Value Stream Mapping by Operational Excellence Consulting

© Operational Excellence Consulting. All rights reserved.
Value Stream Mapping

© Operational Excellence Consulting. All rights reserved. 2
Objectives
Upon completion of this workshop, you will be able to:
• Create a value stream map for both the current and future states
• Develop a data collection plan for the value stream map
• Conduct end-to-end assessment of value-added versus non-value-
added activities
• Scope opportunities by framing project problem statements based
on identified waste
• Prioritize projects based on strategic objectives
• Develop action plan to achieve the future state
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NOTE: This is a PARTIAL PREVIEW. To
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Outline
1. Overview of Lean Thinking
2. Introduction to Value Stream Mapping
3. Phase 1: Define Product Family
4. Phase 2: Document Current State
5. Phase 3: Design Future State
6. Phase 4: Create Implementation Plan
7. Summary

“We must always
keep in mind that
the greatest waste
is the waste we
don’t see.”
— Shigeo Shingo,
a Japanese industrial engineer and
expert on the Toyota Production
System

Lean Principles
1. Specify value from the
customer’s perspective
2. Identify the value stream
for each product/service
family
3. Make the product/service
flow
4. Deliver when the customer
pulls from your operations
(just in time delivery)
5. Manage towards
perfection Source: Lean Thinking by James P. Womack and Daniel T. Jones
Specify
Value
Identify
Value
Stream
FlowPull
Perfection
Principles

• Value Stream - All of the activities, required to
fulfill a customer request from order to delivery.
Value Stream Defined
Process 1 Process 3Process 3
Value Stream
Customer
Request
Customer
Receipt

Why Value Stream Mapping?
• To set strategy before diving into tactics
• Visualize the process at multiple levels
• Enables us to see the flow and sources of
waste
• Provides a common language for analyzing
processes
• Provides a blueprint for creating flow and
implementing Lean concepts and techniques
throughout the entire value stream

• Creates an end-to-end view of the system
• Demonstrates interaction between material/work and information flow
• Provides a common visual language for understanding a complex system
Supplier/
Customer
Management
Control
Customer
Work & Information Flow
Information flow
Value stream mapping provides an overview of
the end-to-end business process

Value Stream Mapping Process
Create
Implementation
Plan
Design
Future
State Document
Current State
Define
Product
Family
 Define and scope
problem
 Pick product family
 Determine VSM objective
and benefits
 Create VSM charter
 Map current state value
stream
 Quantify current state
value stream performance
 Analyze and identify
improvement
opportunities
 Develop future state
value stream map
 Prioritize improvement
projects
 Develop implementation
plan
 Seek management
approval
 Implement the plan
and monitor
progress
1
2
3
4

Value Stream Mapping Symbols
Symbol Name Description
Process
Represents a process or operation
through which the material flows.
Usually, detailed process steps are not
shown unless there are significant
inventory build up or batch transfers.
External
Sources
Represents the supplier or the
customer. The supplier is the start
point and it is usually placed on the
upper left of the map. The customer is
the end point and it is usually placed
on the upper right.
Shipment
Represents the transportation of
materials from an external source or
finished goods to the customers.

Value Stream Mapping Symbols
Symbol Name Description
Operator or
Employee
Represents operator(s). The number
of available operators is shown below
the symbol.
Push Arrow
Represents the movement of materials
from one process to another. It is used
when the previous process ‘pushes’
materials to the next process
regardless of whether it is needed by
the next process.
Material
Receipts &
Shipments
Represents movement of finished
goods to the customer. It can also be
used to represent movement of raw
materials from the supplier to the
factory.

Scoping: Define a Product FamilyProducts
A
321
B
4
Processes
Product
family
C
D
E
5 6 7 8 9 10
Machining Drilling Assy* Pack*Weld.
F
X X X X X
X X X X X
X X X X
XX X X
X X X X
X X X
* The two work stations at assembly and packaging respectively are similar.
Therefore they are considered as one work station in this analysis.
Product family:
• The characteristics
of a product family
are that the
products go through
the same – or nearly
the same –
processes (same
flow) and that the
products have
similar process
times.
Group Product Families by similar downstream processes, steps or equipment

Practice Tips
• Allocate sufficient time for the VSM event. A
mapping takes 1-3 days depending on the size
and the complexity of the value stream.
• Get all interested parties to participate in the
mapping with their knowledge and inputs. This
also commits all parties to the change and
makes for a smoother implementation.

