Value Stream

Analysis
Training
Value Added
Value is added any time we physically change our product
towards what the customer is buying
If we are not adding value, we are adding cost or waste
Lean Manufacturing drives the systematic elimination of
waste

Value-Added Time : Minutes

Time in Plant : Weeks
ORDER CASH

KEY QUESTION – Are my customers willing to pay for this ????

Value Added vs. Non-Value Added
Value added
LEAN = ELIMINATING THE 7 WASTES

5% Overproduction
Waiting
Transportation
Non-value added
processing
Excess inventory
Non-value added Excess motion
Defects

Typically 95% of Total Lead Time is Non-

Value Added!!!
 WAITING OVERPRODUCTION
TRANSPORTATION

PROCESSING
7
Wastes DEFECTS

MOTION INVENTORY
7 Basic Types of Waste (Toyota)
Overproduction – producing more than what is
demanded by the customer
Inventory – Storing more than the absolute minimum
needed
Transportation – the unnecessary movement of
materials
Waiting – waiting for the next process step
Excess processing – due to poor tool or product design
Wasted motion – unnecessary reaching, walking,
looking for parts, tools, prints, etc
Defects – scrap and rework
 What is Flow ?
Producing and moving one item at a time (or a
small and consistent batch of items) through a
sequence of process steps as continuously as
possible, with each step making just what is
requested by the next step.

TRADITIONAL CONTINUOUS FLOW

Lean Lexicon Version 1 p9

Continuous Flow – More Efficient & Faster

Traditional Batch Layout Continuous Flow Layout

 Supermarket Pull System
“Production” KANBAN “Withdrawal” KANBAN

Supplying
process Customer
process

A B
product product

Mike Rother
Learning to See
SUPERMARKET
CUSTOMER PROCESS goes to 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SUPPLYING PROCESS produces to replenish what was withdrawn.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.
Takt Time
Takt time paces production to the pace of customer
requirements.
Total daily operating time
Takt Time =
Total daily customer requirement

Operating time = 1 shift x 8 hours – (2) 20-min.

breaks = 440 mins/day
Customer 880 units/month
= = 44 units/day
Requirement 20 days/month
440 mins/day
Takt time = = 10 mins/unit
44 units/day
What is a Value Stream ?
A Value Stream is all the actions, value
creating and non-value creating, required to
bring a product from order to delivery

Starts with raw materials

Finalizes at the end-customer

Involves several businesses

Value Stream Mapping

Follow a “product” or “service” from beginning to

end, and draw a visual representation of every
process in the material & information flow

Then, draw (using icons) a “future state” map of

how value should flow
Value Stream Mapping
Helps you to see the sources of waste in the value
stream
Shows the flow of information and material
Forms the blueprint for lean implementation (Imagine trying to
build a house without a blueprint).
Helps you to see more than just the single process level
Provides a common language for talking about manufacturing
processes
Makes decisions about the flow apparent, so they can be
discussed
Ties together lean concepts and techniques, which helps to avoid
“cherry picking” Improvement projects
What is Value Stream Analysis?
Value stream maps describe a value stream
Value stream analysis is a planning process
Uses value stream maps to communicate
• Information Flow
• Material Flow
Three value stream maps are created
Current state
Ideal state
Future state (3 months from now)
Action plans are developed for the future state map
The Value Stream Analysis Process

Phase 1-Pre-event work

Phase 2-The Main Event

Phase 3-Accountability Process

Value Stream Analysis
Process

Phase 1
Pre-event Planning
Pre-Event Work
Three weeks prior to the event
Determine team members
Define the objective of the team
Select the area and topic
Logistics (conf. Rm., times, facilitator supplies,
etc.)
Invite team members to the event
Clarify roles and responsibilities
• Event leader-value stream manager from the area (owns
resources and results)
• Event facilitator-CI Leaders who manage the
improvement process and share in ownership of results
• Subject matter experts
Pre-Event Work
Two weeks prior to the event
Part/quantity analysis (select representative part
number)
Gather and review data (Yield, job closures,
CONC, etc.)
Determine future demand
Review prior event data
Review any customer issues
Review any requirements for capital equipment

