LEAN MANAGEMENT :

Value Stream Mapping (VSM)

Transformation . Innovation . Partnership

 TENTATIVE PROGRAM – Day 1
TIME No ACTIVITIES
9.00 am – 1.00 pm Ice Breaking
Introduction on MPC
1. Introduction to Lean Management System
• What is Lean?
• Lean Thinking
• Lean Principles
2. Types of waste
3. Value Added and Non Value Added
Exercise 1 – Identify VA & NVA
4. Lean Method ; Value Stream Mapping
• What is Value Stream Mapping (VSM)
• Why VSM is important tool
• VSM Step – Current State & Future State
• Components of VSM
5. VSM; Step by step
Getting Started
Exercise 2 - Group Activities : Identify project

1.00 pm – 2.00 pm Lunch

2.00 pm – 5.00 pm 6. Phase I - Current State VSM
10 Step in implementing VSM

Exercise 2 - Group Activities : Step 1-7

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 TENTATIVE PROGRAM – Day 2
TIME No ACTIVITIES
9.00 am – 1.00 pm 7. Phase II - Current State VSM with Opportunities
Step 8 – Identify opportunities through: Kaizen Blitz and Burst

Exercise 3 – Group Activities : Step 1 – 8

8. Phase III - Future State VSM

Step 9 - Create future state VSM
Step 10 - Kaizen action plan

1.00 pm – 2.00 pm Lunch

2.00 pm – 5.00 pm 9. What make Value Stream Lean? 8 Rules

Exercise 4 – Group Activities: Project Presentation

Action Plan
Conclusion

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INTRODUCTION ON MPC
 SEJARAH MPC

1962 1991 2008-until now

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 MPC HQ & Regional Office
MPC Pejabat Wilayah
Kelantan

MPC Wilayah
Sabah

MPC Wilayah MPC Pejabat Wilayah

Utara Terengganu

MPC Wilayah
MPC Pejabat Sarawak
Wilayah Pantai
Timur

MPC Ibu Pejabat, P. Jaya

MPC Wilayah
Selatan

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 VISION
The leading organisation in productivity enhancement for
global competitiveness and innovation

MISSION
To deliver high impact services towards achieving
performance excellence through innovation for the betterment
of life

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 OBJECTIVES MPC

• Providing value-added information on productivity,

quality, competitiveness and best practices through

research activities and databases.
• Developing human capital and organisational excellence

for building a knowledge-based society through training,

systems development and best practices.
• Nurturing innovative and creative culture for

productivity and competitiveness through partnership

programmes.

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 FUNCTION MPC
ENTERPRISE
INNOVATIO
N
BUSINESS
EXCELLEN
CE

REGULATO
RY
REVIEW

KNOWLEDGE
KNOWLEDGE
MANAGEME
MANAGEME
NT
NT

GLOBAL
COMPETITI
V-ENES

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MPC LEAN- QE HIGH IMPACT ROAD MAP

5S + KAIZEN +
LEAN MANAGEMENT
5S + KAIZEN
Specific Continuous
5S
Improvement
of the Technique/
Continuous Improvement
Technique / Practices used Practices used
of the Technique/
to Establish and Maintain in Existing 5S System
Practices used
Quality Environment Especially in Quality and
in Existing 5S System
in Organization Product Delivery

 Clean and conducive  Increase profitability.

work place.
 Save cost and more saving.  Well developed an excellent
 Proper storage and culture/ which conform to
management of  Practice correct working International Culture.
documentation. culture.
 More facilities and rewards
 Well maintained tools  Improve work productivity to staff.
& equipments. and products quality.
 Solid customer confidence &
 Developing responsible  Customer happiness. trust/more order.
and accountable
attitude.  Respectable organization.

DEVELOPMENT CULTURE HIGH IMPACT

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 MPC’s PROGRAM on LEAN
1. MPC WPT sebagai CoE Pengurusan ‘Lean’
2. Misi Pembelajaran Antarabangsa
3. ‘Lean Hands-on Workshop’
4. Program Peningkatan Produktiviti & Inovasi
5. Projek Pembangunan Sistem
6. Pengiktirafan ‘Lean’
7. Portal ‘Lean’ – www.leanmpc.com
8. Mewujudkan ‘Lean Database’

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 Objectives Program
This module aims to provide :
 Understanding Lean concept
 Fundamental guidelines in implementing Value Stream
Mapping
 Demonstrate Value Stream Mapping as a tool to support
Lean implementation

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 Introduction to
LEAN MANAGEMENT SYSTEM
 WHAT IS LEAN?

