Value Stream Mapping

Report
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Capacity building of Business Service Professionals and Business Support Institutions
INNOVATIVE QUALITY
TQM – LEAN MANAGEMENT – SIX SIGMA
Day 1
Developed by
Olga Trofymova, PhD
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Capacity building of Business Service Professionals and Business Support Institutions
Olga Trofymova
•Director of the Quality Centre, Kharkov, Ukraine.
•Trainer and consultant for SME with 10-years experience.
•Associated professor at National Aerospace University.
•STE and trainer at 11 International projects (TACIS, World Bank,
DFID, TEMPUS, SWISSContact). The main expertise is training
and consultancy providing for trainers, consultants and SME.
•Partner and trainer of WIFI Austria; designer, organiser and
trainer of training programs on Quality management and Lean
production for SME in Austria, Germany, Russia and Ukraine
together with WIFI, ACVR, Magna Styer, Quality Austria, Moody
International.
•Lead Auditor of Intertek Moody International Certification Body
according to ISO 9001 requirements. Project manager on quality
improvement for SME.
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Capacity building of Business Service Professionals and Business Support Institutions
Training rules
•You will be expected to share your experiences and ideas with the
class as a whole. We will learn from each other.
• The only «bad» question is an unasked question.
• Don’t feel uncomfortable asking questions - it’s how to learn.
• We certainly intend to ask you questions. We will frequently ask
you to read or work on a hypothetical business situation. These we
call «cases». We will expect you to share your thoughts and ideas
on the cases with the class.
• We may want you to discuss openly in the class issues with you
• We have experienced at your enterprises and/or clients. If this
represents a problem, please, let us know.
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Capacity building of Business Service Professionals and Business Support Institutions
Training program. Day 1
Lean management as a movement
• History of Lean Management
• Toyota Production System (TPS)
• Principles of Lean
The Goals of Lean Enterprise
Value Stream Mapping (Current State)
Lean Metrics
Value-add analysis
•Time value maps
•Value-add chart
Future State Value Stream Mapping
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Capacity building of Business Service Professionals and Business Support Institutions
Training program. Day 2
• Reducing Lead Time and Non-Value-Add Cost
• Just-In-Time
• One-Piece Flow
• Generic Pull System
• Replenishment Pull Systems
• Two-Bin Replenishment System
• Kanban
• Quick Changeover (SMED)
• Total Productive Maintenance (TPM)
• Error Proofing (Poka-Yoke)
• Heijunka - Production Leveling
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Capacity building of Business Service Professionals and Business Support Institutions
Training program. Day 3
• Work cell optimization
• 5S
• Standard Operations
• Visual Management
• Car Assembling Game
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Capacity building of Business Service Professionals and Business Support Institutions
Training program. Day 4
• What is Six Sigma
• Six Sigma Tools
• Histogram
• Control Charts
• Process Sigma
•Process Capability
•y = f (x) Formula
•DMAIC
•Six Sigma Storyboards
•FMEA
•Lean Six Sigma for services
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Capacity building of Business Service Professionals and Business Support Institutions
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Capacity building of Business Service Professionals and Business Support Institutions
History of Lean Management
Source:
http://www.strategosinc.com/lean_manufact
uring_history.htm
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Capacity building of Business Service Professionals and Business Support Institutions
What is Lean?
Lean manufacturing, lean enterprise, or lean production, often
simply, "Lean," is a production practice that considers the
expenditure of resources for any goal other than the creation of
value for the end customer to be wasteful, and thus a target for
elimination. Working from the perspective of the customer who
consumes a product or service, "value" is defined as any action or
process that a customer would be willing to pay for.
Essentially, lean is centered on preserving value with less work.
Lean manufacturing is a management philosophy derived mostly
from the Toyota Production System (TPS) (hence the term
Toyotism is also prevalent) and identified as "Lean" only in the
1990s.
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Capacity building of Business Service Professionals and Business Support Institutions
Toyota Production System (TPS)
A production system which is steeped in the philosophy of "the
complete elimination of all waste" imbuing all aspects of
production in pursuit of the most efficient methods.
