Opex VSM Training Module 100711001122 Phpapp02

Operational Excellence – Value Stream Mapping (VSM)
Presented by Frank Adler, Ph.D.

www.Operational-Excellence-Consulting.com
Note: This VSM Training Course is based and supports the VSM Course from
Rother, Mike and Shook, John - Learning to See - Value-Stream Mapping to create
Value and eliminate Muda (Cambridge, Massachusetts: Lean Enterprise Institute, 2009)
1 - May 21, 2010

OPERATIONAL EXCELLENCE
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Excellence-Consulting.com CONSULTING
Value Stream Mapping – Table of Content
Section 1: The Five Lean Principle

Section 2: The Seven Wastes
Section 3: VSM Definition & Benefits
Section 4: VSM Development Process
• Define Product Family
• Establish the Team
• Document Current State
• Design Future State
• Create Implementation Plan
• Execute - Execute - Execute
Section 5: VSM Exercise
Section 6: Summary
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Value Stream Mapping – Lean Manufacturing
All Lean Manufacturing is really trying

to do is to get one process to make
only what the next process needs
when it needs it.
Lean Manufacturing links all processes
– from the final Customer back to raw
material – in a smooth flow without
detours that generates the shortest
Lead Time, highest Quality, and
lowest Cost.
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Value Stream Mapping – Lean Manufacturing
The only way to actually learn lean methods is to apply the techniques
yourself hands-on with a bit of coaching. The willingness to try, fail,
and learn simply goes with the territory when implementing changes
in long-established mass production practices.
Action may not always bring success, but there is no success without action.
Benjamin Disraeli
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Value Stream Mapping – The 5 Lean Principles
Define Value - Specify value from the Customer

perspective.
Map Value Stream - Identify the value stream for
each product or service and challenge all of the
non-value adding steps (wastes) currently necessary
to create and deliver this product or service. Add
nothing than value.
Create Flow - Make the product or service creation and delivery process flow
through the remaining value-added steps.
Establish Pull – Introduce pull between all process steps where continuous flow is
possible.
Pursuit Perfection – Manage toward perfection so that the number of steps and the
amount of time and information needed to create and deliver this product or
service.
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Value Stream Mapping – The 7 Wastes
Waste elimination is one of the most effective ways to increase the profitability of
any business. Processes either add value or waste to the production of a good or
service. The seven wastes originated in Japan, where waste is known as “muda."
Inventory
Motion
Defects Waiting
Extra Processing
Steps
The 7 Wastes
Overproduction Transportation
Value Stream Mapping focuses primarily on waste elimination due to inventory,

waiting, and overproduction.
6 - May 21, 2010
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The 7 Wastes – Extra Processing Steps
Extra Processing Steps

