Learning To See:

Making Value Flow

…From End to End

John Shook
April 2012
 What is “LEAN”?
MIT International Motor Vehicle Program
– Toyota Production System as “LEAN Production”
 Flow production from Ford
 PDSA from Deming
 Toyota’s JIT system dynamics and supply chain
design
 Toyota’s engagement of people to build in quality
and solve problems for continuous kaizen
 Management System
o A highly developed socio-technical system
• With focus on system and people
development
Lean Thinking, Lean Practice,
Lean Value Streams
A simple definition:
Develop people, process, and
systems to meet customer
need while consuming the
fewest possible resources.
 Automobiles: A Century of
Value Stream Challenges
• Reliable, affordable personal mobility
• Ford Model T and Highland Park
• Transportation fashion
• GM: a car for every wallet
• Transportation fashion and affordability
• Toyota flow with variety
• Globalization
• Diffusion of TPS and TMS
• Environmental sustainability
• The next frontier – Toyota with a slight lead…
 The Problem of Production

• What’s most difficult often isn’t making

the product.
• It’s organizing all the parts and materials
that go into it.
 The Problem of Production

In the case of cars:

• 20-30,000 parts must come together at exactly
the right time once per minute.
• Almost all parts are engineered specifically for
each model of car.
• Most cars are unique.
 End-to-End Flow
The Ford Model T Value Stream
A Value Stream as One Giant Conveyor
 Ford Production at the River Rouge
Giant Conveyors for “Ore to Assembly”
15 million sq. ft.
100,000 workers
100 miles of railroad track
15 miles of roads

120 miles of conveyors.

6000 suppliers
The Rouge 1932 – Choked by Complexity
 MASS PRODUCTION

“B
”

Body Paint Assembly

Stamping
B B B B B B B B B B
B

Sub-Assy
B

= Storage
Supplier Supplier Supplier
= Push

Suppliers
 MASS PRODUCTION
with Diverse Customers
C?

A!

Body Paint Assembly

Stamping
C C A A B B B B B B
B

Sub-Assy
B

= Storage
Supplier Supplier Supplier
= Push

Suppliers
The Problem of Production - Cars
6.2%

9,544 SPECIFICATION SETS

1,280 SPECIFICATION SETS

76,745 VEHICLES
(50%)

51 - 50-31 30-11 10-4 2-3 1 VEHICLE / 1 SPECIFICATION

ONE TYPICAL MONTH’S TOTAL SPECIFICATION SETS: 19,349

 LEAN PRODUCTION Customer
Pr. Control Requirements

LEVELING “B?
”
A
Stamping Body Paint Assembly
C B A B B C A B B C B
A

Sub-Assy
C
(sequenced)

Suppliers
=Pull

= “Supermarkets”
 Built-In Quality

High Cost

Ability to find
Low root cause

In-Process Next Process Final Inspection Customer

Location of Defect Detection
 One Piece Flow
To produce an order of ten products that is processed
through three steps, batch & queue versus one piece flow

Process A Process B Process C

Lead Time: 30 ++ minutes for total order

CONTINUOUS FLOW “make one, move one”

Lead Time: 12 minutes for total order

 People Development
Capability development in solving problems
and making improvements

Problem-solving

Problem-solving

Problem-solving
 Short Lead Time

– Get each process to produce only what the

next process needs when it needs it.
– Orchestrate (control, manage, regulate)
operations to get ever closer to this ideal, ever
shortening the lead time.

ORDER CASH

“All we’re trying to do is shorten the time line…”

Taiichi Ohno
Value Stream Improvement and
Process-step Improvement
VALUE STREAM

PROCESS PROCESS PROCESS

Stamping Welding
Assembly
Cell

Raw Finished
Material Product

The Three Value Streams: Order to Delivery

Concept to Launch
Lifecycle Maintenance
WASTE

21
Total System Efficiency

22
 Lean Transformation
Some Lessons Learned
Techniques System Thinking
•Selecting the tools we like
is not enough

•The tools comprise a system

•A way of thinking underlies the

tools and the system
cartoon copyright © U of M

Learn the thinking through doing

 Lean Thinking
Womack and Jones:

• Specify value from the standpoint of the customer.

• Identify the value stream for each product/family –

from concept to launch & order to delivery – and
remove the wasted steps (the muda).

• Make value flow.

• At the pull of the customer.

• Strive continually for perfection.

What is Value Stream Mapping?