Lean refers to a collection of principles

and methods that focus on the
identification and elimination of non-
value added activity (waste) in any
process
James Womack, Daniel Jones, and Daniel Roos coined the term “lean” in their 1990 book The Machine that Changed the World to describe
the manufacturing paradigm (often referred to as the Toyota Production System) developed by the Toyota Motor Company based on
principles pioneered by Henry Ford.

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 LEAN THINKING
(by Father of Lean)

“Lean enable the production and delivery of the

right amount of high quality products and service
(as defined by your customers) at the right time at
the first time while minimizing waste and being
open to change…”

Taicchi Ohno
Father of TPS, Kanban
Production Engineer Toyota

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 LEAN THINKING

“LEAN IS… A mindset, or way of thinking, with a commitment to

achieve a totally waste-free operation that’s focused on your
customer’s success….
It is achieved by simplifying and continuously improving all
processes and relationships in an environment of trust, respect
and full employee involvement….
It is about people, simplicity, flow, visibility, partnerships and
true value as perceived by the customer.”

David Hogg
High Performance
Solutions

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 LEAN & TPS HOUSE
Lowest Cost

VALUE STREAM
POKA YOKE
MAPPING (VSM) Highest Quality Shortest Lead Time

SPAGHETTI ANDON
DIAGRAM
5S
TAKT TIME
VISUAL
KANBAN
CONTROL
SMED/OEE Standards
Customer First Genchi Genbutsu

Safety Stability
Respect for Humanity
Process of making continuous improvements
in both your personal and work life. KAIZEN
The direct translation is KAI = CHANGE and ZEN = GOOD.
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 LEAN HOUSE
Single Lean System
Piece KANBAN ANDON
Flow Efficient use of:
 People  Improve process Built-in
Just-In-
capability Quality
Time  Equipment (Jidoka)
 Minimize variation
 Material
Pull TAKT  Manage abnormality
 Space POKA
System Time YOKE

Workload Leveling (Heijunka)

SMED Stable & Standardized Processes
Visual Management System VSM

HEIJUNKA
Multi Skills Visual Level
Standardize
Work
5S Workers Control Schedule

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 WHY IS LEAN?

1. Lean focuses on the related

process
2. Lean has a measurable impact
on time, capacity, and
customer satisfaction.
3. Lean involves employees.

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 5 PRINCIPLES OF LEAN THINKING

1. Identify Customers and

Specify Value
2. Identify and Map the
Value Stream
3. Create Flow by
Eliminating Waste
4. Respond to Customer Pull

5. Pursue Perfection

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 LEAN TOOLS

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 LEAN IN GOVERNMENT

The “Lean Method” Approach to

Performance Excellence
Super-factory or Super-Government with Lean
Transformation . Innovation . Partnership
 Why Government MUST embark on Lean?
Government faces economic difficulties and rising cost in
recent years. This is further impacted with:
 Country revenue have not rebounded
 Federal funds and reserves will won’t last forever
 Rising administration cost year after year
 Inefficiencies in handling projects or
 Inefficient process flow
 Borrowing and Loans is in the increasing trend
 Other cost cutting measure is taken and ongoing

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Efficient and effective Lean Services or Manufacturing can be achieved…Why?

Government or manufacturing sector is under

increasing pressure to:
 Reduce waste or NVA
 Reduce costs and expenses
 Expand services with less resources (effective and efficient
service)
 Improve processing time (improve cycle time)
 Increase productivity (remove non-value added activity)
 Improve quality of services (less mistake)
 Meet customer satisfaction and expectations

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What make Lean so promising in service and manufacturing sector?

A customer-driven waste reduction technique that:

 It focus and examines on current process or operations
 It improves efficiency by decreasing process time or Cycle
time.
 Produces a product or service to the “beat” of customer
demand
 Measures impact on time, capacity and customer satisfaction
 Initiates organizational change by involving employees
participations
The relentless pursuit of waste.

