Value Stream Analysis

Kaizen Training
What you can Expect

“Value Stream Analysis Kaizen Training”
contains what you need to know to get the job
done, not everything you need to know to be an
expert.

Part 1

Lean concepts and terminology

Part 2

The process by which we create future states
Lean Thinking
• Value in the Eyes of the Customer
• The Value Stream
• Flow
• Pull of the Customer
• Perfection
 Value Added

Value is added any time we physically change our
product towards what the customer is buying

If we are not adding value, we are adding cost or
waste

Lean Manufacturing drives the systematic elimination
of waste Value-Added Time : Minutes
Time in Plant : Weeks
ORDER CASH

KEY QUESTION – Are my customers willing to pay for this ????

 Value Added vs. Non-Value Added
Value added
LEAN = ELIMINATING THE 7 WASTES

5% 
Overproduction

Waiting

Transportation

Non-value added
processing

Excess inventory
Non-value added 
Excess motion

Defects

Typically 95% of Total Lead Time is Non-

Value Added!!!
 WAITING OVERPRODUCTION
TRANSPORTATION

PROCESSING
7
Wastes DEFECTS

MOTION INVENTORY
7 Basic Types of Waste (Toyota)

Overproduction – producing more than what is
demanded by the customer

Inventory – Storing more than the absolute minimum
needed

Transportation – the unnecessary movement of
materials

Waiting – waiting for the next process step

Excess processing – due to poor tool or product design

Wasted motion – unnecessary reaching, walking,
looking for parts, tools, prints, etc

Defects – scrap and rework
 What is Flow ?

Producing and moving one item at a time (or a
small and consistent batch of items) through a
sequence of process steps as continuously as
possible, with each step making just what is
requested by the next step.

TRADITIONAL CONTINUOUS FLOW

Lean Lexicon Version 1 p9

Continuous Flow – More Efficient & Faster

Traditional Batch Layout Continuous Flow Layout

 Supermarket Pull System
“Production” KANBAN “Withdrawal” KANBAN

Supplying
process Customer
process

A B
product product

Mike Rother
Learning to See
SUPERMARKET
CUSTOMER PROCESS goes to supermarket and withdraws what it
needs when it needs it.
SUPPLYING PROCESS produces to replenish what was withdrawn.
PURPOSE: Controls production at supplying process without trying to
schedule. Controls production between flows.
Takt Time
Takt time paces production to the pace of customer
requirements.
Total daily operating time
Takt Time =
Total daily customer requirement

Operating time = 1 shift x 8 hours – (2) 20-min.

breaks = 440 mins/day
Customer 880 units/month
= = 44 units/day
Requirement 20 days/month
440 mins/day
Takt time = = 10 mins/unit
44 units/day
What is a Value Stream ?

A Value Stream is all the actions, value
creating and non-value creating, required to
bring a product from order to delivery


Starts with raw materials


Finalizes at the end-customer


Involves several businesses
Value Stream Mapping

Helps you to see the sources of waste in the value
stream

Shows the flow of information and material

Forms the blueprint for lean implementation (Imagine trying to
build a house without a blueprint).

Helps you to see more than just the single process level

Provides a common language for talking about manufacturing
processes

Makes decisions about the flow apparent, so they can be
discussed

Ties together lean concepts and techniques, which helps to avoid
“cherry picking” Improvement projects
Mike Rother
Learning to See
What is Value Stream Analysis?

Value stream maps describe a value stream

Value stream analysis is a planning process

Uses value stream maps to communicate
• Information Flow
• Material Flow

Three value stream maps are created

Current state

Ideal state

Future state (3 months from now)

Action plans are developed for the future state map
The Value Stream Analysis Process

Phase 1-Pre-event work


Phase 2-The Main Event


Phase 3-Accountability Process
Value Stream Analysis
Process

Phase 1
Pre-event Planning
Pre-Event Work

Three weeks prior to the event

Determine team members

Define the objective of the team

Select the area and topic

Logistics (conf. Rm., times, facilitator supplies,
etc.)