This production control system has been established based on
many years of continuous improvements, with the objective of
"making the vehicles ordered by customers in the quickest and
most efficient way, in order to deliver the vehicles as quickly as
possible."
The system is a major precursor of the more generic "Lean
manufacturing." Taiichi Ohno. Shigeo Shingo and Eiji Toyoda
developed the system between 1948 and 1975.
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Capacity building of Business Service Professionals and Business Support Institutions
Toyota House
„Quality must be built in during the manufacturing process!“ (Toyoda Sakichi)
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Capacity building of Business Service Professionals and Business Support Institutions
TPS Concept. Jidoka – highlighting/visualization of
problems
Quality must be built in during the manufacturing process!
If equipment malfunction or a defective part is discovered, the
affected machine automatically stops, and operators cease
production and correct the problem.
For the Just-in-Time system to function, all of the parts that are
made and supplied must meet predetermined quality standards.
This is achieved through jidoka.
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Capacity building of Business Service Professionals and Business Support Institutions
TPS Concept. Jidoka – highlighting/visualization of
problems
Jidoka means that a machine safely stops when the normal
processing is completed. It also means that, should a quality /
equipment problem arise, the machine detects the problem on its
own and stops, preventing defective products from being
produced. As a result, only products satisfying quality standards
will be passed on to the following processes on the production line.
Since a machine automatically stops when processing is completed or
when a problem arises and is communicated via the "andon"
(problem display board), operators can confidently continue
performing work at another machine, as well as easily identify the
problem's cause to prevent its recurrence. This means that each
operator can be in charge of many machines, resulting in higher
productivity, while continuous improvements lead to greater
processing capacity.
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Capacity building of Business Service Professionals and Business Support Institutions
TPS Concept. Just-in-Time – Productivity improvement
Making only "what is needed, when it is needed, and in the amount
needed!”
Producing quality products efficiently through the complete elimination
of waste, inconsistencies, and unreasonable requirements on the
production line.
In order to deliver a vehicle ordered by a customer as quickly as
possible, the vehicle is efficiently built within the shortest possible
period of time by adhering to the following 4 steps:
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Capacity building of Business Service Professionals and Business Support Institutions
TPS Concept. Just-in-Time – Productivity improvement
1. When a vehicle order is received, a production instruction must
be issued to the beginning of the vehicle production line as soon
as possible
2. The assembly line must be stocked with required number of all
needed parts so that any type of ordered vehicle can be
assembled
3. The assembly line must replace the parts used by retrieving the
same number of parts from the parts-producing process (the
preceding process)
4. The preceding process must be stocked with small numbers of
all types of parts and produce only the numbers of parts that
were retrieved by an operator from the next process
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Capacity building of Business Service Professionals and Business Support Institutions
TPS Goals
The main objectives of the TPS are to design out overburden (muri)
and inconsistency (mura), and to eliminate waste (muda). The
most significant effects on process value delivery are achieved
by designing a process capable of delivering the required results
smoothly; by designing out "mura" (inconsistency). It is also
crucial to ensure that the process is as flexible as necessary
without stress or "muri" (overburden) since this generates "muda"
(waste). Finally the tactical improvements of waste reduction or
the elimination of muda are very valuable.
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Capacity building of Business Service Professionals and Business Support Institutions
Principles of Lean
1. Specify value from the standpoint of the end customer by product
family
2. Identify all the steps in the value stream for each product family,
eliminating whenever possible those steps that do not create
value
3. Make the value-creating steps occur in tight sequence so the
product will flow smoothly toward the customer
4. As flow is introduced, let customers pull value from the next
upstream activity
5. As value is specified, value streams are identified, wasted steps
are removed, and flow and pull are introduced, begin the process
again and continue it until a state of perfection is reached in
which perfect value is created with no waste.
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Capacity building of Business Service Professionals and Business Support Institutions
Principles of Lean
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Capacity building of Business Service Professionals and Business Support Institutions
The Goals of the Lean Enterprise
1.
2.
3.
4.
Goal #1. Improve quality.
Goal #2. Eliminate waste.
Goal #3. Reduce lead time.
Goal #4. Reduce total costs.
Why are these goals important?
•Implementing lean tools and techniques will enable your company to
meet its customers' demand for a quality product or service at the
time they need it and for a price they are willing to pay.