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TYPES OF WASTE
 Focus to reduce the 8 Types of Waste
(Sources of Non-Value-Added Activity)
2. Over production 5. Transportation 6. Inventory

8. Over processing

7. Motion
1. Defects, Rejects, Rework

3. Waiting
4. Talent & miss-use of resource

Transformation :: Innovation :: Partnership

 1. Defects

 Anything that has to be redone, incomplete or incorrect. Employees

probably know what work often has to be redone Incorrect or
incomplete work delivered to the next process (the customer)
 Results in rework
 Causes of defects:
 Weak process control
 Incorrectly processed order
 Inadequate education/training/work instructions
 Misunderstanding of customer needs

Transformation :: Innovation :: Partnership

 2. Overproduction

 When too much or more of something is produced (e.g.,

information) or when something is produced too early and faster,
while the downstream customer (internal or external) waits for
something else.
 Leads to excessive inventory
 Causes of overproduction
 Generating reports that are not needed
 Emails sent to people who do not need to receive them
 Misuse of automation
 Long process setup
 Unbalanced work load

Transformation :: Innovation :: Partnership

 3. Waiting

 Waiting for anything – people, task, paper, signatures, approvals,

etc. This idle time is created when waiting for invoices, copier,
parts, materials, machines, information, signatures, help,
approvals, special task, etc.
 Lead to time waste which is money / cost
 Causes of waiting:
 Unbalanced workload
 Too few office machines
 No clear office protocol
 Upstream quality problems
 Waiting for a signature approval

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 4. Not using employees

 Failing to take advantage of employees’ skills. For example,

does management seek out their ideas for improvement or put
them in correct task? If so, do they act on them?
 The waste of not able to use people’s Abilities, Skill and
Knowledge (ASK) in appropriate place and time.
 Causes of underutilized people:
 Old way of thinking, politics, the business culture
 Poor hiring practices
 Low or no investment in training
 Low-pay, high-turnover strategy

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 5. Transportation
 Transporting time of documents and materials around the office
until the next step. There is an opportunity for the process to
break as work gets lost, misunderstood, etc. Minimizing the
number of touches in a process is can make a process lean.
 Movement of people that does not add value to the product or
service
 Causes of transportation waste:
 Poor office layout
 Processing extra paperwork
 Office processes that are not located near each other
 Poor understanding of the process flow
 Large batch sizes
 Large storage areas

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 6. Inventory/backlog

Not just an abundance of supply, but also a backlog of work that leads to even
greater waste as workers must spend time and effort managing and working
around the backlog
Any supply in excess of one-piece flow
- Often the result of “Overproduction”
- Unbalanced workload
- Improper scheduling
- Unreliable suppliers
Examples:
- Finished Good Inventory
- Work In Process Inventory
- Supplies Inventory
- Staged or “kitted” Inventory
Solutions:
- Make to Customer Order
- Kanban Pull System
- Eliminate Inventory Storage Areas
- Identify bottle-neck or Use TOC

Transformation :: Innovation :: Partnership

 7. Motion

 Excess motion on the part of the worker. For example, a poor office
layout might require a worker to spend too much time walking
between one point to another point where work equipment is located.
 Movement of people that does not add value to the product or
service. It is a waste in time and effort.
 Causes of motion waste
 Poor people/machine effectiveness
 Poor office layout
 Inconsistent or no standardized visual work instructions
 Poor workplace organization and housekeeping
 Extra “busy” movements while waiting

Transformation :: Innovation :: Partnership

 8. Excess processing
 Extra steps or processing that does not add value, from the
customer’s perspective (e.g., obtaining too many signatures or
double- or triple-checking of work, extra testing).
 Effort that adds no value to the product or service from the
customers’ viewpoint. Customer is not paying for the waste…The
organization cost will increase.
 Causes of extra processing:
 Product changes without process changes
 True customer requirements undefined
 Lack of communication
 Redundant approvals
 Emails sent to everyone

Transformation :: Innovation :: Partnership

 T1- Set up Reduction Time
The 4 Key Principles involved are

 External Activities
 Internal Activities
 Parallel Activities
 Streamline internal Activities

You
Approx. 15 mins. F1 Formula- 8 sec. !!!
Transformation :: Innovation :: Partnership
Transformation :: Innovation :: Partnership
Example of Mistake proofing

Without mistake proofing, we can

have a mistake with irreversible
damages

With mistake proofing, error is not

possible

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 One Piece Flow - Order entry - Before

Batch
Open Orders Calculate
Mail
Batch Total

Stack and
Hold Enter
Acknowledge
Batch
Orders

File
Batch

Transformation :: Innovation :: Partnership

 One Piece Flow - Order Entry – After

Enter
One
Open One Order
Envelope

File
Order
Acknowledge
One Order

Transformation :: Innovation :: Partnership

 T7 - Process Mapping / VSM?
What is a Process Mapping?: A visual representation of the flow of work in a
series of steps showing the path of a process and the relationship between
the steps.

Versions of a Process Map

1. What you think it is...

2. What it actually is... 3. What you would like it

to be...

