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LEI - 5 - See the Whole - Mapping the Extend Value Stream

LEI - 5 - See the Whole - Mapping the Extend Value Stream

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Seeing Whole the
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value stream

Dan Jones JimWomack

foreword John Shook by

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the Seeing Whole
Mapping
By Dan Jones Forevvord

the Extended
and Jim Womack

Value Stream

by John

Shook

The Lean Enterprise Institute Cambridge, MA USA lean.org Version 1.1 February 2003

With gratitude to Dan Jones'scolleagues the Lean Enterprise ResearchCcnter, Cardiff L.lniversity, at in particular Nick Rich, Dave Brunt, Dave Simonsand MatthiasHolweg, who helped pioneerextended value-stream mapping. And with further gratitude to our reviewers,editors and designers(who bear no responsibilityfor the remaining faults):JoseFerro, Bruce Henderson, Dave LaHore, Graham Loewy, Dave Logozzo, Bob Morgan, Guy Parsons, Atisa Sioshansi,Peter Tassi,Jeff liimmer, Helen Zak, Maria Elena Stophe1 and Thomas Skehan of OffPiste De sign. And with specialgratitude, as always,to John Shook.

@ Copyright 20OZThe Lean Enterprise Institute, Inc. Onc Cambridge Center, Cambridgc, NIA02142 N{A tlSA Tel: 617-871 -2900 o F-ax:617 -87| -2999 . lean.org

ISBN 0-96678,+3-5-9 All rights rcserved. Design by Oi'f-PisteDesign, Inc. Printed in thc LISA May 2008

Mike Rother & John Shook. tr F F F F . The challenge lies in seeing it. it's time to see and then to optimize entire value streams. from raw materials to customer. there is a value stream. Learning to See When you have learned to see value streams in individual facilities.Whenever there is a product for a customer.

"How can we introduce continuous flow at the processlevel within facilities?"And. we realizedthat managers would do well to hone their skills by "learning to see" within a limited areabefore venrurins forth to "see the whole".In addition.However.readerscould suddenly see how to optimize the flow of each product from receiving to shipping. This insight was breathtakingfor many managers caught up in narrow techniques or looking at only one activity in a complex system.Indeed. "How can we expand the scopeof value stream mapping beyond individual facilities to the extended value stream from raw materialsto the end customer?"Many readerssuspectedthat if there was vastmwda within the walls of each facility rhere was even more mwda between facilities and firms. extended levels. We had been thinking about this issuelong beforeJune of 1998. ollf' a It arY ) ." Readersquickly realizedthat the grear power of Learning to Seelies in focusingattention on the value stream for inclividual product families within plants. we at LEI began to hear from managersin many industriesthat "this is rhe tool we have been looking for. we knew that extended mapping is more challengingthan facility-levelmapping and we soon concludedthat we would need severalpublications. We therefore included a diagram in Learning to Seeillustrating different levels of mapping. As more and more people heard aboutLearning to Seeand began to practicevalue srream mapping' we began to hear of additional needs.was launched in June of 1998. Rather than concentratingon isolatedprocesses along the value srreamor aggregated activities serving many value streams. the initial ourline of Learning to Seedevoted equal attention to mapping the extended value srream.In Seeingthe-Whole we tackle rhe higher.FOREWORD When the first item in the Lean Tool Kit. Learning to See. We've recently addressed the processlevel with Mike Rother and Rick Harris' Creating Continuous Flow.

Why is an extended map harder to draw? It's not becausethe fundamental concept is different. we have had These additional dimensionsof extended mapping truly are challenges. simplifying. . time to In addition.org .lean. However. higher-levelmapping easilybecomesa staff exercise(or a consulting project) yielding only another report that's soon forgotten. Lean Enterprise Institute Ann Arbor. and "right sizing" complex technologies logisticsand informarion systems. this information. divisional.org. level. we are simply observingand writing down every step and physical transformationfor individual product families. Conducting extended mapping requires the cooperationof many departmentsand divisions within firms and between firms. have permitted us to improve Learning to Seeseveraltimes since its first publication.* -' k <r rnnnrvv. USA March 2002 .large facilities.*#'d" 'o.and company we Extended mapping is harderbecause need to map across In boundaries.we hope usersof Seeingthe'Whole will tell us how to improve with the lean community."os*0ry-fi$il'. during the prepararion in success overcomingthem. Finally.and high-scaleprocessing servingmany value streamsand operated by many firms. plant.We now are certainthat change-agent and the facility levels and we know that time alreadydevoted to learningto see at the process will prove invaluableas you expand your field of view..We in information processing observethe flow of customer desiresmoving up the value stream.. We look forward ro an intense and continuing dialoguewith the lean community on Seeing ta the'Whole as well.6. from raw materialsto finished items. addition.we must pay carefulattention to the variability in order and materials flows.in the form of orders or and then observethe progressof products moving downstreamin responseto schedules. we need to think about untangling.:-. extended mapping requires that line managersdevote hard-to-spare direct observarionof each product family's value stream. MI.Failing this. John Shook Senior Advisor. Pleasesend your comments and suggestions stw@lean. At every level of mapping. Numerous this tool and will be willing to sharetheir experiences basedon hands-onexperiencewith value stream mapping at the facility user suggestions. As with Learning to See. including recent instances considerable managers can meet thesechallenges of this workbook. These entities rarely think about the total flow of individual productsand ofren hide information from each other while pushing in opposite directions.

CONTENTS Foreword by John Shook Your Focal Plane Introduction: Part l: Changing Started Getting Part ll: The Gurrent State Map an Extended Value Stream Lean? Part lll: What Makes Part lV: Part V: Part Vl: Future Future State 1 State 2 State Future States The ldeal Part Vll: Achieving Gonclusion About the Authors Value Strearn Appendix Appendix Appendix Facility-Level Facility-Lewel lcons Gurrent Stite Maps Future State Maps Mapping .

their machine.top. the department. they immediately realizethat the performanceof the entire value stream is abysmallysub-optimal. We presentedour first example in Lean Thinking (1996)when we drew the path of a humble cola can. unpacking. checking. Looking at the whole has alwaysseemed natural to us and doing so will always suggestways to slashcostswhile dramaticallyimproving responsiveness and qualiry. reworking.Yet during this long march only three hours of value creating activities were performed and the great majority of the steps.INTRODUCTION Ghanging Your Focal Plane For yearsnow we have loved to "take a walk" along the entire value stream for a given product. are However.their department.We've done chis for dozensof products in many industriesand followed streamsacross the world. most wonder how they have worked for years in traditionally compartmentalizedoperationsand somehow failed to notice the waste everywhere. and the firm are performing well on traditional measures high labor and machine utilization. Often.and endlessmovementsof informationto managethe system's complexity . their firm.Indeed. the plant. This simple product with only three parts (barrel. when we get managersto change their focal plane from their assets and their organizationto look at the product itself and what is actually happening on its long journey. and "pop-top") traveled 319 days through nine facilities owned by six companiesin four countriesto progress from ore in the ground into the hands of the customer.picking. Yet most managers have encounteredon our value streamwalks want to stand we in one place and look at only one point . shipping.createdno value at all.Then they wonder what they can do about the mess. . low defects. the machine.their plant. packing. binning.on-time shipmentsand the managers pleasedwich their achievements.storing. looking for value and waste.

.The first future state will be relatively easyand createsrhe setting for the second.. we believe that most value streamscan be compressedand smoothed to a point where a large fraction of the original steps and practicallyall of the throughput time are eliminated. In this breakthroughguide we presenrour method. the team getting started first and making the quickest progressalong the path will have a continuing comperitive advantage. Then learn to see rhe whole and . Yet we believe that the savingsin time and effort and the improvements in qualiry at every step will encouragereams to keep going once they learn how to jointly optimize the sharedstream. Eventually. It proposesa progression through two "future states" to an "ideal state" after the current state is jointly identified and agreed. Herefordshire.form your cross-department and cross-company team. The key is to summon your courage.It was only when we first saw Mike Rother and John Shook drawing future sratevalue srreammaps ar the facility level and coupling these maps to an action plan for implementation that we begin to see how we might guide groups of managers for all extended value streamsare sharedacross many departmentsand firms for entire streams. toward similar results Dan Jonesand Jim Womack Ross-on-Wye. USA March 2002 . and changeyour focal plane to focus on the product. More important in most cases.This will be a true revolution and the value streamteam getting there first will have an overwhelming competitive advantage.L. MA.The secondfuture state is considerablyharder and reaching the ideal statewill require a major commitment by all the firms touching the product.lK and Brookline.with some creativethinking about processand information technologies.And this is a critical first step becauseit raisesconsciousness.And that is the big challenge. get going to take out the waste!We will be urgingyou on and waiting to hear about your problemsand successes. But providing a managementtool that permits the waste to be removed permanently by achievingsuccessive future stateshas been much harder.Managersfind it easyand fun ro draw extended current state maps.

.

.

evcn though the finished product has many different fcaturesand customerlabels. Maps of the extendedvalue streamcan be drawn fcrrproductscurrently in production 'I'he or for future products being planned.summarizing them uisually.both value-creating and .What is Extended Value Stream Mapping? An extended vah-re streamis simply all of the actions. Alternatively it might be a major componentsuppliedto auto assemblers ls1'ssay an nllglnxgel using a common designarchitecture and assembled a cell. but with varying in power outputs and with different attachment points for different vehicles. o In the auto industry. only difference is that the "current state" map for a product in productionshowsconditionsas thcy cxist today while thc "current state" map for a ncw product shclws the "businessas usual" approachto makingthe productcomparedwith alternative"future states"and "ideal states" with lesswasteand greaterresponsiveness. Value stredm mapping is the simple process of directly obseruing the flows of information and materials as they now occLtr. Tbgethertheseconstitutea closedcircuit clf demand and response. Tir do this you need to start at the furthest point downstream(toward the customer) to be mapped and to dcfine product families at that point.g. F-orexample: o In a power tools business.. product family might be medium-sizcdelectric a drills utilizing a common chassis and passing through a common assembly cell as the last manufacturing step.required to bring a product from raw materialsinto the arms of the wasteful customer. PARTI: GETTINGSTARTED . and then enuisioning a future state with mwch better performance. T'he relevantactionsto be mapped consistof two flows: (a) orderstravcling upstreamfrom the customer(clrfrom the salesdepartmentwhen forecasts substitute for confirmed orders)and (b) productscoming down the value streamfrom raw materials to cLrstomer.where they can be more easily acted on by managcrs.a product family might be a car platform (e. Se l ecti n g a P ro d u ct Family The whole point of value streammapping is to disaggregate operational issues ro the level of specific products.Alternativelvthe mapping team might define the product family as the motor going into the medium drills and map back upstreamfrom that point.Ford Explorer and lVlercuryN4ountaineer) produced in an assemblyplant. Typically a product family will includea groupof productvariantspassing through similarprocessing stcpsand usingcommon equipmentjust prior to shipmentto the customer.

. .And the productswithin rhe family chosenfor mapping might differ slightly in dimensions. The sub-assembly for may have many variantsfor different buyers of the completed aircraft.g.-.a product family might be an entire airframe (e.it might be a major subassembly. the product is clearly a family.Alternatively..-. Extended mapping cuts through this clutcer to focus on jusr one streamin order to think of improvementsthar can eventually apply to all streams. the verticaltail clearlyconstitutesa product family because variants all follow the samemanufacturingpath and have no commonalitywith tails for other aircraft. Final Assembly Component Assembly Part Production Rarru Material Production Summa Platform A Platform B Apogee Kappa Asia Steel /' Zenith Platform A Platform B -. .For example.. Azimuth t. Note rhat the sameproduct family may be supplied to a number of different end customersand have cosmeticdifferencescausingthe casualobserverto overlook product commonaliry. and Illinois Steel suppliesmaterialsto Theta and Zeta as well as Omega. example the vertical tail. I " Monterrey Steel F i r m s a l o n g s i m i l a rv a l u e s t r e a m so f t e n h a v e c o m p l e x r e l a t i o n s i t h e a c h o t h e r . '\. In the aerospace industry. \.. Omega fabricatessimilar parts for Delta and Azimuth. "' " "l Omega Comet Platform A Platform B . Delta suppliessimilar componentsto both Summa and Zenith.the basicrail designmight be slightly longer for use on a srretchedairframe.-.the Boeing 737 or Airbus A320).even if they are made in other areasof the samefacilities by the samefirm utilizing partsfrom the samesuppliers. w .._. '-.F or example the tail structure might incorporatedifferent aerialsand fairings for navigationand communicationequipment.t I Delta \ Admiral Platform A Platform B Perigee :. . Note also from the chart below that firms along similar value streamsoften have complex relationswith eachother. Neverthelessfrom the standpointof the firm or facility at the downsrreamend of rhe map.However..

That is.-l I computers Ensine I Because the product family is defined from the vantagepoint of the final srep mapped.I t'"n"= I I | I t.it is best for your first map to follow the path of a single family and a single component in the product..additional maps can be createdfor many or all of the componentsand parts going into a finished product.keep it simple and focus first on achieving a breakthroughin raisingyour team's consciousness! In subsequentrounds of mapping - PARTI: GETTINGSTARTED .whar appearsro be a product family for an armaturemanufacturer(largearmaturesfor alternators) simply is one of many component parts for an alternatorproducer (who might define a product family as largealternators).. you can define product families from many starting points and map backwardup value streamsof varying lengths. But to ger srarred.For example. And the largealternatoris just one component among many from the standpointof the auto assembler who defines product families in terms of vehicle platforms.The alternativeapproach of mapping the value stream of every component going into the product is time consuming and costly and we have found that it overwhelms managerswith too much data. This is becausethe first obiectiue of extended mapping is to achieue a breakthrougb in shared consciousnessof waste and to identify systematicopportwnitiesfor eliminating the waste.Pr o d u ct F a mi l i e s fro m Summ a' s Per spectiwe t. the conceptis essentially"fractal". if the collaborators the mapping processfind ways in to work together and achieve useful results. As you selectyour start point and move back upstream.It is highly likely that the wastesidentified by following one component back upstreamwill occur in roughlv equal measurein every componentgoing into the finished product.

TAMPil. trying to see roo far with your current vision may be fruitless.ooo "t' | -6..avait I lcto = 1o minuLe6 | luprine=Ioo% 25hila5 | | | 127.. showingall thc wasted actionsand information lossen route. However. avait..600 5ec.i rr'.1 f c. l-. I lupti^.This is the minimum o s c o p e f c x t e n d c dm r p p i n g .I U-_-T f-l 1\ \\ |. H \\ \\\ n />\ 46ooL 24ooR | | t> Coilg 5 Aaye f .nJ*1 -12.400 I "R" | I rtay = 20 pieces I I z5h:'fr... just as trying to map all of a product'sparts back upstream is overwhelming. I soort""t l I I Vr4o.l En=iA. it would srartwith rhe end cusromer who usesor consumes the product. We advisc novice mappersthat a lor can be learncd by looking one or two facilities and firms upstrcam from wherever you start.D e t e r mi n i n g a Ma n a g eable Field of Vievv The ideal map would truly show the whole.600 'ec. 1'hat is.=oot" I 2Shifts | I | 27.A lcto = 10 minu|e.. Single Facility Field of Vievv - Learning to See I t+1 Michisan I steerco.The map would then follow the product all the way up the value streamto moleculesin the ground (or in the rccyclingbin). En -J """"^a lClO= thour lu?time= 05% -l I ffia-ffi:-#ffiHffiWffi Eit.600 5ec.l lc(c= zweeKe I .avail.| | l27.:'.{G I -ElT\4> I zoot | f^_ le..

(12o5.. M .. f"irr.l .) t1(2) PARTI: GETTINGSTARTED .. we will draw mapswith an intermediatefield of view.5h.')lr'x:rl 6 < | ed'.. //@^i /.. | -/' -.M. l. fL------1 Birnlnghan. L_ i :twalt\+t-__ i.t-l'z:#.. "assembly")in Learning to See.l 6aa!.>-rL[@+ C l e e ea n a . .. + :.g.--l... \ I . 'L t l_r f-. "welding".! tn ' ' " llz lI4 l|.^l oeafto-.VL/t - t.\\ \\ ll*n4.Even at this minimum scope../ ..au //! 426e1 214Hr )24 b | | I I 'I" - i=r \)it \\. I | Ml -rl lcar.. Tsnpk- _l rRM0 wtP2h I l--. l":!:tr:"7:"liii.r''o" I D^ n lAphaMoroFl ..i I I ffi li L \ fr rrFrFrl - t:P"9s!-l l--Ff I I l1-: mr--f> J l--n@. ! ' .i ce@ I /ta--a I I | i \_'.Nr t'"-' tN-l 6da!. it is both possible and desirable startnear the end customerand work far back upstream to toward raw matcrials.qha..1.I ---7 r--t \- *- |_____i f-n7u-l | 9)tc.--r k4.afiffi'oo*" L_ .f ll-. lft4 tIA l Alrha I I Distilbut.E.4 T--il. Multiple Facilities Field of Vievv - Seeing the Whole /.Od...tu.. MRP I ranrwind.. centerfor the completedproduct and proceeding upstreamto raw materials For thosc with more ambition and with full cooperationfrom upstreamfacilities and firms.Tl ..A _ . . The facility boxes that are the primary units of analysis this breakthrough guide are the samesizeas the individual process in boxes("stamping".-..an.l l*iii.note that thc scaleof mapschanges dramatically between Learning to See(facility-level maps) and Seeingthe Whole. -e.Vastexpanses people and of equipment within facilitieshave been shrunk into tiny boxes so we can see the big picture! In this guide._____sI I l./ // f_--l--l -rt .// <al'M.-e. O H -___1_ I w4k! I.--] teE#t-l l-w-1 I 2.rolls of steel). startingat the distribution (e.p J .

