build (order to delivery) </li></ul></ul><ul><ul><li>Sustain (in-use through life cycle to service) </li></ul></ul><ul><li>Provide the means to see the material, process and information flows. </li></ul><ul><li>Support the prioritization of continuous improvement activities at the value stream </li></ul><ul><li>Provide the basis for facility layout </li></ul>

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Process Mapping vs. VSM <ul><li>Process Mapping </li></ul><ul><li>Only shows the sequence of activities in a process </li></ul><ul><li>No indication of time or delay between process. </li></ul><ul><li>No identification of value added or Non value added </li></ul><ul><li>VSM </li></ul><ul><li>Shows the flow of materials and information in a process </li></ul><ul><li>Indicates lead time and cycle time for each process </li></ul><ul><li>Also identifies each step as Value-adding or Non-value-adding </li></ul><ul><li>Requires thorough first hand study of process </li></ul>

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Value Stream Mapping Example <ul><li>Elapsed Time from order to delivery: 30 days </li></ul><ul><li>Value Added Time : 1 hour, 25 minutes </li></ul>

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Value Stream Mapping Symbols Supplier/ customer Data box Process box Time Line Time line ends Electronic flow arrow Manual flow arrow Push arow Shipment arrow Logistics Improvement Kanban First In First Out Load Leveling system Batch Kanban Production Kanban Withdrawal Kanban Inventory Safety Stock Sequenced pull

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VSM Measures

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VSM Measures

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What Is Value Stream Analysis? <ul><li>Planning tool to optimize results of eliminating waste </li></ul><ul><li>Select the product/family </li></ul><ul><li>Identify the current state VSM which describes the process as it is today </li></ul><ul><li>Apply lean techniques to reduce the wastes </li></ul><ul><li>Create future state VSM which describes the ideal state based on lean principles </li></ul>

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Eg.1 Current state VSM

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Eg.1 Future state VSM

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VSM in manufacturing industry <ul><li>Decide the process and its boundaries </li></ul><ul><li>Form a multi-disciplinary team with experience in process </li></ul><ul><li>Find a room with large wall </li></ul><ul><li>Hang up a sheet of paper/ board </li></ul><ul><li>Start at the end of the process and work backwards </li></ul><ul><li>Walk along the process </li></ul><ul><li>Collect information about the processes </li></ul><ul><li>Use different coloured notes to record each type of step </li></ul>

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VSM in Manufacturing Industry <ul><li>Identify the non-value adding activities </li></ul><ul><li>Use lean tools to design a future state </li></ul><ul><li>Plan the activities to make the improvements </li></ul><ul><li>Improve the process, verify it works and redraw the map </li></ul><ul><li>Continue from 1 st step, continuous improvement </li></ul>

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Example of VSM <ul><li>Current state VSM </li></ul><ul><li>Future state VSM </li></ul>

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<ul><li>Case Study : VSM of Paper based Procurement procedure of CNC Lathe & optimizing it through e-Tendering. </li></ul><ul><li>Assumptions </li></ul><ul><li>- Procurement is on limited tendering basis , with RFQs floated to 5 approved </li></ul><ul><li>vendors. </li></ul><ul><li>- Time allowed for submitting quotations : Std. 3 weeks (18 days) </li></ul><ul><li>- *Obtaining standard clarifications on technical terms & conditions like pre- </li></ul><ul><li>installation requirements, capacities, training & maintenance related. </li></ul><ul><li>- **Obtaining standard commercial clarifications , like TIN, ED payable, VAT </li></ul><ul><li>& CST , payment and delivery terms etc. </li></ul><ul><li>- ***The machine i.e, CNC Lathe is procured from an Indian vendor based </li></ul><ul><li>within 1000 kms around Mumbai. </li></ul><ul><li>- ****Machine requires standard preparation for installation like grouting </li></ul><ul><li>bolts or vibration isolation pads , compressed air requirement , & electrical </li></ul><ul><li>supply. </li></ul><ul><li>- All days refer to no. of working days </li></ul>

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Typical paper based Procurement procedure of CNC Lathe(current state VSM) 1 day 3 days 2 – 4 days 4 - 10 days 6 - 12 days *2 - 4 days 19 days 1day Vendors

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**2 - 4 days 1/2 day 1 day 4 - 6 days 2-4 days 2-4 days 90 days ***3 - 4 days 4 – 6 days 6 - 10 days 2- 4 days 5 days With commercial dept. From commercial dept .

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<ul><li>Observations from Existing Paper based procedure </li></ul><ul><li>Total lead time (from RFQ floatation to release of final payment) : 176 days or approx. 6 months . </li></ul><ul><li>Unnecessary man movement in the form of messengers for file movement :- </li></ul><ul><li>-For obtaining approval for RFQ file. </li></ul><ul><li>-For obtaining approval & follow-up of technical recommendation </li></ul><ul><li>file. </li></ul><ul><li>-For obtaining approval for PO proposal & PO file. </li></ul><ul><li>The system is having loopholes which raises doubt on transparency . </li></ul>

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Procurement procedure by E-tendering(future state VSM) 1 days 2 days (3) Few mins .(2-4 ) 3 – 6 days (4-10) * 6 - 12 days 2 - 4 days 18 (19) days Few Mins. (1) E-transmission & approval E-transmission of RFQs Electronic opening Electronic transmission to TEC & digital signatures. Electronic opening

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Electronic transmission to authorities & digital signatures **2 - 4 days Few mins . (1/2) 1 day 2 -3 days (4-6 ) Few mins. (2-4) 1-2 days (2-4) 90 days Simultaneous preparation of site ***3 - 4 days 6 - 10 days 2- 4 days 3 days (5) Electronic payment From commercial dept .

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Observations from procurement through e-Tendering -Time involved in file movement gets drastically reduced. -Time taken in dispatching documents is also reduced. - Manpower cut down completely for file movement. - Transparency increased through e-tendering. - Lead time reduced from 176 to 154 days , saving of 22 days . - Optimization through reduction of lead time , improving upon the cycle time and cutting down on NVA man & document movements. . Time taken before in file movement Time taken in e-tendering Saving 15 days 9 days 40% Time taken before in dispatching Time taken in e-tendering Saving 6 days Few mins 100%

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References <ul><li>http://www.strategosinc.com/value-streammapping-3.htm </li></ul><ul><li>http://en.wikipedia.org/wiki/Value_Stream_Mapping </li></ul><ul><li>Purchase Manual published & amended as per GFR, MOF,GOI </li></ul>

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Thank You !