Transformation :: Innovation
Adapted from::Product
Partnership
& Process Innovations, Inc.
 Steady Velocity - VSM
Traditional: Batch Production (like a meandering stream with many stagnant pools, waterfalls, and eddies)

When do we get our Parts? 2 WEEKS!

FLOW: One Piece Production: Pipeline with fast-flowing water or product

The right Job and it must keep moving

Transformation :: Innovation :: Partnership

 TS - Example in Service Sector
 Immigration Department – Online Vs Conventional method in
International passport application.
 Cycle time reduce from week to hours

 Prevent queuing

 High customer satisfaction

 JPJ Department – Online Vs Conventional method in driving license
renewal.
 Cycle time reduce

 Prevent queuing

 High customer satisfaction

 Banking Sector – Online / Internet banking or ATM Vs Conventional
methods.
 Security services – Manual guard service Vs security camera and alarm
system (few areas can be monitored by one guard using CCT.

Transformation :: Innovation :: Partnership

 What is Waste Service sector?  

Examples of Waste:
 Document errors
 Document transport
 Completing work not needed
 Process steps, reviews and approvals
 Waiting for the next step
 Searching for information
 Backlogs
 Behaviors

Developed by Products & Process Innovation, Inc. – following the Taiichi Ohno Model

Transformation :: Innovation :: Partnership

 How is it Done?
 Must obtain management commitment 
 Make employees aware of what Lean is - Identify a
process/procedure to be “Leaned” 
 Build employees desire to participate in Lean - Establish a
Lean team (include people who do the work) 
 Give them knowledge about how to participate - Use
Brainstorming/Process Mapping to identify “bottlenecks” and
areas for improvement in day to day work
 Implement customer-driven waste reduction techniques 
 Evaluate the results and make further improvements 
 Reinforce the change - Continue to find additional Lean
projects within the unit
Transformation :: Innovation :: Partnership
 Barriers to Lean's Success
(Why do some LEAN events ‘Fail’)
 The industrial jargon is a turn-off – Have impression that it cannot be
implemented in Government / Service sector
 Executives generally don’t focus about operations - Lack of alignment around
improvement strategy
 Unrealistic Expectations - The emphasis of Lean is on the wrong thing. Lack
of understanding or missing skills
 Difficult to buy-in or change the mindset towards Lean idea or Lean culture
 Poor support and understanding from top Management - Weak or no
leadership buy-in
 Lack of Visible Management Commitment- Results not communicated
 Inadequate Follow-up - Processes are not monitored and continuously
improved
 No sense of urgency

Source: Adapted from Karen Martin & Associates, “Building a Lean Enterprise: Navigating the Common Obstacles to
Success,” Webinar Presentation, 13 May 2010, www.slideshare.net/KarenMartin2/building-a-lean-enterprise .

Transformation :: Innovation :: Partnership

How to transformation Lean in a service or manufacturing Environment?

How Do You Lead the LEAN Transformation?

 Link Lean to Organizational / Government Strategy
 Obtain support of department head / upper management
 Emulate Lean behavior or culture
 Empower all staff to take responsibilities and sponsor the lean
principles through-out the value chain
 Encourage innovation through creative thinking
 Think like a profit making organization - view lean as a long
term journey
 Instill a continuous improvement viewpoint

Transformation :: Innovation :: Partnership

 Actual savings – Success story

Connecticut Department of
Expert experience
Labor’s
 Reduce WIP CT – Estimated Saving US$ 120K.
 13 Second Auto line Cycle time Reduction –
Estimated Saving US$150K.
 590 process steps
 Improve the Recycle Media Yield from 54% to reengineered or automated
80% - Estimated Saving US$380K.
 Reduce the loss communication and routing fail
in Cert Oven - Estimated Saving US$125K.  14,868 worker hours
 Reduce the Plant Electricity usage on Air-Con
System - Estimated Saving US$80K.
reengineered or automated
 U5 Rework Yield = U5 Prime Yield - Estimated
Saving US$100K.
 Inventory Variance in shop floor - Estimated  $1,270,626 in worker
Saving US$500K
hours saved
VALUE ADDED & NON-VALUE ADDED
Every activity should be considered as waste,
unless it:
- Meets an explicit customer requirement
- Cannot be shown to be performed more Economically

If the activity does not meet a known customer requirement or

could be performed more economically, why continue in the same manner?

This is objective, accurate and challenging

- giving a strong basis for agreement

Transformation :: Innovation :: Partnership

 Typical Timeline
3M (MUDA/MURA/MURI)

Non-value Value
Added Added

Typically, less than 1% of a time

that we own a product or service is spent adding
value.