Supposemanagers are in place for the segmentsof the stream within each facility. purchasing. Whai's more. So there is a need for a new type of managerwho we will call the "Product Line Manager" (pLM). to connect the maps and lead the improvement process? The reality in most caseswill be "no one".We are convinced that this is critical to gain the full benefit of mapping at the facility level.Choosingt a Leader and a Value Strearn Team We hope that you are experiencedwith facility-level mapping as describe in Learning rl to Seeand have appointed value stream managersfor all of the value streamswithin your facilities.design. in l . Indeed. Indeed. the knowledge of facility-level value stream managers will be invaluable for quickly drawing accuratemaps of the extended value srream.And it means "manager" in the senseof looking concretelyat the preciseactionsthat need to be taken all along the value stream to remove wasre and cost while improving quality and responsiveness. Doing this causesa large amount of organizational disruption during the transition and this structure still does not addressthe behavior of upstreampartner firms. we do not usually recommend what is sometimescalled a "product team" structure in which all of the engineering. for optimal resultsthe Product Line Manager needs ::::.rp:i.by their nature. : to be a business manager. Who has the responsibility for directly managingthe total stream across firms.this individual is in a unique position to judge the performance of the many functions touching the product.extended maps crossfacilitiesand firms.rr:::. it is really not necessary most casesif the P[. a continuing assessment functional performancealong with preciseprescriptionsfor of improvement is one of the most important benefits of product line management.r'. as we will see in a moment. What's more. However.and supply chain under his or her oversight.and marketing employeessupporting the product are put on a dedicated team. The most successful firms we have encounteredusing these techniques have Procluct Line Managerswho think about product marketing and engineeringas well as production and purchasing.operarions.M takes an energeticapproachto the job. With all the elementsof marketing. However. This means"business"in the senseof taking responsibility for making money and growing market sharewith the product family in question.producrion. The Product Line Manager This individual in the most downstreamfirm needs to be much more rhan a technician concernedwith one facility.

over production (which is done by the operationsdepartment).working with a tiny group of assistants.and the production controland logisticsdepartment.over engineering(which is done by the variousparts of the large engineeringdepartment). ''.like our proposedPLM. Yet the Chief Engineer. The PLM in the most downstreamfirm will be even more effective if there are similar individuals in each of the upsrreamfirms so that for any product a quick evaluationcan be conducted by a small group composedof one PLM per firm. the one person who can "see the is whole" and think about the necessary contributions from every functional activity and every upstream firm to createand deliver a successful product as judged by the end cusromer. But this is not likely to be the case.someonefrom one of the functional areasin the most downstreamfirm will probably need ro take the lead and aim to achieve a breakthroughin consciousness. (One of our concernsin preparingrhis breakthroughguide has been that the very managersmosr able ro benefit from it don't currently exist in many firms!) Thus to get started. This individual probably will have little formal authority for overseeingrhe value stream and will therefore need to lead by example and by raising hopes about joint gains.Perhapsche best known example of what we are talking about in the manufacturingworld today is the Chief Engineer for a car platform at Toyota (a job position also called the shusa). in today'sworld very few firms have true PLMs. .)Insteadthe Chief Engineer.We can guaranteethat anyone anywherecan raisethe important issues and make construcrive changea possibilitywhere ir was previously impossible . if they have the courageto acr.This individual is widely known by everyone in the company and takes responsibility for the success the product in terms of return on investment and of market share. possible We can't guaranteethat anyone anl.wherealong a value stream can succeedin raisingevery participant'sconsciousness transformthe to entire stream..and over suppliers (who are managedby the purchasingdepartment..Indeed. actually has no direct authority over marketing (which is done by a large marketing department).

sales. Logical candidates are production control. fi'|) ilil ilil flll -L | t a \J .production control purchasing. and product engineering. a purchasing function will probablyneed to assign mapping leadership someone to from its supplier development group if all participantsare to be convinced that the processis fair. informationmanagement. The Wrong Role for Consultants and $taffs A n u n d e r s t a n d a b lie c l i n a t i o nn a n y f i r m w i t h b u s y l i n e m a n a g e r s n i -and this surely includespracticallyall firms-is to delegatethe task of creatingvalue stream maps to outside consultantsor to internalstaff groups. and logistics.Ideally.operations. assigninga buyer from purchasingto be a mapping leader can lead to problems if upstream participantsbelieve that the real purpose of mapping will be to uncover 'Ihus waste at suppliers.followed by demands for immediate price reductions. The value streamteam needs to include representatives all the firms and facilities of that shareownership and managementof the stream. logistics.A beautifulreport is produced by the consultantor staff team-and in our experience the beauty and precisionof the maps is generallyinversely proportionalto their usefulness-but the findings are then fildd away and soon forgotten. operations.To be successful. The team can query the functions supporting the value stream as necessary fill to in missing information. balanced. we generally recommenda small team with a minimum of one representative per company.and aimed at win-win-win outcomes. a processimprovement or function like quality or processengineering.in our experience this is misguided. mapping leader needs to be someonewho can gain the respect the of upstreampartnersby conductinga rigorousand fair process.However.However. manufacturing engineering. from purchasing. However.The findings of the consultantor staff expert are rarely credibleto the managerswho need to take action and the raisingexperienceof walking the value stream consciousness together-discovering the waste and jointly agreeingto a crossfirm action plan-simply never happens.typically in operationsplanning or process improvementdepartments. Remember:Only managerstaking clear responsibility can fix the mess.which is often a critical learningexperience. it would also include the relevant departmentswithin each firm . So the same managersought to draw the maps.Any of these can work. this can make the team too large to walk the value 'fhus streamtogether.

This means introducing continuous flow (as describedin Creating ContinwowsFlow) wherever possibleand instituting smooth.T a ki n g a Wa l k Once designated.sequence.draw the current statemap. and then ask. An Ideal State may then co-locate at one site all of the activities required to proceedfrom raw materialsto finished goods. leaderand the team need to take a walk together the along the value stream.in the process eliminatingpractically all transportlinks and needs for information management. Why is quality so erratic?. Why is order flow so erratic?. Future State 2 then introducessmooth. leveled pull between the areasof continuous flow. leveled pull with frequent replenishmentloops between every facility touching the product. most warehouses eliminated.In particular. How can value be enhancedfor the end-customer?" Once the map is drawn so that the current state of an existing value stream is known precisely.Which stepsare waste?.if you are mapping a new value stream for an entirely new product you will probably want to skip directly from the current (businessas-usual) state to an ideal state. In the process. beginning with Future State 1. or converted are to crossdock operations. PARTI: GETTINGSTARTED . Why are deliveriesso erratic?. Future State 1 achievesthe luture state shown in Learning to Seewithin each facility touching the product. in this breakthroughguide because we believethat this is likely to be the most typical approach.it's time to createthe first of two "future state" maps that remove wasted stepswhile stabilizingprocesses and simplifying information flows. You may or may not find this particularsequence appropriatefor your own value streams.We follow the three-step. "Which stepscreatevalue?.

A Diagnostic for Relations Betrrueen Firms As teams start mapping. real bonus can be achieuedif the improued functional A performance can then be applied to all ualue stredms within the participating firms. we and believe a relentless.(Indeed. .rather than high-level agreementon principles. product engineering. reliability. But they have a hard time seeing the connection between their activities and the needs of the product. Fortunately.)A real bonus can be achieuedif the practical lessonsof sbared ualue stream management can then be applied by each'firm to its relations with its other customers and swppliers. Thus an important benefit of the mapping process. is what has given Toyota its edge in creating the world's leanestsupply base.value stream mapping provides a clear and consistentlanguagefor firms to start an intelligent conversation with each other about the root causes their shared of cost.If the value stream map showswidespreadconfusion and counterproductive actionsbetween firms at the value stream level.Tvvo A Final Benefits for Functions Diagnostic As teamsdraw their current statevalue streammaps.can be to give much clearerguidance to each function about its role in supporting value streams.operations. However.they are likely to make a surprising discovery.purchasing. it will be obvious that "partnership" at the top isn't translatinginto competitivenessat the bottom.Today we all use languagestressing partnershipand cooperationbetween firms sharingvalue srreams. What's more.in addition to a breakthrough in consciousness about the magnitude of waste and the enormousopportunities for improvement . quality. mapping teams in most caseswill discoveran enormousgap between these high-level principles of collaborationand the day-to-dayreality down ar the level of each value stream. Most problems identified along the value srreamwill trace direcrly to the performanceof variousfunctions .fine-grainedfocus on improving each value srream.the functions want to support the value stream for each product. they are likely to make yet another discovery. weaknesses functional in performancediscoveredin the sample value streamwill almost certainly be present in every other value stream the firms touch. In our experience. logistics.information technology. production control. responsiveness. communicationsproblems.

The Current

State Map

With the basic principles of extended mapping in hand, it's time to accompanya value streamteam creating a map of the current state for a specific product family. This map will characterize the value stream as it is today. We've chosento focus on a high-volumeautomotivecomponentoffered with a small number of options- a windshield wiper consistingof a blade holding the actualwiping edge and the arm attachingthe blade to the vehicle. This product is similar in complexity and variery to the steeringcolumn bracket used to illustrate Learning to See. We've decided to map only an intermediate portion of a total value srream,which runs its entirety from the end user (you in your car) at the downsrreamend to raw marerials(iron ore in the earth) at the upstream end. The portion we will map srartsat Alpha Morors, rhe final assemblerof the finished vehicle, toward the customer end of the value stream.We then proceedback up the streamthrough che facilitiesof Beta Wipers and Gamma Stamping to the shipping dock at Michigan Steel, a raw materialsservicecenter.The five-member team, from the four firms sharingthis portion of the value stream,will be led by the head of supplierdevelopmentin the purchasing departmentat Alpha Motors and includesrhe product line managerand the assemblyplant managerat Beta Wipers,the value streammanagerfor this product family at Gamma Stamping, and the salesmanagerat Michigan Steel.

Windshield

W-per

Valrre

Strearn
Information flow

Tearn

Michigan

Steel

Gamma

Stampers f

Beta Wipers I ProductLine Manaoer

Alpha

Motors

f

s.r". Manager

+

Value Stream Manager

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,,"n.*t*un",

Head of Supplier Development (Team Leader)

Material flow

PARTII: THE CURRENT STATEMAP

11

wiper Assembly and Fabrication Rolled steel stamped into blade spine Four brackets attached to blade spine Wiping edge attached to blade spine and brackets assembly Blade assembly attached to arm Assembled wiper attached to automobile Steps . f . G' D.. E. B.Windshield Wiper Assernbly ancl Fabrication path $ \B .-- brackets stiffenerand wiping edge windshield A.

of T . Note that we will only map the circled areain this initial map. This is to keep the map simple and to concentrateinitially on raisingeveryone'sconsciousness the extended value stream.--- arm components PARTII: THE CURRENT STATEMAP 13 . let's look at an exploded view of this product showing the parts going into the wiper and its fit-point on the end product.Before we start mapping.

the transportlinks.are in the same processsequencein the same firms and use the same processing equipment with a few tool and fixture changes.The trim levels differ only in the paint .and the time required.indeed. with the product family clearly identified.This means that the wipers are inrerchangeable from a final assemblystandpoint becausethey use the same fit points and require the same installationtime.7minures). Note rhat we have numbered all of the steps (73) in the left hand margin of the list and comparedthese with value creating steps (8) in the first column on the right. and stamping .of these materialflows.3 days) and compared this time with the actualvalue crearingtime (54.a matte-black finish for the standardtrim vehiclesand a glossy-blackfinish for the high trim models.and in two sizes. We have also recordedthe total elapsedtime (total product cycle time) which sums the time required to conducr all of the srepson a product (44.which is the sum of only the value creating steps. . recordingthe facilitiesvisited.our windshield wiper comesin two specifications high trim and standard (HT and sr) .not in their number or basic design. painting. every action performed on the product' all information managementactions.component assembly. The wipers clearly form a product family becauseall of the actionsoccurringupstream.small and large (s and L) to fit two different vehicles (A and B).The designsfor the two models differ only in the size of rhe parrs. we alwayssuggesrstarting at che customer end becausethe customeris the point . The right-hand and left-hand wipers are identical on the vehicles in this example. No product should be advancingthat the customer doesn't wanr and nothing should be happeningthat rhe cusromerdoesn'rconsiderof value! For the wiper example. the only point . the list of actionson the product is shown in the following list. the first step for the team is to "take a walk" along the entire length of the value srreamto be mapped.

Ml 1.clean. Convey parts to storage 22. 26. Store Parts /rq$' Sl*wt(. Receive& create ticket 5. Tonawanda.ffis.f. Remove parts.sort & accumulatein bin 21.. d i p .inspect.. Store coils 6. .auto feed to press 1 4 . Load coils for twice weekly direct ship Transport Link 1 2. Accumulatestamped parts during run 10.. Load parts in magazine. Conveycoil to Stamping Press1 7 .NY (500 miles) Second-TierSupplier: Gamma Stamping. Store parts prior to shipment 23.' ' n '' i ! 28. Tonawanda. Dearborn Heights.Convey parts in bin to Stamping Press#2 13. Load parts for twice weekly direct ship Transport Link 2 24. p a i n t& b a k e 20.Convey parts bin to storage 1 1 .Formallyreceive 27. cnr$)lo'" D . b ols-Slrfi 96h /r"gqo.1*$ \? V\F' .insen. Directship (truck)to Harlingen.Kar-. Convey parts to paint shop 19. Rackparts on moving conveyor. Retrieveand load truck for daily direct ship 10m 10m 48h 10m PARTII: THE CURRENT STATEMAP 15 . M o u n t o n c o i l r o l l e ra n d f e e d p r e s s 8 .S t o r e p a r t s 12. New York 3 .A c c u m u l a t e a r t sd u r i n g r u n 16..S t a m p f i n a l ( c u r v e d ) h a p e s p 1 5 . Convey parts to storagearea 17. Directship (truck).Ph y s ica l Total Steps A cti o n s R e q uir ed to Gr eate a W indshield Total Time W iper Value Create Time Value Creating Steps Raw Materials Supplier: Michigan Steel. S t a m p i n i t i a l( f l a t )s h a p e 9. U n l o a dc o i l s 4. Store parts 18. TX (1500 First-lrer First-I'ierSupplier Warehouse: 10m 8h 10m 10m 14d 10m 5m 1s 4h 10m 48h 10m 10m 10s 4h 10m 48h 10m 130m 2h 10m 48h 10m 1s 10s 52m Har. rX T:tH.

Harlingen. Store at first assemblystep 34. S h i p b y t r u c kt o H a r l i n g e nT X . R e l o a d r u c kf o r d a i l y s h i p t Transport Link 5 56. Accumulateparts in first assemblystep 36. Directship (truck)to Reynosa. C l a s pw i p e r b l a d ea s s e m b l y o s u b a s s e m b l i e s t 39. Convey parts to second assemblystep 37. Convey parts to shipping dock 49. Insertfastenerclip and securewith pin 35. Cross-Dock 54. U n l o a dt r u c k 53.Mexico ( 1 0 0m i l e sw i t h q u e u e a t b o r d e rc h e c kp o i n t ) First'lier Supplier Assembly Plant: Beta Wipers. Formally receiveand move to storagearea 31. Store in receivingstoragearea 32.Total Steps Value Creating Steps Total Time Transport Link 3 29. Store awaiting full truck 5 5 . Load truck for daily direct ship Transport Link 4 5 1 . Accumulateparts from third assemblystep 44.Mexico 30.TX 5 2 . Conveyfrom storageareato first assemblystep 33. ( 1 0 0m i l e sw i t h q u e u e a t b o r d e rc h e c kp o i n t ) First-TierSupplier Cross-Dock: Beta Wipers.TX { 6 0 0m i l e s ) l Value Create Time 6h 10m 48h 10m 8h 10s 4h 10m 8h 10s 4h 10m Bh 10s 4h 10m 8h 20s 4h 10m 12h 10m 10s 10s 10s 6h 10m 10m 12h 1Om 96h . Reynosa. Store at third assemblystep 4 2 . Convey parts to third assemblystep 41. Store awaiting shipment 50. test & pack step 45. test & pack in protective sleeve 47. I n s e r tw i p i n g e d g e i n b l a d ea s s e m b l y 43. Ship via multi-pick-uproute (truck)El Paso. Accumulateparts at pack 48. Accumulateparts in second assemblystep 40. Convey parts to inspection. Store at second assemblystep 3 8 . Store parts at inspection& test 46. Conductinspection.