•Lean production methods create business and manufacturing
processes that are agile and efficient.
•Lean practices will help your company manage its total costs and
provide a fair ROI to its stakeholders.
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Capacity building of Business Service Professionals and Business Support Institutions
Lean Goal #1. Improve quality
Quality is the ability of your products or services to conform to your
customers' wants and needs (also known as expectations and
requirements). Product and service quality is the primary way a
company stays competitive in the marketplace.
Quality improvement begins with an understanding of your
customers' expectations and requirements. Once you know what
your customers want and need, you can then design processes
that will enable you to provide quality products or services that
will meet their expectations and requirements. In a lean
enterprise, quality decisions are made every day by all
employees.
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Capacity building of Business Service Professionals and Business Support Institutions
Lean Goal #1. Improve quality. How to do it
1. Begin your quality-improvement activities by understanding your
customers' expectations and requirements. Tools such as quality
function deployment are helpful ways to better understand what your
customers want and need.
2. Review the characteristics of your service or product design to see if
they meet your customers' wants and needs.
3. Review your processes and process metrics to see if they are
capable of producing products or services that satisfy your
customers.
4. Identify areas where errors can create defects in your products or
services.
5. Conduct problem-solving activities to identify the root cause(s) of
errors.
6. Apply error-proofing techniques to a process to prevent defects from
occurring. You might need to change either your product/service or
your production/business process to do this.
7. Establish performance metrics to evaluate your solution's
effectiveness.
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Capacity building of Business Service Professionals and Business Support Institutions
Lean Goal #2. Eliminate Waste
Waste is any activity that takes up time, resources, or space but does
not add value to a product or service. An activity adds value
when it transforms or shapes raw material or information to meet
your customers' requirements. Some activities, such as moving
materials during product production, are necessary but do not
add value. A lean organization's primary goal is to deliver quality
products and services the first time and every time. As a lean
enterprise, you accomplish this by eliminating all activities that
are waste and then targeting areas that are necessary but do not
add value.
To eliminate waste, begin by imagining a perfect operation in which
the following conditions exist:
•Products or services are produced only to fill a customer order - not
to be added to inventory.
•There is immediate response to customer needs.
•There are zero product defects and inventory.
•Delivery to the customer is instantaneous.
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Capacity building of Business Service Professionals and Business Support Institutions
Types of Waste
1.
2.
3.
4.
5.
6.
7.
8.
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Overproduction
Waiting
Transport
Extra Processing
Inventory
Motion
Defects
Underutilization of employees
Capacity building of Business Service Professionals and Business Support Institutions
Types of Waste. Overproduction
The worst type of waste, overproduction occurs when operations
continue after they should have stopped. The results of
overproduction are
1) products being produced in excess quantities and
2) products being made before your customers need them.
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Capacity building of Business Service Professionals and Business Support Institutions
Types of Waste. Waiting
Also known as queuing, this term refers to the periods of inactivity in
a downstream process that occur because an upstream activity
does not deliver on time. Idle downstream resources are then
often used in activities that either don't add value or, worse,
result in overproduction.
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Capacity building of Business Service Professionals and Business Support Institutions
Types of Waste. Transport
This is the unnecessary movement of
materials, such as work-inprogress (WIP) materials being
transported from one operation to
another. Ideally, transport should
be minimized for two reasons:
1) it adds time to the process during
which no value-added activity is
being performed, and
2) goods can be damaged during
transport.
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Capacity building of Business Service Professionals and Business Support Institutions
Types of Waste. Extra processing
This term refers to extra operations, such as rework, reprocessing,
handling, and storage, that occur because of defects,
overproduction, and too much or too little inventory. Another
example of extra processing is when an inside salesperson must
obtain customer information that should have been obtained by
the outside salesperson handling the account. It is more efficient
to complete a process correctly the first time instead of making
time to do it over again to correct errors.
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Capacity building of Business Service Professionals and Business Support Institutions
Types of Waste. Inventory
This refers to any excess inventory that is not directly required for
your current customer orders. It includes excess raw materials,
WIP, and finished goods. Keeping an inventory requires a
company to find space to store it until the company finds
customers to buy it. Excess inventory also includes marketing
materials that are not mailed and repair parts that are never
used.
