Current State VSM

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Online Student Guide

2008 The Quality Group. All Rights Reserved, Version 1.0 June 2008


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STUDENT GUIDE

2 2008 The Quality Group

Table of Contents

Current State Value Stream Mapping

Value Stream Mapping ..................................................................................................... 3

Product Family Analysis ................................................................................................... 3Product Family Matrix....................................................................................................... 4Value Stream Selection .................................................................................................... 5Value Stream Mapping ..................................................................................................... 6Value Stream Mapping Symbols ...................................................................................... 7Value Stream Mapping Logistics ..................................................................................... 8Creating a Current State Value Stream Map ................................................................... 9Current State Value Stream Maps for the Office ........................................................... 11

Glossary ........................................................................................................................ 13

2008 by The Quality Group All rights reserved.Version 1.0 June 2008

Terms of UseThis guide can only be used by those with a paid license to the corresponding course inthe e-Learning curriculum produced and distributed by The Quality Group. No part ofthis Student Guide may be altered, reproduced, stored, or transmitted in any form by

any means without the prior written permission of The Quality Group.

TrademarksAll terms mentioned in this guide that are known to be trademarks or service marks havebeen appropriately capitalized.

CommentsPlease address any questions or comments to your distributor or to The Quality Groupat [email protected].


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CURRENT STATE VALUE STREAM MAPPING

2008 The Quality Group 3

The current state value stream map is a graphical and analytical depiction of current stateof the process for a specific value stream. Understanding the current state is a critical firststep to evaluating and improving the flow of value to the customer.

Students will also be able to describe a current state value stream map.

The importance of identifying value streams within operations

Factors to consider when selecting a value stream for improvement

Steps to create a current state value stream map

How to calculate takt time and evaluate takt time versus cycle time

Value stream consists of all the activities required to generate a product or service fromstart to finish.

Once designed, the value stream starts with taking in and processing your order, includingall the steps necessary to put that salad together, and ends with delivery of that salad into

your hands.

Think of the value stream for a product in terms of materials flowing from suppliers tocustomers; including both internal and external customers, the transformation of materialsinto products and services, and the flow of information that supports the material flow andits transformation.Our lean goals include reducing waste, improving quality, reducing lead time and reducingcosts for the value stream.

To do this we need to provide what is needed by customers, at the rate needed bycustomers, when needed by customers in the quantity and quality needed, without waste,and using methods that allow for development of people.Keep in mind that customers may be the next process or operation in the value stream or

the external customer.

To get started we need to first select a product family for evaluation. Organizations mayproduce numerous products or provide many services, and we cannot work on everythingat once.

What is a product family, and how do companies identify their product families?

A Product Family is a group of products or service offerings that go through the same orsimilar processing steps. Typically the products within a product family use the sameequipment or tools in the processing steps.

Products or services within a Product Family are not usually exactly alike, but they share atleast 80% of the same steps

Product Family Matrix is used to compare steps across products or services and identifyProduct Families. The goal is to look at products or services from a processing point ofview, not a marketing point of view, so products that may seem dissimilar at first mayactually be very similar in terms of their processing steps.

Introduction

Value Stream

Mapping

LearningLearningLearningLearningObjectivesObjectivesObjectivesObjectives

Product

Family

Analysis


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STUDENT GUIDE


To create a product family matrix, the products or services the company provides shouldbe listed. Listing all products is ideal, but for companies that produce a large number ofproducts this may be a very daunting task. In this case the company may be able toidentify similar products, and may decide to focus on one of those high level productgroups. It is important to select a broad category to ensure that the product families thatare identified contain all related products.

Once all products have been listed, all the process steps that are required to produce theproduct need to be gathered and listed across the top, forming a matrix. For physicalproducts, the manufacturing routings are usually a good source of required processsteps.

For service offerings or transactional processes the company may reference trainingmaterials or other process documentation to create the list of steps. If no suchdocumentation exists they may need to start by creating basic process maps tounderstand the steps required by each offering.

Once all products and process steps have been listed, the matrix is filled in by placing anX under the process steps required by each product.

Product

Family Matrix


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As processes are marked, patterns will start to appear. To make the patterns moreapparent, the matrix should be sorted by the use of major process steps.

In our example, we sorted the matrix by Select bread in descending order then by Addmeat in descending order Then by Fill with soup in descending order.

To select the major process steps to use for the sort, many times it is useful to select aprimary category of equipment used for the process. There is no one right way to makethis selection, so it may take a few different sorts to be able to see groups of products.