NJ by truck ( 2 0 0 0m i l e s ) Car Company's State Street Assembly Plant: Alpha Motors. U n l o a dt r u c k 58. Store awaitingfull truck 6 0 . S h i p t o C l e v e l a n d i s t r i b u t i o n e n t e rb y t r a i n D C ( 5 0 0m i l e s ) 10m 10m 12h 10m 96h 10m 10m 48h 10m 10m 2h 1m 1m 10m 12h 2h 1m 1m 12h Summar1y of Physical Actions Total Steps Value Greating 73 44. S t o r ef i n i s h e dv e h i c l e s 72. Conveyto kitting area 66.TX 5 7 .7 Min. NJ 62. Time Distance 53OO Miles overT TraneportLinke PARTII: THE CURRENT STATEMAP 17 . Store awaiting need 65. West Orange. Cross-Dock 59. R e l o a d r u c kf o r d a i l y d i r e c ts h i p t Transport Link 6 61. El Paso. Load train for daily direct ship Transport Link 7 7 3 . Directship to West Orange.3Days I 54. Line off vehicle and test 7 1 . Formallyreceive 63. Transfer assemblybins to 67. Attach wiper arm with blade to vehicle 70. Conveyto storagearea 64.Total Steps Value Greating Steps Total Time Value Create Time Car Company Cross-Dock: Alpha Motors.A s s e m b l e i p e r b l a d ei n h o l d e rt o a r m w 69. Store in assemblybins awaiting need 6 8 .

Far from creatingvalue. packing. the warehousingand crossdocking activities along the value stream.painting them.Actually. the answeris clear. Given the importanceof telling the difference between value and waste.the numerous testing and inspection steps. What's more.categorized waste and value.792or 0.L e a rn i n g to S e e V alue As we write down the actions.the long transportlinks between plants. 18 .and similar ratios are likely to emerge from any maps you draw. and sub-assembling them prior to attachment on the vehicle. Indeed. And would you be happier if the car company could get you the model you want with the trim level you wanr quicker becausethese steps were left out? Of courseyou would.look at the many movementsof the product within each plant between processsteps. The final attachment step clearly createsvalue for the customer. as a consumer'be less satisfiedwith your vehicle if these currently necessary activities could somehow be left out? Of coursenor.Our example is the norm.08%) and of value-creating stepsto total steps(8 out of 73 or ll%) and the amount of transport distance(5300 miles) are quite typical for discretemanufacruredproducts in the world today. it is not surprisingthat we often encounter readersand audienceswho are anxious about their ability to categorize actionscorrectly. the lessyou probably are willing to pay for it. and warehousingactionsactually destroy it! D r avvi n g a U se fu l Map The long list of steps. By contrast. "Some assemblyrequired".7 minutes out of 6S. The enormousgap between total time and value-creating time and between total actionsand value-creatingactions is the opportunity the value stream team must seize.So do the seven actionsof stampingthe metal arms. not the exception.Consumersdo not expect to receive their vehicles with the wipers in the front seat. Put yourself in the position of the consumerand ask if you would pay less for the producr or be lesssatisfiedwith it if a given step and irs necessary time were left out.. these shipping. it is very simple. In the caseof attachingthe wipers to the vehicle in the Alpha assemblyplant. is highly provocarivebecause by it helps the team realizethe enormousopporrunity for savings. Would you. inspecting.accompaniedby a polite note stating. rhe ratiosof value-creating time to total time (54.and the repeatedpacking and unpacking of the product. the more these stepscausea delay in receiving exactly the product you want.the ability to distinguish value-creatingsrepsfrom currently necessary but wasteful steps and value-creatingtime from currently necessary but wasted time is critically important.

From there they go to auto retailersand then into the hands of the customer.First Vievv of the Gurrent Showing the Gustorner State Map -zLzL-1 Atpha I I Dietribution Center I Cleveland.Again. which interactswith car dealersto get end consumers the products they want. The best way to do this is to group and summarize the data by each of the facilities and transportlinks the product encounters. Note that this facility is a cross-docking operationwhere vehiclesare sorted and sent onward as quickly as possible to several regional storageareasacrossNorth America. We'll representthis organizationwith a facility icon placed on rhe right side of the map.Thus our intermediate-viewmap stops considerablyshort of the total value stream map thar ir may be useful to draw at some point in the future. the place ro starr is with the customer.the customer is the Alpha Motors Distribution Center. Underneath this icon we'll draw a databox recordingthe customer requirement for size and frequency of shipmenr. In this case. for this information to be useful we need to simplify it and put it in a form managers can act on.at the most downstreamend of the map. PARTII: THE CURRENT STATEMAP 19 . OH I I I ar6oEi--] 640^ | | | | | | 4265r 214Hr 32ob 213er 1o7Hr | I I I I I However.

a-L-14 lVichiganSteetl ferviceco. I DearbornHeights. fabrication.and cross-dock facilities. Mexico o Beta Wipers' PartsWarehousein Harlingen. the procluctflows through seven assembly. New Jersey o Alpha Motors' Cross-Dock. New york o Michigan Steel'sServiceCenter in Dearborn Heights.TX I betaWipereI Agsembty I I Reynosa. Texas o Gamma stamping's stamping and Painting plant in Tonawanda.Mexico To get from raw materialsto the Alpha Distribution Center. in Harlingen. El Paso. Michiean . Texas o Beta Wipers' ComponentAssemblyPlant in Reynosa.t I l Harlingen.warehousing. I 4--14 Gamma stampins I I fonawanda.These are: o Alpha Motors' State street Assembly Plant in west orange.'Ibxas in o Beta Wipers' Cross-Dock. many components for from many suppliers.for parts sent from severalplanrs ro many customers.NY I lbetaWipers I I WarehouseI lrr |.

The other is a warehouse icon for facilities where incoming goods are sorted and stored before shipment to their next point of use.NJ We have createdtwo new facility icons not seen in Learning to See.in particularfor activitiesnot encounteredin our example.OH ZLzL-1 1160| orv | | | | | I betaWipers I I Cross-Oock I I zzoo I 213er rc7Hr I I 640A 426er 214Hr I I I I -= lhl + l I Harlingen. (The iconsused in this workbook are displayedon the inside back coverand explainedin Appendix A.Gurrent State Map Shovving All Facilities | .TX West Orange.lf""^ | Center I I Cleveland.of course.One is a cross-dock icon for facilitieswhere productsare not stored but instead moved immediately from an incoming vehicle to an outbound shipping lane."llr.) You may want or need to createother icons. PARTII: THE CURRENT STATEMAP 21 .Just make sure that everyonc working on the extended map Llses the same icons.fX El?aeo.

Mexico RM56 h.Ww. Beta Wipers Assembly. Finished Goods). and you'll want to append yorir facility-level maps ro your current state macro map as well. the frequency of the production cycle (showing how ofren every part is made.I I ll Gamma I stampins I I Warehciuee I trn.Gamma Stamping. Note that the data box under each facility contains data on inventories (Raw Materials. We've drawn current scatefacility-level maps for the three manufacturingfacilitiesalong this value stream.I E?E=ro"vt.NY In I I oetaWipersI Assembty I I Reynosa. wtP41h. such as .and Alpha Motors Assembly in Appendix B of this workbook.Work-In-Progress. I I tathrrb"-l I s.1 Harlingen.TX Tonawanda.-l wrPl1o h. FG O\.] -1 2Shifts 5Oavs E?E = 1 Dav Defects = 4OO ppm Dd".This is why masteryof the material in Learning to Seeis a prerequisitefor macro-mapping.t a-=2oooppm | I You will soon discoverthat you can't successfully gather and summarizerhe informarion needed for improving the value stream without drawing detailed currenr state in-facility value stream maps for products as they move through manufacruringfacilities.rhe amount of productive time (the number of shifts per day and the number of working days per week)."v. FG12h I I t--RMaa6r'.

Current State Map and Data Boxes

Shovving

All

Facilities

| ,"il?,lf"", I Center
I I
Cleveland,OH

/L-L-1

l%otD"v--]
| | | | | | 640^ 42651 214Hr 32oB 2135f 1o7Hr | | I I I I

I oetawipersI I Cross-Dock I | .'---+ a

lsl- l 1

Harlingen,TX

El?aso,TX

WeslOran6e,NJ RM50 h. wt?2h. FG14h.
2?hifts SDavs E?E=1Day Defects = 5P?^

"EPE = 1 Day" meaning "every part every day"), and the defect level (in parrs per million) as reported by the customer at the next downstreamfacility (or by the customer'sinspector at the point of shipment in the caseof the Alpha Morors Assembly Plant.) We have not drawn facility-levelmaps for the Alpha and Beta cross-docks and for the Beta partswarehouse. This is partly to keep the size of this guide manageable and alsobecause we will endeavorto eliminate these facilities altogetheras we move through progressive furure states.If your value streamswill require large distribution warehoutesin any imaginable future for example for serviceparts - or cross-docks, you should also draw maps of these facilitiesas a guide to improving their performance.Exactly which facilitiesmerit in-facility maps and in what detail will alwaysbe a matter of judgmenr, so be preparedto adjustyour approachas your experienceaccumulates and you encounterdifferent siruations.

PARTII: THE CURRENT STATEMAP

T h e Ou a l i ty

S cre e n

As we look at the data in the facility boxes,we nore a trenclworthy of further crarnination. At Alpha Motors Assembly the defect rate for wipers installed on rhe vehicle - def'ects discovered a representative by from Alpha'sDistribution Division in a final inspection just - is 5 per million. (SinceAlpha is assembling prior to shipment 250,000 vehiclesper year with two wipers per vchiclc, this means that two to three wipers per ycar arc rejccted at final inspection,usually for scratches the finish.) Yer when we look at defects emerging in from Beta Wipers Assembly (asjudgcd by Alpha), we note that there are 400 def'ccrsper million and when we look at defects emcrging from (]amma Stamping (asjudged bv Beta) we note that there are 2000 defectivc parts per million. F'inally,when wc look at defccts arriving ar Gamma from N,lichigan Steel the figure soarsro 10,000pcr million. In brief, clualityis worseat every step up the value stream,a common phenomenonin practically every industrytoday.This meansthat to achieve5 clefects million (approaching per the Six Sigmalevel of 3.4 dcfectsper million), the prodr,rct flowing through a scriesof is qualitv screens each facility,cach of which resultsin scrapand inspectioncost.The in slope of this clualitygradient can surely bc reduced in firturc sraresanclit is importanr to nore carefully the current slope to aid our thinking on how to do this. We therefore recommend drawinga Quality Screen(asshown below) on the (lurrent Statemap. In this casewe have placedthe diagramin a convenientspot in the rowerright-handcorner.

O.rrality
ppm defects

Screen

2000

r500

1000

500

0 MICHIGAN TO GAMMA

GAMMA TO BETA

BETA TO ALPHA

ALPHATO ALPHAPC

24

Mapping
'fhe

the Transport

Links

next step, oncc the facilitv-level maps are drawn and the data have been summarized, in facility boxes,is to add the transportlinks between the facilities. do this, you may Tb need boat, train, and airplane icons,in addition to the truck icon frctmLearning to See. In this example,we will use the airplaneicon with a dotted line for shipmentsexpedited by air and a truck icon with the same stylc of dotted line fr-rr those expedited by truck. Thc

numbersin the regularshippingicon (a truck or a train) show the fiequency of shipments (e.g.,"1 x day" : on€ shipmcnt per day) while the number in the expeditingicon shorvs the number of costlyexpeditedshipmentsin the past year (e.g.,"2 x year" : rwicc a year). With these data in hand, we are ready to complete the physicalflow portion of the map Lry drawing in the normal product flows between facilities, using broad arrows.Notc that thcse arc striped,"push" arrowsbecausc productsare mclvingaheadat thc commandof a centralized informationsystemand not necessarily accordwith the immediateneedsof the next in downstream facility.l.lnder eachof the transportlinks we recordthe distancein milcs, the shippingbatch sizc,and the percentage defectivedelivericsas reportedbv thc cusromcr. of As thcse flows are drarvn,the team shoLrld notc one additionalpoint the trcnd in def'ective (the wrong product or in the wrong amount). shipments: latc, early,or incorrect As is alscltypical in most industriestoday,we note that the furthcr up the value streama facility is, the morc likely it is to make defectiveshipments. This situarionis analogous to the quality gradientand equallyworthy of improvementin future srares because ever_v defectiveshipmcnt generatcs correction costsdownstream and perturbsthe schcdule.Fclr economyof spacewc have summarized this trend in the samebox as thc qLralitv data on the Current Statemap, changingthe label to the "Quality and Delivery Screen".

O.ualitlz
PPM DEFECTS 2000

and

Delirrerlz

lScreen

% DEFECTIVE DELIVERIES 10

1500

1000

500

MICHIGAN TO GAMMA

GAMMA TO BETA

BETA TO ALPHA

ALPHA TO ALPHA PC
PARTII: THE CURRENT STATEMAP

l oooo. I I DearbornHeights..NY RM336h. o . and summary boxes at the ends of the time-and-stepsrines on the indivicluar facility maps.Time. FG12h z5ntftq SDavs =zoooppm E?E=1Dav Defects = 4OO ppm o.3d.The "Bottom Line" Finally...ts 4-/14 Gamma I P. l . we can draw a time-and-stepsline along the bottom of the map. .6 d.. Ml I _N- SteelCoits I :\ .\ r1. FG4Ah.Mexicot. wrP110h. ..6d. while the figure in parentheses ro the right is the value creating time.' FRM56 h. Note that the first figure above each segment of this line is the total rime within each facilitv and along each transportlink.or> I stampins I I Tonawanda.. 35hifts 5Davs E?E=3Davs Defec. 20.(3131e.. l-l U-T I -2LzL-1 ril-v + |Dr ^' o ' .L laf"a" lal t.25d.2"1_ lweekl I u---*- ra. t\ l. with the value creating actionsshown to the right in parentheses.steps. The first number below each segment of the line showsthe total actions(steps)taken on the product in each facility and transportlink. f wt? 41h. r rrrrrrr+ 1 a 3t"w4#+ Reynosa. . 4.) 21(3) . Note that information needed for each facility is contained in the . -2LzL-1 luichisansieetl Sewiceco..) 22(3) o. (3o s.

) 11(2) Ouality .".NJ RM50 h.5d. 4 1 1 and Delivery Screen 2000 70 OEFECTIVE DELIVERIES 10 1500 1000 s00 t .r."flr.r?*' MICHIGAN TO GAMMA GAMMA TO BETA 0 BETA TO ALPHA ALPHATO AIPHA PC . 2.l&.Od. I Center I I Cleveland. 4 1 o. wt?2h.Gurrent state shovving all Facilities. // /r 1 | . 4.Od. (12os.Od.5d. 2xYear FGIAh 2Shitrs SDavs E?E = lDav Defects = Sppm 4.5d.'. Transport Defects & Delivery. o.PPM DEFECTS defeds o. and Time-and-Steps Line Links. OH zz't-21--1 -1 | I I I I I qfil // l xDay | | | | | | .rooio^v 640^ 4265r 214Hr 32oB 2135r rc7Hr WeetOrange.

vou shor"rld start where ordersenter the sysremand follou' the ordcr flor. At this point orders are aggregated and placed in inventory (shown by order queue icons along the information flows).M a p pi n g th e l n fo rma ti on Flow The tcam has now completcd mapping the physicalflow of the product but the valuc srream map is onlv half done.These ordcrs are then releasedupstream to the following firms and departments: o Alpha l\{otors HeadquartersProduction Control o Alpha N.given orders in hand from dcalers.Iotors SalesOrder Bank. To actuallydraw the informationportion of the extendcd map wc will need an additional icon for production control. Bc sure to use a pencil as you skctch informationflows and kccp an eraser handy! What's more. which we have drawn in the shapeof a compurer rerminal.Whcn you add the complexity of going across several companies and through sales.fotors Assembly Plant ProdLrction Control o Alpha NlotorsAssembly Plant Ntlarerials Control o Beta Wipers Headcluarters ProductionControl . line managers seem to have useful knowledge of how infclrmationis managedon a macro-scalc. Thcv are held trntil the weekly salesplanningmeeting that decidesthc specificarion thc orders of that should be relcasedinto the system. This is for the simple reason that if no clrstomcrsignals demand a for products from upstream.first through the most downstreamfirm and then upstream through the supplierfirms. not surprising it's that very feu. productioncontrol. requcstthesedata aheadof your visit because many facilitiesand IT departmcntsdo not have them readilv at hand. Or at least nothing shor-rld flow! We thereforc need to go back to the upper right corner of our map and draw the flow of order and prroduction informarion going back from rhe customcr. if you can. productioncontrol.and operations salcs. Bcta Wipers AssemblyPlant ProductionControl o Gamma StampingHeadquarters ProductionControl r (iamma StampingPlant ProductionControl o Ntlichigan Steel ServiceProductionControl 2A . groupswithin most companiestend to communicatepoorly and a managerwho fLrllytrnderstands infrrrmation rhe managementmethods of all thrcc groups is a rarity. Cliven this rcality.and operations deparrmenrs within eachcompany. as we do this we nccd to warn you that mapping the information flow is the 'l'he hardestpart of the task. Howevcr.then nothing will flow.The first of these is for Alpha N.v fiom department to department and from information managementsystem to infbrmation managementsystem.

