Module 4 Discussion Question

Module 4 Discussion: Mapping the Value Stream

Discussion Board: Mapping the Value Stream

Where and how could you apply value stream mapping in your environment (please specify industry)? What benefit to you anticipate from this?

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Introduction to Value Stream Mapping This course is organized around the five Lean principles, and they are presented in a specific order. The second principle of Lean is to map the value stream. Lean provides us with a powerful tool for doing this: it’s called value stream map.

Identifying value is important for implementing Lean, especially at the organization, enterprise, or process level. Once you understand the process and define value, the next step is to map the who, what, where and how about the processes. In mapping the value stream, we will identify all the activities that contribute to delivering the product or service end-to-end from supplier to customer. The next step is to map the value stream; more specifically, walk the floor or “GO TO GEMBA” to see what is happening, and then map the value stream. Use VOC to calibrate customer needs within the process rather than trying to adjust or fix later. There is no single tool that will do as much to identify value, show process waste, communicate the process flow, and focus efforts on Lean as much as a value stream map. One good value stream map can generate the information necessary to drive any Kaizen events.

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Some prefer to jump into Lean with other tools, such as 5S, which you will learn about later. But the risk of starting somewhere besides a value stream map is that you will spend time improving things that will/may be eliminated as waste later.

In conclusion, Lean provides us with a powerful tool for identifying value called value stream map. By developing a value stream, we will map all activities that contribute to delivering the product or service from end-to-end, from supplier to customer.

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Voice of the Process (VOP) vs. Voice of the

Customer (VOC)

Introduction All work in an organization gets done via some process. Many people conduct a process every day, but they do not really think about it as a process. A process is the result of all activities used in order to transform some input into an output based on pre- determined specifications and requirements. However, this definition does not tell us how well the process transforms or changes the inputs to outputs, if the outputs meet customer requirements so they are willing to pay for the output, and if the process will deliver products or services “right the first time” – thus avoiding wasted due to added cost and resources for us, the producer, and the customer. What Is a Process? Our definition of a process in general terms is that it is a repetitive and systematic series of steps – activities – where these inputs are going to be modified, or transformed, into outputs based on pre-determined specifications and requirements. This is Voice of the Process. When we gather customer requirements, expectations, and preferences, as well as comments and feedback on our products and services, this is Voice of the Customer. When we refer to the flow of products and services to out customers from the producer’s (manufacturer) point of view based on process constraints and cost saving, this is the Voice of the Business.

What is Value Add?

From a Lean perspective, for value to be value added, three criteria must be met: the activity must change the form or function of the product or service in some way; the customer must be willing to pay for the activity; the activity must be done right the first time.

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Three Perceptions of a Process There are usually three perceptions of a process. “What you think it is” and “what it actually is,” and the perspective of “what it should be.” We know what it is designed to look like, but that is just what it should be, and sometimes these perceptions do not line up. What you think quite often is different from what it should be and even more different than from what it is. So, we need to be careful and ensure that we focus on what it actually is when we are mapping and reviewing our processes. This is going to show what is happening in the process. It will allow us to identify the problem and the location. An investigation is conducted to determine why the problem exists; a solution is identified; a fix is implemented to improve the process. Whenever a process is mapped, ensure that the AS IS state is reflected in the map.

Examples of Processes In general, a process has a beginning, a middle, and an end. These activities make up a process.

• Processing invoices, reconciling accounts receivable, reconciling accounts payable

• Backing up files in a computer • Manufacturing commodities such as auto parts, screws, clamps, nails • Manufacturing consumer products such as cosmetics, personal care products • Manufacturing pharmaceuticals, medical devices, diagnostics

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• Conducting service calls • Providing answering services for doctor’s offices, real estate offices

Why Do We Need a Process Focus?

Focusing helps us understand how and why things get done. It gives us the opportunity to make a link between our customers and our supplier relationships. It allows identification of opportunities to conserve resources without compromising quality. It allows us to gain a deeper understanding of the process used to make our products or services.

Understanding our processes allows us to focus on the problems rather than the people. For the best business and customer service results, there are two voices that require our focus: the voice of the customer and the voice of the process. .

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Defining and Detailing the Process Flow Charts: Defining and Detailing the Process When looking at flowcharts, you’re likely to see four symbols: ovals, steps, decision diamonds, and connectors. Ovals typically indicate the starting or ending point in the flowchart. Steps are rectangular boxes that usually have to do with process. Decision diamonds typically indicate a “yes” or “no” scenario, and connectors are circled letters or numbers indicating a match on another page or window. We can use an “A” with a circle if the process is large and extends to the next page.