In our example we separated our Soup product from the others because it shares fewerthan 80% of the process steps. It is important to note that our Salad product, though a verydifferent product from Sandwiches, is considered to be part of the same product familybecause so many of the process steps are shared. This demonstrates why as manyproducts as possible should be included in the Product Family Matrix.

Once the Product Families have been identified, a specific Product Family and its valuestream needs to be selected for initial Lean efforts. When selecting the initial value stream,consideration should be given to the following:

What are the volume of products and services necessary to satisfy customer demand?How much is needed and how long do we have to produce it?

What does a review of the performance data for issues related to quality, delivery, or coststell us?

Consider market competition, is the market changing? Are we losing business? Are therenew players in the market?

And finally, review routings. Select a stream that is not too simple or too complex.

Value Stream

Selection


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Once we've selected an initial value stream, we need a way to manage the Leanjourney. Envisioning the future with improvements must be preceded by a hard look atreality. Before we can start planning improvements we need to understand where we are the current state. The data we have reviewed during the value stream selectionprocess provides performance information, but the old saying goes a picture is wortha thousand words.

Value stream maps provide a graphic representation of the sequence and movement ofinformation, materials and actions in a value stream.

They serve as a communication tool and help achieve agreement on how value is addedand where waste exists.

Typically they are a poster size graphic or storyboard drawn in pencil or on a whiteboardto facilitate changes.

Usually value stream maps are shown in two parts current state and future state. Theteam initially works to define the current state.

Value stream mapping focuses the team on the whole process - start to finish.

It allows the team to see the big picture. Recall that luncheon salad ... value streammapping would include the information or ordering flow as well as the operations orsteps necessary to produce the salad.

Value stream mapping helps prevent the "hit and miss" approach.

Following initial planning and review of the flow to identify all involved processes, theteam must go to the value stream to get map information; a checklist of what data tocollect is handy. Starting at the end or last operation or process and working backwardsis recommended. The checklist items apply for each of these operations.

The team needs to be attentive to exceptions and disruptions that may not show in a

typical flow; for example, is product brought into the line for rework or reprocessing?

After ensuring all necessary information has been collected, the team will review the dataand begin constructing the "current state" map.

Finally, the team needs to manage this "current state" mapping in support of the overalltimeline for the project.

CUSTOMER DEMAND

Determining and calculating demand for specific products based on customer orders

sounds straightforward, but may not be so easy.

And don't be short-sighted about that basic definition. The quantity of product requiredcomes with additional needs related to quality, delivery and price.

You must also consider how their requirements are communicated and understood.

Value Stream

Mapping


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TAKT TIME

Takt Time is a calculation used to match the rate or pace of production to customerdemand and to final sales. The method determines the time required for each product,part, or service based on demand. Takt Time equals Available time divided by customerdemand. In our example the lunch counter is open for 4 hours each day. This translates to14,400 seconds. If current demand for salads during this four hour period equals 100 thenTakt Time is 14,400 divided by 100 which is equal to 144 seconds.

The process time bar chart shows the process time of each step. Next we take intoaccount our customer demand in terms of Takt Time. As you can see our third processstep takes 180 seconds while the Takt Time is 144 seconds. This is one of our firstindications of where improvement activities must focus, as step three cannot currentlyproduce at a rate to meet customer demand.

Lets look at how to put a map together by first reviewing some of the symbols.

Value Stream

Mapping

Symbols


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W

T

Now that we have reviewed the purpose of a current state value stream map and the keycomponents, lets start our mapping exercise. When gathering the team to walk the valuestream, it is important to follow a few key suggestions.

Beginning with a quick walk through of the value stream allows the team to becomequickly familiar with the general flow of product.

Do not rely on standard routing times or estimates. Wherever possible, gather informationlive while the process is occurring.

Do not break the teams into groups to map segments of the process. A divide andconquer approach will only allow a few team members to see portions of the process.

One of the fundamental principles of value stream mapping is to ensure that the entireprocess is visible and understood by the entire team.

Value Stream

Mapping

Logistics


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1. Start the Current State Value Stream Map with the Customer and a data boxcontaining information about demand:

Quantity of each specific product required per time period

Pack quantity

Other relevant metrics

2. Next, draw the basic production processes and collect data for each operation.Each process box indicates a group of processes through which material isflowing. One process box stops and another starts where processes are notconnected and the material flow stops, creating WIP inventory.Each process box may represent more than one processing step; the focus is onwhere the material flows and where it stops.

Enter attributes for each operation and tally total cycle time, which is dependent onprocessing and changeover time, in seconds or minutes.