Queue at Alpha Headquarters Production(lontrol 4. Queue at Gamma Plant ProductionControl 19. Tiansmit weckly ordersfrom Bera HQ to Gamma He 16. Release weekly productionschedule of 20. we note the following alongthe longestpath.In almostall manufacturingcompanies. Tiansmit weekly orders fiom Alpha HQ to Beta He B. If we follow the weekly schcduleand write down the infrrrmation managemcnt stepsand the time involvcd. Queue at Bera Plant ProductionC<tntrol 11. and productionreleases back upstream. Beta Plant issues daily ordcrsfrom Beta Warehouse 13. Queue at Beta HQ ProductionControl 9. Releasevl'eeklyproduction requiremcnts to Alpha plant 5. the salesand prclrlucticln control departmencs actually send a seriesof forecasts. Tiansmit weekly production requirementsto (iamma plarit 18. one-month rolling schedule. Queue at Gamma HQ ProductionControl 17.a weekly fixed a schedule. Queue at Alpha Plant ProductionControl 6. l. Gamma Plant Producti'n control issucs twice-weeklyshippingrelease * All transmissions electronic essentially are and instantaneous. Release weekly productionschedule of 12. as we did earlicr with physical actionspcrformed on the producr. Ttansmit weekly production requirementsto Bera plant 10.and a daily shipping releasemight be typical. schedules.l davs 6 davs 6 davs 10 Davs 14 davs Actions Currently Value Strearn Required to Delays* 6 davs 6 davs PARTII: THE CURRENT STATEMAP .For our purposes. Dealer Ordersqueue in the SalesOrder Bank 2. in the car industry a rhree-month forecasr. the impolant informationis the weeklv fixed scheduleand the daily shippingrelease because rhese actually trigger production in facilities and shipmenrsbetween facilities. Beta Nlatcrialstransmitsrwice-weeklyrequiremcnrsto Gamma planr 21. Beta Plant ProductionControl issues dailv shippingrelease Production at Gamma Stamping 15. Information Manage the Steps Production at Alpha Motors 1.For example.These arc the information flows wc will capture on this map. Tiansmit weekly ordersfrom Alpha SalesOrder Bank 3. Release daily productionsequence of Production at Beta Wipers 7. Alpha N'Iaterials control rransmirs daily requiremenrsto Beta plant 14.

assertion. as we did for the list of physical steps..value creating" versus "wasteful".In the future sraresand ideal state we will show how As the weekly order information flows across the top of the map from headquarters to headquarters. AssemblyPlant ProductionControl takes the schedules production from Alpha Headquarrers Control. there are limits on how many Model As or Model Bs can be run down the line in a row without overloadingsome workstationswhere work content variessignificantly between Model A and Model B. runs them through its computerized Materials Requiremenrsplanning (MRp) system (after a delay averagingsix days). Alpha Motors. is also flowing from each headquarters it down to plant production control departmentswhere weekly schedulesfor each plant are set. more information is better.Transmit weekly ordersfrom Gamma He to Michigan Steel 23.perhapsshocking . information fbr control of operations necessary is waste (Type One Muda). For example. To test this . .g. These schedulesare rhen released to the plant floor. and all possibleinformation is best. This scheduleis fully sequenced (e. Yet in the modern era of automatedinformation management'most managershave implicitly acceptedthe notion that information is good. This is becausefrom the end customer'sstandpoint none of the information processing steps creaces any value. Michigan Steel issuestwice-weekly shipping release Total number of steps Elapsedtime for an order from the first to the last step (along longest the path) information Actual processingtime (assuming eachMRprunsovernight) * All transmissions electronic are and essentially instantaneous.Indeed. just ask yourself whether you would be less satisfiedwith a product if it could be ordered and delivered to you with no managemenr of production and logisticsinformation. then a green Model B with standardtrim) and takes into account iine balancingconstraints. you would be more satisfiedif the cost savingsfrom eliminating information acquisitionand managementcould be passedalong to you. 14 days* 25 steps 58 days 8 nights The Value of Information Note that we have made no effort to categorize information managementsteps as . In fact.Delivery from Michigan Steel 22. Managersought to be minimizing the need for it rather than maximizing it's availability. Queue at Michigan Steel 24' Gamma Materials conrrol transmirs twice-weekly requiremenm to Michigan Steel 25. Obviously you would not be less satisfied. For example.and crearesa rolling six-day ahead schedulefor the assembly plant.a blue Model A with high trim.

an old-fashionedtelephone. in extreme situations. What you find will be invaluablefor achievingyour future states. productionschedules.in the form of daily shipping releases.from plant-level materialscontrol departments.the weekly schedulefrom each firm's production control department and the daily releasefrom the customer. We're alwaysamazedthat companiesawash in information about what ought to happen do a poor job of recordingand preserving what actuallyhappened. PARTII: THE CURRENT STATEMAP . which is direct communicarion betweenthe materials handling departmentin the downsrream plant and the shipping department in the upstream plant. They usuallydo this basedon their direct observations emerging shortages of and their judgment about what to do in response. These are the preciseamounts of each part number the upstream plant is authorizedto ship to its downstreamcustomer on the next pickup. these flows are nor preciselysynchronized. usually a telephone voice line.Often. becomesthe real production control and shippingmechanismwhenevermanagers the ends of this link overridethe at shippingreleases and.So a third information managementloop comes into play.At the sametime information is being releasedto the floor in each plant it is also being sent upstream. From this it is apparentthat there are two separateinformation flows coming into each plant . A Warning on Order Data As you move upstream don't confuse the customer's official releasewith the amount each plant actuallymade. Instead gather from each facility data on what was actuallyproduced daily over an extendedperiod and compare this with customer daily requestsin the form of shipping releases you can see so the relationof one to the other and the amount of variation in both. you may need to dig a bit So or even assign an observerto captureaccurateinformationon l plant-level productionand shipping performance. We have drawn these information flows between the plants with a dotted line and our information expediting icon . These daily releaseamounts are basedon known order lead times and the stocksthought to be on hand at the downstreamplant. This direct link.

fr. Ml Tonawanda.Trrrr+ Reynosa..od....6 d.6 a.> Tonawanda. (3131e.3 d.*. 20. .''o.25d.."^l .=.Y"7".J o..TX t . OH tdr /v44ffi luichiqanst....-1 1 Harlingen.TX I. wt?110h.. I I DearbornHeights. FG4Ah.' '.NY o RM336h.I "". (3o s.NY 1 V I lr{ | 6 daye . NY Controt I I lr-J I +_ 6 days f-MEI-I Cleveland. oooo. -+ T'"-1llr+ -.t E TRM 56 h.zl Control I f-- MiF--] Harlingen.* | ?roduction I f 14 dayo Fuffalo.. SShifts 2 UaVS _/1/L.Mexicot. 4. ] wt? 41h. .Gurrent State Map Showing Information Ftovv - I. .utl frji. servtce co...''''''''' (..) 32 ..) +.... I-1 < 1""il?. Dailv I I 7. 25hif'rs 5Davs E?E=1Dav Oefects = 4OO ppm E?E=3Davs Defects =2000p?m o.21.2.

8 d.Plymouth.' 1. 2xYear FG14h.i. 4 1 o.' l. 4.5 d.Ml t t--:-. 2.l Crrrr-r> I--r-x{':'- '\ WeetOrange.----l I vaity 4 T // // f--H----l r k I //.5 d.Ml lrN I 14 daye I lf'J I 10 dayo birmingham. (12Oe.5d.s = 5ppm 4.O d. o.NJ Harlingen. 2Shifts 5 Days EPE = 1 Day DefecI.) 11(2) Ouality and Delivery Screen o.3" l.oH <1 /r-J - 32oD z+ur I 2135T r c Zn r I I I 'txDay f 1"-L l.Od. 4 1 1 MICHIGAN TO GAMMA GAMMA TO BETA BETA TO ALPHA ALPHA TO ALPHA PC .fX aaaaaaaaaloaaaaaaaaaaaaaaa RM50h wt?2h.PrE?-1 +zosr I | | | | | Atpha I I I Dietribution I Center I L Ctevetand.

output of Alpha Morors Assembly varies rhe by only about SVofrom the 960 units planned for each day and all vehiclesbuilt are shipped on the daily train to the Alpha Distribution Cenrer. by adjusting the scheduleand working overrime at the end of each shift as necessary.due to pulling vehicles out of sequenceto correct defects or becauseof problems in the paint booth or due ro a lack of parts.Alpha Motors sales order Bank has senr very stable weekly orderscalling for 960 vehicles per day. However. Dernand wipers/day 2800 2600 2400 2200 2000 1920 1800 Arnplification for Arpha Motors amplification ot +l4Oo/" 3OVo 2OVo 10o/o OVo -1Oo/" 1600 '20o/o 1400 -30o/o 1200 -40o/" 1000 March 15 20 25 30 ALPHA PRODUCTION ALPHA ORDERSTO BETA . five working days per week to Alpha's Headquarters ProductionControl.Demand Amplification For the pasr year. The actualbuild still variesfrom the schedule. And HQ ProductionConrrol has releasecl level weekly buckets of orders to Alpha's Assembly Plant Production Control and to Beta HeadquartersProduction Control.

as we plot the production and order/release databack upstream. as shown below. . Model A accountsfor two thirds of production and Model B one third while StandardThim wipers accountfor two thirds of demand and High Tiim the remainder.. I I ..Thus production and shipments are fairly stable ar rhe cusromer(rieht) end of our map. { .we nore that the amplitude of changesin both production and releases increases markedly from facility to facility. ll ll l.) On average. 1t t I ll I I ?J' tl tl 1600 1400 1200 1000 March I I I 1t I '. I t I I -20o/" -30% -4OYo 10 ALPHA PRODUCTION BETA PRODUCTION 15 25 ALPHA ORDERSTO BETA BETA ORDERSTO GAMMA 30 PARTII: THE CURRENT STATEMAP 35 . .Similarly.. Yet.the mix of models (A versusB) variesby only about 5% daily as does the mix of wipers (Standard Tiim with flat paint versusHigh Tiim with glossypaint. . Dernanel wipers/day 2800 2600 Arnplification -nclrrding Beta Wipers amplification ol +l4OVo 30Vo 2400 2200 . I I I I 2OYo 1Oo/o 0o/o '1Oo/o I I 2000 1920 1800 I I l. I t i.'l--. . Minor variationsin production at Alpha Motors Assembly become much larger by the time we reach Beta Wiper's assemblyplant.' l.

This infbrmationfor Gamma Stampingcompletesthe Demancj Amplification Screenlbr our current state.Indeed.most firms in this industrv includine Beta. as shown on the ncxr page spread. Beta. Gamrna arc Stamping'sreleases Nlichigan Steel varicd by nearly 40% in the month prior to thc arriyal to of the mapping team. 36 . : i -40o/o 10 ALPHAPRODUCTION BETAPRODUCTION GAMMA PRODUCTION ALPHAORDERS BETA TO BETAORDERS GAMMA TO GAMMA ORDERS MICHIGAN TO STEEL 'Ib deal r'viththc erraticorder flow.'t ri .Bv the time we reachGamma Stamping. Becausefailing to ship on tirne to meet customcrneedsis an unacceptablc alternative suppliersin thc auto industryand for bccauscextra tooling can be very expensivc. 'lb make this verv common phenomenonclearer.and NlichiganSteel must either maintain extra production capacityor carry large stocksof finished goods in inventory or disappoinr downstreamcustomersa significant fraction of the time.j r'tt' 1400 t.the variations very large. we've summarizecl maximum perccnrage the changein dailv productionand dailv releases over rhe past month for each facility and alignecl them in a simplified Demand Amplification chart as shown at right.Gamma.as shown below. We've placed this chart in a box in the upper left cornerof our Current State map. Dernancl wipers/day 2800 2600 2400 2200 2000 1920 1800 j Arnplification screen in Grrrrent state amplification oI +l40o/o ivi ti" il-z \ t -1Oo/o :'r :tt r i 'i r .

creating a wave.confidencein the formal systemdeclincsand more and more of thc actualsche duling and rclcasingmay be done manually despitc the largeinvestmentsin informationtcchnologv. as misalignments the individuals shippingand receiving in grow. transportproblemsoccuron evcry link.or a total of 6.carryextra inventrlrics protectthe customcr.Then. PARTII: THE CURRENT STATEMAP . feedbackon crlrrcnr conditionsand amountsof product on hand is nevcr completelyaccurate. if one wiper is discovcredto be defective at thc asser-r-rblv plant and the re-orderamount is just on thc cdge of one new. The irregularities the systcm are tlrther exaggerated the misalignmentof what the in by official schcdulingand releasing system(in the ccntralizedcompurers)are sayingand what jobs are seeingand doing. ro T'he cost implications demand amplification of are therefcrre apparentin the amount of errra inventories the value stream.rallet (containing320 r.and N'Iichigan Stecl. and largeminimum productionand shipmentquantitiescausevcry small changes the amountsnecded in downstream producemuch largerchanges the amountsrequcstedand producedupstrcam.r ipcrs in our example) che re-orderwill jump to 2 pallets. The reasonthis wavc grows largcr as we move upstreamis because the numbcr of schedulingpoints (B) and the length of of the delays(totaling . This is the familiarand dreaded"F orresrer liffect" documentedby Jay Forrestcrat MIT in the 1960s.And this phenomenoncan be repeatedseveralmore times as the order flows back upstream. to in To take the u'orst-case example.Sirnplified Dernand Arnplification Screen % variation Demand Amplification GAMMA ORDER GAMMA PRODUCTION BETA ORDER BETA PRODUCTION ALPHA ORDER ALPHA PRODUCTION Gamma.58days) before infcrrmation acted upon. in Whv doesthis growingvariationexist?For the simple reasons that productionproblemsoccur in cvery plant (even the lcanest!).even though only onc additionalwiper is needcd. Each system recalculates is its schedulebascdon its own (not very accurate)forccastsand on information from cusromcrs that is alreadyup to a week old.10 wipers.

zl Control I r-] 6 days 3..'"*" DearbornHeights.(3131s.".c"ltt-] lY2n?:"7:"1. f2"-1---' '. t l w e e k ll t ' . ..: . wt? 41h.NY : \ '."l < ts .Mexico RM56 h.Demand Amplification GAMMA ORDER GAMMA PROOUCTION BETA ORDER BETA PRODUCTION ALPHA ORDER ALPHA PRODUCTION - I f-Fuffalo. EClCU 25hifts SDavs E?E=1 Dav Defects = 4OO ppm W I | Shipdarch =6?allets =2oooppm @ o..rt ..\ ..3 d.-l-- \ 19) '\' +. T-U 2a\ C MRp-l \ I.flX. FG40h. r lr. 20.li.1 1 V i 'fonawanda. (3O s. NY I ". wt?110h.NY RM336h.) 21(3) 22(3) 3a .+J x Tonawanda. .) 4.6.6 d. SShrtbs SDays E?E=3Davs Defecte Reynosa...* I | ?roduction I Controt MRp-l I I lf{ 6 daya | Cleveland. OH I wTkry I (anffi . . Ml l-t ^.6d.

l I -t El?aso. (12Oe.OH /f ar6ot-6oto-o" 640^ a| 9etaWivers I I Croes-Oock I l-lJ---] -- // // i"f:i I | 32ob I i | ' 21zgr I .5d.t MICHIGAN TO GAMMA 500 o GAMMA TO BETA BETA TO ALPHA ALPHATO ALPHAPC . 2.rr.NJ RM 50 h.O d. \ l. wl?2h.3 dayt 4.TX n-s\t--> zl -z* 44.Ml -4-4-1 I EI | i 4 I .8 d."-J4 SOaya E?E = 1 Dav Defecl.s = Sppm 13.'\. I center I 1 Cleveland.TX J I roznr I rl.*o^t I-T*-L:'t.3 day Year | zooo"rA @ | = 6?alteto I 31..l 14daye ll'{ r 10 dayt 6irmingham.000 defeds 2000 1500 7o DEFECTIVE DELIVERIES 10 1000 ttr?*.-l lJ'v l.-+ t | I -l TIME WestOrange. o. 4 1 o. 4.1.i.5 d.t Trr) ' -=*-l l----.7min o. FGIAh Harlingen.) 11(2) Ouality ' PPM DEF6CTS 32b1 sec 54.Oday: 2Shifte @.Ml {-'N.Final Gurrent State Map Showing Demand Arnplification Plymouth. 4 1 1 and Delivery Scrgon | 10.Jl?.i'v l.5 d.O d.