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Capacity building of Business Service Professionals and Business Support Institutions
Types of Waste. Motion
This term refers to the extra steps taken
by employees and equipment to
accommodate inefficient process
layout, defects (see the section
below), reprocessing,
overproduction, and too little or too
much inventory. Like transport,
motion takes time and adds no
value to your product or service. An
example is an equipment operator's
having to walk back and forth to
retrieve materials that are not
stored in the immediate work area.
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Capacity building of Business Service Professionals and Business Support Institutions
Types of Waste. Defects
These are products or aspects of your service that do not conform to
specification or to your customers' expectations, thus causing
customer dissatisfaction. Defects have hidden costs, incurred by
product returns, dispute resolution, and lost sales. Defects can
occur in administrative processes when incorrect information is
listed on a form.
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Capacity building of Business Service Professionals and Business Support Institutions
Types of Waste. Underutilization of human resource
Every worker, even the people do the most routine job in the
organization will have something to contribute to the organization
than their muscle power. Therefore not making the full use of the
human resource is a waste. Wasting this without using to fight
against wastes is the biggest loss for the organization.
Most of times the human talents are deteriorated because they are
not identified by the decision makers. Decision makers do not
have the mind set of managing human resource productively.
Also most of the organization do not have a proper system to use
the talents of the people. They also do not have a good
motivation and rewarding system for the talents.
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Capacity building of Business Service Professionals and Business Support Institutions
Lean Goal #2. Eliminate Waste. How to do it
1. Begin your team-based waste-reduction activities by identifying a
product or operation that is inefficient.
2. Identify associated processes that perform poorly or need
performance improvement. If appropriate, select the operation in your
organization with the lowest production output as a starting point for
your waste-reduction activities.
3. Begin by creating a value stream map for the operation you are
reviewing.
4. Review the value stream map to identify the location, magnitude, and
frequency of the seven types of waste associated with this operation.
5. Establish metrics for identifying the magnitude and frequency of
waste associated with this operation.
6. Begin your problem-solving efforts by using lean principles to reduce
or eliminate the waste.
7. Periodically review the metrics you have identified to continue
eliminating waste associated with this operation.
8. Repeat this process with other inefficient operations in your
organization.
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Capacity building of Business Service Professionals and Business Support Institutions
Lean Goal #3. Reduce Lead Time
Lead time is the total time it takes to complete a series of tasks within
a process. Some examples are the period between the receipt of
a sales order and the time the customer's payment is received,
the time it takes to transform raw materials into finished goods,
and the time it takes to introduce new products after they are first
designed. By reducing lead time, a lean enterprise can quickly
respond to changes in customer demand while improving its
return on investment, or ROI.
Reducing lead time, the time needed to complete an activity from
start to finish, is one of the most effective ways to reduce waste
and lower total costs.
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Capacity building of Business Service Professionals and Business Support Institutions
Lead Time components
1. Cycle time. This is the time it takes to complete the tasks required
for a single work process, such as producing a part or completing a
sales order.
2. Batch delay. This is the time a service operation or product unit waits
while other operations or units in the lot, or batch, are completed or
processed. Examples are the period of time the first machined part in
a batch must wait until the last part in the batch is machined, or the
time the first sales order of the day must wait until all the sales orders
for that day are completed and entered into the system.
3. Process delay. This is the time that batches must wait after one
operation ends until the next one begins. Examples are the time a
machined part is stored until it is used by the next operation, or the
time a sales order waits until it is approved by the office manager.
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Capacity building of Business Service Professionals and Business Support Institutions
Lead Time solutions. Product design
•
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Product rationalization. This involves simplifying your product
line or range of services by reducing the number of features or
variations in your products or services to align more directly
with your customers' wants and needs.
Capacity building of Business Service Professionals and Business Support Institutions
Lead Time solutions. Manufacturing
•Process simulations. These enable you to model your work
processes to reveal waste and test the effects of proposed changes.
•Delayed product configuration. This means waiting until the end of
your production cycle to configure or customize individual products.
•One-piece, or continuous, flow of products and information. This
enables you to eliminate both batch and process delays.
