Vpmep vsm gaining traction

Value Stream Mapping –Value Stream Mapping –Gaining Traction, Gaining Traction, Getting ResultsGetting Results

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1 – Obstacle to Traction - 1 – Obstacle to Traction - WASTEWASTE

2 2 – Benefits of Value Stream Mapping3 3 – What is Value Stream What is Value Stream Mapping?Mapping?

4 4 – A Road Map for A Road Map for ImprovementImprovement

AgendaAgenda

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What is WASTE?

Any Activity that DOES NOT increase the Market Form or Function of the Product or Service based on the Critical Customer Requirements.

These are things the customer is NOT willing to pay for.

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Definition of Value Definition of Value AddedAdded

Value Added

Any activity that increases the market form or function of the product or service. (These are things the customer is willing to pay for.)

Non-Value Added

Any activity that does not add market form or function or is not necessary. (These activities should be eliminated, simplified, reduced, or integrated.)

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Lean = Eliminating the Lean = Eliminating the WastesWastes

Value Added

Typically 95% of all lead time is non-value added

Non-Value Added

• DDefectsefects

• OOverproductionverproduction

• WWaitingaiting

• NNot Utilizing Employeesot Utilizing Employees

• TTransportationransportation

• IInventorynventory

• MMotionotion

• EExcess Processingxcess Processing

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Where is the Waste?Where is the Waste?• DDefects – incomplete or incorrect information efects – incomplete or incorrect information

• OOverproduction – releasing work before next process verproduction – releasing work before next process can work on them, unbalanced work loadscan work on them, unbalanced work loads

• WWaiting – unbalanced work loads, slow system response, aiting – unbalanced work loads, slow system response, incomplete information, approvalsincomplete information, approvals

• NNot Utilizing Employees – old guard thinking, politics, high ot Utilizing Employees – old guard thinking, politics, high turnover, low investment in trainingturnover, low investment in training

• TTransportation – poor layout, poor flowransportation – poor layout, poor flow

• IInventory – large batches, complexity to complete tasknventory – large batches, complexity to complete task

• MMotion – poor organization, no standard workotion – poor organization, no standard work

• EExcess Processing – excess communication, lack of xcess Processing – excess communication, lack of communication, unnecessary approvals, customer communication, unnecessary approvals, customer requirements are not clearly understoodrequirements are not clearly understood

All processes have waste.

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Without Change There Can Be No Improvement

“The definition of insanity is doing the same thing over and over and expecting different results.”

Albert Einstein

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Identify waste

Measure&

Adjust

Current state

Future state

Implement

ContinuousIncrementalImprovement

The Lean Process

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•Understanding the Process

•Information and Material Flow

•Data Driven Decision Process

Benefit of Value Stream Mapping

94% if Failures are due to Poor Systems

6% are caused by Worker Mistakes

Deming

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“Whenever there is a product or service for a customer, there is a value stream.

The challenge lies in seeing it.”

Examples:Raw Materials to Customer - ManufacturingConcept to Launch - EngineeringOrder to Cash – Services including Support Processes

Look for Value Streams

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Value Stream Mapping is a Value Stream Mapping is a Key Process Diagnostic ToolKey Process Diagnostic Tool

Quick Changeover

Standardized Work Batch Reduction Teams

Quality at Source

5S System Visual Layout

POUS

Cellular/FlowPull/Kanban TPM

ValueStreamMapping

Continuous Improvement

Kaizen

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Value Stream Mapping Value Stream Mapping StepsSteps

• Select product / service Select product / service familyfamily

• Draw Current State map. Draw Current State map. Understanding how the Understanding how the process currently operates. process currently operates.

• Identify opportunities for Identify opportunities for elimination of waste and elimination of waste and areas of improvement to areas of improvement to meet customer’s needs.meet customer’s needs.

• Draw the Future State map. Draw the Future State map. Design a lean flow using lean Design a lean flow using lean techniques.techniques.

• Develop action plan and Develop action plan and implement it.implement it.

Product / Service family

Future state

drawing

drawingCurrent state

Plan and Implementation

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IncomingOrders

Receive Order

Fax

Check Credit

FIN

Review & Enter Order

MRP

Reconcile Order

MRP

Confirm Order

Phone

Finalize Order

MRP

MRP MRPProductionSchedule

Semi-WeeklyShip Schedule

.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 daysTotal Processing Time= 24.5 min

Order Entry ProcessCurrent State - Sept. 2007

First Pass Yield = 34.4%

P/T = ½ minBatch = 4hours

IN

P/T = 1 min% Accept = 90%Batch = 4 hours

IN

P/T = 10 min% C&A = 60%Batch = 1.6 hours

IN

P/T = 1 min%C&A = 75%Batch = 1.6 hours

IN

P/T =7 min%C&A = 85%Batch = 2 hours

IN

P/T = 5 minBatch = 1day

IN

Weekly FaxInformation

Material

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Future State QuestionsFuture State Questions