Step 1 – Label Map
• Label your map in upper right corner
 Value stream name
 Current or future state
 Customer demand (volume of work per time period)
 Takt time (if relevant)
 Date
 Facilitator’s name (and/or team)
Step 1: Label Map

Takt Time
• The heart of “One-Piece Flow”
is takt time
• Takt = German name for
rhythm or meter
 Takt Time = Demand Rate
 Rate of which customer is buying
Step 1: Label Map
Takt can be expressed in seconds, minutes, hours or days

Step 5 – Add Data (Manufacturing)
• Add key metrics for all process
blocks
 Cycle Time (CT)
 Lead Time (LT)
 FPY
 Uptime
• Add work-in-process (WIP) at
every step
Step 5: Add Data
• Cycle Time
• Uptime
• FPY (Defect Rate)
• Changeover Time
• # Operators
• # Shifts
• Distance Travelled
• Other Relevant Data
Process Name

Current State Value Stream Map
Manufacturing Process
Demand all families =
100 pcs/day.
Demand family A =
35 pcs/day.
2 shifts.
Takt time = 532 sec.
Customers
Machining
Ct = 420s
Co = 20m
Up = 70%
☺ = 1
Shifts = 3
Drilling
Ct = 145s
Co = 15m
Up = 50%
☺ = 1
Shifts = 2
Welding
Ct = 185s
Co = 8m
Up = 70%
☺ = 1
Shifts = 2
Assembly
Ct = 360s
Co = 7m
Up = 80%
☺ = 1
Shifts = 2
Packaging
Ct = 40s
Co = 3m
Up = 15%
☺ = 1
Shifts = 2
Suppliers
MRP
Weekly plan
Forecasts =
30 days
Daily orders
Continuous
forecasts
Daily orders
58 days 6 days 9 days 5 days 2 days 42 days
420 sec 145 sec 185 sec 360 sec 40 sec
Component A =
35 pcs per/day.
Orders are placed
on demand.
Lead time from order
is placed= 2 days.
2030 pcs 210 pcs 315 pcs 175 pcs 70 pcs 1470 pcs
= 122
days
=1150
sec.
Step 5: Add Data
ILLUSTRATIVE

D
D
D
E
AAA
AA
B
B
A
A
A
A
AA
F
FGG
OFFICE
C
2
1
3
5
7
9
11
4
6
810
12
13
14
15
16
17
18
19 20
21
2223
24
25
26
27
28
29
30
31
32
36
33 34
3537
38
39
40
41
42
43
44
45
46
47
49
51
48
50
X Transport using truck or man
Inventory or buffer stocks
Value adding processX
X
Machining (10)
Drilling (20) Welding (28) Assembly (34)
Packaging(44)
Current State Layout
Step 5: Add Data
ILLUSTRATIVE

• From this figure it is
visible why the flow
is bad in the current
production. The bad
flow also causes
inventory between
all processes.
• The takt time is 532
sec. based on 2
shifts. It is also
clear that 2 shifts is
not enough on the
machining process.
100
200
300
400
500
600
Machining
420sec.
Drilling
145sec.
Assembly
360sec.
P.
40
30%
50%
20%
85%
30%
Welding
185sec.
Bottleneck
Sec.
Takt time (2 shifts) = 532 sec.
= Lost time
Takt time (3 shifts) = 799 sec. • Calculation of takt
time:
 The daily demand
from the packaging
process is 100 pcs.
 The packaging
process runs 2 shifts.
 Takt time =
(2 x 7.4 x 3600)* /
100 pcs. = 532 sec.
• For every 532
seconds there must
be a new product
ready for shipping.
Current State – Leveling of Cycle Times
* 2 shifts x 7.4 hours per shift x 3600 seconds per hour
Step 5: Add Data
ILLUSTRATIVE