Transformation :: Innovation :: Partnership

VALUE VERSUS NON-VALUE-ADDED
Value-Added Activities Non-Value-Added Activities
• Entering order • Waiting/sorting
• Ordering materials, supplies • Moving
• Preparing drawings • Kitting/staging
• Assembling • Counting
• Shipping to customers • Inspecting
• Processing customer deposits • Checking
• Examining patients • Recording
• Filing insurance claims • Obtaining approvals
• Dispensing event tickets • Testing
• Fueling airplane • Reviewing
• Copying
• Filing
• Revising/reworking
• Tracking work

- Charlene B. Adair & Bruce A. Murray,

Breakthrough Process Redesign

Transformation :: Innovation :: Partnership

 LEAN METHOD:
VALUE STREAM MAPPING
 WHAT IS VALUE STREAM MAPPING

VSM is a graphical tool that helps you to see and

understand the flow of material and information as
a “product/service” makes its way through their
value stream.

You then look for opportunities to eliminate

or reduce WASTE in the process.

A value stream usually includes people, tools and technologies, physical

facilities, communication channels and policies and procedures.

Transformation :: Innovation :: Partnership

 What is a Value Stream?
 A value stream involves all the steps, both value added and non value
added, required to complete a product or service from beginning to end

Transformation :: Innovation :: Partnership

WHY DO VALUE STREAM MAPPING?

Implementation without a plan

will lead to disaster!

A Value Stream Map is a simple

picture that helps you focus on
flow and eliminate the waste

…Eyes for Waste

…Eyes for Flow
“Constantly shorten the time it takes to convert customer
orders into deliveries.” Toyota Motor Company, TPS

Transformation :: Innovation :: Partnership

Why do Value Stream mapping?

• Visualize the whole process (across functional

boundaries)
• Highlight sources of waste and put in place a plan
to eliminate them
• Provides a common language for improvement
• Makes decisions about flow apparent
• Ties together lean techniques
• Forms the basis of an improvement plan
• Shows linkage between information flow and
material flows. No other tool does this.

 Gather data and turn it into an understanding

 Turn understanding into a plan
 Turn aTransformation
plan into an:: action
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 Value Stream Mapping

A tool originally used by the Toyota

Production System experts to study processes
Developed and refined by John Shook and
Mike Rother in Learning to See
Used in manufacturing, engineering and
administrative offices by lean experts to
improve business processes

Transformation :: Innovation :: Partnership

 What is a Value Stream?

A VALUE STREAM INVOLVES ALL THE

STEPS, BOTH VALUE ADDED AND NON
VALUE ADDED, REQUIRED TO COMPLETE A
PRODUCT OR SERVICE FROM BEGINNING
TO END

Transformation . Innovation . Partnership

 3 Types of VSM

Current State VSM Future State VSM

Current State VSM with Opportunity

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 What Makes Value Stream Mapping Unique?

 Visualizes the Process Flow from a systems perspective

 Focuses on the customer and the customer’s
requirements
 Includes information flow and product movement
 Summarizes the timeline as it relates to delivery to the
customer
 Documents performance characteristics of both the
Value Stream and the individual process steps

Transformation :: Innovation :: Partnership

 Value Stream Map Elements
XYZ Org
Customer Orders
Supplier Orders
Internal
Scheduling

Supplier
Customer
Delivery
Freq.
Delivery
Freq.

Process 1 I Process 2 I
I
Inventory Process Time Process Time
Wait Time Wait Time
Material
FTQ Movement FTQ Lead Time
via PUSH
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 VSM Analysis – Data Attributes

 Lead time =
 Processing time + Wait Time / Delays
 Typical batch size
 First-Time Quality
 Reliability (e.g. system or equipment uptime)
 Rework / revisions
 % Complete and Accurate Inputs (% C&A)
 Design Changes
 Errors
 Number of people involved
 % utilization of people

Transformation :: Innovation :: Partnership

Using the Value Stream Mapping Tool
Scoping the Determine the Value
Value Stream Stream to be improved

Understanding how things

Current state currently operate. This is
drawing
the foundation for the
future state.
Future state Designing a lean flow through
drawing
the enterprise.

Planning and The goal of mapping!