•Technology (i.e., hardware and software) solutions. These enable
you to reduce cycle time and eliminate errors.
•Quick changeover. This involves making product/service batch sizes
as small as possible, enabling you to build to customer order.
•Work process standardization. This means identifying wasteful
process steps and then standardizing "best practices" to eliminate
them.
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Capacity building of Business Service Professionals and Business Support Institutions
Lead Time solutions. Supply
•Demand/supply-chain analysis. This reveals wasteful logistical
practices both upstream and downstream in your demand/supplychain. It often reveals excess inventories being held by your
customers, your organization, and/or your suppliers due to long
manufacturing lead times that result in overproduction. Freight
analysis sometimes reveals that overproduction occurs in an effort
to obtain freight discounts. However, these discounts do not
necessarily offset the costs of carrying excess inventory.
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Capacity building of Business Service Professionals and Business Support Institutions
Lean Goal #3. Reduce Lead Time. How to do it
1. Begin your team-based lead-time-reduction activities by creating a
value stream map for the business process you are targeting.
2. Calculate the time required for the value-added steps of the process.
3. Review the value stream map to identify where you can reduce lead
time. Brainstorm ways to make the total lead time equal the time
required for the value added steps that you calculated in step 2.
4. Determine what constraints exist in the process and develop a plan to
either eliminate them or manage them more efficiently.
5. Establish metrics to identify the location, duration, and frequency of
lead times within the process.
6. Once you have established a plan for improving the process,
measure the improvement.
7. Repeat this process for other inefficient operations in your
organization.
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Capacity building of Business Service Professionals and Business Support Institutions
Lean Goal #4. Reduce Total Costs
For cost management to be successful, everyone in your
organization must contribute to the effort. When you implement a
process to reduce total costs, your goal is to spend money wisely to
produce your company's products or services.
To minimize the cost of its operations, a lean enterprise must
produce only to customer demand. It's a mistake to maximize the use
of your production equipment only to create overproduction, which
increases your company's storage needs and inventory costs.
Before you can identify opportunities to reduce costs, your team
should have some understanding of the way that your company
tracks and allocates costs and then uses this information to make
business decisions.
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Capacity building of Business Service Professionals and Business Support Institutions
Cost-Reduction Methods
Target Pricing. This involves considering your costs, customers, and
competition when determining how much to charge for your new
product or service. The rise and fall of production volumes impact both
the variable and fixed costs of the product - and ultimately how
profitable it will be for your company.
Target Costing. This involves determining the cost at which a future
product or service must be produced so that it can generate the desired
profits. Target costing is broken down into three main components,
which enables designers to break down cost factors by product or
service, components, and internal and external operations.
Value Engineering. This is a systematic examination of product cost
factors, taking into account the target quality and reliability standards,
as well as the price. Value engineering studies assign cost factors by
taking into account what the product or service does to meet customer
wants and needs. These studies also estimate the relative value of
each function over the product's or service's life cycle.
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Capacity building of Business Service Professionals and Business Support Institutions
Cost-Reduction Methods
Activity-based costing (ABC). ABC systems allocate direct and
indirect (i.e, support) expenses - first to activities and processes, and
then to products, services, and customers. For example, your company
might want to know what percentage of its engineering and
procurement costs should be allocated to product families to determine
product-contribution margin. In addition, you can do indirect cost
allocations for each customer account, which enables you to do a
customer-profitability analysis.
Kaizen (i.e., continuous improvement) costing. This focuses on
cost-reduction activities (particularly waste reduction and lead-time
reduction) in the production process of your company's existing
products or services.
Cost maintenance. This monitors how well your company's operations
adhere to cost standards set by the engineering, operations, finance, or
accounting departments after they conduct target costing and kaizencosting activities.
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Capacity building of Business Service Professionals and Business Support Institutions
Lean Goal #4. Reduce Total Costs. How to do it
1. Decide whether your cost-improvement efforts will begin with
new or existing product lines.
2. If new products or services are the focus of your improvement
efforts, techniques to consider using are target pricing, target
costing, and value engineering.
3. If existing products or services are your focus, begin by
reviewing your company's high-cost products and processes.