The value related attribute of an activity
can only be assessed in the context of
the process, never in isolation
– Consider other activities upstream and downstream
Value Added activities are those absolutely
necessary to deliver the customer’s requirements
– These are colored green on the flowcharts
– They are later re-designed into the new process
Non Value Added activities are those that are not
necessary to deliver the customer’s requirements
and can be eliminated in the re-design
– These are colored red on the flowcharts
Sustaining activities are those that are not
necessary to deliver the customer’s
requirements but are either:
– absolutely necessary to sustain the business or:
– cannot be eliminated due to known severe
constraints (often external)
– These are colored blue on the flowcharts
– They are later re-designed into the new process
Sustaining activities are targeted for gradual
elimination during the Continuous
Improvement process
NVAVA SNVA
VA
NVA
Sustaining Activities
The analysis and redesign requires a clear
understanding of: Value Added, Non Value Added
& Sustaining Activities
Step 7: Identify VA & NVA Steps

Lean Approach to Process Excellence
Lean approach to process excellence takes a holistic view of the value
streams to eradicate waste, variability and inflexibility with the
involvement of management and staff.
Focus on the Non-Value
Added Resources
through…
• Total Quality Control
• Total Waste Elimination
• Total Staff Involvement
• Enforced Problem Solving
• Process Focus (Value Stream)
• Information Technology as an
Enabler
Step 7: Identify VA & NVA Steps

S.M.A.R.T. Goals
• Is it clear and unambiguous?Specific
• Can it be measured?
• How will I know when it is accomplished?Measurable
• Is it challenging?
• Can it be accomplished?Achievable
• Can you make it come true?
• Are you willing and able to work?Realistic
• Is there a target completion date?Timely
Step 8: Define Goals & Gaps

Future State Design Considerations
• Eliminate steps / handoffs
• Combine steps
• Create parallel paths
• Alter task sequencing and/or
timing
• Improve quality (error-proof)
• Eliminate unnecessary
approvals / authorizations
• Stop performing non-value-
adding (NVA) tasks
• Standard work
• Reduce / eliminate batches
• Implement pull
• Create an organized, visual
workplace
• Reduce setup and changeover
• Eliminate motion and
transportation
• Co-locate functions based on
flow; create cells (teams of
cross-functional staff)
• Balance work to meet Takt
time requirements

Future State Value Stream Map
Manufacturing Process
Demand all families =
100 pcs/day.
Demand family A =
35 pcs/day.
1 shift.
Takt time = 266 sec.
Customers
Machining
Ct = 420s
Co = 5m
Up = 85%
☺ = 1
Shifts = 2
U-Cell
Ct = 250s
Co = 1-3m
Up = 65-80%
☺ = 4
Shifts = 1
Suppliers
MRP
Daily plan
Forecasts =
30 days
Daily orders
Continuous
forecasts
Daily ordersComponent A =
35 pcs per/day.
Orders are placed
on demand.
Lead time from order
is placed= 2 days.
Goal 700 pcs Goal 140 pcs Goal 70 pcs
Kanban
U-cell
Orders
20 days 4 days 2 days
Sum = 730 sec
= 26
days
=1150
sec.
420 sec
Kanban
Changeover time
Increase OEE
Physical layout
Flow between
work stations
etc.
Daily
planning
Changeover times
Increase OEE
Task distribution
ILLUSTRATIVE

Value Stream Mapping: Summary
Draw Customer
Box
Draw Customer
Requirements
Draw Management
Control Box
Draw Supplier
Box
Draw Transport
to Production
Draw
Production/
Service Flow
Draw
Communication
Arrows
Draw Push/
Pull Systems
Finalize
Measurements
Analyze
Value Stream
Map
Identify
Kaizen
Opportunities
Develop
Future
State Map

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About
Operational
Excellence Consulting

About Operational Excellence
Consulting
• Operational Excellence Consulting is a management training and
consulting firm that assists organizations in improving business
performance and effectiveness.
• One of our unique strengths is going beyond a tools-focused
approach to seamlessly integrate people, processes, technology
and continuous improvement initiatives to suit the specific needs
and situations of our clients.
• We provide corporate learning programs and management advisory
services to assist our clients to achieve breakthrough in business
performance and effectiveness. Our aim is to support our clients in
designing, managing and executing lasting beneficial change.

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Value Stream Mapping by Operational Excellence Consulting

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