Many organizations use expensive high precision equipment where simpler tools
would be sufficient. This often results in poor plant layout because preceding or
subsequent operations are located far apart. In addition they encourage high
asset utilization (over-production with minimal changeovers) in order to recover
the high cost of this equipment.
Toyota is famous for their use of low-cost automation, combined with
immaculately maintained, often older machines. Investing in smaller, more
flexible equipment where possible; creating manufacturing cells; and combining
steps will greatly reduce the waste of inappropriate processing.
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The 7 Wastes – Waiting
Waiting
Typically more than 99% of a product's life in traditional batch-and-queue
manufacture will be spent waiting to be processed. Much of a product’s lead
time is tied up in waiting for the next operation; this is usually because material
flow is poor, production runs are too long, and distances between work centers
are too great.
Goldratt (Theory of Constraints) has stated many times that one hour lost in a
bottleneck process is one hour lost to the entire factory’s output, which can
never be recovered. Linking processes together so that one feeds directly into
the next can dramatically reduce waiting.
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The 7 Wastes – Transportation
Transportation
Transporting product between processes is a cost incursion which adds no
value to the product. Excessive movement and handling cause damage and
are an opportunity for quality to deteriorate. Material handlers must be used
to transport the materials, resulting in another organizational cost that adds
no Customer value.
Transportation can be difficult to reduce due to the perceived costs of
moving equipment and processes closer together. Furthermore, it is often
hard to determine which processes should be next to each other. Mapping
product flows can make this easier to visualize.
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The 7 Wastes – Defects
Defects
Having a direct impact to the bottom line, quality defects resulting in rework
or scrap are a tremendous cost to organizations. Associated costs include
quarantining inventory, re-inspecting, rescheduling, and capacity loss.
In many organizations the total cost of defects is often a significant
percentage of total manufacturing cost. Through employee involvement and
Continuous Process Improvement (CPI), there is a huge opportunity to
reduce defects at many facilities.
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The 7 Wastes – Motion
Motion
This waste is related to ergonomics and is seen in all instances of bending,
stretching, walking, lifting, and reaching. These are also health and safety
issues, which in today’s litigious society are becoming more of a problem for
organizations. Jobs with excessive motion should be analyzed and redesigned
for improvement with the involvement of plant personnel.
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The 7 Wastes – Overproduction
Overproduction
Simply put, overproduction is to manufacture an item before it is actually
required. Overproduction is highly costly to a manufacturing plant because it
prohibits the smooth flow of materials and actually degrades quality and
productivity. The Toyota Production System is also referred to as “Just in Time”
(JIT) because every item is made just as it is needed. Overproduction
manufacturing is referred to as “Just in Case.” This results in high storage costs
and makes it difficult to detect defects in a timely manner. The simple solution
to overproduction is turning off the tap; this requires a lot of courage because
the problems that overproduction is hiding will be revealed. The concept is to
schedule and produce only what can be immediately sold/shipped and improve
machine changeover/set-up capability.
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The 7 Wastes – Inventory
Inventory
Work in Progress (WIP) is a direct result of overproduction and waiting. Excess
inventory tends to hide problems on the plant floor, which must be identified
and resolved in order to improve operating performance.
Excess inventory consumes productive floor space, delays the identification of
problems, and inhibits communication. By achieving a seamless flow between
work centers, many manufacturers have been able to improve Customer
service and slash inventories and their associated costs.
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The 7 Wastes – Summary
In the latest edition of the Lean Manufacturing

classic Lean Thinking, Underutilization of
Employees has been added as an eighth waste.
Organizations employ their staff for their
nimble fingers and strong muscles but forget
they come to work everyday with a free brain.
It is only by capitalizing on employees'
creativity that organizations can eliminate the
other seven wastes and continuously improve
their performance.
Many changes over recent years have driven organizations to become world
class organizations or Lean Enterprises. The first step in achieving that goal is to
identify and attack the seven wastes. As Toyota and other world-class
organizations have come to realize, Customers will pay for value added work,
but never for waste.
14 - May 21, 2010

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Value Stream Mapping – Definition & Benefits
• Value stream mapping is a lean manufacturing technique used to analyze the

flow of materials and information currently required to bring a product or
service to a consumer.
• A sophisticated flow charting method that uses symbols, metrics, and arrows
to help visualize processes and track performance. This method helps
determine which steps add value and which do not.
• The Value Stream represents the actions taken to bring a product into
existence, from the raw material stage to the finished good stage.
• The Value Stream Map is a pictorial representation of the flow of material
and information as the product is being built.
• A pencil-and-paper tool used: a) to follow a product or information (or
both) activity path from beginning to end and draw a visual representation
of every process (value and non-value) in the material and information
flows. b) then to design a future state map which has waste removed and
creates more flow and c) to end up with a detailed implementation plan for
the future state.
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Value Stream Mapping – Definition & Benefits
• It is a business-planning tool.
• It is a tool to manage the change process.
• It forms the basis of an implementation plan.
• It is a communication tool.
• It provides a common language to talk about processes.
• It shows the linkage between material flow and the information flow.
• It is a powerful tool in identifying waste, so it can be eliminated,
contributing to improved Customer satisfaction
• It helps us see and focus on flow with a vision of an ideal or improved state.
• Enabling broad participation in shaping the future
“Value-
Value-Stream Improvement is primarily a Management Responsibility.
Responsibility.””
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Value Stream Mapping – The Development Process
1. Define Product Family