Invite team members to the event

Clarify roles and responsibilities
• Event leader-value stream manager from the area (owns
resources and results)
• Event facilitator-CI Leaders who manage the
improvement process and share in ownership of results
• Subject matter experts
Pre-Event Work

Two weeks prior to the event

Part/quantity analysis (select representative part
number)

Gather and review data (Yield, job closures,
CONC, etc.)

Determine future demand

Review prior event data

Review any customer issues

Review any requirements for capital equipment


One week prior to the event

Verify customer demand

Review above data
Value Stream Analysis
Process

Phase 2
The Main Event
The Main Event
1. Training
2. Gemba Walk
3. Value Stream Map-Current State
4. Develop Ideal State Map
5. Develop Future State Map (3 months out)
6. Develop Future State Plan
7. Management Report Out
VSM Event Steps 1 &2
Training and Gemba Walk

1. Training

The concepts of Lean need to be applied to
classroom training as well as our other processes
• This is a learn by doing process
• We will minimize classroom learning

2. Gemba Walk

Gemba means, “shop floor” or “where the process is”

We need to go there so we know what we are
mapping
VSM Event Step 3
Current State Map
3. Value Stream Map-Current State
1. Map the physical flow (manufacturing loop,
customer loop, supplier loop)
2. Map the information flow
3. Complete the lead time data bar
4. Visually identify waste
1. Identify value added/non-value added (red, yellow,
green dots)
2. Visually identify the most significant opportunities with
kaizen bursts.
5. Summarize all information and metrics (date,
P/N, times, inventory, OTD, quality, etc.)
Elements of Value Stream Maps
30 Days MRP Monthly Orders 880
SupplierSupplier Loop Customer LoopCustomer

Takt Time = 440 min/44

= 10 min/unit
Information
Bi-Monthly

Manufacturing Loop
Op 1 Op 2 Op 3 Op 4 Op 5 Op 6
45 Days 1 Day 2 Days 2 Days 1 Day 5 Days 1 Day

S/U = 0.08 hr S/U = 0.08 hr S/U = 0 S/U = 0.08 hr S/U = 1.95 hr

S/U = 1 hr
CT = 0.9 min CT = 0.9 min CT = 1.2 min
CT = 1.6 min CT = 60 min CT = 40.3 min

45 1 2 2 1 5 1

1.6 0.9 0.9 60 1.2 40.3

Total = 57 Days
Lead Time Data Bar Total = 1 Hr. 44.9 Min.
Manufacturing Loop Questions

What are the changeover times?

What are the quantity of machines per process?

Count all work in process (WIP)

Look for evidence of quality problems

Look for processing waste

Is there great distances between processes?

Is the product flexible or made to order?

Is there obvious batch processing?
Customer Loop Questions

Who and where are your customers?

What are the product lines or families? G.M.
AT&T

Future marketing plans? Review growth

potential.

What is the total yearly order requirement? Quantity by product
family or product type

What is the high, low and mean ordering pattern? Monthly or
quarterly high & low for several periods

How often do we deliver to our customer?

What takt time do we supply to?
Production Control Questions

Where in the production chain
do we trigger production?

How much work do we release
at one time?

How long does it take to go from
customer order to production order?

How do we physically schedule production?

How do we react to customer emergencies?
Supplier Loop Questions

#1 question, how do you tell suppliers
what to ship, make, etc.?

When and how often do they get purchase
orders from Customers?

When and how do we change the purchase order?

When and how often do suppliers ship product and how?
Is it level? (Truck, train, etc.)

Do we have standard pack quantities?

Are suppliers aware of our inventory quantities?

Are we sure of suppliers inventory? How?

Do we have a supplier training program?
Information Flow Questions

How are the manufacturing and procurement orders
distributed?

