Value Steam mapping

Points to Learn ?
• What is VSM ?
• Why should we prepare a Value Stream Map?
• What do we understand by Value Addition ?
• What are Value Added activities ?
• What are non-value added activities ?
• How to calculate Value Added Percentage for a plant.
• Material Flow + Information Flow
• Current State Map
• Future State Map
 Points to Learn ?

• How to identify Improvement Opportunities

• What are basic 6 Resources?
• What are 7 wastages?
• What do we understand by basic Japanese principles – 3G/3K/3M/5S
• What do we understand by the terms – TAKT Time ; Cycle Time; Lead Time;
Change Over Time ?
• What is the difference between Production and Productivity ?
 What is Value Stream Mapping?

• Value stream mapping is a process-mapping method that enables your

organization to:

• Current State Map: Visual representation of existing

operations (information and product flows)
– Identify the largest sources of waste (non-value added activity) in the value stream

• Future State Map: Drawing of Lean flow (vision)

– Develop implementation plan for Lean activities

Ｂ Ｃ
Ａ Ｄ
 Map the Process
• Makes work visible
– Visibility improves communication and
understanding
• Identifies Improvement Opportunities
– Eliminate the non-value added steps
– Reduce wasted resources
• Diagnostics
– Determine the cause of a problem or condition.
• Training and communication

６ ６ ６ ３
 Current State Value Stream Map (Unmodified)
Production
Control Market Forecast

Customer Customer
Supplier Supplier A B
1 2

D
D I
WK WK
30 days
Shipping

Receiving Assembly &

I Milling Welding Painting
Inspection
5 days I I
2 people I 2 people 3 people 3 people

C/T = 2 min C/T = 4 min C/T = 7 min C/T = 2 min

C/O = 2 hr C/O = 3 hr C/O = 4 hr C/O = 30 min
Uptime = 74% Uptime = 61% Uptime = 48% Uptime = 93%

5 days 10 days 15 days 8 days 30 days

2 min 4 min 7 min 2 min

Total Lead Time = 68 days

Value Added Time = 15 min
 Opportunities to Enhance Value Stream Mapping

• Classic Value stream mapping can overlook environmental

considerations:
– Raw materials used vs. needed in products and processes
– Pollution & other environmental wastes in the value stream
– Flows of information to environmental regulatory agencies

• Making some simple adjustments to your value stream map

can help you explicitly address pollution and natural resource
wastes:
– Improving cost reduction opportunities
– Saving additional time
– Improving the health and safety of the workplace
 Establishing Flow

Information

Production Flow
Material

• Establishing the Vision

• Reducing the Lead Time

 Sub-Assembly

Finished Goods
Supplier Inventory
C/O Time

Stamping Down Time

Takt Time

Customer

Assembly
 Elimination of Waste
A Broadened Perspective

• Identify and Target the Source of Waste in the Entire Value

Stream, rather than Just the Work Unit
 Adding Value

• Establishing the Vision

• Reducing the Lead Time

Benefits of Value Stream Mapping

• Big Picture Approach

• Links Material/ Information Flow

• Team Growth
 Visionary Tool
• Planning

• Communication

• Implementation
The Current State Map
 Sub-Assembly

Finished Goods
Supplier Inventory
C/O Time

Stamping Down Time

Takt Time

Customer

Assembly
The Future State Map
 A Lean Stream!!!

Sub-Assembly Finished Goods

Inventory
C/O Time Cycle Time

Down Time
Stamping
Final Assembly
 Annual Value Stream Plan
• This Plan Visually Displays:
– Step-by-Step Implementation Plan
– Measurable Goals
– Clear Checkpoints with Listed Deadlines,
Ownership, and Named Reviewers

• The Value Stream Plan will Play a Fundamental Role in the

Optimization of your Value Stream
 Management’s Role
• See Overall Flow
• Develop the Vision
• Lead Implementation
• Support EI Teams

– Make Sure Everyone Understands!