Basic Flow Chart Symbols • Oval: the starting or ending point in the flow chart

• Step: a rectangular box, usually a process step

• Decision diamond: usually a yes or no scenario

• Connector: a circled letter, or possibly a number, indicating its match on another page or window

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Flow Chart: Making Coffee

Consider the following flow chart for brewing coffee in a coffee maker.

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Swim Lane Flow Chart: Car Sales This more sophisticated flow chart shows the process of purchasing an automobile. The swim lanes depict responsibility among the people involved in making the sale happen: the customer, the salesperson, the boss, and the closer.

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Process Map: The Future State of Car Sales The future state of sales may be a much simpler process with fewer agents involved. Many dealers are going to a process map model, which includes only one customer, one salesperson, and one price.

A swim lane chart provides focus and compartmentalizes responsibilities. Lean thinkers strive for simplcicty.

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Value Stream Mapping

Introduction In this lecture, we will discuss three rules for creating a value stream map.

Value Stream Mapping Rules Start out with a basic value stream map.

1. Focus only on major process steps (approximately 10 to 15) 2. Value stream mapping is best accomplished by a team

o Ask each team member to create their own map so that you can see what everybody thinks they saw

3. Ensure you train everybody on how to construct their value stream map o Create a structured process to ensure that everything is captured, and biases

are not injected into the process

Some prefer to jump into Lean with other tools, such as 5S (many newer LEAN reference use 6S. The 6th S is for Safety.) The risk of starting somewhere besides a value stream map is that you will spend time improving things that will be eliminated as waste later.

Value Stream Mapping Process

Cross-Functional Teams and Education

• Form a cross-functional team • Include process Subject Matter Experts (SME’s) • Educate the team on how to create a Value Stream Map

Initial Brainstorming

• Brainstorm your initial map o Get an idea of what will be mapped o Collect data based on scope o Decide the level of detail to be mapped o Use VOC input where applicable

Waste Walks

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• “Go to GEMBA” o Conduct a walk of the physical area to be mapped o Note any waste observed. This helps identify areas for improvement

and potential future Kaizens Rough-Cut Map, Final Current State Map, and Missing Information

• Complete a rough-cut map • Agree on what the final current state map looks like • Ask the team if anything has been missed

Basic Value Stream Mapping Symbols Since you want to keep the mapping process simple, use simple symbols. Applications such as Microsoft VISIO have stencils, which include Value Stream Mapping symbols. Other applications provide similar tools. The following is an example:

Supplier and Customer Symbol

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• The symbol for suppliers and customers is the same • It is used as a beginning and ending symbol

o Supplier capabilities go at the top of the map o Customer requirements go at the end of the map

• Start with the customer and work backwards, filling in other symbols as you go Transportation and Shipment Symbol

• The symbol that looks like a truck with an arrow on it symbolizes shipping to and from the customer and supplier o The truck at the beginning shows how long it will take the

supplier to get the raw materials o The truck at the end shows that we are transporting our

product to the customer Kaizen Burst

• The third symbol is called a Kaizen Burst o It is used to indicate opportunities for rapid improvement o It will appear around quick wins o It can be used in the materials flow at the bottom of the map o It can be used in the information flow area of the value

stream map Operator Symbol

• The operator symbol looks like a man sitting at a desk

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o You can use this in many ways such as adding a number to indicate how many people are working in that process

Supermarket Symbol

• The supermarket and the pull symbols often go together o A supermarket symbol indicates where inventory is needed

Process Box with Data Symbol

• The process box is where you identify high-level process steps and the data that process is generating Electronic Flow Symbol

• Capture electronic flows of information with a lightning bolt Push Arrow Symbol

• The push arrow symbol is an arrow with stripes o It is used to indicate that a downstream process is being

inundated with things from the upstream process, whether they need it or not

Manual Information (Paper Flow) Symbol

• The straight-line arrow is used to indicate manual information flow

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o It is where hard copy paper flows are taking place Inventory Symbols

• There are two symbols that indicate inventory o A triangle with an “I” in the middle

o “I” stands for inventory o It is the most commonly used symbol o Place the symbol where something is piling up o It might be used with the push symbol

o Tombstone o Used to indicate where inventory is waiting to “die”

and/or become obsolete Go See Symbol

• The Go See symbol looks like a pair of eyeglasses o It is used where you need to actually and physically go look

at a process Timeline Symbol

• The timeline symbol is where you capture the value-add vs. non- value-add times o Capturing these times (Value-add vs non-value-add) gives

you a summary of what is going on in your value stream and what the customer would and would not be willing to pay for

Other Symbol

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In conclusion, by including the experts, (the people that do the job) a process is developed to ensure every hand off is captured and employee bias is not included in the map. It is crucial that you have experts in the room who understand the process from start to finish. There are many symbols for use in a value stream map, depending on what outcome you are trying to communicate.