Implementation

Transformation :: Innovation :: Partnership

 Components of VSM
Semi-
Weekly
Order Entry Process Ship
Supplier Current State - Sept. 2007 MRP Schedule
MRP Customer
Productio
ABX n ABX
Schedule

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

Fax FIN MRP MRP Phone MRP 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 = %C&A = 85% Batch = 1day
hours Batch = 4 hours Batch = 1.6 75% Batch = 2
hours Batch = 1.6 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 1 min

• Process flow across the bottom • Information flow across the top
• Each process have a data box • Timeline along the bottom
• Customers outlined on the right • Symbols that provide insight into flows, process
• Suppliers outlined on the left boxes as well as what happens between the process
boxes

Transformation :: Innovation :: Partnership

 The Material Flow Symbols

Material Icons Represents Notes

WELDING One box equals an area of continuous
Manufacturing
flow. All processes should be labeled.
Process
Box also used to identify departments
such as production control.

ABC Outside Sources Used to show customers, suppliers

COMPANY and outside manufacturing processes.

C/T=120 sec.
C/O=22 min. Used to record information concerning
3 SHIFTS
W/T=20 hrs Process Data Box a manufacturing process, department,
3% SCRAP
etc.

I Inventory Count and time should be noted.

225 pieces
1.5 days

Tuesday
+ Thurs Truck Shipment Note the frequency of shipments.

Transformation :: Innovation :: Partnership

 The Material Flow Symbols

Material Icons Represents Notes

Identifies material movements that are
Movement of prod’n pushed by producer, not pulled by the
material by PUSH customer ( the following process ).

Movement of finished Also shows movement of raw material

goods to the customer and components from suppliers if
they are not pushed.
Supermarket

Physical pull Pull of materials from a supermarket.

Transfer of controlled
FIFO quantities of material Indicates a device to limit quantity
between processes in and ensure FIFO flow of material
a first in first out seq. between processes.

Transformation :: Innovation :: Partnership

 The Information Flow Symbols:
Information Icons Represents Notes
Manual flow of For example: production schedule
information shipping schedule

Electronic flow of For example: EDI, Fax, etc.

information
Weekly Information Describes an information flow.
Schedule

OXOX Load leveling Tool to level the volume and mix of

Kanban over a specific period of time.

Gives permission to produce a

Sequence-Pull Ball
predetermined type and quantity.

Buffer or safety “Buffer” or “Safety Stock” must be

stock noted.

Transformation :: Innovation :: Partnership

 The Information Flow Symbols:
Information Icons Represents Notes
Tells a process how many of what
20 Production Kanban
can be produced and gives permission
to do so.

Withdrawal Kanban Tells a process how many of what

can be withdrawn and gives permission
to do so.

Signal Kanban Production instruction that orders

production from a batch process,
eg: stamping.

Kanban post Place where Kanban are collected

and held for conveyance .

Highlights critical improvement needs

Lathe Kaizen burst at specific processes. Can be used to
Changeover
plan Kaizen events.

Transformation :: Innovation :: Partnership

Value Stream Mapping :
Step by step

Transformation . Innovation . Partnership

 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

Transformation :: Innovation :: Partnership

 Getting Started
From Sand to Display Product at the customer

But...
Mapping the entire stream is too
much for getting started!

Transformation :: Innovation :: Partnership

 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

Transformation :: Innovation :: Partnership

 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

Transformation :: Innovation :: Partnership

 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.

 GO WALK IT!

Understand the process through facts and data!

Transformation :: Innovation :: Partnership

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
Don’t map
map the
the organization.
organization. Map
Map
the
the flows
flows through
through the
the organization.
organization.

Transformation :: Innovation :: Partnership

 Step 3: Map the Process Flow (with Data Box)
Identify the
major
process steps 120m 80m 30m 180m 20m 60m

and start storage

Lager Stanzen
stampin
welding
Schweißen Schweißen
welding Montage1
assembly1
Montage2
assembly
shipping
Versand

mapping I
g 2
I
1 1 1 1 1

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

R/T:
C/O: 60
60 Min.
Min. R/T:
C/O: 10
10 Min.
min. R/T:
C/O: 10
10 Min.
min. R/T:
C/O: 0
0 Min.
min. R/T:
C/O: 00 Min.
min.

V: 85 % 80%
Uptime: Uptime:
V: 100 % Uptime: 80%
V: 80 % Uptime:95%
V: 100 % V: 100 %
Uptime:95%
90%
Q:
FTY:
0,01
0.9
%A FTY:
Q: 0,80.9
%A Q: 0,20.85
FTY: %A FTY:
Q: 1,20.95
%A Q: 0,30.95
FTY: %A
Collect
2 shift
information 2 shift 2 shift 2 shift 2 shift

for Data Box

Example
ExampleABC
ABCcompany:
company:
The
Thesequence
sequenceofofthe
theseveral
severalprocesses
processeswill
willbe
bedrafted
draftedafter
afterthe
the
first overview has been carried out and the appropriate data
first overview has been carried out and the appropriate data
will
willbe
beadded
addedininthe
theproper
properdata
databoxes.
boxes.