Mapping theseaciditional stepswould doubtless provide additionalinsights. to increases steadilvto a very high level as onc looks back up the value stream. The map does not go all the rvay downstream the customertaking dcliveryof a car at the dealership to and it doesnot go all the way upstreamto the steelmill.of Our Map As thc team finishesrecordingthese product and information flows.and in somecase probablybecause it . frequent activities assembly operations) havehigher will turnsthanfacilities with manybatchoperations.g.9992% the elapsedtime and 89% of rhe roralacrigns. (e. individual and facilities havehigher will turns thanthe entire valuestream.\\. This meansthat 99. tcchnicallysophisticated informationmanagement sysremrhat on its face is totallv ar.demancl s of amplification. Yet cven within this scope. and **Notethatfacilities with simple.we nore that end-of-the-value srreamindicators of both measures very good (5 ppm and lVa defecdveshipmentsto the customer)br-rt are this is achieved through a sericsof screenswith significantcosrsand delays.What is morc. Evcn with this intervention.the map coversa considerablepgrtion of a lengthy and complex value streamand uncoverssomevery provocative pcrfclrmance features.6 2. we can expressthese findings in terms of lead times and invenrory rurns: Gamma + CurrentState 20. The Limits What We See When We See the Whole With regardto physical flows we note that 421.rtomated. of while currently unavoidable.3 Total 44. 40 .6 LEADTIME(in days) Beta + Alpha : In-plant* 4.are of no value to the customcr.0 + Tiansporr = 13.3days INVENTORY TURNS(annually)** 1149805 *lncludes threedaysspentin warehouses cross-docks. six inclividuals in receivingand shippingdirectly intervenein mediatingorclerflows within an expensive. With regardto qLrality and delivery reliability.281seconds (54.7minutes)of value crearioninvolving only cight actions.but to do so would require largeamounts of time and expenseto examine organizations whose behaviorthe team has little prospectof changing right now.8 31..e note rhat ordcr information is acted upon up to 17 times and storedfor up to 58 daysin queues. much lessto ore in the ground. With regardto information about customer clemand.3 days and 73 acrionson thc product are nceded to achieve3. it seemssensibleto conclude the Current State map at this scopeof mapping. with compcnsaring inventories protcct customers.

productioncontrol. it is highly unlikely that they are aspect doing a better job of supportingother product families.lved common to all are its path to the customer.they are not at all effective in supportingthis product on inv<r.we must note a suddenlyobviouspoint about the performance the manv departmcntsand firms touching the physicalproduct on its 44-dayjourney and order information on its 5B-dayjourney: However effective the variousfunctions operations.manufacturingengineering.The functionaldiagnostic .oB% 11% Value Percentageof Steps (valuecreating steps to total steos) Inventory Turns 5 400 B 7 Ouality Screen (defectsat the downstream end over defectsat the upstream end) Delivery Screen (% defectiveshipments at the downstream over o/"defective s h i p m e n t sa t u p s t r e a me n d ) Demand Amplification Index ( % c h a n g ei n d e m a n d a t d o w n s t r e a m e n d o v e r % c h a n g ei n d e m a n d a t u p s t r e a me n d ) Product Travel Distance (miles) 5300 of Finally. and purchasing.What's more. PARTII: THE CURRENT STATEMAP 41 .3 days Value Percentageof Time ( v a l u ec r e a t i n g i m e t t o t o t a lt i m e ) o. logistics.quality. becausethe processes productspassingthrough these departmentsand firms.which we believe is its most important contribution of our extended mapping process to firms in the long run therefore revealsseverelymal-performingfunctions all thc wav up and down the value stream.may be in achievingtheir own objectives.Grrrrent State Srrrnrn ary' Gurrent State Total Lead Tme 44.

The objective must be to truly "see the whole" by summarizingthe value srream on a singlesheetof paper (11" x 17" is a good size." Lewis Carroll.If this is an accurateportrayalof the current state.you may wonder just how much detail to include. To make room for all this detail they even createwall-sizedmaps in corporarewar rooms.I enquired. The Power o f S i mp l i city "What do you consider the largest [scale]map that would be really useful?" "About 6 inches to the mile.To begin to do this we need to specify in rhe nexr secrionthe featuresof a lean extended value stream that can deliver these benefits. there is good reasonto think that it is . But too much detail in an extended map interfereswith clear thinking about how to improve the value stream. and I assureyou thar it does very well.Only then can you identify ways to quickly improve performanceall along the value stream and motivate the firms involved to optimize the whole. becausethe value streamteam has directly observedit.there are surely opportunities to speed the accuratedelivery of products to the customerwhile eliminating large amounrs of cost. Chapter l1 As you experiment with drawing extended maps suitable for your product families. Syluie and Bruno Concluded. the farmersobjected [that] it would cover rhe whole country and shut out the sunlight! So now we use the country itself." "Only six incbes!. Lewis Carroll'smyopic mapmaker - . We often find that novice reams..as well as mapping the flow of every part in the finished product.and. as its own map.43 in Europe) and to use this big picture to raiseconsciousness among all the value stream participants..like want to record every conceivable{etail about the current state...Weactually made a map on the scaleof a mile to the mile!" "Have you used it much?.We therefore urge teams to keep extended maps as simple as possible." "It has never been spreadout.

r-) e^ .

Waiting waiting for machinesto cycle. lJsually production associates moving out of their work space Associates Unnecessarymotion in the workplace Moving products between facilities to find materials. the facility.or flashremovalafter molding eliminatedwith higher mold tolerances and better mold maintenance. (Ohno alwaysstressed that overproductionis the worst waste. and motion.Reducing these three forms of waste .waiting. work instructions.we are always When mapping at the facility level and at the process concernedabout overproduction due to poor information flows withiz facilitiesand the desireof managers move productsaheadto meet performancemetrics for equipment to utilization.And we are now speciallyinterested in the two final forms of waste:unnecessaryinventories (due to erratic information flows as well as incapableand batch-orientedupstream processes) and unnecessarytransportation (causedby location decisionsthat seek to optimize performanceat individual points along the value stream rather than the whole value stream). Errors in products.largely by better managing information flows and logistic.Principles of a Lean Extended Value Stream Fifty yearsago Thiichi Ohno at Toyota enumerated seven types of waste in value streams.or delivery performance.s extended-mappingof future states. You may have them memorized by now but they bear repeating becausethe types of waste are the same at the process. overproductionis still a critical concern but now due to erratic information flows between firms and facilities. such as Unnecessaryinventory customer needs. will be centrai concerns for our PARTIII: THE EXTENDED VALUESTREAM .and help. looking carefully for unnecessary defects. level within facilities. Products in excessof the amount needed to insure meeting Activities not adding value that could be eliminated. Unnecessaryprocessing - a separateinspeccionstep replacedby a self-monitoringmachine with auto-stop. macro level. When we more our analysisof product and information flows to the extended. Unnecessarytransportation between work sites that could easilybe consolidated.lools. and the extended value stream levels of analysis: OverproductionDefectsMaking items upstreambefore anyonewants or needsthem downstream.paperwork supportingproducts.)We are also processing.

This is a wonderfully uscful concept within every facility becauseit tells everyone rhe necessary rate of production from minute to minute to meet the neeclsof the nexr downstreamcustomer. However. as adjusteclfor the availablcamounr of productiontime at each step and the neeclt' make multiple copiesof some productsto incorporate productsdownstream. However. 44 - .rning is a leveled mix of what the next downstreamfacility requests for delivery this afternoonor tomorrow Knowing changesin actual consumption at the end of the stream(particularly the amplitude of the changes) extremelyimportantfor is capacityplanning but is not sufficient for controlling productioh todav. what each facility should produce each m.What shoulda lean extendetlvalue streamlook like? First. every facility along on the stream needs to be aware of the encl rate of consumption to calculatefacility-specifictakt time. You are probably familiar with takt time. Production ar every Llpsrream stageshould run on averageat the same rate. everyone in the entire value stream should be aware of the rate of customer consumption of the product at the end of the stream. which is the amount of procluctdcmanded per unit time adjustedfor the amount of production rime available. in Any time we see a chronic pattcrn of imbalancedproduction rates in clifferentfacilities we know we don.in most cases'there is no single takt time for the entire value stream. T. pleaseunderstandthat every facility upsrream should not conduct its activities in lock step with the current rate of the end facility in the stream.hus.This seemsto be the implication today of many naive claims for e-commerceand the web: "If you know the rate of end consumptionright now you can schedule y'urself accordingly.Howevel note that takt time will vary from facility to facility along a value stream if the amount of availableproduction time differs from facilitv to facility and if downstreamsteps incorporatemore than one unit of an upsrream component'Thus takt time at the Alpha Motors Assembly Plant is 60 seconds (tcr build 960 vehiclesduring the sixteenhoursof production time available eachdav) but is 30 seconds Beta'swiper assembly at plant running the sameshift pattern (because eachvehicle needstwo wipers)and would fall to l5 seconds if the wipcr assemblyplant switched to only a single eight hour shift each day.r have a lean value stream."In facr.

A second feature of a truly lean extended value stream will be very little inventory.producing"demand amplification"unrelatedto true customerdesires(aswe see in our Current State map).What u'e can learn from comparingproductionratesupstreamwith actualconsumption downstreamis hou. and (3) finished goodsrequired to support the needsof the next downstream demand. stepsneed to be taken to eliminate these gyrationsin future states.Toyota continr. faithfully the production control systemis sending true customer demand (which we call "signal") upstreamversusdistorted demand (which we call "noise").a more likely consequence chaos and outraged is customerswhen the newly "lean" value stream fails to deliverthe right a m o u n t sw i t h t h e r i g h t q u a l i t ya t t h e r i g h t t i m e . inventories the new standardin a future state after variabilityand to capabilityissuesare addressed. (2) This inventory will consistof the minimum amount of (1) raw materials.(b) the capabilityof customergiven (a) the variabilityof downstream upstream processes. The standardis calculatedfor each categoryof inventory depending upon its function in the value stream.However.rally seeksto reduce this amount by decreasing batch sizes. PARTIII: THE EXTENDED VALUESTREAM . increasing shipmentfrequencies.and improvingcapability. work-inprocess. leveling demand. "lowering of the water level" may indeed "expose the rocks" and put pressureon everyoneto go fasterto reducevariabilityand improve capability. If there is significantnoise. A better strategyis to calculate the standardinventoryat every storage p o i n t a l o n g t h e v a l u e s t r e a mi n t h e c u r r e n ts t a t ea n d i m m e d i a t e l y l i m i n a t e e g i n v e n t o r i e s r e a t e rt h a n t h e s t a n d a r d T h e n l o w e r t h e s t a n d a r da n d r e d u c e .Toyota calls the minimum amountsof invcntory neededto supportthe customers a value streamat any given time the standard in inventory. and (c) the inventory reqr-rired between processing steps due to batch sizesand shipping quantities. Lovv Low lnwentories vvith High Demand = Ghaos Process Gapability Variability and w W e s o m e t i m e s n c o u n t e r e a n i m p l e m e n t e r s h o s e e kt o r e d u c ei n v e n t o r i e s e l along a value stream without botheringto calculate the standardinventory n e e d e df o r t h e c u r r e n tl e v e l so f v a r i a b i l i t y n d c a p a b i l i t yA n i m m e d i a t e a .

describingthe reasonsfor keeping specificamounts of materialsand goods in specificplacesas standardinventory.for example-can be included in severalcategories-a "safety stock" and a "buffer stock" in the case of our wiper-depending on the practiceof the firm and the facility."Finishedgoods" can be "safety stocks".or "shipping stocks".The key point with regardto definitionsis for the members of the value stream team to agree on a consistentuse of this sometimesconfusingterminology.What's more. ll #.As they do this.Note that these categories overlap. many value streamteams decideto actuallyincrease the amount of inventoryin a downstreamfinished goods area near the schedulingpoint.The Uses of Inventory: Greating a Strategy We've definedthe three traditionalcategoriesof inventoryand comparedthese with severaladditionalcategoriesin common use (as shown in the next page).it may be possibleto reduce inventories every other point along the value streamand for the value stream as a whole. The key point with regard to the inventoriesthemselvesis for the team to make a strategic plan for every part in a future state. "buffer stocks". the same item-a pallet of windshieldwipers in Beta'sfinished goods area.seeminglya step backward.This guards againstdemand amplification traveling upstreamand facilitates the reductionof work-in-process and raw materialsto a very low level in upstreamfacilities. both as a buffer stock and as a safety stock. ll#=l EE: l'T'all F+l|mql 46 . at Many Forms and The Manyz Forrns of lnrrentort/ E:E lT.By increasing inventoryat one point .

PARTIII:THE EXTENDED VALUESTREAM 47 . Work-ln-Process processing Itemsbetween stepswithin a facility. Finished Goods Itemsa facilityhascompleted that awaitshipment. Shipping Stocks Goods in shipping lanesat the downstreamend of a facilitythat a r e b e i n g b u i l t u p f o r t h e n e x t s h i p m e n t . A D D IT ION A L C ATEGORIES Defined their purposein the valuestream by Safety Stocks Go o d sh e l da t a n y p oint( in RawM ater ials. usually at the downstream end of a facility or process. lP.Tlrpes of lnrrentory TRADITIONAL CATEGORI ES Defined their positionin the valuestream by Raur Materials Goodsentering facility a that havenot yet beenprocessed. Buffer Stocks Goods held. Finished W or prevent Goods) to downstream customers from beingstarved process by upstream capability issues.to protect the downstream customer from starvation in the event of an abrupt increasein point demand by a customer -a demand spike that exceedspoint production capacity.( T h e s ea r e g e n e r a l l y proportionalto shipping batch sizesand frequencies).

A third feature of an extended lean value stream is as few transport links as possible between steps in the production process.to the shop in floor where each processing step and each facility can signal the previous srcp and facility directly about its immediatenecds.when they are necessary. In general \\rewant to eliminatetransportratherthan speedit up.proccss variations. eliminate inventories. Indeed. the morc likely it becomesthat thc entire value stream can respond to real orders rathcr than inaccurateforecasts. This meanspulling information managementdown from highcr levels of the organization. Thus we need to ask about every transportlink: Is this really necessary? SLrbstituting modes. is certainly an alternativeway to reduce thftrughputtime. capital costs.We should schedulethe cntire value streamfrom only one point. 48 . What's more.Indeed. A final principle of a lean value stream at the macro level is that changes introduced to smooth flow.and every other problem will be detected before significantwasre is created. And the more likely it becomesthat defects. but typicallyat an unacceptable cost premium. and eliminate excess transport and lead time. Thiichi Ohno ofren remarked the whole point of the Toyota Production System was simplv to reduce lead times from raw materialsto the customer. with pure signal and no noise in the information flows that remain. should involve the least possible or even zero cost. should be deferred until casierand quicker actionshave alreadybeen taken. notably air fbr truck. remote informationmanagementdcpartments. in this casethe assembly line of Alpha. As we have noted earlier. this may be the most importanrof all. A fourth feature of a lean value stream is as little information processing as possible. and pull materials back up rhe value streamfrom this point.The shorter the lead timc. A fifth feature of lean value stream will be the shortest possible lead time.no customer attachesvalue to moving thc product around.customers will often be willing to pay more for a product if it can be supplied in the eract specificationthey want very quickly.

With information flows smoothed and noise reduced. in Once flow and pull have been introducedwithin eachfacility.sfirst using the methods describedin Learning to See and Creating Continwous Flow.eliminating many wastefulstepsin the process. noting rhar a in smooth pull of orderscan often be tested on an experimcntal basisfor one product family without effecting information flows for other productsgoing through thc samefacilities.Often it will be possiblc to smoorh the value stream and reduce the need for buffers by introducing direct feedback loops with leveling mechanismsfor information flowing from each downstream"cllstomer"to the precedingupstream"producer". Frequent delivery in small lors will require the introductionof some tvpc of "milk run" logisticsbetween facilitiesand for the first time will raisethe issue of relations between multiple product families.The Plan for the Remainder Breakthrough Guide 'l'he of this last principle suggests that we addressin-plant product flolr.it may make senseto begin re-sizing and relocating activitiesin order to "compress"the value stream.This is because organizing a milk rLrnfor the parts needed for only a single product family ar rhe next downstreamfacility will often be impractical.We will also do this in FurLrreState 2. as described Part IV of this Guide. it will be timc to reduceshipmcnt sizeswhile increasing shipment frequencies between each facility and it's upstreamcustomer. after Future State 1 and Fr-rture State 2 are achieved. major portions of a facility or an entire facility may need to make rhe leap from dedicated shipments arriving infrequently to sharedshipments arriving often.We will do this in Future State 2. PARTIII:THE EXTENDED VALUESTREAM 49 . as described Part V of this Guide. 'Ihese entail practically capitalcostsand will creatcwhat we will call our no Future Statel. will be time to examine the information it and transportlinks between facilities.Instead. Finally.Doing this may make it possibleto remove large remaining blocks of time and cost and move the value streammuch clgserto perfection in an ldeal State.