Apply ABC, Kaizen costing, and cost maintenance to assist your
cost-improvement initiatives.
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Capacity building of Business Service Professionals and Business Support Institutions
Value Stream Mapping
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Capacity building of Business Service Professionals and Business Support Institutions
Value stream maps
A value stream can be defined as all the steps – both value added
and non value added – required to take a product or service from
its raw materials state into the waiting arms of a happy customer.
Purpose
To capture all key flows (of work, information, materials) in a
process and important process metrics. It helps employees
understand how the separate parts of their company’s value
stream combine to create products or services.
Why use a value stream map
More complicated to construct than other flowcharts, but much
more useful for identifying and quantifying waste (especially in
time and costs)
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Capacity building of Business Service Professionals and Business Support Institutions
What is a value stream?
The term Value stream refers to all the activities your company
must do to design, order, produce, and deliver its products or
services to customers. A value stream has three main parts:
•The flow of materials, from receipt from suppliers to delivery to
customers
•The transformation of raw materials into finished goods
•The flow of information that supports and directs both the flow of
materials and the transformation of raw materials into finished
goods
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Capacity building of Business Service Professionals and Business Support Institutions
Why Value Stream Mapping?
•To set strategy before diving into tactics. The future state VSM is
a macro level blueprint for change; road map
•Enables us to SEE the process
•Promotes systems thinking/seeing the whole. Helps us avoid suboptimizing
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Capacity building of Business Service Professionals and Business Support Institutions
Four Steps to Value Stream Mapping
1. Define and pick the product or product family
2. Create the “Current State” Value Stream Mapping (CSVSM)
3. Create the “Future State” Value Stream Mapping (FSVSM)
4. Develop an Action plan to make the FSVSM the CSVSM
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Capacity building of Business Service Professionals and Business Support Institutions
Let’s create a Current State Value Stream
“Whenever there is a product for a customer,
there is a value stream. The challenge lies in
seeing it.”
-Learning to See, Lean Enterprise Institute
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Capacity building of Business Service Professionals and Business Support Institutions
1. Draw the process flow
•Review process mapping symbols
•Begin at the end of the process with what’s delivered to the
customer and work upstream
•Identify the main activities
•Place the activities in sequence on the map
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Capacity building of Business Service Professionals and Business Support Institutions
2. Add the material flow
•Show the movement of all material
•Group together material with the same flow
•Map all subprocesses
•Include any incoming inspection, and material and process testing
activities
•Add supplier(s) at beginning of process
•See symbols
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Capacity building of Business Service Professionals and Business Support Institutions
3. Add the information flow
•Map the information flow between activities
•For manufacturing areas:
•Document the production orders associated with the parts through
the process
•Document the scheduling system and tracking of the parts as they
move through the process
•Document how the process communicates with the customer and
supplier
•Document how information is gathered (electronic, manual, “go
look”, etc.)
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Capacity building of Business Service Professionals and Business Support Institutions
4. Collect process data and connect it to the boxes on
the chart
•Walk the process to observe reality
•For each step, gather the following data:
•Trigger – what starts the step
•Setup time and Processing time/until
•Takt rate (rate of customer demand)
•Percent defective and/or scrap rate (in mfg.)
•Number of people
•Downtime % (includes any time that people cannot reach full
productivity because machines, computers, materials, information.
etc., is not available when needed)
•WIP downstream and upstream
•Cost of links to IT, warehouse(s), etc.
•Batch size
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Capacity building of Business Service Professionals and Business Support Institutions
5. Add process and lead time data to the chart
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Capacity building of Business Service Professionals and Business Support Institutions
5. Add process and lead time data to the chart
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Capacity building of Business Service Professionals and Business Support Institutions
Key Metrics: Time
Process time (PT) - Value added time (VA/T)
•The time it takes to actually perform the work, if one is able to
work on it uninterrupted
•Includes task-specific doing, talking, and thinking
• aka “touch time,” work time, cycle time
Lead time (LT) - Production lead time (PLT) – ROI LT
•The elapsed time from the time work is made available until it’s
completed and passed on to the next person or department in the
chain
•aka throughput time, turnaround time, elapsed time
•Includes Process Time, not merely waiting time.