Transformation :: Innovation :: Partnership

 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

Transformation :: Innovation :: Partnership

 Data Collection
 Shipping/Receiving schedules Attribute Data to Collect
 Pack sizes at each process
 Demand rates by process (Takt
Time)
 C/O (changeover time)
 Working hours and breaks  OEE(Overall Equipment
Effectiveness)
 Inventory Points (location & size)
 How Operations are scheduled
 FTY (First Time Yield)
 Work-in-process inventory
 Scrap rate
 Overtime per week
 Defect/Rework Rate
 Process cycle times
 VA/ NVA Time
 Number of product variations at each
 Batch Size/ Pack Size
step  Distance Traveled
 Batch (lot) sizes  Downtime
 Changeover times/frequencies  Etc..

Transformation :: Innovation :: Partnership

LEAN GOVERNMENT PROCESS METRICS

FTQ

Transformation :: Innovation :: Partnership

 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 Stanzen welding
Schweißen welding
Schweißen assembly1
Montage1 Montage2 shipping
Versand
I I I II I
stamping assembly2
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:
C/T: 39 Ss Z/T:
Z/T:
C/T:46
46 SSs Z/T:
C/T: 62
62 Ss Z/T:
C/T: 40 Ss 1440R

R/T:
C/O: 60
60 Min.
Min. R/T:
C/O: 10
10 Min.
min. R/T:
C/O: 10
10 Min.
min. R/T:
C/O: 0 Min.
min. R/T:
C/O: 00 Min.
min.
FTY.:
V: 85 80
% % FTY.:
V: 10090
%% s.
V:r.:
8080
%% V:
s. r.:
100100
%% s.
V:r.:
100100
%%
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
WT/S:480min AZ/S:480Min
WT/S:480min
S: 2 S: 2 S: 2 S: 2 S: 2

Example
ExampleABC
ABCcompany:
company:
Now
Nowthe
theentire
entirematerial
materialflow
flowfrom
fromthethesupplier
supplieracross
acrossthe
the
manufacturing
manufacturing to the customer will be added to the actualmap.
to the customer will be added to the actual map.
The arrows of the material flow symbolize a push-system.
The arrows of the material flow symbolize a push-system.
Transformation :: Innovation :: Partnership
 Step 5: Indicate Time Pulse
(Cycle Time, Waiting Time and Lead time)

Krupp-
Stahl XYZ
customer
AG
supplier

150 ft coils 18400 pcs / month

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

täglich
daily

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

storage
Lager stamping
Stanzen Schweißen
welding
Schweißen Schweißen
welding assembly1
Montage1
Montage1 assembly2
Montage2 shipping
Versand
I I II I II
I 1 1 1 1 1 I
Coils
Coils 4600L 1100L 1600L 1200L
1200L
1Tag 2400R 600R 850R
850R 640R
640R
Coils 2700L
2700L
4Tage
4Tage Z/T:
C/T: 1S
1s C/T: 39
39 Ss C/T: 46
46 Ss C/T: 62 Ss C/T: 40
40 Ss 1440R
Z/T: Z/T: Z/T: Z/T:
R/T:
C/O: 60
60 Min.
min. R/T:
C/O:10
R/T: 10
10Min.
Min.
min. R/T:
C/O: 10
10 Min.
min. R/T:
C/O: 00 Min.
min. R/T:
C/O: 00 Min.
min.
s.
V:r.:
8580
%% s. r.:
V: 10090%% s.
V:r.:
8080
%% s.
V:r.:
100100
%% s. r.:
V: 100100
%%
Q: 0,01 % A 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
WT/S:480min AZ/S:480Min
WT/S:480min
S: 2 S: 2 S: 2 S:
S: 22 S:
S: 22