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Key Measures in A Value Stream Map

Introduction In this session, we’re going to discuss additional important measures to understand when creating value stream maps. We will demonstrate how to calculate or arrive at some of these measures.

Capturing relevant data in the data box will help you to understand why your value stream is not meeting your customer’s expectations. What kind of data does the team need?

• Cycle time • Changeover time • Uptime • Reasons for delays • Batch size • Number of resources used in the process boxes • Any other information that will help you see where waste is located

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Quality Levels • Yield: the number of good parts or services that are delivered divided by the total number of parts or services we produced or attempted to deliver o The complement to scrap rate (i.e., the yield percentage and scrap

percentage add up to 100 percent) • Rolled throughput yield (RTY): found by taking the yield percentage at each step along the way and multiplying them o Tells us what percentage of products or services started were actually

completed successfully

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Time Measures • Available time: the raw amount of time that the organization is open for business and staffed in that area • Uptime: the percentage of the available time that the equipment or service is running or being delivered o Found by taking the amount of time we were running or delivering a

service and dividing it by the available time o Downtime percentage is the complement to uptime. Another way to

think about that is the uptime percentage and the downtime percentage add up to 100 percent total of the available time

Additional Measures • Machine capacity: the number of units the machine can produce or the

number of services we can deliver during the available time • Available or open capacity: the percentage of the available time that is

not currently demanded by our customer (i.e. for producing units or delivering services)

• Machine availability: the pure percentage of the minutes that were running divided by the minutes that were available o Differs from uptime in that some people will take changeover time out

of the equation for uptime o You may not take it out when calculating machine availability

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Changeover Time Changeover time is the time between the end of the previous part or service and the start of the next part or service at expected rates of speed. It is not just setup time. For example:

1. It begins when I stop producing Product A 2. Then I remove Product A, the paperwork, and the tooling 3. I retrieve Product B, the paperwork, and the tooling 4. I set it up; I run my first piece. I measure it; I make some

adjustments 5. I submit to quality for approval, and go through that cycle until I

have approval 6. Finally, I hit the Go button to turn on Product B at the expected

rate That entire length of time is the changeover time.

Takt Time

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When we are looking at the measures in the data box, we should look at capacity, changeover times, and available time in relationship to takt time: • The amount of time within which we must complete each product or

service in order to keep up with customer demand • From the German word taktzeit, or meter, and references the

German word for the conductor’s baton (it sets the beat for production)

Example The customer demands 1,000 units a day. We are operating two shifts per day; each shift gets two 10-minute breaks and a 20-minute lunch period for a total of 40 minutes that each shift is off. Therefore:

1. Two shifts × eight hours per shift × 60 minutes per hour × 60 seconds per minute = 57,600 seconds available per day

2. Two shifts × 40 minutes × 60 seconds = 4,800 seconds per day that we are not functioning

3. Net available production time = 57,600 seconds – 4,800 seconds = 52,800 seconds per day

4. Customer demand rate = 52,800 seconds / 1,000 units = 52.8 seconds per unit

5. Do not round up. If we need to produce a product or service every 52.8 seconds and we round up to 53 seconds, over time we will fall farther and farther behind the customer demand rate

6. Cycle time always needs to be shorter than or less than takt time

Planned Cycle Time We need a planned cycle time. Until we are perfectly Lean and have no waste at all, we need to plan our cycle time to be slightly faster than our customer’s demand rate, or takt time. You might say, “Isn’t that a waste of overproduction?” Yes it is, and we overproduce because we

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know we will have unplanned downtime due to the waste in our system. That way, we can still come out on the positive side of the equation when there is unexpected downtime. The more waste we have in our system, the smaller our cycle time needs to be relative to takt time. So just to reiterate: your planned cycle time should always be less than takt time. The more waste we have in our system, the smaller our cycle time needs to be relative to takt time. The more waste, delta, or difference between takt time and our planned cycle time the more we allow for that unplanned downtime that comes along with our waste. In conclusion, there are critical measures in these data boxes for value stream mapping. We want to ensure we understand how to calculate their importance.