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Capacity building of Business Service Professionals and Business Support Institutions
Summary Metrics: Time
Activity Ratio (expressed as a percentage) – Process Cycle
Efficiency (PCE)
•The percentage of time anything is being done to the work
passing through the system (whether value-adding or non-valueadding)
• %Act = (∑PT ÷ ∑LT) × 100
• 100 – %Activity = % Time Work is Idle
•Common finding = 1-10%
•Could also calculate %VA Activity to show how little time is spent
on value-adding activities.
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Capacity building of Business Service Professionals and Business Support Institutions
Key Metrics: Quality
%Complete and Accurate (%C&A)
•The percentage of input that’s deemed “usable as is” by the
person doing the work
•% of incoming work where the downstream customer can perform
task without having to “CAC”:
Correct information or material that was supplied
Add information that should have been supplied
Clarify information that should have or could have been clearer
• Measured by the immediate downstream customer and all
subsequent downstream customers.
•Similar to first pass yield in manufacturing.
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Capacity building of Business Service Professionals and Business Support Institutions
Summary Metrics: Quality
Rolled First Pass Yield (RFPY)
•The percent of value stream output that passes through the
process “clean,” with no “hiccups,” no rework required.
•RFPY = %C&A x %C&A x %C&A…
•Common finding = 0-15%
•Multiply ALL %C&A’s, even if parallel processes
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Capacity building of Business Service Professionals and Business Support Institutions
Training program. Day 1
Lean management as a movement
• History of Lean Management
• Toyota Production System (TPS)
• Principles of Lean
The Goals of Lean Enterprise
Value Stream Mapping (Current State)
Lean Metrics
Value-add analysis
•Time value maps
•Value-add chart
Future State Value Stream Mapping
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Capacity building of Business Service Professionals and Business Support Institutions
Value-add (VA) vs. non-value-add (NVA) analysis
•Used to distinguish process steps that customers are willing to
pay for from those they are not
•The objective of VA/NVA analysis is to:
•Identify and eliminate the hidden costs that do not add value for
the customer
•Reduce unnecessary process complexity, and thus errors
•Reduce the process lead time
•Increase capacity by better utilizing resources
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Capacity building of Business Service Professionals and Business Support Institutions
To perform a value analysis…
1. Classify each process step as value-added (also known as
“customer value-add”), business non-value-add (sometimes
called “required waste”), and non-value-add.
2. Add up the time spent in each category. Use a Time Value
Map or Value-add Chart to display the results
3. Decide what to do next
• Value-add tasks should be optimized and standardized
• Business non-value-add tasks should be checked with
customer and, where possible, minimized or eliminated
• Non-value-add activities should be eliminated
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Capacity building of Business Service Professionals and Business Support Institutions
Value classifications
1. Value-Added (VA), also called Customer Value-Add (CVA):
Any activity in a process that is essential to deliver the service
or product to the customer
2. Business Non-Value-Added (BNVA): Activities that are
required by the business to execute VA work but add no real
value from a customer standpoint
3. Non-Value-Added (NVA) or waste: Activities that add no value
from the customer’s perspective and are not required for
financial, legal, or other business reasons
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Capacity building of Business Service Professionals and Business Support Institutions
Time value maps
•A visual depiction of value-add and non-value-add time in a
process
•Gives better impression of overall cycle time than Value-add chart
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Capacity building of Business Service Professionals and Business Support Institutions
To create a time value map …
1. Determine process cycle time
2. Determine queue times (delays) between steps and the valueadd time needed to perform each task
3. Draw a timeline and divide into units equal to the total process
time
4. Place steps and delays along the timeline in the order in which
they happen; use segments proportional to the times
•
VA steps go above the line
• Non-value-add goes below the line (think about using different
colors for emphasis)
•
The white space between boxes indicates queue or delay
time
5. Draw in feedback loops and label yield percentages
6. Summarize time use
•
Activity vs. non-activity times
•
Value-add vs. non-value-add times
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Capacity building of Business Service Professionals and Business Support Institutions
Value-add chart (task time or takt time chart)
•A visual depiction of value-add and non-value-add time in a process
•Does more to illustrate balance of time between process steps;
weaker on overall cycle time (compare to time value map on previous
page)
•Does not visually emphasize wasted time as strongly as a time value
map does but makes it easier to compare steps to each other
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Capacity building of Business Service Professionals and Business Support Institutions
To create a value-add chart …
1. Follow instructions in the value-add analysis to classify
process work as customer value-add (VA), business nonvalue-add (BNVA), or other non-value-add
2. For each step in the process, collect data on how much time is
spent on each type of work
3. Visually display the results in a bar chart like that shown here
4. Calculate takt time
• The takt time is the amount of available work time divided by
the customer demand during that time period.