2. Establish the Team
3. Document Current State
4. Design Future State
5. Create Implementation Plan
6. Execute - Execute - Execute
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Value Stream Mapping – 1. Define Product Family
Customers care about their products, not every product made by an organization.
Therefore, Value Stream Mapping focuses on walking and drawing the processing
steps for on product family from product delivery to raw material shipping. A
product family is a group of products that pass through similar processing steps in
the process.
Processing Steps & Equipment
1 2 3 4 5 6 7
A X X X X
Product
B X X X X X
Family 1
Products
C X X X X
D X X X X
Product
E X X X X X
Family 2
F X X X X
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Value Stream Mapping – ACME Current State Example
1. Customer
Requirements
3. Information Flow
2. Material Flow
4. Timeline
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Value Stream Mapping – 3. Document Current State
3.1 Depict the Customer requirements !!!

3.2 Follow the flow of the product from shipping to the raw
material stage
3.3 Draw the processing steps used to process, move and store
the product
3.4 Input the process and inventory data
3.5 Draw the information flow
3.6 Draw a time line depicting the lead and processing time
21 - May 21, 2010

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Value Stream Mapping – 3. Document Current State
A few Value Stream Mapping Rules:

Rules
• Always collect current-state information while walking along
the actual pathways of material and information flows yourself.
• Begin with a quick walk along the entire door-to-door value
stream, ...
• Begin wit the shipping end and work upstream, ...
• Bring your stopwatch and do not rely on standard times or
information that you do not personally obtain. ...
• Map the whole value stream yourself, ...
• Always draw by hand in pencil, ...
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Value Stream Mapping – Process Icons
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Value Stream Mapping – Material Icons
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Value Stream Mapping – Information Icons
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Value Stream Mapping – Information Icons
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Value Stream Mapping – Other Icons
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Value Stream Mapping – Time Metrics Definitions
Working Time (WT)

• To calculate Working Time - deduct breaks, meetings, beginning of shift set-
up, end of shift clean-up, planned maintenance, and other planned non-
working time. Do NOT deduct unplanned downtime or changeovers.
Cycle Time (CT)
• The average time between two consecutive parts coming out of a process.
Value--Add Time (VT)
Value
• The average time between two consecutive parts coming out of a process
that actually transform the part in a way that the Customer is willing to pay
for.
Changeover Time (CO)
• The time it takes to changeover (to reset or change equipment) from one
part to another (Change Over Matrix).
Queue Time (QT)
• The time between sub-processes that the part gets shuffled around or sits
around waiting for someone to work on it.
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Value Stream Mapping – Time Metrics Definitions
Up Time (UT)
• The ratio of the actual available production time of a process to the available
working time. Expressed as a percentage, uptime is calculated by dividing
actual available production time by the available working time.
Lead Time (LT)
• The average time it takes for one part to go through the entire process - from
start to finish - including time waiting between sub-processes.
Processing (or Touch) Time (PT)
• The time it takes to actually do the work from beginning to end, if one is
able to work on it uninterrupted.
Takt Time (TT)
• Planning drumbeat. How often completed parts NEED to come out the end
of the pipe - as established by Customer demand.
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Value Stream Mapping – ACME Example Current State
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Value Stream Mapping – ACME Example Analysis I
Review the Current State of the ACME Example and document your findings.
31 - May 21, 2010

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Value Stream Mapping – Exercise Current State
TWI Industries – Case Study (Part 1)