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Constructing a Value Stream Map

Introduction In this session, we are going to:

• Discuss why we create a value stream map

• Review the high-level steps

• Discuss data boxes and review a selection of the metrics to add to the data boxes

• Discuss current and future state value stream maps and why we need both when we do value stream mapping

The Importance of Value Stream Mapping Value stream mapping was developed by Mike Rother Ph.D. in the book, Learning to See. Here are a few takeaways from his book: • VSM is instrumental to identifying opportunities for improvement • It allows us to locate the most significant problems and prioritize

them • We won’t be able to fix all problems immediately, but we can start

with one primary value stream, identify kaizen bursts or opportunities for improvement, and prioritize the projects

Why Create a Value Stream Map? The primary reason to create a value stream map is to:

• Be able to see both the flow of information and material

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• Allow us to see the defects, waiting, and inefficiencies associated with our process

o We will note non-value add time and total lead time o The total lead time is the process from start to finish

• Calculate how efficient the process is based on lead time and how long it takes each operator to perform their tasks o This metric is known as cycle time

FIRST STEPS IN CREATING A MAP • The first step to constructing a Value Stream Map is

to go to Gemba and observe the process from beginning to end o Note any problems, waiting, stores of inventory, or other

areas in need of a closer look • The next step is to collect data such as turn-around time,

delivery times, defects per hour, wait time, customer complaints or any other pertinent data to illustrate the problems

• Based on observation or data collection note any inventory remaining at every step and identify non- value add time or activities observed

Current State vs. Future State • We begin the current state map by adding the supplier and customer

o We then add five to seven boxes as high-level steps • The next step is to add data boxes

o We will populate the data boxes with the metrics helpful for this process

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• We’ll add the operators, cycle time, non-value add time, changeover, and any other metric.

• The next metric of importance is lead time o The lead time is calculated by identifying the time between the

actual time and day the process started and the time and day the process ended

• Now we’ll review the five to seven high level steps and add any waiting in-between each step

o At the bottom of the map, we’ll bring down the totals for cycle time and wait time for each step

o By adding the total for Lead time and the total for cycle time, we can determine the percent efficiency metric: how efficient is this process?

• Once the current state is complete, a future state map is developed o The future state is an error free perfect state or future vision o This vision for the future is the

optimal process that is brainstormed by the team o The future state is accomplished by implementing

process improvements and opportunities for process redesign noted during review of the current state  How can the process be redesigned? What steps can be

eliminated? What can be put in place to shrink the overall Lead time?

In conclusion, the current state is redesigned into a leaner future state. The kaizen bursts can now be reviewed, and process improvements applied. We will learn tools and techniques that can be implemented to assist us on our journey.

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Value Stream Mapping for Manufacturing And

Service

Introduction In this lecture, we will discuss a value stream map example in a transactional environment. The definition of “transactional” is “something related to a process or other action.” An example of a transactional interaction is two individuals negotiating a contract or requesting a service.

Transactional Process Value Stream Map Let’s go over a transactional process in some detail: Facts depicted in this example:

• There are five employees that work in six areas of the organization and are physically far apart from each other o All five employees share the steps

• Each employee works in a multifunction staffing concept known as a shared resource and this path is highly inefficient

• Each order process, operation, and delivery is manual and many deliveries span across the plant

• This transactional VSM is an order process • Step 1: Customer places an electronic order and the order is

electronically transmitted from the customer to the supplier o The supplier submits the request to

the copy paperwork step

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 The process is fraught with delays indicated by the triangle prior to this first step

o This step includes five shared resources o The cycle time to perform this step is one to two minutes o The batch size is between five and ten orders o Downtime is 20% of the time o First pass yield (FPY) is 62%, meaning the orders pass

through defect free 62% of the time o One or all shared resources deliver the order 650 feet

to step two o The wait time is 30-60 minutes before step two

clerks receive the order • Step 2: The five shared resources working on this process must

post the original order o Cycle time is seven to ten minutes o The operators must walk 55-300 feet o It takes 300-480 minutes of wait time before the

next step receives it o Batch size is 50-80 orders

• Step 3: The original order must be signed o Cycle time is one to two minutes o Batch size is between five and ten orders