One week prior to the event

Verify customer demand
Review above data
Value Stream Analysis
Process

Phase 2
The Main Event
The Main Event
1. Training
2. Gemba Walk
3. Value Stream Map-Current State
4. Develop Ideal State Map
5. Develop Future State Map (3 months out)
6. Develop Future State Plan
7. Management Report Out
VSM Event Steps 1 &2
Training and Gemba Walk
1. Training
The concepts of Lean need to be applied to
classroom training as well as our other processes
• This is a learn by doing process
• We will minimize classroom learning

2. Gemba Walk
Gemba means, “shop floor” or “where the process is”
We need to go there so we know what we are
mapping
VSM Event Step 3
Current State Map
3. Value Stream Map-Current State
1. Map the physical flow (manufacturing loop,
customer loop, supplier loop)
2. Map the information flow
3. Complete the lead time data bar
4. Visually identify waste
1. Identify value added/non-value added (red, yellow,
green dots)
2. Visually identify the most significant opportunities with
kaizen bursts.
5. Summarize all information and metrics (date,
P/N, times, inventory, OTD, quality, etc.)
Elements of Value Stream Maps
30 Days MRP Monthly Orders 880
Supplier Customer
Supplier Loop Customer Loop
Takt Time = 440 min/44
= 10 min/unit
Bi-Monthly Information

Manufacturing Loop
Op 1 Op 2 Op 3 Op 4 Op 5 Op 6
45 Days 1 Day 2 Days 2 Days 1 Day 5 Days 1 Day

S/U = 0.08 hr S/U = 0.08 hr S/U = 0 S/U = 0.08 hr S/U = 1.95 hr

S/U = 1 hr
CT = 0.9 min CT = 0.9 min CT = 1.2 min
CT = 1.6 min CT = 60 min CT = 40.3 min

45 1 2 2 1 5 1

1.6 0.9 0.9 60 1.2 40.3

Total = 57 Days
Lead Time Data Bar Total = 1 Hr. 44.9 Min.
Manufacturing Loop Questions
What are the changeover times?
What are the quantity of machines per process?
Count all work in process (WIP)
Look for evidence of quality problems
Look for processing waste
Is there great distances between processes?
Is the product flexible or made to order?
Is there obvious batch processing?
Customer Loop Questions
Who and where are your customers?
What are the product lines or families? G.M.
AT&T
Future marketing plans? Review growth
potential.
What is the total yearly order requirement? Quantity by product
family or product type
What is the high, low and mean ordering pattern? Monthly or
quarterly high & low for several periods
How often do we deliver to our customer?
What takt time do we supply to?
Production Control Questions
Where in the production chain
do we trigger production?
How much work do we release
at one time?
How long does it take to go from
customer order to production order?
How do we physically schedule production?
How do we react to customer emergencies?
Supplier Loop Questions
#1 question, how do you tell suppliers
what to ship, make, etc.?
When and how often do they get purchase
orders from Customers?
When and how do we change the purchase order?
When and how often do suppliers ship product and how?
Is it level? (Truck, train, etc.)
Do we have standard pack quantities?
Are suppliers aware of our inventory quantities?
Are we sure of suppliers inventory? How?
Do we have a supplier training program?
Information Flow Questions
How are the manufacturing and procurement orders
distributed?
Who gets them
How frequently
What is the process of generating them
How are the shop order schedules generated and
revised? Are there “shortage meetings”? What parts
of the manufacturing loop are scheduled by MRP?
Make sure to document the informal (hot lists) as well
as formal (MRP) information channels.
 Current State Lead Time Data Bar
Lead
Time
Cycle Time DOH Inventory Total
(CT)
8 Days 4 Days

