GBE-KPO-2-005-00 Value Stream Mapping (VSM)
GBE-KPO-2-005-00 Value Stream Mapping (VSM)
GBE-KPO-2-005-00 Value Stream Mapping (VSM)
REVISION HISTORY
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Table of Contents
Contents Slide(s) Contents Slide(s)
Value Stream Mapping (VSM) is a Lean tool commonly used in kaizen activities to understand
and improve Materials, Information and Process flow.
VSM captures and presents whole process from end to end in a method that is easy to
understand by those working the process
VSM helps to analyze and design flow of Materials, Information and Process required to bring a
product or service to a customer in a more efficient way by systematically identifying and
eliminating wastes.
“A systematic approach to identify and eliminate wastes (non-value-added activities) through continuous
improvement by flowing the product / service at the pull of the customer in pursuit of perfection”
--The MEP Lean Network
Scope
All business processes associated with Flextronics – Operations, Supply Chain and Office
functions
Note : Office functions inclusive of Back-Office within the organization
Objective
To graphically illustrate and analyze how the flow of products or services and information are
being processed
To have a blueprint or a display of the total picture to focus on lean transformation
To highlight the problem areas and identify opportunities for wastes elimination
To serve as a dashboard to monitor and continuously improve processes
Visualize the whole picture—not just visualize the individual process, but the entire value
stream
Enable Materials, Information and Process flow more visible
Identify bottlenecks, inefficiencies and improvement opportunities
Benefits of VSM ?
Wastes elimination to enable End to End (ETE) improvements.
Operations Supply Chain Office
• WIP reduction ~ 40% • Lead time reduction ~ 30% • Process Time reduction ~ 30%
• FG inventory reduction ~ 25% • Raw matl inventory reduction ~ 25% • Rework information reduction ~ 80%
• Manufacturing lead-time ~ 50% • Logistics cost reduction ~ 25% • Accuracy improvement ~ 25%
• Crew size optimization ~ 50% • Warehouse optimization ~ 30% • Report process reduction ~ 50%
• Manufacturing line optimization ~ 50% • Material localization ~ 30% • Office productivity improvement ~ 30%
• Quick Change over ~ 40% • Manual process time reduction ~ 50% • Automation improvement ~ 50%
Note : The items and figures shown above are only indicative not representing any specific business or operations scenario
Achieve kaizen goals : Double the good, Halve the bad, Triple the speed
DIPLESS
• Defect x 1/10 : improvement 90%
• Inventory x 1/2 : improvement 50%
• Productivity x 2 : improvement 100%
• Lead-time x 1/2 : improvement 50%
• Energy x 9/10 : improvement 10%
• Scrap x 1/10 : improvement 90%
• Space x 1/2 : improvement 50%
FLE
i. Takt Time
Production i. Stop @
Abnormality
ii. Single Piece
Flow JIT Jidoka
iii. Pull ii.Autonomation
Production
What is Value ?
Values
the task or activities carried out to build products or deliver services which payable by
customer or add values to customer
Waste
the main enemy in LEAN implementation and add no value
the task or activities carried out to build products or deliver services which not payable or
even upset the customer.
A Value Stream
set of all actions (both value added and non value added) required to bring a specific
product or service from raw materials or information through to the processes to meet
customer expectation
Whenever there is a product or service for a customer, there is a value stream. The
challenge lies in seeing it.
Work / activity which neither add nor Work / activity which directly either add or
increase the value of the product / service increase the value of the product or service
(e.g. operator rework product or buyer (e.g. assembly of parts or trigger kanban
manual re-input PO data or HR re-update signal to suppliers or IT anti-virus security
employee personal files) patching)
Work
Elements
The objective is to
maximize the value-added
No value-added but necessary work part by eliminating ‘wastes’
(e.g. OBA check or IQA check or Finance cycle and ‘value enable’
count audit or Engineer calibrate fixtures)
Defining Value
Non-Value Added Activity
Value Added Activity
• All other functions and unwanted features are by
• Something customers are willing to pay for definition … WASTE
• Activities that either add or increase values • Activities that neither add nor increase value
• Changes the form, fit & function • Adding no value to customers
• Is being done right the first time • Simply raise costs in our business
IDENTIFY
Identify Non-Value Add, Value Enabler and Value Add activities. Usually about 60% of activities are Non-Value
Add, and they are embedded inside the process lead-time resulting in high operational costs.
ELIMINATE
Eliminate the Non-Value Add activities to enable the process lead-time and to reduce more than 50% of the
resulting competitive costs.
BREAKTHROUGH
Breakthrough improvement to add more values is the spirit to pursue perfections and to achieve the position
ahead of competitions. In Flextronics, Best-in-Class practices for such improvements are in implementation.