1.1. What does the customer really need?What does the customer really need?2.2. How often will we check our performance to customer needs?How often will we check our performance to customer needs?3.3. Which steps create value and which are waste?Which steps create value and which are waste?4.4. How can we flow work with fewer interruptions?How can we flow work with fewer interruptions?5.5. How do we control work between interruptions? How will work How do we control work between interruptions? How will work

be prioritized?be prioritized?6.6. Is there an opportunity to balance the work load and/or different Is there an opportunity to balance the work load and/or different

activities? activities? 7.7. What process improvements will be necessary?What process improvements will be necessary?

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IncomingOrders

Receive Order

Fax

Check Credit

FIN


MRP

Reconcile Order

MRP

Confirm Order

Phone

Finalize Order

MRP









IN


IN


IN


IN


IN


IN

Weekly Fax

What does the customer really need?

How often will we check our performance to customer needs?

All orders will be processed within one hour of receipt (6 orders processed each hour).

Each hour.

460 minutes46 Orders = 10 minutes/orderTakt Time =

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IncomingOrders

Receive Order

Fax

Check Credit

FIN


MRP

Reconcile Order

MRP

Confirm Order

Phone

Finalize Order

MRP









IN


IN


IN


IN


IN


IN

Weekly FaxStop walking to the FAX that’s waste!!!

PhoneOr WEB

Which steps create value?

Which are waste?

Waste

Over Processing

Waste

Rework


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IncomingOrders

Receive Order

Fax

Check Credit

FIN


MRP

Reconcile Order

MRP

Confirm Order

Phone

Finalize Order

MRP







IN


IN


IN


IN


IN


IN

Weekly Fax

Finance Cross Train

Link Finance / MRP

On-Line Order Entry How can we flow work with

fewer interruptions?

Total Lead Time = 1.25 daysTotal Processing Time= 11.5 minNEW

METRICS! First Pass Yield = 90%

Auto Confirm

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Receive / CreditCheck / ReconcileConfirm

MRP/FIN


P/T < 10 min% accept = 90%Batch = 1

Order Entry ProcessFuture State - Sept. 2007

Phone / Web

Semi-WeeklyShip Schedules

How can we control work between interruptions?

ScheduleProductionvia FG Kanban

ImplementKanban

Kanban will:Schedule Production to real time demand.Optimize (level) and Control Inventory.Link Production to Customer Demand.

IncomingOrders

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MRP/FIN

MRP



Phone / Web

Semi-WeeklyShip Schedules

IncomingOrders


Shipping Training

DirectSchedule Shipping

If FG Kanban is implemented what improvements can be made to Shipping?

I.T. Link to Order Entry

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MRP/FIN

MRP



Phone / Web

IncomingOrders


Shipping

Total Lead Time < 10 Minutes

Total Processing Time < 10 MinutesFuture State Metrics!First Pass Yield > 90%

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Implementation Road Implementation Road MapMap•Clarify Business Drivers and Key Customer MetricsClarify Business Drivers and Key Customer Metrics•Assess and Map Current Capabilities (Baseline)Assess and Map Current Capabilities (Baseline)•Identify Opportunities for Improvement including Identify Opportunities for Improvement including

the elimination of WASTEthe elimination of WASTE•Create a Vision for the Future Based on Voice of the Create a Vision for the Future Based on Voice of the

Customer and Voice of the BusinessCustomer and Voice of the Business•Analyze Gaps and Create Action Plan to SucceedAnalyze Gaps and Create Action Plan to Succeed

- Use Robust Set of Tools (i.e. Lean Six Sigma)Use Robust Set of Tools (i.e. Lean Six Sigma)•Determine Priorities and Resources NecessaryDetermine Priorities and Resources Necessary

- Structured Process ImprovementStructured Process Improvement•Track Impact through MetricsTrack Impact through Metrics•Celebrate WinsCelebrate Wins

- With CustomersWith Customers- With EmployeesWith Employees- With SuppliersWith Suppliers

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ALL processes have WASTE that cost you MONEY.

Improvement requires change. To change a process you have to understand the process.

Process Excellence will not be Process Excellence will not be achieved without involving people achieved without involving people at all levels of the organization.at all levels of the organization.

Summary:Summary:

It is Not about Starting. It is Not about Starting.

It is about Getting Things DoneIt is about Getting Things Done!

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Questions?Questions?

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Parting ThoughtParting Thought

Learning is not compulsory …Learning is not compulsory …

neither is survival.neither is survival.

Dr. DemingDr. Deming

Vpmep vsm gaining traction

Technology

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