4 Hrs 12 Days

(1 Hr.) 4 Hrs

VA Time (yes/no) CT Total

Mapping
Icons

COMPUTER WIP
Visually Identify Waste
As a team, review each process step for elements
that are value added and non value added
Each step can have any combination of value
added, type 1 waste and/or type 2 waste
Identify value added with a green dot
Identify type 1 waste (waste but unavoidable in the current
state) with a yellow dot
Identify type 2 waste (pure waste, eliminate immediately)
with a red dot
As type 2 waste is identified, generate the actions
to remove it (this will be the beginning of the future
state implementation plan)
Prioritize the waste opportunities and identify the
biggest opportunities on the CS map with kaizen
bursts
VSM Event Step 4
Ideal State Map
Avoid shared resources
Assume that anything is possible
Our customers are happy
Our profits are up
High job satisfaction
Capital is available if needed
Create an ideal state map
Map the physical flow
Map the information flow
Complete the lead time data bar
VSM Event Step 5
Future State Map (3 months out)
What of the ideal state map can be
implemented in 3 months?
Identify short term goals
LEAD TIME
INVENTORY
PRODUCTIVITY
QUALITY
CAPACITY
Work from your current state map
 VSM Event Step 6
Future State Plan
This plan answers the question, “what actions need to be
completed in the next 90 days to achieve the future state?
Think back to the “visually identify waste” step
Plan addresses all “red dots” and Kaizen bursts
DATE
Activ- GOAL/
ACTION PRIORITY LEADER EST ACT STATUS/REMARKS
ity OPPORTUNITY OPEN
COMP COMP
The electrical Re-locate THE ELECTRICAL TEST
station is located electrical station STATION HAS BEEN
1 Test Short Term TEAM 1/5/2005 1/10/2005 1/7/2005
away from the closer to test RELOCATED NEAR THE
test area. area. TEST AREA

Only three Train and certify

technicians are more technicians 4 MORE TECHNICIANS
2 Assy Short Term Joe 1/5/2005 4/30/2005 3/18/2005
certified to perform HAVE BEEN TRAINED
solderers. soldering

Details are being Most of the detail parts

issued in the Review kitting are part of POU inventory.
3 Plan'g Long Term John 1/5/2005 3/15/2005
middle of the process The leftovers will be
process looked at case by case.
VSM Event Step 7
Management Report Out
This report out is how the team publicly commits
to management
What the goal of the event was
What was learned
What was accomplished during the event
What the outcome is. How much better will we be?
Description of the future state
Commitment of the action plan
Value Stream Analysis
Process

Phase 3
Accountability Process
The Accountability Process
The momentum for improvement is never higher
then at the end of the event when everyone can
really see the waste. As a result the accountability
process must start immediately following the event
(next day).
Display the current state map, future state map and
future state plan in the the affected area.
Commit to a stand up meeting in front of the maps
and plan (daily at first, and then less frequent as
applicable)
Focus on Due date control. Not meeting dates is letting
the team down
Current State Value Stream Map
Future State Value Stream Map
 Value Stream
Mapping :
Step by step

© 2002 Eaton Corporation. All rights reserved.

Getting Started
Define Team, Scope ( Start – End Process),
Key Metrics and Main Process Step

• Identify project Sponsor/Champion

• Identify task force and cross functional team
• Identify the scope business area/process (Start & End)
• Identify key Performance Metrics to be measured-analyzed

Tools:
• Team Charter
• SIPOC/Top- Down Charting/Swim lane Flow Chart
Getting Started
From Sand to Display Product at the customer

But...
Mapping the entire stream is too
much for getting started!
10 Steps VSM Analysis

Phase I - Current State VSM

Step 1 - Select Service/process
Step 2 - Establish Mapping and Data Collection Ground
Rules.
Step 3 - Map the Process Flow (with Data Box)
Step 4 - Map the Material Flow
Step 5 - Indicate Time Pulse
Step 6 - Map the Information Flow
Step 7 – Identify VA & NVA
Phase II - Current State VSM with Opportunities
Step 8 – Identify opportunities through: Value Analysis, Waste
Analysis, Root Cause Analysis, etc
Phase III - Future State VSM
Step 9 - Create future state VSM
Step 10 - Kaizen action plan
Step 1: Select Service / Process

Determine what individual product or service, or

product group/family you will map

✓ Has biggest impact on customer

✓ High Impact on volume, quality, cost
✓ Has common flow/same steps
Step 2: Establish Mapping Rules

3 Simple Mapping and Data Collection Ground

1. Go to the Gemba! - Actual place where the process is performed.

2. Talk to the Actual people involved in the process and get the real
facts.
3. Observe and chart the Actual process.
– Reality is invariably different from perception; Few processes
work the way we think they do.
– The purpose of value stream mapping is to identify waste, not
to develop the perfect process map.