– A tool to display flow of material and

information of a business process
through all the steps (value creating
and not) as it moves from beginning
to end.
– A process to align a team around a
target condition, a Future State, for
that value stream and plan to achieve
it.
Current State Map

26
john shook
Future State Questions
VALUE STREAM VISION
•What is the Takt Time?
(How do you understand customer demand?)
• Where can you flow?
• Where should you pull?
• At what single point in the production
chain do you trigger production?
• How much work do you trigger and take away?
• How do you level the production mix?
PROCESS KAIZEN to Support the Value Stream Vision
• What process improvements are necessary?
(reliability, quick changeover, etc.)
 Takt Time
Matches Pace of Production with Pace of Sales

Operating Time per Shift

Takt Time =
Production Requirement per Shift

450 minutes 59 sec.

= 59 sec
460 pieces 59 sec.

59 sec.
Set the Pacemaker Process
 Pull System
Rules:
Following processes go to preceding processes and
withdraw the amount need when they need it.
Preceding processes replenish exactly what is taken away.

Withdrawal
Production
Kanban
Kanban
Preceding Following
Process Process
New Needed
Product Product

Supermarket
 Pull System
Assumptions:
• Production schedules will always change
• Production will never go according to
schedule, anyway

Withdrawal
Production
Kanban
Kanban
Preceding Following
Process Process
New Needed
Product Product

Supermarket
 What is Your EPEX?
Every Part Every Week
Monday 400A
Tuesday 100A, 300B
Wednesday 200B, 200C
Thursday 400C
Friday 200C, 200A

DANGER:
Every Part Every Day Kanban
Tsunami
Monday:
140 A, 100 B, 160 C

Monday Every Part Every X (EPEX)

20 A 10 C 20 A 10 C 20 A 10 C 20 B 10 A
20B 20 A 20 B 20 A 20 B 20 A 20 C 20 B
10 C 20 C 10 C 20 C 10 C 20 C 10 A 20 C

How do you want to run your operations?

Why?
Frequent Movement of
Small Quantities
Future State Map

Takt Time = 58

<5d
Future State Questions
VALUE STREAM VISION
•What is the Takt Time?
(How do you understand customer demand?)
• Where can you flow?
• Where should you pull?
• At what single point in the production
chain do you trigger production?
• How much work do you trigger and take away?
• How do you level the production mix?
PROCESS KAIZEN to Support the Value Stream Vision
• What process improvements are necessary?
(reliability, quick changeover, etc.)
 Lean Transformation
Some Lessons Learned
Techniques System Thinking
•Selecting the tools we like
is not enough

•The tools comprise a system

•A way of thinking underlies the

tools and the system
cartoon copyright © U of M

Learn the thinking through doing

Fujio Cho of Toyota:

“Production Control”

“When you try to apply TPS, the first thing you

have to do is to “even out” or level the
production flow. And that is the responsibility
primarily of production control.”
 Role of Production Control

1. Interface between customer

requirements and company capability .
2. Must satisfy both sales and
manufacturing.
3. Must be very strong.
 The challenge of any business:
Matching capability with demand

MUDA (Excess)

Capability

Demand
MURI (Overburden)

MURA (Instability) •Know your demand

•Know your true capability (capacity)
Management
•Create flexibility to get them to match

TIME
39
 System Design to Control the 3 M’s

MUDA = Waste

MURI = Overburden

MURA = Variation, fluctuation

1. Design the system with sufficient capacity to

fulfill customer requirements without
overburdening people, equipment, or methods.
 System Design to Control the 3 M’s

MUDA = Waste

MURI = Overburden

MURA = Variation, fluctuation

1. Design the system with sufficient capacity to

fulfill customer requirements without
overburdening people, equipment, or methods.
2. Reduce controllable variation/fluctuation to a
bare minimum.
 System Design to Control the 3 M’s

MUDA = Waste

MURI = Overburden

MURA = Variation, fluctuation

1. Design the system with sufficient capacity to

fulfill customer requirements without
overburdening people, equipment, or methods.
2. Reduce variation/fluctuation to a bare minimum.
3. Eliminate sources of waste!
 MURI - Overburden

Lead
Time

0 % Utilization 100
MURA – Fluctuation, Variation

“Variability will be buffered by some

combination of inventory, capacity and time.”
- Hopp and Spearman,
Factory Physics

 This is true for any kind of capacity, not

just factory equipment, e.g. people in
product development.
 What is a system?
• “A network of interdependent
components that work together to try
to accomplish the aim of the system.”
- W.E. Deming

45
 What is a system?
•A process (or network of processes) with
inputs, outputs and a feedback loop that
enables adaptation. That’s what an Material
& Information Flow system is.
•Value Stream Mapping, used fully and
properly, does much more than simply
identify waste to eliminate. VSM is a tool &
process to design lean value creating
systems.
46
Lean Thinking, Lean Practice,
Lean Value Streams

A simple definition:
Develop people, process, and systems to
meet customer need while consuming
the fewest possible resources.