5. Act on the result by brainstorming ways to
• Eliminate NVA activities
• Improve VA activities
• Reduce BNVA activities
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Capacity building of Business Service Professionals and Business Support Institutions
Takt Time The key to Continuous Flow
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Capacity building of Business Service Professionals and Business Support Institutions
Training program. Day 1
Lean management as a movement
• History of Lean Management
• Toyota Production System (TPS)
• Principles of Lean
The Goals of Lean Enterprise
Value Stream Mapping (Current State)
Lean Metrics
Value-add analysis
•Time value maps
•Value-add chart
Future State Value Stream Mapping
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Capacity building of Business Service Professionals and Business Support Institutions
Apply Five Simple Principles
•
•
•
•
•
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Specify value from the stand point of end customer
Identify the value stream for each product family
Make the product flow
So the customer can pull
As you manage toward perfection
Capacity building of Business Service Professionals and Business Support Institutions
8 Questions for Future State VSM
1. What are the customer requirements? What’s the takt time?
2. With goods, will we produce to order or to finished goods
inventory? (With services, you’re almost always producing to
order.)
3. Where can continuous flow be put in place?
4. Where should pull systems be implemented?
5. What is the single point of scheduling?
6. How do we level the load and the mix?
7. What should the management time frame be?
8. What process improvements are necessary to achieve the
future state?
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Capacity building of Business Service Professionals and Business Support Institutions
Future State Value Stream Mapping
1.
2.
3.
4.
5.
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Create a Cycle Time/ Takt time Graph
Decide if you will build to stock or make to order
Calculate optimal crew size and Implement One piece flow
Pull when One piece flow is not possible
Improve communication and schedule a pacemaker
Capacity building of Business Service Professionals and Business Support Institutions
Purpose, Process, People
Purpose
What customer problems will the enterprise solve to achieve its
own purpose of prospering?
Process
How will the organization assess each major value stream to make
sure each step is valuable, capable, available, adequate, flexible,
and that all the steps are linked by flow, pull, and leveling?
People
How can the organization insure that every important process has
someone responsible for continually evaluating that value stream
in terms of business purpose and lean process? How can
everyone touching the value stream be actively engaged in
operating it correctly and continually improving it?
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Capacity building of Business Service Professionals and Business Support Institutions
Bibliography and Links
•Michael L. George, John Maxey, David T. Rowlands, Malcolm Upton. The Lean
Six Sigma Pocket Toolbook : A Quick Reference Guide to 70 Tools for Improving
Quality and Speed, McGraw-Hill, 2005
•Manor Parkway, Salem. The Lean Enterprise Memory Jogger. GOAL/QPC.
•Diane Ritter, Michael Brassard, Lynda Finn, Dana Ginn, Cathy Kingery, Michele
Kierstead. Six Sigma Memory Jogger II: A Pocket Guide, GOAL/QPC, 2002
•Paul Sheehy, Daniel Navarro, Robert Silvers, Victoria Keyes. The Black Belt
Memory Jogger: A Pocket Guide for Six Sigma Success, GOAL/QPC, 2002
•James P. Womack, Daniel T. Jones. Lean Thinking. Simon&Schuster, Inc.
•Mike Rother, John Shook. Learning to See. The Lean Institute.
•www.toyota-global.com
•www.lean.org
•www.gembaacademy.com
•http://lssacademy.com
•www.ksmartin.com
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Capacity building of Business Service Professionals and Business Support Institutions
HVALA VAM NA POZORNOSTI!
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Capacity building of Business Service Professionals and Business Support Institutions

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