The Lean Enterprise

Value Analysis/ Flow Analysis

Lean Foundations
Continuous Improvement Training
The Causes of Waste in most Processes
Focus on
Types of Waste Problems/ Causes
reduction (7W’s)
Value Incorrect layouts
Waste
Added Lack of proximity of machines
Motion Off-line resources

People
Waiting workers, machines, materials
Long set-ups and lead times
Waiting time
Non- Value Added, Large batches, raw material stocks
High WIP, finished goods stocks
but necessary Overproduction Making for the sake of it
Ignoring customer demands
Process

Long cycle times- process, itself

Processing time Reduced efficiency- over processing
High overall lead times

Defects Long delays for rectification

Costly rework
Dissatisfied customers
Inspection Approvals of approvals
Product

High number of verification steps

Reliance- Mass inspection techniques
Transportation
Unnecessary movement
Extra handling

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Value Analysis
Overview
Overview
Methodology For Reducing Muda
(waste)

Value-Added Flow Analysis (VA/ FA)

 A Group of Practices (using rigor and discipline)
which evaluates the individual steps or activities
in a process to determine if they ‘add value’ to
the output

– VA/ FA can be used to improve the process or

aid in the creation of a new process

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Definitions
Definitions
 Value Added
– Any activity or operation performed that helps transform a product or
service from its raw state into its finished form.
– Completed right the first time.
– Any activity customer is prepared to pay for. Activity required to ensure
that a product or service is delivered in conformance to specification.

 Non-Value Added
– Any activity that doesn’t help to transform a product or service into its final
form. Activity not performed right. Activity customer not willing to pay for.
– This includes:
 Unnecessary process steps
 Movement of inventory, paperwork, etc.
 Re-work, corrections, etc.
 Storage between operations, batching inventory
 Queue –
Wait times, delay times, idle times (reference: Time-Value Analysis )

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VA/
VA/ FA
FA Steps
Steps

 Step 1
– Define and describe process to be analyzed
• Project charter
• Clearly define goals
• Cost benefit analysis
• Signatures – Champion, Controller, Belt
(minimum)
• Time Frame for completion

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VA/
VA/ FA
FA Steps
Steps

 Step 2
– Map the process and determine major and
minor activities
– Start with the customer
• Customer – receiving department of an output,
the next person in line, or the (external)
Customer
• Conduct detail inquiry of what occurs
• Use investigative questions

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VA/
VA/ FA
FA Steps
Steps

 Step 3
– Identify value-added activities or processes
– Utilize investigative questions
• What does it do?
• Why does it work?
• What must it do or accomplish?
• How does it relate to other systems, units, or
components?
• What requires this step to be done?

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VA/
VA/ FA
FA Steps
Steps

 Step 4
– Calculate the time spent on value-added
activities or processes (Value Stream Map)
– Spread Sheet Analysis (VA to NVA ratios)
– Time-Value Analysis

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Value Analysis
Investigative
Investigative Techniques
Techniques
VA/
VA/ FA
FA Questions
Questions

 DECISION POINTS
– Does the decision point represent as
appraisal, a review, or an inspection which
could be eliminated if prevention were built
into the process at an earlier point?
– Is this a necessary decision or can the
process proceed without a decision here?
– Is there repetition of decision within the
process?

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VA/
VA/ FA
FA Questions
Questions

 VALUE ADDED
– Does each activity within the process add
value to the output, the product, or service
which the customer receives?
– Is the activity necessary to meet the
customer’s requirements and expectations?
– Would the customer be willing to pay for
that step of the process if the customer
knew it existed?

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VA/
VA/ FA
FA Questions
Questions
 ACTIVITY FLOW
– Does the process move frequently back and
forth between various units of the
organization?
– Can any of these movements be eliminated?
 DUPLICATION OF ACTIVITY
– Are some of the activities duplicated or
repeated?
– Can any activities be removed from the
process while meeting the customer’s valid
requirements for outputs?
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VA/
VA/ FA
FA Questions
Questions

 TIME REQUIRED
– What is the time required for each of the
steps or activities within the process?
– Can the time be shortened for any of the
steps or activities?
– Is unnecessary time wasted on
transportation, storage, or delays?
– How much time is used between activities?
– Can time activities be reduced?

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VA/
VA/ FA
FA Questions
Questions
 MATERIALS
– Are the supplies and materials used in this
activity effective?
– Have new materials been developed that
would perform the function at less cost?
– Has there been any price, delivery, or
quality problems?
 TECHNOLOGY
– What is the cutting edge?
– Is there related technology which could be
adapted to improve this process?
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VA/
VA/ FA
FA Questions
Questions
 PROCESS USERS
– Why are you doing this?
– What document controls this activity?
– How were you trained?
– Was the training adequate?
– How do you know you are performing the
activity correctly?
– Where do you get the inputs you need to
perform this activity?
– What types of errors come to you?
– Do you have any problems related to this?
– What makes the job difficult?
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VA/
VA/ FA
FA Best
Best Practices
Practices

 KEY POINTS
– ASK the person if they have any
suggestions on how to improve to process!

– Value can be viewed as a relationship of

functionality or effectiveness over cost

VALUE = Functionality
Cost

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VA/
VA/ FA
FA Best
Best Practices
Practices

 KEY POINTS

– The VALUE of the output can increase by either

reducing costs or by increasing effectiveness

– EVALUATE alternatives based on their impact on

both efficiency and effectiveness

– Achieving a minor increase in functionality at a

major cost is not justified

– A major increase in functionality with a minor cost

could be acceptable
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Value Engineering
Overview
Overview
VA/ VE = Continuous ‘Cost’ Improvement
Attacks the Total Cost of Producing a New Product

Manufacturing Part Assembly Overhead

Costs = Costs
+ Costs
+ Tooling
Costs
+ Overhead Costs

Part Costs
• Material
• Finishing
Assembly Costs
• Design
 Assembly Time
 Parts Handling
• Dimensions & Tolerances Tooling Costs
• Tooling Type
 Levels of Assembly
• Volume
• Process
 Labor Rate
• Process
• Volume
 Volume
• Tooling Material
• Standardization
 Design
• Dimensions & Tolerances
• Packaging
 Standardization
• Standardization
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Approach for Reducing Costs

Design for Assembly (DFA)

 A Group of Practices which Minimizes
Manufacturing Costs
– Minimize the Number of Parts
– Avoid Separate Fasteners
– Establish Assembly Surfaces
– Eliminate or Simplify Adjustments
– Reduce Handling

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Design for Assembly Benefits

 Fewer Drawings
 Less Assembly
 Less Handling, Inventory
 Less Inspection
 Improved Quality (Fewer Problems)
 Less Purchasing

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Methodologies for Reducing Waste
Value Engineering
 Occurs During the Design
Process. Value Analysis
 Examines the Function of  Occurs on After the
the Design.
Design has been
 Documents the Cost of Completed or on
Each Function.
 Explores Alternatives for Carryover Products.
how the Same Function can
be Provided at a Reduced
 Existing Designs are
Cost. Evaluated to Increase
 Maintains the Focus on Function or Reduce
Customer Satisfaction. Cost.

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 The Lean Enterprise
Value Analysis/ Flow Analysis

Lean Foundations
Continuous Improvement Training