Who gets them

How frequently

What is the process of generating them

How are the shop order schedules generated and
revised? Are there “shortage meetings”? What parts
of the manufacturing loop are scheduled by MRP?
Make sure to document the informal (hot lists) as well
as formal (MRP) information channels.
 Current State Lead Time Data Bar
Lead
Time
Cycle Time DOH Inventory Total
(CT)
8 Days 4 Days

4 Hrs 12 Days

(1 Hr.) 4 Hrs

VA Time (yes/no) CT Total

Mapping
Icons

COMPUTER WIP
Visually Identify Waste

As a team, review each process step for elements that
are value added and non value added

Each step can have any combination of value added,
type 1 waste and/or type 2 waste

Identify value added with a green dot

Identify type 1 waste (waste but unavoidable in the current
state) with a yellow dot

Identify type 2 waste (pure waste, eliminate immediately) with
a red dot

As type 2 waste is identified, generate the actions to
remove it (this will be the beginning of the future state
implementation plan)

Prioritize the waste opportunities and identify the
biggest opportunities on the CS map with kaizen bursts
VSM Event Step 4
Ideal State Map

Avoid shared resources

Assume that anything is possible

Our customers are happy

Our profits are up

High job satisfaction

Capital is available if needed

Create an ideal state map

Map the physical flow

Map the information flow

Complete the lead time data bar
VSM Event Step 5
Future State Map (3 months out)

What of the ideal state map can be
implemented in 3 months?

Identify short term goals

LEAD TIME

INVENTORY

PRODUCTIVITY

QUALITY

CAPACITY

Work from your current state map
 VSM Event Step 6
Future State Plan

This plan answers the question, “what actions need to be
completed in the next 90 days to achieve the future state?

Think back to the “visually identify waste” step

Plan addresses all “red dots” and Kaizen bursts
DATE
Activ- GOAL/ DATE
Activ- GOAL/ ACTION PRIORITY LEADER EST ACT STATUS/REMARKS
ity OPPORTUNITY ACTION PRIORITY LEADER OPEN EST ACT STATUS/REMARKS
ity OPPORTUNITY OPEN COMP COMP
COMP COMP
The electrical Re-locate THE ELECTRICAL TEST
The electrical Re-locate THE ELECTRICAL TEST
station is located electrical station STATION HAS BEEN
1 Test station is located electrical station Short Term TEAM 1/5/2005 1/10/2005 1/7/2005 STATION HAS BEEN
1 Test away from the closer to test Short Term TEAM 1/5/2005 1/10/2005 1/7/2005RELOCATED NEAR THE
away from the closer to test RELOCATED NEAR THE
test area. area. TEST AREA
test area. area. TEST AREA

Only three Train and certify

Only three Train and certify
technicians are more technicians 4 MORE TECHNICIANS
2 Assy technicians are more technicians Short Term Joe 1/5/2005 4/30/2005 3/18/2005 4 MORE TECHNICIANS
2 Assy certified to perform Short Term Joe 1/5/2005 4/30/2005 3/18/2005HAVE BEEN TRAINED
certified to perform HAVE BEEN TRAINED
solderers. soldering
solderers. soldering

Details are being Most of the detail parts

Details are being Most of the detail parts
issued in the Review kitting are part of POU inventory.
3 Plan'g issued in the Review kitting Long Term John 1/5/2005 3/15/2005 are part of POU inventory.
3 Plan'g middle of the process Long Term John 1/5/2005 3/15/2005 The leftovers will be
middle of the process The leftovers will be
process looked at case by case.
process looked at case by case.
 VSM Event Step 7
Management Report Out

This report out is how the team publicly commits
to management

What the goal of the event was

What was learned

What was accomplished during the event

What the outcome is. How much better will we be?

Description of the future state

Commitment of the action plan
Value Stream Analysis
Process

Phase 3
Accountability Process
The Accountability Process

The momentum for improvement is never higher
then at the end of the event when everyone can
really see the waste. As a result the accountability
process must start immediately following the event
(next day).

Display the current state map, future state map and
future state plan in the the affected area.

Commit to a stand up meeting in front of the maps
and plan (daily at first, and then less frequent as
applicable)

Focus on Due date control. Not meeting dates is letting
the team down