We'll provide some simple guiclelines in Part VI of this Guide.production technologies. describing the Ideal State. A truly ideal state will be the happy circumstancein which all actionscreate value with zero defects and consumerresponseis instantaneous.Because value streamcompression will often require significanrinvestments by a firm at Point A that lower costsfor a firm downstreamat point B.what's more. and locarionallogic can close as much of this gap as possible. one is No likely to reach this perfect realm soon.bur it is highly provocativeto ask what types of product designs. the processof developing an Ideal State can provide an invaluable North Star for steering each value stream through succeedingproduct generationsthat come closer and closerto perfection. some method will be needed to justify these investmenrs and to determine how the firms can sharethe cosrsand benefits. 5() .

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It's when you get to the. This is both to keep the exercise manageable and because we will seek to eliminate these facilities in Future State 2.Drawing the current state map is fun but entails no real commitment. the key question becomes. Beginning with this step also has che critical advanrage imposing a of "price of admission" on all of the value stream participants.Future State 1 Once the team completesthe Current State map and everyone agreesthat it is accurate. Yet the hurdle is nor roo onerous becauselittle capital investment is needed to achieve a future state within the individual acilities. f Level Pull and Flovv Within All Facilities In Appendix B.the easiest placeto start is to createfuture stateswithin the walls of each of the facilities the product visits en route to the customer. and the Gamma Stamping Part FabricationPlant.By drawing and then achieving a future state of the type describedin Learning to Seewithin each major facility it will be possibleto achievea substantialimprovemenr in the performanceof the entire value streamand to do this within a short time. we show the Future State Maps for the Alpha Morors Final AssemblyPlant. PARTIV: FUTURESTATE 1 .no changeshave been attempted at the Alpha and Beta crossdocks and in the Beta warehouse. At the urging of the extended value stream team. "What are we going to do today about the waste?"question that the hard issuesarise. the Beta Wipers Component AssemblyPlant.Insisting that each participatingfacility and firm quickly implement actual improvements as the price of continuing with the exercise also tends to gain buy-in for the process."What should be done in what sequenceto create a better future state?" In our experience. (As noted earlier. these were implemented and stabilizedover a three-month period by newly appointed value stream managersin each plant. This createsconfidencein the process and give teams a sensethat much more is possible..) The cumulative result of these actionsat the plant level is shown in the summary boxes on the Future State 1 map.

.kl l'------r- t l l f M-Rr--] ' oor . \ l eekl I ar.-| I arrlr:io^'1 =8% I Derective | a D"r*r"= I rltoooppm I f----.ft.. A-s\? re vn' DetaWipers Warehouse | I Harlingen.I DearbornHei7htz.. o. ".fi.zf Conrrol I \ lwichiqansteell ? Adavs I seiviceco.l__ \.1.4%1 f-----__-1 4. >r..NY .. \-_ \-"..NY.. nlfl""'7.2d.mt'-] ------\- i i :.-fr. ...r:t-f .3 d..TX RM16 h.--] ehipaar. NY f "". \3. I '-rrr. | la zeh:. 2."t-. 2Shilts SOays E?E=1 Day Defecls = 2OO ppm | soo^.". \'#!i fr r----T 751 Liq\ |W?."'J I I 5oom.iltlF"w. (3o e. Ionawanda..-J lonawanda..-------l w t ?o h . .) I (3) 20 (3) 52 .OH @ v E 6 days / lr"#7.7ovariation 35 30 25 20 15 10 5 Demand Amplification GAMMA ORDER GAMMA PRODUCTION BETA OBDER BETA PRODUCTION ALPHA ORDER ALPHA PRODUCTION t-il-f 14 daye Buffalo. . o.shtpl^r*h I | =36?atetsI F"r.* I -r"ijl"#i^l tFt 6 days +- C-MEI-I Cleveland.+ l. 5Jd. (3131s.ch I =7zcoits I |-jD-=2. > I 32nfr?.25d. Ml fri{ -e W | ?tant | ?roductio r-1 a-sr..Od.-'8. 1.) o.Od.25d.--ll l.21.

Ml 14 daye 10 da birminqham.. w t ?2 h .O d.Wiper Value Stream Future State 1 - : I IFJ { '--l Plymouth.-l I p.3d. lxDay I lo7Hr I I betaWipers I I Cross1ock I 'Y.5 d. OH . 1.NJ RM 15 h. ppm deteds 2000 % defedive deliveries o. 29hifte 5Davs E?E = 1 Dav Defecf.Ml // /r I Cleveland.) 7 (2) . 4.----> l | | ---<'-+ | -l I Harlinaen. FG14h. lT---l \ // 640^ 426e1 214Hr 1 | | I | | 32oe 21351 I | t . 4 1 o.s = 5PP^ rrll yl---X___+ . o.Ys:oi"b:I+ I -r-] f rfrrr=r} WeetOrange.Od.v [-] !----i5 t_ q=il .TX "oaaaaalaooaaaaoaaaaa._ il. 4 1 1 Ouality and Delivery Screen r500 1000 500 0 MICHIGAN TO GAMMA GAMMA TO BETA BETA TO ALPHA ALPHA TO ALPHA PC . (12O s.\i. 2x Year 4.5 d.5 d.160 tDrv | | | _.

Specifically. of downstreamfirms and facilities lecturing upsrreamfirms and facilities on improving their performancewhile doing nothing about their own performance. Finally. the batch narure of che stamping and painting operationswas acceptedfor the moment. . the team createdleveled pull loops from the supermarketin the shipping areato the assemblycell and from the assemblycell to the supermarketin receiving. a simple pull system was introduced between final assembly and wiper subassembly cur the amount of invenroryin half while to smoothing the flow.with frequent replenishmentof the downstreamsupermarketsin small amounrs. each firm participating in this shared ualue stream has quickly taken concrete steps to eliminate wdste and improue performance in its own operdtions. Note that the extended map itself seemshardly ro have changed. Rather than trying to introduce continuous flow by cellularizingthese operarions.Future State 1 Ghanges At Alpha Motors Assembly it was possibleto eliminate a kitting operation and deliver parts directly from receiving to lineside.This is not an example. At Beta Wipers the team took advantageof the approachdescribedin Creating Continuous Flow ro relocate4 formerly srand-alone tasks into one cell while reducingthe number of productionassociates needed from five to three. This permitted much smallerbatchesto be made. compared with the Current State. as we see all too often.All of the indicatorsof value stream performancein Future State 1.At the same time.to reduce invenrories and smooth flow.All of the facility boxes and flow arrowsare as they were.the total number of steps has been cut from 73 to 54 and total throughput time has been reduced from 44 to 24 days.are shown on the next page. at Gamma Stamping. Yet the summary figures in the facility data boxes are now considerablydifferent and the data in the summary box at rhe lower right corner is different as well. Euen more important. the team focusedon introducing leveled pull loops berween the three operations and reducing set-up times (from one hour ro three minutes on the two stamping presses and from 30 minutes to five minutes in the painr booth). At the same time.

oB% 11% Value Percentageof Steps (value creatingsteps to total steps) 15% Inventory Turns 5 400 B 7 I 200 B 7 Ouality Screen (defectsat the downstream end over defectsat the upstream end) Delivery Screen (% defectiveshipments at the downstream over o/o defective s h i p m e n t s t u p s t r e a me n d ) a Demand Amplification Index (% change in demand at downstream end over 7ochange in demand at u p s t r e a me n d ) Product Travel Distance (miles) 5300 5300 At the level of the scampingplant. However.3 daye 23. Thus the whole value stream is still producing to a forecastrather than to confirmed order. and the final assembly plant these changesare often truly impressive.In the most striking instance.16% Value Percentageof Time ( v a l u ec r e a t i n g i m e t to total time) o. che component assemblyplant.What's more.Frrtrrre State I Srrrnrn ary' Future State 1 Gurrent State Total Lead Tme 44.as experiencedby the customerat the end.in terms of the entire value stream. which is still much longer than the end customer is willing to wait. PARTIV: FUTURESTATE 1 55 .9 daye o. the changein performanceis more modest:a 25% reduction in the number of steps and 46% reductioriin total throughput time.the Beta Wipers component assemblyplant in Reynosathe number of steps at has been cut by 60Voandthe throughputtime has been slashed by75%. the performanceimprovements only assumethese magnitudeswhen every facility touching the product achievesits future state.

This necessarily requires tackling operationalrelationsbetween firms.individual action: If you want ro achieve a breakthrough. the last three items .the demand amplificacionscreen. Any firm unwilling or unable to implement the Future State I in its facilitiesis unlikely to be willing or able to take the next steps to achieve Furure State 2. 56 .that altersyour position in your industry or producesprofits far above industry averages. it will be critical to find alternativevalue stream members befcrre other participantswaste time in futile efforts.and travel distanceshow no change.The next challengefor the team therefore is to tackle relationsbetween the facilities.as many managersand firms do today.the cleliverv screen. This is becausethese indicatorsare driven by relationsbetween facilities rather than activitiessolely within facilities. you'll need to optimize the entire value stream rather than stopping after improving the flow along small coursesof the streamwithin your own facility .An obvious additional question for thc firms downstreamto ask is. 'Iherefore. if it becomesapparentat this point that some participantswon'r make this commitment.This realizationprovides a useful insight to rhe value srreamteam abour the limits of isolated. "Do we want to keep the do-nothing upstream firms in our supply base?" T h e D i sta n ce S ti l l to Go While the first five items in the summary box show a substantialimprovement between the Current State and Future State 1.a "game changer" .

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For example. High Trim (Part #2) 5 trays of Type A. time to take thc it's next leap. after implementingF'utureState 1. The minimum productionquantity.this is very simple. Low Trim (Part #4) PARTV: FUTURESTATE 2 57 .by contrast.For example.for a total of 320 wipers. High Trim (which we will call Part #1) 5 trays of Type B. Low Trim (Part #3). to level production to the maximum extent feasible as orderstravel back upstream. It is simply too expensiveto ship individual rrays. What we want to do is to link each point of use of the product in a downstreamfacility with the prcvious point of production or shipment in the next upstreamfacility. introducinga smoorh and leveledpull alongwith frequent shipmentsbetween eachof the facilities. by In practice. But itwould still be too expensivefor materials handlersto wrap and movc individualwipers. consumption at thc point-of-useis tluickly and exactlyreplenished the nexr upsrreamprocess. I n s ta l l i n g L e ve l e d Pull Betwr een Facilities In concept.shipping qr-rantities be considerably u'ill largcrthan minimum trrroduction quantities.if 20 trays(one pallet) are ordered by Alpha Motors Assembly with the order consistingof: 5 trays of Type A.s of wiper arms with each tray containing 16 wiper arms. In this way.we will want to send production signalsto the work cell at Beta by travs ratherthan by palletsand to level theseorders.the minimum shipping quantity of wipers to the final assemblyplant in this casc is one paller with 20 tra1. and 5 Trays of Type B. would be one tray of 16 wipers. even in a very lean value stream.much lessindividualwipcrs.Future State 2 As the value stream team achievesFuturc State 1 within each facility and begins tcr sensethat collectivemanagementof the value streamis possible.This is to draw and quickly achievea Future StateZ. This is becauseset-up times and cosr ro alrernareberween -fyp" A and Type B wipers in the two trim levels are now zero at thc Beta Wiper Plant. Therefore.

the cardscan be sent back with the truck bringing the new parts and returning the empty pallets. There. A further step in automation that has become atrractiverecently is to substitute a simple web-basedinformation transfersystem for the EDI link. (When these trays are received in pallets ar rhe downstream facility' the cardscan be scannedagain to confirm receipt and trigger supplier paymenr. (When plants are very close together and shipments from the next upstreamfacility occur many times a day .) A small step up in automationwould involve the use of an electronicreader ro scanthe kanban cardsfrom emptied trays and send this information through an Electronic Data Interchange(EDI) network to the next upstream facility.there are many ways to achieve this result. The bar code scanningand the printing of new cardsat the upstreamfacility remain the samebut now the dam are senrover the web. In practice.not the casein our example .this was the primary method of information transferin Toyota City. Some firms install pull systemson a strictly manual basisby collecting kanban cardsfrom trays and phoning or faxing these ordersback to the next upstream facility.and discardedto complete the cycle . we alwaysstart to get anxiouswhen information disappears into complex electronic sysrems . kanban signalcardsare written up and sent to the finished-goodssupermarketto assemblethe next shipment. (This configurationof information managementis shown in the diagram below.) The cardsremoved from trays in the upstream supermarketas product is shipped would then be placed in some type of load-leveling(heijunka) device before transmission upstream to the previous processing step. There.However.) Still a further step is to eliminate the cardsaltogetherand send electronic signalsdirectly from the downstreamprocessto the supermarketin the next upsrreamprocesswhere shipping instructionscan be displayedon screensor hand-held devices.when they are removed from the empty trays as the parts are consumed in the downstreamprocess.we will want to sendtheseorders the Betaassembly in the sequence: ro cell 1t 2 l 3 | 4 l 1t 2 l 3 I 4 t 1t 2 t 3 I 4 t 1 t 2 t 3 t 4 t 1t 2 t 3 t 4 rather than in the sequence: 1I1I1|1I1t2t2t2t2t2t3 t3 t3 t3 t3 t4t4t4t4t4 By repeatingthis production leveling processar every link upstreamwe will continuallv smooth production rather than creatingwaves due to batchine. They would be scannedone last time . new kanban cardscould be printed and releasedto the finished goods supermarkerto inserr in trays and place in pallets for the next shipment. For many years.

Rather than requiring elaboratecalculationsin a centralized processing system on what should be produced in each plant and at each machine . PARTV: FUTURESTATE 2 . p Note that the telephone-based expediting loop.the new system simply. accurately. acknowledging that some businesses inherently require more complexity in information managementthan others. is now gone. the need for expediting is eliminated. Nor is there a need for customersto send daily releases generaredby their schedulingcomputers.Bake A99EMBLYCELL Gamma 1tamping Note that the rows in the heijunka box are for the four types of parts in this product f a m i l y w h i l e t h e c o l u m n s ( a c r o s s h e t o p ) a r e f o r t h e p i t c h ( r a t e )o f w i t h d r a w a lo f t h e t cards for conveyanceto the upstream paint process. The key point to note about each of these arrangements that there is no need to send is day-to-dayproduction instructionsdown from MRPs in the plant office or ar company headquarters.?aifii"&. and frequently in responsero acrual use..r . DetaWipers whose inner workings are opaque to line managersand production associates.Electronic I I kanban rrsing a bar code reaeler -t I I I I I I Heijunkadevice I t ..... We've drawn this new information managemenr system in our Future State 2 map..! . If small amounts of parts are re-orderedand shipped automatically. reflexively re-ordersfrom the next upstream point what hasjust been consumed by the nextdownsrream oint.cannerl -i ' Clean..t - I I I I I I I I I ! I I I ---1 via Web Y l t@ rytttt+l r : l-------: |Card I l?nnterl f cr.given expected operatingconditions and pre-established lead times . which was often rhe real schedulingsysrem in the Current State and in Future State 1. advise We using the simplestpossiblesystemthat can get the job done.dl lg..

2d.3d. (3Os.s 5 Days E?E = 1 Dav Defects = 25O ppm RM 16 wtPo FG 12 2 Shitrs 5 Davs EPE=1Dav Defects = 50 ppm o.) 20 (3) 4. 1.Demand Amplification GAMMA ORDER GAMMA PRODUCTION BETA ORDER BETA PRODUCTION ALPHA ORDER ALPHA PRODUCTION RM24 wt?62 FG12 3 thifr.) B (3) 60 .o d. (3131s. a.Od.

. 1..5 d.OH 32oo I bxof -% l xDay RM 15 wt?2 FG14 2ShifIs SDays EPE='lDav Defects = 5 ?P- 4.- rl loiaeroanul Dirmingham.) 7 (2) o.:.5 d.3d. Ouality PPM DEFfCTS )ooo 1500 and Delivery Screen % DEFECTIVE DELIVERIES 10 1000 dofective deliveries 500 @.Ml t\ I I I -T I Daity I Alpha Materials Conlrol Alpha ?roduclion Control Z1z1--l Atpha I Distribution I Cen+er I #r-*r | ll t=fl Cleveland.^. (12O s. 0 MICHIGAN TO GAMMA GAMMA TO BETA BETA TO ALPHA ALPHA TO ALPHA rc .Wiper Value Stream Future State 2 Shovving Level Pull Betvveen Facilities ..