• STEP 4: Sort the stack o Cycle time two to five minutes o Batch size is between five and ten orders o First pass yield (FPY) is 62% (The orders pass through

defect free 62% of the time) o The workers must walk 650 feet to the next step o The process waits from 30-300 minutes before the

next step receives it • Step 5: Post on the board

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o Cycle time is one to two minutes o Batch size is between five and ten orders o First pass yield (FPY) is 99% (the orders pass through

defect free 99% of the time) o The wait time is 60-960 minutes before the next

step receives the work. • Step 6: File the original

o Cycle time is one to two minutes o Batch size is between five and ten orders o First pass yield (FPY) is 84% (the orders pass through

defect free 84% of the time)

Let’s analyze this value stream map and ask some questions of the process: • Look at the times: 30 to 60 minutes? Why 480 minutes? Why 960

minutes? That seems like a long time of nothing going on between steps

• How about batches of 50 or 80 travelers? What if they made the bulletin board smaller so that only 20 can fit?

• Why is the copy going back to the order taker? Should it not go directly to the customer?

• What about 650 away vs. zero feet? Could they shore that up a little bit?

• Any idea why that vertical line is there at the bottom? That is the end of the value add

• Any idea why? These two steps are in white? There is no value add in signing off on something and sorting it, so that might be why those steps are white

• Downtime is 20 percent of the time o First pass yield for one step is 62 percent, which is terrible

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o First pass yield of another step is 84 percent, which is not as bad, but not good

In conclusion, the overall goal of value stream mapping is to develop the current state to identify waiting, waste, inefficiency, and loss

• The multifunctional team is critical to success of the project and are very knowledgeable about the process

• The team can brainstorm viable solutions. • Processes that produce little value can be improved

• However, we must ask ourselves if this process is worth saving

• Can we automate the orders and eliminate the manual handoff process?

• In order to add real value, we can reallocate the five shared resources to a value-add task for which the customer is willing to pay

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Using the Value Stream Map

Introduction Although many people try to jump into Lean using some of the simpler tools before making a value stream map, there’s reason for doing so early in the process. The value stream map is an elaborate tool in the following ways:

• It’s foundational to Lean • It will help focus on value and eliminate waste • The customer’s right there, the supplier is right there, you see the

value-add steps, and the waste is clearly visible Let’s take a look at a value stream map example with four value-add steps. Here we have the value stream map. Value add, value add, value add, and value add. And we also see the waste. It’s very obvious. Look at the inventory triangles and ask the following questions:

• Why is inventory piling up between the steps? • What’s going on there?

o Inventory is a waste that we’d like to eliminate And look at the transportation distances between each of the steps.

• Why are we moving things so far? o Transportation is a form of waste

Look at that change over time.

• What’s going on there? • Why is that taking so long? • Why are we getting it right in the previous step and why are we

inspecting?

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o Is that, perhaps, over-processing? o Maybe this one is not actually a value-add step

• Since the changeover time here in step two is so long, nobody’s probably upset about the fact that over here, at the end, we only have uptime of the machine 80 percent o Why is this thing only up 80 percent? We have material

coming in but not so much coming out o Maybe we need to get this up 100 percent of the time

• Why are we sending information down to the server?

Be sure to use your map to identify the value-add steps. Use it to see both the obvious waste and the not so obvious waste. Furthermore, post it for everybody to see. Use it to communicate the process to everybody. And finally, use it to create and envision the future state.

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CLASS EXERCISE 1. Let’s see what we can do to move things around and shorten up

the transport distances 2. What can we do to get rid of those inventory levels or eliminate

them altogether? a. Let’s get the inputs and the output levels balanced

3. Let’s fix the uptime and changeover issues 4. Now look at our process. Not only is everything faster but look

at our output. Much more output. Fantastic!

In conclusion, make a value stream map, but more importantly, use it to focus on value and eliminate waste.

  • MODULE 4 TOPIC 1 INTRODUCTION TO VALUE STREAM MAPPING V1
  • MODULE 4 TOPIC 2 VOP_VOC v2
    • Voice of the Process (VOP) vs. Voice of the Customer (VOC)
      • Introduction
  • MODULE 4 TOPIC 3 DEFINING AND DETAILING THE PROCESS
    • Defining and Detailing the Process
  • MODULE 4 TOPIC 4 VALUE STREAM MAPPING
    • Value Stream Mapping
  • MODULE 4 TOPIC 5 KEY MEASURES IN A VALUE STREAM MAP
    • Key Measures in A Value Stream Map
  • MODULE 4 TOPIC 6 CONSTRUCTING A VALUE STREAM MAP
    • Constructing a Value Stream Map
  • MODULE 4 TOPIC 7 VSM FOR MANUFACTURING AND SERVICE
  • MODULE 4 TOPIC 8 USING THE VSM