Show the number of operators currently required to carry out each operation.

Focus at this time is to document the current state. For example, cycle time is thetime from entry into an operation or process to exit from the operation withcompletion of that operations activities. The team will focus on identifying wasteand non-value adding activities as they move toward the future improved state.

3. Continue by drawing in inventory triangles where material stops and accumulatesbetween operations.There may be more than one place where inventory accumulates betweenprocesses; be sure to draw each one.Record inventory, either with an item count or by how long the items stay in eachlocation

4. Draw in delivery and shipment methods and frequencies for customer deliveries.Remember the shipping process block.

5. Draw in one or two key suppliers, their shipping method and schedule, and databoxes to capture relevant data (such as pack quantity). Do not draw in everysupplier or every purchased item; just pick one or two key incoming parts or rawmaterials.

Creating a

Current State

Value Stream

Map


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Now you have a complete picture of material flow in your value stream.

Next we will focus on information flow.

6. & 7. Continue to add to the Value Stream Map by inserting production

control as a process box, and then add narrow lines to representinformation flow. Manual, or paper information flows are shown with astraight line, and electronic information flow is shown with a zigzag line.

A small box can be used to label the information flows.

8. & 9. The last step in creating a Current State Value Stream Map is to addmaterial movement arrows and timeline. A striped arrow indicates whereproduct is pushed from one operation to the next. Because each operationin this Value Stream Map is given a schedule, each operation is producingto that schedule rather than in response to a need from the downstreamoperation. This is push material movement.The timeline is drawn beneath all operations and inventory locations.


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By understanding the "current stat e" of the selected value stream, a team can then beginidentifying opportunities to better meet customer demand and envision the "future state".

Now lets try an example for the office environment; invoice processing.

Suppliers are required to send paper invoices by mail. Once a week, all the invoices thathave been received are manually entered into the system by a data entry clerk. Theentered invoice is put in the system work queue for the purchasing agent responsible forthat supplier.

The purchasing agent then manually matches the invoice to the related purchase order.Once the invoice is matched to the PO, the original requester of the goods or services isrequired to confirm that payment can be released.

After the requester has marked the invoice as OK to Pay, the invoice is released forcheck print & mail, which is performed in a weekly batch run.

Lets build a Current State Value Stream Map for this process.

Current State

Value Stream

Map for the

Office


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In this case, our suppliers are both the supplier on the Value Stream Map because theysupply the raw material, which is the invoice, and the customer, because they receive theproduct, which is the payment.

Starting from the end of the process, draw in the customer and metrics that we knowabout their delivery requirements. Add all the processing steps and their data boxes.Add inventory triangles where the product stops and waits for the next processingstep.

Remember that our product is the invoice. Assume we walked this process mid-week, soour inventory levels will be based on a mid-week count. Draw in the delivery modes andfrequency for the deliveries to customers. Draw in the suppliers, their data boxes, anddelivery modes and frequencies.

Now lets draw in our information flow, motion, and timeline of the product.

In office environments the product being produced is often information rather than aphysical product. Do not confuse information flow with product flow in an officeenvironment. Information is the information about process and product scheduling.Suppliers do not receive any communication from our organization that they may submit

an invoice. Their trigger for releasing an invoice is when they provide goods or services.Our organization A/P system is notified that the supplier received their check when thecheck clears the bank.

Processing the invoice is scheduled in two processes both invoice entry and print/mailare executed only weekly. The remaining steps are not scheduled; invoices are pushedthrough the processing steps.

Also notice that once the invoice has been entered into the system, once an operationhas been completed the invoice is placed in the next operations queue when it is readyfor processing. This is passive notification that work needs to be done on the product.One way to see the waste of inventory in an office environment is to identify where theproduct is waiting to be processed. In our example here, it is now apparent that invoices

are piling up before the Ok-to-Pay step, even though that operation has plenty ofavailable time. This is an area we should target for improvement.


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Key Terms, Concepts, and Tools to Remember:

CurrentState ValueStream

A snapshot view of a value stream as it exists at the time ofobservation.

ValueStream

A holistic collection of value added and non-value added activitiesthat chain together to create a product or service.

ValueStream Map

The visual documentation of the activities creating stakeholdervalue and how information and resources flow between them

ValueStreamMapping

A paper and pencil tool that helps you to see and understand theflow of material and information as a product or service makes itsway through the value stream.

GlossaryGlossaryGlossaryGlossary

Current State VSM

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Transcript of Current State VSM