Understand the process through facts and data!

Value Stream Mapping
Best Practices
• Always map in paper and pencil - rough out 1st, clean later.
• Walk the actual material and information flows yourself.
• Start with a quick walk, to get a feel for the flow and sequence then, go
back and talk to the right people for each step. (Don’t forget second
and third shifts)
• Color Code the operations. (Red, Yellow, Green)
• Always collect ‘current-state’ information while waking along the actual
pathways of material and information flows.
• Involve the Management team totally.

Don’t map the organization. Map

the flows through the organization.
Step 3: Map the Process Flow (with Data Box)
Identify the
major process
steps and start 120m 80m 30m 180m 20m 60m

storage welding
mapping Lager Stanzen
stamping
Schweißen Schweißen
welding Montage1
assembly1
Montage2
assembly2
shipping
Versand

I 1 1 1 1 1 I

coils 2700L
4 days 1440R
Z/T: 1S
C/T: C/T: 39 S
Z/T: s Z/T:
C/T: 46
46 Ss Z/T:
C/T: 62 S
s Z/T:
C/T: 40
40 Ss

R/T: 60
C/O: 60 Min.
Min. R/T:
C/O: 10
10 Min.
min. C/O: 10
R/T: 10 Min.
min. R/T: 00 Min.
C/O: min. R/T:
C/O: 00 Min.
min.

V: 85 % 80%
Uptime: Uptime:
V: 100 % Uptime:
V: 80 %
80% Uptime:95%
V: 100 % V: 100 %
Uptime:95%
90%
Q:
FTY:
0,010.9
%A 0,80.9
FTY:
Q: %A Q: 0,20.85
FTY: %A FTY:
Q: 1,20.95
%A Q: 0,30.95
FTY: %A
Collect
2 shift
information for 2 shift 2 shift 2 shift 2 shift

Data Box
Example ABC company:
The sequence of the several processes will be drafted after the
first overview has been carried out and the appropriate data will
be added in the proper data boxes.
Data Box: Select Data Attributes
What to measure?
Should support a company’s objectives for the cost, service, and
quality
Should highlight waste
Be flexible
Revise as necessary as the process tasks are defined
Select ones you may already be using
If there is time, seek out some baseline measures
 Data Collection
Attribute Data to Collect
➢ Shipping/Receiving schedules
➢ Pack sizes at each process ➢ C/O (changeover time)
➢ Demand rates by process (Takt Time) ➢ OEE(Overall Equipment
➢ Working hours and breaks Effectiveness)
➢ Inventory Points (location & size) ➢ FTY (First Time Yield)
➢ How Operations are scheduled ➢ Scrap rate
➢ Work-in-process inventory ➢ Defect/Rework Rate
➢ Overtime per week ➢ VA/ NVA Time
➢ Process cycle times ➢ Batch Size/ Pack Size
➢ Number of product variations at each ➢ Distance Traveled
step
➢ Downtime
➢ Batch (lot) sizes
➢ Etc..
➢ Changeover times/frequencies
LEAN GOVERNMENT PROCESS METRICS

FTQ
 Step 4: Map the Material Flow

customer
supplier
18400 pcs /
150 ft coils month
12000 L
6400 R
1Tray = 20 pieces
AZ/S: 480 min
Mo + We

daily

120m 80m 30m 180m 20m 60m

storage
Lager stamping
Stanzen welding
Schweißen welding
Schweißen assembly1
Montage1 assembly2
Montage2 Versand
shipping
I I I II I
I 1 1 1 1 1 I
coils 4600L 1100L 1600L 1200L
1day
1 2400R 600R 850R 640R
coils 2700L
4 days Z/T: 1S
C/T: Z/T: 39 S
C/T: s Z/T:
Z/T: 46
C/T: 46SS
s Z/T:
C/T: 62
62 Ss Z/T: 40 S
C/T: s 1440R