S I T Transportation
I Inventory
M Motion
7+1 W Waiting
D Wastes M
O Over Production
O Over Processing
D Defect
O W
S Skills Unutilized
O
No The 7+1 Wastes Definition Examples of Supply Chain Examples of Office Wastes Examples of Manufacturing
Wastes Wastes
1 Transportation Unnecessary
movement of
parts between
processes
Customer/ supplier
Pending clearance of waiting to meet up with Operator waiting due to non
Challenge inventory Flex employee (s) arrival of part
No The 7+1 Definition Examples of Supply Chain Examples of Office Examples of Manufacturing
Wastes Wastes Wastes Wastes
7 Defects A defect is a
component which the
customer would deem
Incoming Inspection
unacceptable to pass
the quality standard
Draw VSM
VSM – Basic Requirements
ADJUST
PLAN
Draw current state VSM
Analyze gaps to
to show gaps for
Analysis determine root
improvement A causes
Current State P
VSM
C Future State
CHECK
Implement
kaizen and D
verify the Implement DO
effectiveness Establish future state
VSM for kaizen
implementation
Step 6 : Develop Future VSM – CF-VSM (Optional) & ETE VSM • CF-VSM & VSM guideline
Develop future CF-VSM and connect to future ETE VSM • VSM Icons and VSM Symbols
Step #1
Step #6 Step #5 Step #3 Step #2
1
Step #7
Information Flow
Step
Step #4 #26
2
Step #8
Step
#25
Materials Flow
Data Box 5
6
Revision Tracker
VSM Revision: 01 (After VSM refer as Rev 1)
VSM Originated Date: (Date Rev 01 drawn)
VSM Last Updated Date: MM / DD / YYYY(Current VSM
Drawn Date for the first time)
VSM Leader: (Process / Business Owner)
Next time – when VSM is drawn the Revision will be marked as 01 – template to follow the below
example:- VSM Revision: 01 (VSM Revision refer after Rev 00)
VSM Originated Date: (Date Ref to Date Rev 01 drawn)
VSM Last Updated Date: MM / DD / YYYY(Current VSM Ref 00 -
Drawn Date for the first time)
VSM Leader: (Process / Business Owner)
Third time onwards – when VSM is drawn the Revision will be marked as 02 and then on the sequentially
numbering – template to follow the below example:-
VSM Revision: 02 (VSM Revision refer after Rev 01)
VSM Originated Date: (Date Ref to Date Rev 02 drawn)
VSM Last Updated Date: MM / DD / YYYY(Rev 01 VSM Drawn
Date)
VSM Leader: (Process / Business Owner)
Value Stream Mapping (VSM)
30 GBE-KPO-2-005-00 Rev.06
Cross-Functional VSM (CF-VSM)
Cross-Functional VSM (CF-VSM) is also known as “Cross-functional Diagram”, “Process
flowchart” and “Swim lane Chart”
After kaizen focus area (generally indicated with starburst ) has been identified using
VSM, CF-VSM is used to understand specific kaizen focus area.
Note : There can be multiple CF-VSM established within a single VSM depending on
kaizen focus areas in the VSM.
CF-VSM focus on identifying time traps in cross-functional processes to enable improvement in process
lead-time and quality of communications leads to flawless information flow
Value Stream Mapping (VSM)
31 GBE-KPO-2-005-00 Rev.06
Cross-Functional VSM (CF-VSM) – Format
Starburst
(Kaizen opportunities)
Red line
Sample
(Rework Flow)
Processes
Function / Owner
Information flow Waiting time
Note :
CF-VSM Key Benefits – refer page #37
CF-VSM Standard Guide – refer page #34
VSM icons / symbols – refer page #39 & #40
5 2
4 3
1
Shortened lead-
time by process
pulled in
Pull-in processes from right to left – reduce time forecast to MRP loading Hrs 120 48 60%
Reduce criss-cross communication flow Reduce forecast collect timing Hrs 48 12 75%
Reduce # forecast report # 35 4 89%
Reduce # of functions/owner – reduce touches Reduce touch point # 60 30 50%
Clear ownership on who does what by when Reduce rework report time Hrs 16 0 100%
Process overview – awareness within team Reduce man hours Hrs 8.8 2.2 75%
Value Add (VA) • A step in an Industrial or Business Process that customer pays for.
• Change or Add Form , Fit or Function
Green What Customer Pay
• Includes those activities that are required by contract or law
for
• Things that would impact Customer
Non Value Add • Any activity that does not directly impact the customer and cost is
not borne by the customer
(NVA)
Red • Activities that would not impact Product or Service
What Customer
DON’T Pay for
• Statutory or Company Policy Requirement or process Enabler
Essential Non • Any activity that does not directly impact the customer.