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

Transformation :: Innovation :: Partnership

 Step 6 - Map the Information Flow
Example
ExampleABC ABCcompany:
company:
Now
Now the entire informationflow
the entire information flowfrom
fromthe
the
supplier across the manufacturing to
supplier across the manufacturing to thethe
customer
customerwill
willbe
beadded
addedtotothe
theactual
actualmap.
map.
forecast forecast
production planning
Krupp-Stahl & -control customer
XYZ AG
supplie faxback daily order
MRP 18400 pcs / month
r150 ft coils 12000 L
6400 R
1Tray = 20 pieces
weekly production plan AZ/S: 480 min
S: 2
Mo +
&Mi
We

täglich
daily

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

storage
Lager stamping
Stanzen Schweißen
welding
Schweißen Schweißen
welding assembly1
Montage1
Montage1 assembly2
Montage2 Versand
shipping
I I II I II
I 1 1 1 1 1 I
Coils
Coils 4600L 1100L 1600L
1600L 1200L
1200L
1Tag
1Tag 2400R 600R 850R
850R 640R
640R
Coils 2700L
4Tage
4Tage Z/T:
C/T: 1S
1s C/T: 39
39 Ss C/T: 46
46 Ss C/T: 62 Ss C/T: 40
40 Ss 1440R
Z/T: Z/T: Z/T: Z/T:
R/T:
C/O: 60
60 Min.
min. R/T:
C/O:10
R/T: 10
10Min.
Min.
min. C/O:10
R/T: 10Min.
min. R/T:
C/O: 00 Min.
min. R/T:
C/O: 00 Min.
min.
s.
V:r.:
8580
%% s. r.:
V: 10090%% s.
V:r.:
8080
%% s.
V:r.:
100100
%% s.
V:
V:r.:
100
100100
%
%%
Q: 0,01
Q: 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 AZ/S:480Min
WT/S:480min AZ/S:480Min
WT/S:480min AZ/S:480Min
WT/S:480min
S: 2 S: 2 S: 2 S:
S: 22 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

Transformation :: Innovation :: Partnership

 Towards Future State Value Stream

A simple way to
approach the Future
State Map is to begin by
modifying the Current
State Map.

Transformation :: Innovation :: Partnership

 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%

Transformation :: Innovation :: Partnership

 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 within one hourPhone MRP

P/T = ½ min P/T =of receipt (6 P/T

1 min 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%

Transformation :: Innovation :: Partnership

 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
 Sorting work  Monitoring work
 Any type of rework
Transformation :: Innovation :: Partnership
 Analysis Tools to identify opportunities
Value Analysis
Waste Analysis
Root Cause Analysis
 5 Whys
 Fishbone Diagram
 Fault Tree Analysis
Eliminate, Combine, Rearrange or
Simplify

Transformation :: Innovation :: Partnership

 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!

Transformation :: Innovation :: Partnership

 Kaizen Blitz

Add the sign of a “Kaizen Blitz” to show “Kaizen” interventions

that help you move from the current to the future state

?
?

Transformation :: Innovation :: Partnership

 Semi-Weekly
Ship Schedule
Order Entry Process
Incoming Current State - Sept. 2007 MRP MRP
Orders Production
Schedule
Phone
Or WEB
Weekly Fax
Stop Rework Over
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

WhichP/T =steps
10 min
create 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

Total Lead Time = 2.65 days

Takt Time = 460 minutes
= 10 minutes/order Total Processing Time= 24.5 min
46 Orders First Pass Yield = 34.4%

Transformation :: Innovation :: Partnership

 Semi-Weekly
Ship Schedule
Order Entry Process
Incoming Current State - Sept. 2007 MRP MRP
Orders Production
On-Line 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 Finance P/T = 1 min Auto

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

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

Transformation :: Innovation :: Partnership

 Continuous Improvement
through VSM

Current Identify
state waste

Continuous
Incremental
Measure
& Improvement Future
state
Adjust

Implement

92 Transformation :: Innovation :: Partnership

 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?

Transformation :: Innovation :: Partnership

 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

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

If FG Kanban is implemented what improvements can be

made to Shipping?
Transformation :: Innovation :: Partnership
 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%

Transformation :: Innovation :: Partnership

 VSM Discussion Example – Current State

Transformation :: Innovation :: Partnership

VSM Discussion Example – Current State

Transformation :: Innovation :: Partnership

Transformation :: Innovation :: Partnership
Step 10: Improvement Activities to achieve the future state

A Yearly Value Steam Project Pipeline

Transformation :: Innovation :: Partnership

 Value Stream Managers

Each Value Stream Needs a Value Stream Manager

Process 1 Process 2 Process 3

Customer

For product ownership beyond functions

Kaizen

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
Transformation :: Innovation :: Partnership
 Future State Map

“Do It”
Implement - Implement - Implement

Action - Action - Action - Action - Action

“Check It - Follow up”

Transformation :: Innovation :: Partnership