R/T: 60
C/O: 60 Min.
Min. R/T: 10
C/O: 10 Min.
min. R/T: 10
C/O: 10 Min.
min. R/T:
C/O: 00 Min.
min. R/T:
C/O: 00 Min.
min.
V: 85 %
FTY.: 80 % V: 10090
FTY.: %% V:
s. r.:
8080%% V: r.:
s. 100100
%% V:
s. r.:
100 100
%%
Rejt:
Q: 0,01
0,01
%%AA Q: 0,8 % A Q: 0,2 % A Q: 1,2 % A Q: 0,3 % A
AZ/S:480Min
WT/S:480Min AZ/S:480Min
WT/S:480min AZ/S:480Min
WT/S:480min AZ/S:480Min
AZ/S:480Min
WT/S:480min AZ/S:480Min
WT/S:480min
S: 2 S: 2 S: 2 S: 2 S: 2

Example ABC company:

Now the entire material flow from the supplier across the manufacturing to the customer will be added to
the actual map.
The arrows of the material flow symbolize a push-system.
Step 5: Indicate Time Pulse
(Cycle Time, Waiting Time and Lead time)

XYZ AG
customer
Krupp-Stahl
supplier

150 ft coils 18400 pcs / month

12000 L
6400 R
1Tray = 20 pieces
AZ/S: 480 min
S: 2
Mo +
&Mi
We

daily
täglich

120m 80m 30m 180m 20m 60m

storage
Lager Stanzen
stamping welding
Schweißen
Schweißen Schweißen
welding Montage1
assembly1
Montage1 assembly2
Montage2
Montage2 Versand
shipping
I I I I II
I 1 11 1 1 11 I
Coils
Coils 4600L 1100L 1600L 1200L
1200L
1Tag
1Tag 2400R 600R 850R
850R 640R
640R
Coils 2700L
2700L
4Tage 1440R
C/T: 1S
Z/T: 1s Z/T: 39
C/T:
Z/T: 39
39 S
S
s C/T: 46
Z/T: 46 S
s C/T: 62
Z/T: 62 S
s Z/T: 40
C/T:
Z/T: 40
40 S
S
s
C/O: 60
R/T: 60 Min.
min.
Min. R/T: 10
C/O:
R/T: 10
10Min.
Min.
min. R/T: 10
C/O: 10 Min.
min. R/T: 00 Min.
C/O: min. R/T: 00 Min.
C/O: min.
s. r.:
V: 8580
%
%% V: r.:
s.
V: 100
100 90%
%% s. r.:
V: 8080%% s. r.:
V: 100 100
%% V: 100
s.
V: r.:
100100
%%
%
Q: 0,01 % A Q: 0,8 % A Q: 0,2 % A Q: 1,2 % A Q: 0,3 % A
WT/S:480min
AZ/S:480Min WT/S:480min
AZ/S:480Min WT/S:480min
AZ/S:480Min WT/S:480min
AZ/S:480Min
AZ/S:480Min WT/S:480min
AZ/S:480Min
S: 2 S: 2 S: 2 S:
S: 22 S: 2

5 days 7,6 days 1,8 days 2,7 days 2,0 days 4,5 days W/T: 23,6 d
1s 39 s 46 s 62 s 40 s
P/T: 188 s
 Step 6 - Map the Information
Example ABC company:
Flow
Now the entire information flow from the
supplier across the manufacturing to the
customer will be added to the actual map.