Management’s Commitment

• Eliminate Overproduction

• Support Lean Principles

• Willingness to Take Risks

“Whenever there is a product for a customer there is a value stream

The challenge lies in seeing it”

AM
 Pull System

“Production” KANBAN “Withdrawal” KANBAN

Supplying Customer
Process Process
Product Product

Supermarket
 3 6
3 6

Game
Supply Table 5
Board

4
2 1
5 4

1
Tool Die Paper
Storage Storage Storage

Dance Chart Example

 What is VSM ?
• The Value Stream Mapping means mapping the stream of Value- how the Value
is Flowing in an organization or rather How non-value added activities are flowing
in the organization
• let us have a practical experience that focuses on the seven types of waste and
the difference between value-added versus non-value-added activities in a
process.
• Let us learn in a practical way to prepare Value Stream Map for the plant and
then by way of brainstorming, identify wastages and improvement opportunities.
Chassis Final
I Ass’y A Ass’y B Ass’y C I
I Build-up 5
Insp. I
50 10 20
5 days (60’) 1 day (60’) (60’) (60’) ½ day 60’ 180’ 2 days
(7200’) Chassis (1440’) A B C (240’) Insp. Rework (2880’)
200’ 180’ 200’ 200’
20 days (60’) 10 days (60’) 1 day
(28800’) Mill (14400’) Sub (1440’)
30’ 150’
 What are Value Added Activities ?

• What is value addition ?

• When do we say that value addition has taken

place in a process ?
 Value addition ??

In any process there are 2 main things: Input

and Output and we utilize resources to convert
input into output. To understand value Addition
we should always compare Output with Input.

If Output = Input ……. No value addition X

If Output is more than Input…. Value addition
(The physical form or the surface treatment of the
product changes.)
 What is Value Added percentage for your plant ?

Can you guess ???

Value Added % = Value Added Time / Total Lead Time X 100

1) 1%
2) 10%
3) 20%
4) 50%
5) 80%
6) 100%
 Material Flow + Information Flow ?

Material Flow – Is it visible ????

Can you observe some wastages in the flow ?
Can you improve the flow ?
Can you reduce the Lead Time?
Can you reduce the Cycle time ?
Can you reduce the Change Over Time ?
Can you reduce the inventory ?
Can you reduce criss-cross movement ?
Can you ensure Single piece flow ?
Can you observe the stagnant inventory ?
Can you reduce un-necessary material movement?
How to ensure faster deliveries ?
How to ensure First Time Right ?
How to reduce In-house rejections/rework?
 Material Flow + Information Flow ?

Information Flow – is it visible ???

• How the information is flowing ?
• Can you make it faster?
• How are we processing the information ? Or we are just passing it from one point
to the other ?
• For how much duration the information is lying stagnant with me ?
• Can I make it paper less ?
• Who is updating the information ?
• Can we use some other means for information transfer ?
 Questions

Can this job be made more comfortable ?

Isn’t there a better method for this operation ?

Isn’t there a faster way of doing it ?

Isn’t there a safer way of doing this ?

 Attributes for World Class
S.NO. ITEM TARGET

1 Safety : Zero Accidents

2 5 S – Score 90% min.
3 Quality : less than 50 ppm
4 Supply to Customer 2 hourly basis
5 Customer Line Stops Zero
6 Inventory Turns: more than 50
7 Change over time < 10 min.
8 OEE (Overall Equipment Efficiency) 85%
9 VSM : Value stream mapping 25%
10 Cost 50% less
11 Absenteeism (Unauthorized) 0% 6
 Spaghetti Chart

1
3
13
2, 5, 7, 9, 12, 15, 17 14
10
11
4

16
6,8

Measure: How many one way trips?

What distance traveled?
 A Standard Operation is...
The best combination of people and machines

Utilizing the minimum amount of

labor, space, inventory, and equipment
 Opportunities in the Supplier Loop

• Supplier Development
– Identify Key Suppliers
– Reduce Container Size
– Increase Delivery Frequency
– Kanban!!!

• Overall Benefit
– Inventory Reduction
– Cost Reduction
 How Do We Implement?

• Break Implementation Into Steps

– Customer Loop
– Internal Loop
– Supplier Loop
 ...How Do We Implement...
• Develop Implementation Packet
– Current State Map
– Future State Map
– Supporting Documentation (Standard Work Studies,
etc.)
– Value Stream Plan
 Value Stream Plan
• The Plan Visually Displays:
– Step-by-step Implementation plan
– Measurable Goals
– Clear Checkpoints with Listed Deadlines,
Ownership, and Named Reviewers
 Key Points for Planning
• Produce to Takt Time
– Eliminate Overproduction
• Pull Product Based on Customer Demand
– Kanban
– Point of Pull
– Leveling
• Establish Continuous Flow
 Outline the Plan
• For Each Value Stream Loop