This is capacityplanning on a total systembasis. Surely the whole sysrem must be changedin order to changeanything and this. and installed simple pull loops between activities within each plant. The key point is for the value stream ream ro take this opportunity ro try the experiment and judge the results. Lean Lab 62 . Just as we have disconnectedour sample product family from the MRPs within severalplants in Future Stare 1." Actually massivechange is nor necessary." you will say.The Need for Gontrolled Experiments "But.We confidently predict that the performance of the value stream as mapped in Future State2 will argue forconverring more and more product families to simple pull systemsso rhat the overly complex production control systemscommonly in place today are graduallyconverted to an activity where they are actually useful. a massive is and costlyundertaking. we can disconnectindividual value streamscurrendy running between facilities under centralconrroland install simple pull loops."how can you do this for information flow for only a single value streamco-mingledwith many others?The samecompurer sending signals to control this streamis alsoschedulingother streams. realistically.

(Plus.7^ \-t HUU Futn Installing Frequent Transport Loops The logicaland necessary complementro pull systems berweenfacilitiesis increased shippingfrequenciesbetween facilities.the facilicies themselvescan be eliminated with major cost savings.other suppliers and customerswithin an industry are alreadyusing milk runs. The introducrion of milk runs and more frequent deliveriesmakes it possibleto eliminate the srop at the Beta Wipers warehousein Harlingen and the long excursionto the Alpha Motors crossdock in El Paso. This has an additional and substantialbenefit. if the parts for other value streamsusing these facilities are treated similarly.) We've drawn these changesin the F'uture State 2 map by substituting our icon for milk run replenishment loops for the striped push arrowsused in the Current State and Future State 1. FUTURESTATE 2 6: .And often these days.This saveseight steps and six days of throughput time and a thousand miles of rransport.This can be achievedby converting infrequent full-truck direct shipments between two facilities to frequent milk runs involving severalfacilities. but bounding the experiment can keep the amounts small until resultsare in and a decisionis made on whether whole production systemsshould undergo conversion. Perhapsyour product can tag along. milkrun replenishment /c Introducingpull loopsand milk runs on an experimental basiswill require a modest investment. PARTV.

I (3) 64 .s SOays E?E = 1 Dav Defects = 25O ppm I ( Reynosa.Mexico o.7o variation Demand Amplification 35 30 25 20 15 10 5 GAMMA ORDER GAMMA PRODUCTION BETA ORDER BETA PRODUCTION ALPHA ORDER ALPHA PRODUCTION 4-/v/l Daity I ba.i.Od.) d.3 d.s 5Davs E?E = 1 Dav Defects = 50 ppm I beta I I F. 3 thifr.2 (3Os. 4. 1.) 20 (3) 4.tr ^ | luicrtisansteetl J center lsewicecenterla_\| I -1 W^^A <- Dearborn{eiqhts.Ml I ii ii iv wipe.o d. (3131e.g RM 16 WIPO FG12 21hifr.M24 wtP 62 FG'12.

1.5 d. (12O s.. 0 MICHIGAN TO GAMMA GAMMA TO BETA BETA TO ALPHA ALPHA TO ALPHA PC . 7 (2) o'uality PPM DEFECTS ' 2000 1500 and Delivery Screen defeds V DEFECTIVE DELIVERIE 10 1000 de{ective deliveries 500 @.Wiper Value Stream Future State 2 Shovving Frequent Transport Loops - W loraeraanu I birmingham.OH Alpha Materials Conl.Ml + L _T I ouiry I I Diotribution I Cenrer I Cleveland..3d.rol Alpha ?roduclion Control ZLa-'1 Atpha I I I ll I x: I I l-J-J (\7 "*^-1 ---% Ioxoxl 1x D a y Weet Orange.) o...5 d.NJ RM15 wl?2 FG14 25hitts SDavs E?E =1 Dav DefecLs = 5PP 4.

and late shipments as the orders move back upstream.o8% 11% o. 66 .qualiry problems.In addition the dramatic reduction in shipping complexity and lag time between the creation of a defect and its discoveryat the next downstreamprocesshas causeddefects and shipping errorsat the upper end of the value stream to convergeon the low levels at the lower end of the value stream.Frrtrrre State 2 Srrrnrnary Current State Future State 1 Future State 2 Total Lead l-ime 44.The amount of variation experiencedat Michigan Steel is now much closerto the very low level of variation at Alpha Motors Assembly.9 daye o.16% 15% 15.3 days 23.8 daye Value Percentageof Time ( v a l u ec r e a t i n g i m e t t o t o t a lt i m e ) o.6% 21% 14 Value Percentageof Steps (valuecreating steps to total steos) Inventory Turns 5 I 200 I 7 Ouality Screen (defectsat the downstream end over defectsat the upstream end) 400 B 7 50 3 5 Delivery Screen (% defectiveshipments at the downstream over Yodefective s h i p m e n t sa t u p s t r e a me n d ) Demand Amplification Index ( % c h a n g ei n d e m a n d a t d o w n s t r e a m e n d o v e r 7 0c h a n g ei n d e m a n d a t u p s t r e a me n d ) Product Travel Distance (miles) 5300 5300 4300 Totaling the Results The consequence smoothpull signals of and frequent replenishment our eight for indicatorsof value stream performanceis shown in the summary boxes on the Future State 2 map and in the chart above.The most striking change from Furure State 1 to Future State 2 is the dramatic reduction in demand amplification.

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changing only informationflows and shipment frequencies while eliminating unneeded warehouses and cross-docks. What is the logic of relocation? The first principle is simply that all manufacturingsteps in the product shouldbe moved as closetogetheras possible.much waste and long time lags remain. after all.Compressing the Value Stream So far we have left every value creatingactivity in its original place. these cosrsmusr be weighid againstthe value of the time savinqs.the better. a critical third rule is necessary: That if proximity should entail extra manufacturingcosts(although the reversewill be more common). Becauseit appearsthat moscof the remaining waste and time are due to the need to move the product between many facilities and over long disrances. Remote manufacturingalwaysworks againstthis goal becauseit increases responsetime once the customers'desiresare known. and greatly damped demand amplification. "Do it all in one place" and "locate that place next to thg customer" are useful principles to get started. A secondprinciple is that the closerthis compressedsequenceof activities is to the customer. PARTVI: THE IDEALSTATE . this is even more the case. the currenr global security In environment. reduced throughput time by 64%. The unavoidable consequence remotely located manufacturerswho are determined to for immediately serve their customersis to createinventoriesof finished units produced to (usually inaccurate)forecasts. where shipments acrossbordersare subject to disruptions. Although the value stream team has cut the number of stepsfrom 73 to 39. is to reduce cosrsand improve quality while getting customersexactly what they want when they want it.However. a logical next step is "value stream compression"to relocateand co-locate value-creatingactivities so they can be performed fasterwith lesseffort.Alpha Motors Assembly in our example . Ideally this would even be in the same room. The objective of lean thinking.

manufacturethe entire product. China fbr Japan..Shipment of the finished product by rruck. 3.S.while shipment by seafrom anothercontinent requireswecks. (The number.Germany) and needsimmediateresponse orders.in geographicproximity in that counrry.S.) actuallyvery small.S. If the customeris in a low labor-cost country and scalerequirements permit. 4.the [J.is willing to wait for some shipping interval.) The team found that a small increasein direct labor costsfrom even when traditional corporateoverheadswerc added to direct wage costs.s. inventory. If the cusromcris in a high labor-cosr counrry(e. If the customeris in a high labor-cost countrv. manufacrurethe entire product . with the product even deliveredby air. or a short ferry ride. - 68 -- .would be more than offset by a big reduction in shipping..Poland fbr Germany. As the wiper value streamteamslooked at the situationand ponderedtheserules it becameapparentthat the best locationfor an iclealstatein this casewould be immediatelyadjacentto the vehicle assembly plant in the high-cost country (the L. relocation this assembly of step from Mexico ro rhe tl. Mexico for the fl.Japan. conduct all of the manufacturingsteps in close proximity and close to the customer in the high-wagecountry. and the product is price sensitive. and generalconnectivity costs. from raw materials finished goods.from raw marerialto finished goods.In our experiencethe correct location is almost alwaysat a low-wagecountry within the region of sale.These principlesin combinationsuggest very simple locationalgorithmfor a most products: 1.and if the product has relativelylittle to labor content. 2. ro a new technologyremoving high-costmanufacturinglabor in the high-costcounrry of sale and permitting the conduct of all manufacturingstepscloseto the customer.indeed only thirty seconds rhe wiper assembly at plant and a vanishinglyslight amounr ar rhe stampingplant.ofwiper assembly operatorsrequired had already been reduced from five in the Current State to three in Future State 2..in closeproximity in a low-cosrlocale.f This was becausethe amount of direct labor content in the product was . The best locationmight vary from a very low-wage site in anotherregion of the world.F-orexample.shipping to Only the final goods. do a careful costing exerciseto determine the correctlocationof manufacture.g. If the customerin a high labor-cost country needsimmcdiate response but thc product has high labor content. and across only one border can still permit responseto thc customerwithin a few days.

A mini paint booth . The water spider lo<-rp connectsseveral plant.Note that wiper assembly(inclLrdingthe blade-to-armassemblystcp previouslyconductedin Alpha'sassembly plant).painting.l d e a l S ta te Changes The value stream team therefore created the Ideal State map shown on the next page. Motors assembly low-speedstampingpresshas been introduced. bringing back similarcomponentplantsadjacentto the Alpha final assembly empty trays and needed parts to the wiper assemblyareaon each circuit. A cheaper. Oc s PARTVI: THE IDEALSTATE . wipers with high and low trim for vehicle models A and B can now be assembledto line sequence.This pressis also able to make both the . They are then placedin line-sequenced traysof 40 wipers and conveved to the fit point on the final assembly line every twentv minrrtesby a "water spider" (a small cart pulled by a converted fork-lift).and stampinghave now been compressed into one room in a "supplier park" clnthe site of the Alpha plant.rrimary and secondarystampingsfor all of the other parts needed for the wiper assembly (seethc schematic drawingon pages12 and 13 showingtheseparts)and in very small batchesto minimize inventories and lead times. Bccausethc new wiper manufacturingmodule gets an electronic signalon what plant to build next as eachvehicle leavesthe paint booth in the vehicle assembly (a 3-hour lead time) and because the time neededfrom the startof wiper assemblv until delivery to the final assembly linc is lessthan thc available lead time. which we call a "right-sized"tool because capacityis prt-'portional the its to requirementsof this value stream.a secondright-sizedtool .has also been designedand is located between the stampingstep and wiper assembly.

70 .4 d.Demand Arnplification GAMMA ORDER GAMMA PRODUCTION BETA ORDER BETA PRODUCTION ALPHA ORDER ALPHA PROOUCTION NewJersey1beel 5ervice Center Wiper Value Stream ldeal State EaetOrange.NJ o.

W Dearborn.Ml Alpha ?roduction Alpha Control Materials Control Alpha Distribui.ion Center % t--J' / Daily I I t I--ELL -l I-cE[_-l AlphaMotors @Gl-ffiful o.) 1 7 (2) Ouality and Delivery Scro€n MICHIGAN TO GAMMA GAMMA TO BETA BETA TO ALPHA ALPHA TO ALPHA PC PARTVI: THE IDEAL STATE 71 . ) 20 (6) O. (12O s. 1 d(. 1 .5 d.3 1 6 1 s .8 d.

In addition.16% o.5% o.ldeal State Srrrnrn ar.oB% 11% o.t3 days.and handoffsthe key drivers of connectivity costs. and practicallyall of the transport links.8 daye 2. Beta.9 daye 15.have been eliminated. and Gamma at locationsthousandsof miles apart arenow being conducted in continuous flow in one room located acrossthe road fiom the customer.it is hard to tell where one company leavesoff and the next picks up the valuc stream bepause activities formerlv conducted by Alpha. from thc final assembler back through the wiper maker to the stamperand raw materials supplier.yFuture State 1 Future State 2 ldeal State Gurrent State Total Lead Time Value Percentageof Time ( v a l u ec r e a t i n g i m e t to total time) 44.6% 21% 14 Value Percentage of Steps (value creatingsteps to total steos) 15% 27% 79 2.5 Inventory Turns 5 I (defectsat the downstream end over defectsat the upstream end) Ouality Screen 400 200 50 (% defectiveshipments at the downstream over lo defective shipments at upstream end) Delivery Screen B 7 B 7 3 5 1 ( % c h a n g ei n d e m a n da t d o w n s t r e a m e n d o v e r % c h a n g ei n d e m a n d a t u p s t r e a me n d ) Demand Amplification Index 1 Product Travel Distance (miles) 5300 5300 4300 525 Dramatic Changes Throughput time from raw materialsto customerhas now been reduced by 94Vo t<tZ. 72 .& days 1.3 days 23. invenrories.

it will still be important to calculateconnectivity costsfor various configurationsof the value stream to see which one will actbally produce the best combinationof low cost and rapid customcrrcsponse.However. Thesc systems typicallyrequire enormousamountsof data to allocate overheadsby product and they usually fail to calculatecostsin a way that all participants will acceptas valid.implements leveled pull systemswith its suppliers.rptimize wholc. the If it were easily possible to compare total product cost before and after the future state improvemen[s. We proposekeeping it simple by ignoringtraditionalsystems and instead determiningthe incremental cost (in some common currencyunit) and the incremental benefit (in the same currency unit) of each proposedchange in 'I'his the value streamin future and ideal states. The problem of cross-firm compensation will not be such an issueif the product being mapped is new and the courseof the value streamis not constrainedby existing facility locationsor even existing suppliers. compensation might be an easierissue. However.introducesmore capableprocesstechnologies. even when everyonecan see that the incremental savingsexceed the incremental costsof these initiatives. little is likely to happenunlessupstreamparticipants are compensatedby downstreambeneficiariesfor taking costly actionsthat <. and relocatesactivities.Winners Need to Gornpensate Losers As future state and ideal state maps are drawn up. is because will commonly be the it casethat a downstreamparticipant can get better value at lower cost if an upstream participant leavesout wasted steps. PARTVI: THE IDEALSTATE 73 . it will quickly become apparent that positive change is most likely if the team can find a way for 'l'his winnersto compensate losers. is surprisingly easyin manv casesand can change the focus of the value stream team from redressing (or defending)the mistakesand inequitiesof the past to discovering win-win-win alternativesft-rr the future.Howevel traditionalpurchasing and accounting systems are often incompatiblebctween value stream participantsand in any case are poorly suited for calculatingproduct costsfor each product family.

when teams do this we've found that they lose sight of the key point. not to shavea bit of cosr out of one specific product and then declarevictory. A Final Risk to Avoid In developing the examples for seeing the'whole we have learned of another risk for the value srreamteam to avoid. (Note that New Jerseysteel is to be substitutedfor Michigan steel in rhe Ideal State. the best time to leap to the Ideal state will be with the next product generation. when new process equipment will be needed in any case.Timing the Leap to the ldeal State Lower-speedpresses will be cheaperand more capableif used on new part designs. This is that the types of wasre exposedand the demand amplification discoveredare also presenr in every product family passingthrough all of the participant firms. The exerciseof creating an ideal srate ro contrastwith a business-as-usual state should be conducted for every new product generation.to reduce shipping distancefor steel coils from 500 miles and eight hours to 25 miles and one hour. The first purpose of the exerciseis to raiseconsciousness about systemicproblems and to spur the development of systemicsolutionsrequiring better performance by the functions. This is ro turn the mapping exerciseinto a conventionalcost study for a product family by trying ro map the flow of every part going into the product.)Therefore.when the barriersto doing everything right are greatly reduced.and a change in the raw marerial provider will be required as well.This can lead to a very creativejoint mapping of the ideal sratefrom the very start of the next design. 74 .

.