forecast forecast
production planning
Krupp-Stahl & -control customer
XYZ AG
supplier faxback daily order
150 ft coils MRP 18400 pcs / month
12000 L
6400 R
1Tray = 20 pieces
weekly production plan AZ/S: 480 min
S: 2
Mo +
&Mi
We

daily
täglich

120m 80m 30m 180m 20m 60m

storage
Lager Stanzen
stamping Schweißen
welding
Schweißen Schweißen
welding Montage1
assembly1
Montage1 Montage2
assembly2 shipping
Versand
I I I II II
I 1 11 1 1 1 I
Coils
Coils 4600L 1100L 1600L
1600L 1200L
1200L
1Tag
1Tag 2400R 600R 850R
850R 640R
640R
Coils 2700L
4Tage 1440R
C/T: 1S
Z/T: 1s C/T: 39
Z/T:
Z/T: 39
39 S
S
s C/T: 46
Z/T: 46 S
s C/T: 62
Z/T: 62 S
s C/T: 40
Z/T:
Z/T: 40
40 S
S
s
C/O: 60
R/T: 60 Min.
min. R/T: 10
C/O:
R/T: 10
10Min.
Min.
min. C/O: 10
R/T: 10 Min.
min. C/O: 00 Min.
R/T: min. C/O: 00 Min.
R/T: min.
s. r.:
V: 8580
%% V: r.:
s.
V: 100
100 90%
%% s. r.:
V: 8080%% s. r.:
V: 100 100
%% s.
V: r.:
100100
%%
Q:
Q: 0,01
0,01 %
%AA Q: 0,8
Q: 0,8 %
%AA Q:
Q: 0,2
0,2 %
%AA Q: 1,2
Q: 1,2 %
%AA Q: 0,3
Q: 0,3 %
%AA
WT/S:480min
AZ/S:480Min WT/S:480min
AZ/S:480Min WT/S:480min
AZ/S:480Min WT/S:480min
AZ/S:480Min
AZ/S:480Min WT/S:480min
AZ/S:480Min
S: 2 S: 2 S: 2 S: 2 S: 2
D/T: 23,6 d
5 days 7,6 days 1,8 days 2,7 days 2,0 days 4,5 days
1s 39 s 46 s 62 s 40 s P/T: 188 s
Example VSM in action
Semi-Weekly
Ship Schedule
Order Entry Process
Incoming Current State - Sept. 2007 MRP MRP
Production
Orders Schedule

Weekly Fax

Review &
Receive Order Check Credit Enter Order Reconcile Order Confirm Order Finalize Order
IN IN IN IN IN IN

Fax FIN MRP MRP Phone MRP

P/T = ½ min P/T = 1 min P/T = 10 min P/T = 1 min P/T =7 min P/T = 5 min
Batch = 4 % Accept = 90% % C&A = 60% %C&A = 75% %C&A = 85% Batch = 1day
hours Batch = 4 hours Batch = 1.6 Batch = 1.6 Batch = 2 hours
hours hours

.5 days .5 days .2 days .2 days .25 days 1 day

½ min 1 min 10 min 1 min 7 min 5 min

Total Lead Time = 2.65 days Total Processing Time= 24.5 min First Pass Yield = 34.4%
 Step 7 – Identify VA & NVA Semi-Weekly
Ship Schedule
Order Entry Process
Incoming Current State - Sept. 2007 MRP MRP
Production
Orders Schedule

What does the customer

Weekly Fax
really need?
Review &
Receive Order Check Credit Enter Order Reconcile Order Confirm Order Finalize Order
IN IN IN IN IN IN

Fax FIN
All orders willMRP be processed MRP Phone
within one hour MRP

P/T = ½ min P/T = of

1 minreceipt (6 P/T
orders
= 10 min processed each hour).
P/T = 1 min P/T =7 min P/T = 5 min
Batch = 4 % Accept = 90% % C&A = 60% %C&A = 75% %C&A = 85% Batch = 1day
hours Batch = 4 hours Batch = 1.6 Batch = 1.6 Batch = 2 hours
hours hours
How often will we check our
performance
.5 days .5 days to customer
.2 days needs?
.2 days .25 days 1 day