Develop a Current State Value Stream Map for TWI Industries.
Document your initial findings.
60 Minutes
Exercise based on the “TWI Industries” exercise in Rother, Mike and Shook, John -
Learning to See - Value-Stream Mapping to create Value and eliminate
Muda (Cambridge, Massachusetts: Lean Enterprise Institute, 2009)
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Value Stream Mapping – 4. Design Future State
The goal of value-stream mapping is to highlight sources of waste and

eliminate them by building a chain of production where the individual
processes are linked to their customers either by continuous flow or by pull.
The first iteration of a future-sate map should take product designs, process
technology, and plant location as given and seek to remove as quickly as
possible all sources of waste not caused by these features.
“What can we do with what we have?”
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Value Stream Mapping – Key Guidelines & Concepts
4.1 Produce at your Takt Time

4.2 Develop Continuous Flow wherever possible
4.3 Use Supermarkets to control & schedule Production
4.4 Determine the Pacemaker Process
4.5 Level the Production Mix
4.6 Level the Production Volume (Paced Withdrawal)
4.7 Ability to make “Every Part Every Day”
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Value Stream Mapping – Withdrawal & Production Kanban
• Kanban means “visible record”, "signboard“, or "billboard". Kanban is a signaling

system to trigger action. Kanban uses cards, plastic markers, balls, an empty part
transport trolley, or simply a floor location to trigger the movement, production, or
supply of a unit in a factory. Kanban cards, describe the parts, supplier and quantity.
When the bin is emptied, the Kanban is used to order more.
• “Withdrawal" kanbans are used to relocate items from one workplace to another.
• “Production" kanbans are used to replace the material when it is used or sold.
• “Signal” kanbans are used to initiate production of a predetermined batch size of a
specific part.
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Value Stream Mapping – Supermarket
"Production" Kanban "Withdrawal" Kanban
Supplying Customer
Process Process
A Product Product B
SUPERMARKET
• Customer Process goes to the Supermarket and withdraws what it needs when it needs it.
Supplying Process produces to replenish what was withdrawn.
• Purpose:
Purpose Controls production at supplying process without trying to schedule. Controls
production between flows.
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Value Stream Mapping – FIFO Lane
Kanban
OP!
S T
FULL ?
Supplying Customer
Process Process
max. 20 pieces
A FIFO Lane B
SUPERMARKET
• In some cases a FIFO Lane between two decoupled processes can be used to substitute
for a Supermarket. A FIFO Lane is like a chute that can hold only a certain amount of
inventory, with the supplying process as the chute entrance and the customer process at
the exit.
• If the FIFO Lane gets full, the supplying process must stop producing until the customer
process has used up some of the inventory.
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Value Stream Mapping – Pacemaker Process
SCHEDULE = Pacemaker Process
Supplying Supplying Customer Customer

Process Process Process Process
Pull max. 50 pieces max. 20 pieces
A B FIFO Lane C FIFO Lane D CUSTOMER
Upstream FLOW Downstream
• Try to send the Customer schedule to only one production process, the
pacemaker process.
• A process is called the pacemaker process, because it is used to control
production and sets the pace for all upstream processes.
• Note, the material transfer from the pacemaker process downstream to
finished goods need to occur as a flow.
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Value Stream Mapping – Sequenced Pull
• Sometimes one can install a “Sequenced Pull” between 2 processes, instead of a

complete Supermarket or a FIFO Lane.
• Sequenced Pull means that the supplying process produces a predetermined quantity
of parts (e.g. one subassembly) directly to the customer process’ order. This works if
lead time in the supplying process is short enough for “production- or build-to-order”,
and if the customer process follows strict “ordering” rules.
• Sequenced Pull is sometimes called the “Golf Ball System” because colored balls or
disks (that roll nicely down a chute to the supplying process) are sometimes used to
provide production instruction.
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Value Stream Mapping – Leveling Production Mix
• Leveling the Product Mix means distributing the production of different products evenly
over a time period. For example, instead of assembling all the “Type A” products in the
morning and all the “Type B” products in the afternoon, leveling means alternating
repeatedly between smaller batches of “A” and “B”.
• The more you level the product mix at the pacemaker process, the more able you will be
to respond to different Customer requirements with a short lead time while holding little
finished-goods inventory. This also allows the upstream Supermarket to be smaller.
Changeovers & Inventory &