Achieving Future States Value stream maps at the macro-levelare very useful for raising consciousness about wasteand the lack of customerresponsiveness in today'stypical current state.a situation often invisible to value stream partnerslooking only at their own operations.addressing production control problems to stabilize demand. if consciousness is raisedbut no future stare is achieved the whole mapping exercisejust createsmore corporatewallpaper.cut costs. this will give all of the value stream partnersthe courageand incentive to go further. PARTVII: ACHIEVING FUTURESTATES .then become much brighter. in the great bulk of instances. small stepswill be essentialat the srartro lay the groundwork for big leapslater.pure mwda.may be possiblein some cases particularlyfor entirely new productsand we certainly don't want to discourage value streamteams in a position to make rhis leap. if Future State 2 can be achievedas well . How can you actually achieve future stateswhen many departments and firms must cooperateand no one person or firm is legally "in charge"? We have already suggestedthat progressis best made in a seriesof steps beginningwith the easiest. beginning with a big leap to in an ideal state. with its requirementsfor investment and relocationof activities. a Future State 1 can be achievedthat reduces If time and effort within each participatingfirm. Running the process the oppositedirection. remove noise.the momentum for improvement will be to much stronger. However. Then.and enhance responsiveness the customer.The prospectsfor successful introduction of the Ideal State.However.

at the point that the nexr generationof vehicle Models A and B with redesigned wiper sysremsis introduced. F uture State Z canbe in place in six months after the achievementof Future State 1. Furure state 1 can be achievedin about three months after completion of the Current Stare map. This is because many of the activitiesinvolvedare quite separate and can proceedin parallel. Even if the precisetiming of the later srares harclto determinenow is the simple act of writing down all of the necessary steps and agreeingon specific target dates for achieving specific steps has the highly useful effect of converting vague intentions and "no year" projectsinto concrete. trackabletasks.In our experience. Howeveq conditions will vary and it may be more practicalfor the value stream ream ro begin implementingFuture state 2 even if Furure state 1 is not completelyin placeand stabilized. 'I'he timing for the ldeal State may range from "soon" (particularlyfor new products)to "much later". The team in our exampleconcludedthat the new supplier park configurarioncan be in place in four years. 76 . Tiying to move faster would mean that Beta and Gamma would need to continue their remote operations their other for customersand would incur substantialcostsfor duplicate rooling and underutilization of their existing facilities.

it will be a bit more complicated becausethis plan builds on the "YearlyValue Stream Plan" for each facility being developed at the same time. as shown on the next page. as illustrated in Learning to See. FUTURESTATES PARTVII: ACHIEVING . measurable goalsfor team members o clearcheckpoints individuals with real deadlines and responsible . the formula for sharingcostsand benefits among participatingfirms 'I'his planning processwill be familiar to you if you have had experiencewith policy deployment or if you have alreadydeveloped facility-level value stream plans of the type shown in Part Y of Learning to See(and Part VI of Creating Continwous Flow). when the Current State map is drawn. This exerciseshould only take a few days. However.The Value Stream Plan We suggestthat the value streamteam develop a value streamplan for their product family at the end of their initial walk. A value streamplan shows: o exactly what your team plans to accomplish. The wiper value stream team developed a simple value stream plan.If it dragson the odds are very high that nothing will ever be implemented.Just as in the caseof lean production.step by step .velocity is criticallyimportantin lean improvementactiviries.

J oe baker.9 days lnventnryturfls=9 Qualityecreen=2OO *level pullbetween allfacilities Leadtime=15. Steel 5 up plier YEARLY Product-Family Business Objective Value Stream Objective GOAL (measurable) OUAR T ER LY 2oo2 lmproveWofitability onwipersfor Alpha. F91 *continuousflow wherepoeeiblein allfacilii"ies *level pull within all lacilities Leadtime=23. Deta.Gamma. + steel eupplier. G amma: 9 ally J ones.5 DeJivery ecreen=1 Demand amplification Sareen= 1 O Start A Completion 78 :: . Beta.?aul Doe.8 days lnventnry turne = 14 Quality ecreen = 50 Delivery screen=3 Demand amplification gcreen=5 F92 *trequent repleniehment loopsbetween allfacilities 'value stream compreeeionby co-locating all ete?e adjacent to customer Leadtime=2.8 daye lnvenlory turns =79 Quafityscreen=2.

SIGNATURES \ 'A L U E STREAM PLAN SCHEDULE 2()()3 5mith Doe baker Jones Operatione ?urchaeing ?C&L Manufacturing Engineering Quality (inevery firm/facility) o o A A O On target A Behindtarget Wipersfor Alpha ModelsA+b PARTVII: ACHIEVING FUTURESTATES .

or some combination). it woLrldbe possibleto mold wipersto line secluence with total throughputtime and value crcatingtime both shrinkingto seconds. Then estimatethe "prize" availableto the group if the whole value streamcan be optimized.If cycle times for these activitieswere at or below takt times for wipers on the final assemblyline and if changeovers from onc wiper color and specificationto the nexr were also (or essentially instantaneous at leastwithin takt time).by real managers real firms building current product designs. the writing of technical manualsfor complex aerospace products. and As firms and departments learn to see togetherit should alsobe possibleto make your maps ever more inclusive. For example. . there'sa companionpoint that alsoseemsto be a secretto manv managers. many readershave already startedto do with the micro-mapsin Learning to as See.eventuallvreachingall the way from the customer's use of the product through the life cycle back upstreamto inchoatcmatter before any processing.CONCLUSION At the end of this brief breakthrough guide for achievingfuture and ideal srates must we sharea secret:You'll never actually achieveyour ideal state! It rurns out that there is always more waste to removc and that value for the customer can alwaysbe further enhanccd. This is that successive futurc statesgetting much closerto the ideal statecan be achieved.postal sorting operations. the "Ideal State" portrayed in this workbook will appearto be full of mwdal However. fish stick manufacture. not look back. It won't happen all at oncc and you'll probably never reach that huppy land of completely frictionless cooperationbut the challengeis to get started.)Bccausethere is alwaysa value stream whenever there is a product (whether it's a good. are confident that consciousness continue to spreadabout the pcltential we will of value streammapping.(For example. we at LEI have alreadyheard from readersabout mapping gold mining.insuranceclaims processing.wipers might some day be molded as a singlepiece in matchingbody colors.gain some initial successes.painting.and final assembly considerable of numbers of parts. At that point.before machinesand faciliticsare locked in place. The trick is to take a walk together so everyonecan see the whole. Wc wish you the best in your endeavors and hope to hear about your problemsand your successes. eliminatingthe need for the stamping.And even more can be accomplished with the next generationof products.and visits to the doctor.in only a short period of rime even in when there is no "value streamdictator" giving orders. And wc believe it will be attractiveto map wider and wider range of goods and servicesincluding office processes. Then devise a mutually acceptable way to split the loot if the current state "Bank of Muda" can be robbed. a service.

Lean EnrerpriseAcademy in the the uK (www.uk. He is a SeniorAdvisor to the Lean EnterpriseInstitute (LEI). has long had an interest in mapping He enrire value srreamsand took the lead in developing the examplespresentedin Chapter Z of Lean Thinking. construction. communication.About Dan Jones the Authors Dan is co-author of rhe Machine That changed the'world and Lean Thinking.lean.org).and logistics. These began with the humble can of cola that requires319 days to passthrough six different companiesand nine facilities acrossthe world. 82 . firms and facilities that collectively conduct only three hours of value-creating activities before the cola finally reachesrhe cusromer. defense. Jim Womack Jim is co-author of The Machine That Changed the'World and Lean Thinking and Presidentand Founder of the Lean Enterprise Institute. mobilitv food. and Chairman and Founder of LEI's affiliate organization. He fin<isit hard not to think about extended value streams including thoseinvolvinghealthcare.

department. and General Icons.etc.AP P E N D IX A .E xte n d ed Value Str eam M apping lcons The icons and symbolsfor current and future state mapping fall into three categories: Material FIow.l-l H T r u c kS h i p m e n t Note frequencyof shipments. Information Flow. processes. and outsidemanufacturing Data Box Used to record informationconcerning process. I | + wed.suppliers. A n Inventory C o u n ta n d t i m e s h o u l db e n o t e d . All processes labeled. Material lcons Represents Process Manufacturing Notes One processbox equals an area should be of flow. O u t s i d eS o u r c e s Used to show customers. such as ProductionControl. 3OO pieces lDay APPENDIX I .---I Lvdl-J I P l a n eS h i p m e n t Note frequencyof shipments.'--+ | Cross-Dock | Warehouse ln NS_ |-lr-. T r a i nS h i p m e n t Note frequencyof shipments. a manufacturing customer. -? I Mon.Also used for departments. tl | lhl ----+ | - .

an s Electronic Informationflow Information 84 . Indicates deviceto limit quantity a and ensure FIFOflow of material between processes. Maximum quantity should be noted. sequence.20 pieces -FIFO* Transferof controlled quantitiesof material between processes in a "First-ln-First-Out. usuallybased on a schedule. For example via electronicdata interchange.. Information lcons Represents Notes +- ManualInformation flow F o r e x a m p l e :p r o d u c t i o n c h e d u l e s o r s h i p p i n gs c h e d u l e . a supermarket.Material lcons Represents Movement of production m a t e r i a lb y P U S H Notes M a t e r i a l h a t i s p r o d u c e da n d t moved forward before the next processneedsit. Withdrawal max. Movement of finished goods to the customer M i l kR u n o o ooooooooo o 1 ExpeditedTransport Supermarket A controlledinventoryof parts that is used to scheduleproduction at an upstreamprocess. Describes informationflow. P u l l o f m a t e r i a l su s u a l l yf r o m .

b a t c hk a n b a n . ControlCenter Phone Itr't. s e dw h e r e s u p p l y i n g U processmust produce in batches because hangeovers re required. I General lcons Orders Represents Operator Notes Represents person viewed a from above. S i g n a l sw h e n a r e o r d e rp o i n t i s reachedand another batch needsto b e p r o d u c e d .p e r . c a P l a c ew h e r e k a n b a na r e c o l l e c t e d a n d h e l df o r c o n v e y a n c e .p e r .e. " T h e " o n e ..c o n t a i n e k" n b a n ./t\\t I I I lr r K a n b a nA r r i v i n g in Batches Load Leveling Tool to interceptbatchesof kanban a n d l e v e lt h e v o l u m e a n d m i x o f t h e m o v e r a p e r i o do f t i m e .Information lcons Represents K Production anban (dottedline indicates k a n b a np a t h ) Notes ra T h e " o n e . APPENDIX A .from a supermarket the to c o n s u m i n gp r o c e s s ) . t I W i t h d r a w a lK a n b a n t T S i g n a lK a n b a n t Kanban Post I - . Card or devicethat tells a process how many of what can be produced a n d g i v e sp e r m i s s i o no d o s o . t Card or devicethat instructsthe material handlerto get and transfer parts (i.

February 2OO2 plant.F-----> * E|?aso.Appendix B: Alpha Motors Assernbly Gurrent State . west orange.TX l92OWiperslDay \ 12bOA 6406 16WiperslTray 32O Wiperel?allet 4A 26 \ Receiving Kitting "'?A+ 2560 A zAOD Wipers us 160A 808 Wipere Wiper 5ub-aeeembly I'T-I . NJ Alpha Crosb-Dock .

Alpha1ales Orderbank Dearborn. 1 (1) 12h.\_> * 960WiperslDay 640 A 3200 l xDay FACILIry9UMMARY RM50 h.Ml AlphaDist. 29hifts 2h. 1 APPENDIX B . FG14h. 1 60 e. CIO= O. Center --)(-* .. wt?2h. 1 2h. 2Shifts FinalAeeembly &Test SDaye E?E=lDay Defects = 5 ppm Defeciive =1% CIT= 60 sec.

8000 ?arts 4324 224b ?arts Assemblyl Qvt C I T= 1 9 e " " .) 3 (1) aa .NY Harlingen. Mexico 20o2 Gamma Saamping Tonawanda. C I O= 5 m i n .3h.Oh.2h.Oh.(1os. ryAsf q9r 4324 2249 Wipers Aseembly2 zN4324 2248 Wipers ClT = 10 sec.Oh. 48.) 3 (1) B.February Assem bly Plant.8.Appendix B : B e ta Wi p e rs Gurrent State .TX | | I t. 4. B.2h. Uptime = 95% 29hifts E?E = l Day E?E=1Day o.zh.I lDuv br-'d I v Receiving A=eP 25.600 A 12.ooonau"tI 1Z?allets I @ ZOothox I ril-.(1oe. Reynosa. 4.

AssemblyS Qr C I T= 1 O s e c .TX h I weetrv I Detroit. 4.2h.O h. &Test 2Shifts Q2z CIT =20 eec.5h. Uptime=95% 2Shifts E?E=1Day ryA\il 4324 2249 Wipers lnspect. 12. FG12h. ryAsf 640 A 3200 Wipers SDays E?E=1Day Defects=4OOp?m Detective = 5% B.) 3 (1) 1 3 APPENDIX B . 1 4. ClO =5 min. wt?41h.Ml Y l92OWiperelDay zAO A 640b 4?allets A Z?alletsA FACILIry9UMMARY RM56 h.Oh.(1oe.Beta HQ ?roduction Control MRP Alpha Motors Harlingen.

) 4.4h.Ml Receiving "zA\+ 336 coilg 1tam pi ng2 fT] 25. Ny DearbornHeighte. Tonavvanda. 4.) . 14d.600 A 12. E ? E= 1 w e e k 10m. (1O s. (1s.6h.800b parae CIO= th.February 2OO2 plant.Appendix B: Garnrna starnping Assembly Gurrent State .

1$j Time gec. CIO = 3O min.600 A 12. (312c.GammaHQ.6 LeadTime days ?rocessing _ 3. e.OH 9etaWipere Warehouse ?lant.800 D ?aft. ?roduction Control MRP Tonawanda.600 A 12. 3 4. SShifts SDays Clean.) 4Bh. h FG4Ah. ?roduction Control Cleveland.e W Shipping E?E=$Q2yg Defects=2OOO?pm Defective = 6% C IT= 5 2 mi n .800B Parts ?roduclion _ 20. Uptime= 85% E?E=1week 25.NY 97AM?ED?4R79 2OOlbox 1600l?allet 2 xWeekly th i p 5 ch edule 12?allets FACILIry9UMMARY RM336h. 48h. w t P1 1 0 .5h. 2 5 (1) APPENDIX B .?aint&Bake 25.

west orange.May 2OO2 Assernbly plant. NJ beta Wipers Alpha Cross-Dock El?aso. Wiper 1ub-Adoembly .Appendix G: Alpha Motors Future State .

Alpha 9ales Order Oank Alpha Dist.Center /r // |_LJ-_--.eembly _F IFO* Defects = 5 ppm Delective = 1% 12h.. 1 2 (1) . FG14h. 1 2h. w t ?2 h . 60 s.l t-dl-J 1 960lday 640 A 320b FACILITY9UMMARY l xDay % RM15 h. 29hifts SDays .F E?E=lDay Final&.

.May 2OO2 prant.) Vt/'a i----------------' I I I l + J 4.- .NY Beta Warehouse Harlingen.) h. =1OO% 25hifts ?tamped ?aris 16h.. CIO = 5 min. Reynosa..TX t- .Appendix G: Beta wipers Assernbly Future State .1 (3O e.. O.. rNr 1T Cell I -- V box . &the Y A9SEMDLY I A9SEMFLYCELL ll -1 I lo\e = 30 sec.. Mexico Tonawanda. g4 .

beta HQ ?roduction Control Alpha Motorg Harlingen.TX ->% toxoXl 1920tNiperelDay 12BO A 6404 16WiperslTray 32O Wiperel?allet 4?allets A Z?allet'sO D- RM 16 h. Defecfts=4OO ppm 1 2h . 2 APPENDIX C . wl?oh. FG12h.Ml beta?lant ?roduction Control Harlingen.TX Detroit.

Uptime= 95% thifts = 2 E ? E =4 x s h i f t 10 m.) e 96 . 2h. Uptime = 95% thifts =2 E ? E =4 x s h i f t C I T= 1 Os e c . NY Future State GammaHQ ?roduction Control Cleveland.Ap p e n d i x C : Ga mma S ta mping Asser nbly Plant .(1s.l sec. CIO = 3 min.(1O .NY 9tam pingl 9t amping 2 ClT .OH iw a' DearbornHeights.May 2OO2 Tonavvanda.) 2h.Ml t Tonawanda. CIO = 3 min.

Uptime = 95% Shifts = 2 E?E = shift.(312O e. 13O m.BetaWipers HQ ?roduction Control OetaWipers Warehouse STAM?ED?A'R15 2OOl6ox 1600l?allet. w t ?6 2 h . Trocessing 2131 _ Time gec. 12?allets FACILITY9UMMARY RM4A h. ?aini &6ake thipping SDays 7yg=1Day Defecl.s=2OOOWm Defective = 6% CIT = 52 min. F G1 2 h . SShifts Clean. CIO = 5 min.) APPENDIX C .

{- I Feedback we've tried to make this workbook easyto use.org r-- . we know fiom yearsof experiencethat applying even the simplesrconcept in a complex organization is difficult. one cambridge center.However. After you have tried implementing the techniquesdescribedin this workbook. MA 0zr42 usA trax:617-871-2999. fax. Email: stw@lean. simple illustrations.org Reach o us ar: lean. or email commentsto: Lean EnterpriseInstitute. cambridge. wirh detaired instructions. So we need your help.and clear examples.pleasemail.

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