– Establish the Objectives

– Determine the Measurable Goal

 Plant Level Objective

Goal Measurable
Reduce lead-time 9 Days to 4 Days
 Customer Loop

Goal Measurable
Decrease Container Quantity 300 Pieces to 25 Pieces

Increase Delivery Frequency 2 per Week to 1 per Day

Finish Goods Pull System 1.75 Days of F/G Inventory

 Internal Loop
Goal Measurable
Increase Uptime % Best in Class - 97%

Establish Continuous Flow (0) Inventory Between Work Units

Reduce Changeover Time (30) to (15) Minutes

Internal Pull System Production/Move Cards

 Supplier Loop

Goal Measurable
Implement Kanban Supplier Cards

Increase Delivery Frequency 4 times per Day

Decrease Container Quantity 300 Pieces to 25 Pieces

 Product Family:
Date:
Champion: Yearly Value Stream Plan
Plant-Level Value Stream Value Stream Goal Specific Scheduling Deadlines Owner Reviewer and
Objective Loop Objective (Measurable) (on Monthly Basis) Review Dates

Loop 1 2 3 4 5 6 7 8 9 10 11 12

1
Customer

2
Internal

3
Supplier
Date: 10/29/99 Product Family:
Champion: Bill
Green
Yearly Value Stream Plan Sub-Muffler

Plant-Level Value Stream Value Stream Goal Specific Scheduling Deadlines Owner Reviewer and
Objective Loop Objective (Measurable) (on Monthly Basis) Review Dates

Loop 1 2 3 4 5 6 7 8 9 10 11 12

Dec Cont. Qty. 300 to 25

Gold
1 Joan Smith
Reduce Team 2/28/00
Customer
Finished Goods Inc. Del. Freq. 2 /wk to 1/D 4/15/00
Inventory 5/29/00

FG Pull System 1.75 Days

Finished
Goods

Inc. Uptime % BIC 97%

2 Cont. Flow (S/A 0 Inv. Between
Internal 2 to F/A) work units Blue John Doe
Team 5/30/00
Reduce C/O 15 minutes 7/30/00
Time 8/30/00

Int. Pull Sys. Prod. Move

Cards

Kanban Supp. Cards

3 Inc. Del. Freq. 4/Day Red Jim Smith

Supplier Team 9/30/00
10/15/00
12/30/00
Dec. Cont. Qty. 300 to 25
 Choose the Model

• Practice Makes Perfect!

– Begin with the less complicated

– Move to the more difficult
 Establishing the Team
• Selecting the Team
– Who are the people in the value stream
– What type of resources are required
• Function of the Team
– Analyze Value Stream Together
– Hold Frequent Meetings to Monitor Progress
– Eliminate Obstacles Together
 Transfer the Knowledge

• Start the Process • Check Understanding

– Current State Map – Clear Up Confusion
– Future State Map – Get Commitment
– Develop the Plan
 Things to Remember
• Benchmark the Current Condition
• Dedicate the Resources
• Monitor the Progress
• Evaluate the Results
• Celebrate Success
• Continue the Pursuit of Perfection!!!
 How to create a VSM ?
Step by step guide to Value Stream Mapping;
• Select the product or product family
Firstly we need to decide what it is exactly that we wish to map, in a company with
many products there may have to be some initial work done to identify which
product or family group of products that should be mapped, we may decide to go
with highest volume or value, or take a longer term strategic look at those product
ranges that we expect to do more business with in the future or we may be guided
by our customers as to what to map.

• Bound the Process

We need to decide the limits of our map, most value stream maps are conducted
from supplier through to customer within an organization and these should be the
first boxes placed on your VSM to bound the process. It is possible to map the entire
supply chain, in this case the start and end points for your process map would be the
raw materials and the final consumer, instead of putting boxes for process steps
thereafter however you would use companies.
 How to create a VSM ?
Step by step guide to Value Stream Mapping;
• Process steps
Once you have your process boundaries established you need to define your process steps for
your map, some people advocate walking the process from customer back to supplier or the
other way around, quite frankly it does not matter too much which way you do it.
The process steps are the various operations that are performed on the product, these are
generally located in a single place with one point that inventory enters and then leaves. We
are not breaking down each operation into specific tasks, there are other process
mapping techniques such as flow charting that would be a better tool for analyzing to that
level of detail.