Productivity Customer Dissatisfaction
COST COST
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Value Stream Mapping – SMED
• Single-
Single-Minute Exchange of Die (SMED
SMED)
SMED provides a rapid and efficient way of converting a
manufacturing process from running the current product to running the next product.
This rapid changeover is key to reducing production lot sizes and improving flow.
• The phrase "single minute" does not mean that all changeovers and startups should take
only one minute, but that they should take less than 10 minutes (in other words, "single-
digit minute").
• There are seven basic steps to reducing changeover using the SMED system:
1. OBSERVE the current methodology (A)
2. Separate the INTERNAL and EXTERNAL activities (B). Internal activities are those that can only
be performed when the process is stopped, while External activities can be done while the last
batch is being produced, or once the next batch has started. For example, go and get the
required tools for the job BEFORE the machine stops.
3. Convert (where possible) Internal activities into External ones (C) (pre-heating of tools is a good
example of this).
4. Streamline the remaining internal activities, by simplifying them (D). Focus on fixings – For
example, it is only the last turn of a bolt that tightens it - the rest is just movement (waste).
5. Streamline the External activities, so that they are of a similar scale to the Internal ones (D).
6. Document the new procedure, and actions that are yet to be completed.
7. Do it all again: For each iteration of the above process, a 45% improvement in set-up times
should be expected, so it may take several iterations to cross the ten minute line.
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Value Stream Mapping – Takt Image & Pitch
• Takt Image is any sort of visual way to monitor process performance to takt time.
• For example we can use a hand-drawn chart, a digital display board, a material delivery
trolley that comes around every multiple of takt time, or a signal given off by a machine
when a product is completed on-time to takt time.
• One of the most common types of takt image is called Pitch. When used in the context of
conveyance, pitch is also a calculated number. Typically used at the pacemaker process,
pitch is calculated as takt time multiplied by the pack out quantity. In other words if the
takt time is 3 minutes per piece and the pack out quantity is 10 pieces per container the
pitch is 30 minutes per container.
– Takt time = 3 minutes / piece
– Pack-out quantity = 10 pieces / container
– Pitch = 10 pieces x 3 minutes / piece = 30 minutes
– Takt image = 30 minutes / container
– Every 30 minutes a material handler would arrive to remove the box and also
replenish material.
• Pitch is extremely useful when managing large or bulky items that need to be removed
from the line periodically. Pitch also functions as takt image because the filling and
removing of a box every 30 minutes is a very visual way of letting you know if you are
meeting takt.
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Value Stream Mapping – Level Production Volume
• A tool that some organizations use to help level both the mix and the volume of
production is a load-leveling box.
• A load-leveling box has a column of Kanban slots for each pitch interval, and a row of
Kanban slots for each product type. In this system Kanban indicate not only the quantity
to be produced, but also how long it takes to produce that quantity (based on Takt
Time).
• Kanban are placed (loaded) into the leveling box in the desired mix sequence by product
type.
Schedule for Pacemaker Process
Supplying Customer Customer

Process Process Process
max. 50 pieces max. 20 pieces
B FIFO Lane C FIFO Lane D CUSTOMER
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Value Stream Mapping – The 8 Basic Questions
1. What is the Takt Time ?