Value Add • Customer may not pay but is an enabler to meet Contract
Yellow Obligation or Company Policy or Statutory Requirement
(ENVA)
• These steps may be necessary to support value added steps
Process Enabler
• Any activity required by the business
[Process Time + Waiting Time] = Cycle Time PT : Process Time CT : Cycle Time
(PT) + (WT) = (CT) WT : Waiting Time TC : Touch Points
VSM icons / symbols have been categorized into Primary and Secondary
This is to simplify and to make it easier to use
Primary icons / symbols – critical and applicable
Secondary icons / symbols – for additional information to strengthen the VSM representation
Personal
Transportation Decision Document Computer Process Supplier Customer
Process Box
P/T
Iterations Tel MRP
W/T
Quality
Shipment In / Out Telecom Receipts Technology Used Data Box
FIFO
ABCD
Leveling Mix
Withdrawal
&/or Volume (Pull)
Air Freight Sea Freight Fork lift
Segregate
Normal
Easy to see Abnormal
Conditional Abnormal
Eliminate Abnormal
Sea Level
Automation
Note 1 :
a) Value in Process Step#, Task, P-T, VA-T, NVA-T, W-T and C-T are auto link to Gemba Observation Log Sheet
b) Any change to the above a) will be prompted with the Reminder alert message.
Note 2 :
a) Time Interval is auto calculated to provide sugessted value which will be rounded up for the first value and subsequent intervals of the time chart
b) Any change to the above a) will be prompted with the Notice alert message.
Note 3 :
STEP 1 : Segregate Normal and Abnormality
a) Select category of N, AB or CAB from drop-down list
a1) "N" highlighted Green is Normal activity for further improvement opportunities
a2) "AB" highlighted Red is Abnormal activity for immediate elimination in next step
a3) "CAB" highlighted Yellow is Conditional Abnormal activity for future elimination in moving forward steps
b) Any other category value chosen from above a) will be prompted with the Wrong input alert message.
STEP 3 : Combine
a) Select range of combination from C1 to C30 from drop-down list
b) When "C#" is selected, then the activity is indicated for combination Step 3 onwards with cell highlighted Purple
c) Any other range or value chosen from above a) will be prompted with the Wrong input alert message.
STEP 4 : Review
a) Combine the time of those activities from the same "C#", and chose one of those combined cell to input the combined time and leave the rest blank
STEP 5 : Simplify
a) Select range of simplification from S1 to S30 from drop-down list
b) When "S#" is selected, then the activity is indicated for simplification Step 5 onwards with cell highlighted Orange
c) Any other range or value chosen from above a) will be prompted with the Wrong input alert message.
STEP 6 : Automate
a) Select range of automation from A1 to A30 from drop-down list
b) When "A#" is selected, then the activity is indicated for simplification Step 5 onwards with cell highlighted Blue
c) Any other range or value chosen from above a) will be prompted with the Wrong input alert message.
Note 4 :
a) Expandable time scale - expandable time is hidden
39%
Improvement
Target
Form team to walk the current ETE process to record all details of observation and information
into ‘VSM Gemba Observation Log Sheet’ based on 3G approach.
Value Stream Mapping (VSM)
57 GBE-KPO-2-005-00 Rev.06
Case Study
Step 3 – Draw the ETE VSM based on Observation Log Sheet
Based on VSM Gemba Observation Log Sheet, draw the current state VSM and identify the areas
of kaizen needs (starburst red) for improvement opportunities.
Value Stream Mapping (VSM)
58 GBE-KPO-2-005-00 Rev.06
Case Study
Step 4 – Draw / Develop Cross Functional VSM (Current)
Current CF-VSM
Based on current state ETE VSM, expand the kaizen needs areas (starburst red) by establishing
CF-VSM to focus on cross-functional interactions for process lead-time and information flow
improvement.
Value Stream Mapping (VSM)
59 GBE-KPO-2-005-00 Rev.06
Case Study
Step 5 – Develop 7 Steps of Office Kaizen
Office 7 Steps
Use ‘7 Steps of Office Kaizen’ to systematically eliminate the abnormalities and improve the back-
office process lead-time and accuracy.
Value Stream Mapping (VSM)
60 GBE-KPO-2-005-00 Rev.06
Case Study
Step 6 – Draw / Develop Cross Functional VSM (After)
Future CF-VSM
Future VSM
Establish future state CF-VSM to visualize improvements and incorporate it into future ETE VSM.
Standard Work
Standardize the operation of the process to maintain consistency and sustain quality.
MRC Meeting
Automated Demand Master
For sustenance, develop Visual Tracking Chart to monitor process effectiveness for Yokoten.
GOLS_7-Steps_CF-VSM
7 Steps of Office Kaizen