½ min 1 min 10 min 1 min 7 min 5 min

Total Lead Time = 2.65 days Total Processing Time= 24.5 min First Pass Yield = 34.4%
 Process Streamlining – Removing
NVA
Eliminate Non-Value Add
Tasks: NVA
 Handling
 Paperwork
 Counting, Issuing, Retrieving  Logging information
 Wait  Checking calculations
 Proofreading  Reviewing and approving
 Inspection and checking  Moving and set-up
 Monitoring work
 Sorting work
 Any type of rework
Analysis Tools to identify
opportunities
Value Analysis
Waste Analysis
Root Cause Analysis
5 Whys
Fishbone Diagram
Fault Tree Analysis
Eliminate, Combine, Rearrange or
Simplify
Design Future State - Purpose

➢ Define how the plant will

operate in the future

➢ Serve as the blueprint for

implementation

Without it, the Current State Map is

nothing more than wallpaper!
 Semi-Weekly
Ship Schedule
Order Entry Process
Incoming Current State - Sept. 2007 MRP MRP
Orders Production
Schedule
Phone
Or WEB
Weekly Fax Rework Over
Stop
walking to Review & Processing
Receive Order Check Credit Enter Order Reconcile Order Confirm Order Finalize Order
the FAX Waste
IN
that’s IN IN IN IN Waste IN

Fax waste!!!
FIN MRP MRP Phone MRP

P/T = ½ min P/T = 1 min

Which steps create
P/T = 10 min
value?P/T =7 min
P/T = 1 min P/T = 5 min
Batch = 4
hours
% Accept = 90%
Batch = 4 hours Which
% C&A = 60%
Batch = 1.6 are waste?
%C&A = 75%
Batch = 1.6
%C&A = 85%
Batch = 2 hours
Batch = 1day

hours hours

.5 days .5 days .2 days .2 days .25 days 1 day

½ min 1 min 10 min 1 min 7 min 5 min

460 minutes Total Lead Time = 2.65 days

Takt Time = = 10 minutes/order Total Processing Time= 24.5 min
46 Orders First Pass Yield = 34.4%
 Semi-Weekly
Ship Schedule
Order Entry Process
Incoming Current State - Sept. 2007 MRP MRP
Orders
On-Line Production
Schedule

Order Entry How can we flow work with

Weekly Fax
fewer interruptions?
Review &
Receive Order Check Credit Enter Order Reconcile Order Confirm Order Finalize Order

IN IN IN IN IN IN

Fax FIN MRP MRP Phone MRP

Link FinanceP/T = 10 min Auto

Finance
P/T = ½ min P/T = 1 min P/T = 1 min P/T =7 min P/T = 5 min
Batch = 4
hours
/ MRP %Batch
% Accept = 90%
Batch = 4 hours
C&A = 60%
= 1.6
%C&A = 75%
Batch = 1.6
%C&A = 85%
Confirm Batch = 1day

Cross Train hours hours

Batch = 2 hours

.5 days .5 days .2 days .2 days .25 days 1 day

½ min 1 min 10 min 1 min 7 min 5 min

Total Lead Time = 1.25 days

Takt Time = 460 minutes NEW Total Processing Time= 11.5 min
= 10 minutes/order
METRICS!
46 Orders First Pass Yield = 90%
Continuous Improvement through
VSM

Current Identify
state waste

Continuous
Measure Incremental
Improvement Future
&
state
Adjust

Implement

62
 Order Entry Process
Incoming Future State - Sept. 2007
Orders
Semi-Weekly
Ship Schedules

MRP Schedule
MRP
Phone / Web Production
Production
via
Schedule
FG Kanban

Receive / Credit
Check / Reconcile Implement
Confirm
Kanban

Kanban will:
MRP/FIN ✓Schedule Production to real time demand.
✓Optimize (level) and Control Inventory.
✓Link Production to Customer Demand.
P/T < 10 min
% accept = 90%
Batch = 1

How can we control work between interruptions?