2. Will you build to a finished-goods supermarket from which the
Customer pulls, or directly to shipping ?
3. Where can you use continuous flow processing ?
4. Where will you need to use supermarket pull systems ?
5. At what single point in the production chain (the “pacemaker”
process) will you schedule production ?
6. How will you level the production mix ?
7. What increments of work will you consistently release ?
8. What process improvements will be necessary ?
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Value Stream Mapping – ACME Example Analysis II
Apply “The 8 Basic Questions” on the ACME Example and document your findings.
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Value Stream Mapping – ACME Example Future State
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Value Stream Mapping – Exercise Future State
TWI Industries – Case Study (Part 1)

Develop a Future State Value Stream Map for TWI Industries.
Document your findings.
90 Minutes
Exercise based on the “TWI Industries” exercise in Rother, Mike and Shook, John -
Learning to See - Value-Stream Mapping to create Value and eliminate
Muda (Cambridge, Massachusetts: Lean Enterprise Institute, 2009)
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Value Stream Mapping – Action Planning
Action planning is the process of planning what needs to be done, when it

needs to be done, by whom it needs to be done, and what resources or inputs
are needed to do it.
Most action plans consist of the following elements:
• a statement of what must be achieved (the outputs or result areas that
come out of
• the strategic planning process);
• a spelling out of the steps that have to be followed to reach this objective;
• some kind of time schedule for when each step must take place and how
long it is
• likely to take (when
when);
when
• a clarification of who will be responsible for making sure that each step is
• successfully completed (who
who);
who
• a clarification of the inputs/resources that are needed.
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Value Stream Mapping – Excellence in Execution
Gordon Eubanks - “Strategy gets you on the playing field, but execution pays
the bills.”
Larry Bossidy - “The trouble is there are too many companies that basically
believe in socialism. They give stock options to everybody, give pay increases
that are the same to everybody within the same salary scale. If you don't
differentiate, you can't possibly be an execution company! And if you don't
single out for reward the people who get things done for you, then you
won't keep the people who will ultimately run the company successfully.”
Geoffrey Moore - “A large number of execution problems are really direction

problems.”
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Operational Excellence – Value Stream Mapping (VSM)

Presented by Frank Adler, Ph.D.

1 - May 21, 2010

Section 1: The Five Lean Principle

2 - May 21, 2010

All Lean Manufacturing is really trying

3 - May 21, 2010

4 - May 21, 2010

Define Value - Specify value from the Customer

5 - May 21, 2010

Value Stream Mapping focuses primarily on waste elimination due to inventory,

Extra Processing Steps

7 - May 21, 2010

8 - May 21, 2010

9 - May 21, 2010

10 - May 21, 2010

11 - May 21, 2010

12 - May 21, 2010

13 - May 21, 2010

In the latest edition of the Lean Manufacturing

14 - May 21, 2010

• Value stream mapping is a lean manufacturing technique used to analyze the

15 - May 21, 2010

16 - May 21, 2010

1. Define Product Family

17 - May 21, 2010

18 - May 21, 2010

1. Define Product Family

19 - May 21, 2010

20 - May 21, 2010

3.1 Depict the Customer requirements !!!

21 - May 21, 2010

A few Value Stream Mapping Rules:

22 - May 21, 2010

23 - May 21, 2010

24 - May 21, 2010

25 - May 21, 2010

26 - May 21, 2010

27 - May 21, 2010

Working Time (WT)

28 - May 21, 2010

29 - May 21, 2010

30 - May 21, 2010

31 - May 21, 2010

TWI Industries – Case Study (Part 1)

32 - May 21, 2010

1. Define Product Family

33 - May 21, 2010

The goal of value-stream mapping is to highlight sources of waste and

“What can we do with what we have?”

34 - May 21, 2010

4.1 Produce at your Takt Time

35 - May 21, 2010

• Kanban means “visible record”, "signboard“, or "billboard". Kanban is a signaling

36 - May 21, 2010

"Production" Kanban "Withdrawal" Kanban

37 - May 21, 2010

38 - May 21, 2010

SCHEDULE = Pacemaker Process

Supplying Supplying Customer Customer

A B FIFO Lane C FIFO Lane D CUSTOMER

Upstream FLOW Downstream