• Add Information Flows to your Value Stream Map

One of the things that differentiates a VSM from most other mapping tools is the inclusion of
the information flows into the map. We need to include how the customers order product,
frequency and method, and how we translate that back to our supplier. We also include how
we then communicate requirements to our processes to ensure that we produce what the
customer wants.
 How to create a VSM ?
Step by step guide to Value Stream Mapping;
• Collect Process Data

This where we need to do a little thinking and some work, get the team to collect data
regarding the performance of each step of the process; typical types of date to collect are;
• Inventory
• Cycle time (time taken to make one product)
• Change over time (from last good piece to next)
• Up-time (on-demand machine utilization)
• Number of operators
• Shifts worked
• Net available working time
• Scrap rate
• Pack size/pallet sizes
• Batch Size
 How to create a VSM ?
Step by step guide to Value Stream Mapping;
• Select the relevant measures for your process and
• Record actual data at the workplace,
• Try to avoid “historical” measures where possible,
• Get your own current information.
• If you do use timings and other data from the “system” to save time make a note
of those measures and ensure that you go back and verify them during the
action phase.
• Record this data in the “data boxes” on your Value Stream Map
 How to create a VSM ?
Step by step guide to Value Stream Mapping;
• Inventory
• Inventory and overproduction are two of the biggest of the seven wastes of
lean and tend to occur when we have problems in our production processes.
• We use excess inventory to cushion ourselves against process problems so
careful note should be taken of inventory build up.
• When counting inventory for your map question carefully as it is not unusual to
find pallets of inventory stored in odd locations due to previous problems or as a
contingency.
 How to create a VSM ?
Step by step guide to Value Stream Mapping;
• Time Line
• We create the time line to give us information about total process times and lead
times for inventory through our processes; we use the inventory at each stage
and the daily demand to calculate the amount of stock in days and add this to
the top of the time line, this will allow us to calculate a total lead time.
• The cycle time for one product is then placed in the lower portion and this will be
added to give a total processing time.
• It is usual to at this point to have lead times that are several days to several
weeks and processing times that are only a few minutes which highlights just
how much waste there is in our system.
• This gives us our completed current state value stream map; now the real work
can start.
 How to create a VSM ?
Step by step guide to Value Stream Mapping;
• Multiple Suppliers and Customers in VSM
• The map produced above is a fairly simple map with just one customer and one supplier,
more often than not we have multiple suppliers and customers and it may be necessary to
draw on more than one. In this case the process is still the same but when you calculate
your timeline use the worst case for inventory. If you have many suppliers it may be worth
concentrating on your most important suppliers or grouping them into similar types such
as fasteners.
• More often than not you can still show multiple customers as one, or if required as groups
with similar requirements such as weekly or monthly demands.
 How to create a VSM ?
Step by step guide to Value Stream Mapping;
• Interpreting the Value Stream Map
The data boxes and the timeline contain much information about our process, you can now
see in one document where the problem areas within your process lie, issues such as;
• Excessive Inventory
• Long cycle times
• Low uptime
• Excessive Setup Times
• Poor Quality / Rework
 How to create a VSM ?
Step by step guide to Value Stream Mapping;
• Creating an Ideal and Future State Value Stream Map
• These problems highlighted above could all be tackled one by one; but what we
really need is a vision of where we want to end up so that we can focus our efforts
on achieving an agreed “Ideal State.”
• The team guided by the expert should create an ideal state value stream map which
should envision the absolute best the process could be,
• This should then be agreed by senior management as the ultimate goal of your
value stream mapping exercise.
• This Ideal state could be a single cell rather than isolated process silos in different
parts of the factory with daily (or more frequent) deliveries to the customer and
from the supplier. Kanban systems could be utilized to remove the need for planning
and scheduling as well as many other ideas that could be considered.
 How to create a VSM ?
Step by step guide to Value Stream Mapping;
• Once you have your ideal state then you can plan to achieve your shared vision of where
the process needs to be; the simplest way to do this is to plan a series of improvements,
each taking two to three months, and
• Use your value stream map to communicate what you want to do.
• Use the kaizen burst symbol on your current state map to highlight the improvements that
you want to make, for instance reducing the setup time on the final test from 20 minutes
to 5 minutes,
• Your aspirations for your improvements become your future state value stream map. You
may need several iterations of future state maps before you finally reach your ideal state.
SIPOC
• Once you have your ideal state then.
 Symbols used for preparation of VSM ?

• H