 Order Entry Process
Incoming Future State - Sept. 2007
Orders
Semi-Weekly
Ship Schedules

MRP
Phone / Web Schedule
Production
via FG Kanban
Receive / Credit
Check / Reconcile
Confirm

I.T. Link to Shipping

MRP/FIN Order Entry Direct Training
P/T < 10 min Schedule
% accept = 90%
Batch = 1
Shipping

If FG Kanban is implemented what improvements can be

made to Shipping?
 Order Entry Process
Incoming Future State - Sept. 2007
Orders

MRP
Phone / Web Schedule
Production
via FG Kanban
Receive / Credit
Check / Reconcile
Confirm Shipping

MRP/FIN

P/T < 10 min

% accept = 90%
Batch = 1
Total Lead Time < 10 Minutes
Future State Metrics! Total Processing Time < 10 Minutes
First Pass Yield > 90%
Step 10: Improvement Activities to achieve the
future state

A Yearly Value Steam Project Pipeline

Value Stream Managers

Each Value Stream Needs a Value Stream

Manager
Process 1 Process 2 Process 3
Customer

For product ownership beyond

Kaizen functions
Assign responsibility for the future state
mapping and implementing lean value streams
to line managers with the capability to make
change happen across functional and
departmental boundaries.
Value stream managers should make their
The Value progress reports to the top manager on site.
Stream
Manager
 Present State Value Stream Map

Value Stream Mapping

 The Process Box

• Indicates basic production process.

• One box for each major material flow, not for each
processing step.
• Process disconnection and inventory accumulation are
indicators of where processes are separated.

Value Stream Mapping

 The Data Box
• The Data Box stores process information
- Cycle Time (C/T). Rate at which a part or product is completed by a process.
- Changeover Time (C/O). Amount of time to switch from one product type to another.
- Uptime. Measure of machine use (100% = Always running).
- Every Part Every (EPE). Measure of batch sizes and changeover cycles.
- Available Work Time. Per shift of a process (in seconds, minus break, meeting, and
cleanup times.)
- Quality Level. % First time yield.
- Number of Operators. Required personnel for a process.

Value Stream Mapping

Inventory Triangle and Push Movement Arrow

• An Inventory Triangle captures the location and amount

of inventory
• A striped arrow indicates a Push movement of inventory
according to a predefined schedule

Value Stream Mapping

 Lead Time Bars

• Lead time indicates total time for a process or series of

process.
- Production/Manufacturing Lead Time (MLT). Lead time through entire production.
- Process Lead Time. Lead time though each process, including time in inventory.
Calculated as inventory quantity divided by daily customer requirement.
- Processing Time = Value Added Time. Actual time spent processing the part or
product.
- Used to highlight inefficiencies

(7000 pcs)/(28400 pcs/month)x(20

workdays/month)
Value Stream Mapping
Present State Value Stream Map

Value Stream Mapping

 Establish Takt Time
• Synchronizes pace of production to match pace of sales.

Takt Time = Demand Rate

Takt Time = Work Time Available
Number of Units Sold

Takt Time = 900 Seconds = 10.6 Sec/Board

85 Boards
Cycle Time
Takt Time = Minimum # of People

GOAL: Produce to Demand

Value Stream Mapping

 Supermarket Pull System

• Used to control production where continuous flow does not extend upstream.
• Example Reasons for Supermarkets:
- Process that operate at very fast or slow cycle times and need to change over to serve multiple
product families
- Some processes, such as those at suppliers, are far away and shipping one piece at a time does
not make sense.
- Some processes have too much lead time or are too unreliable to couple directly to other
processes in a continuous flow.

Value Stream Mapping

 Pacemaker Process

• A pacemaker process is single point in the manufacturing value stream that sets the
production pace for the entire process.
• The pacemaker process is frequently the most downstream continuous-flow process.
• On the future-state map, the pacemaker process is the production process that is
controlled by the outside customer’s orders.
• Load-leveling means
distributing the
production of different
products evenly over a
time period, creating a
product “mix”.
• The schedule should
create an “initial pull” by
releasing and withdrawing
a small, consistent
increment of work, called
the “Pitch”.

Value Stream Mapping

 Load Leveling and Paced Withdrawl

• Load-leveling means
distributing the
production of different
products evenly over a
time period, creating a
product “mix”.

• The schedule should

create an “initial pull”
by releasing and
withdrawing a small,
consistent increment of
work, called the
“Pitch”.

Value Stream Mapping

Future State Value Stream Map

Value Stream Mapping