End-to-End Value

Stream Design
How to Apply the Eight Principles of Flow to Develop
an Accurate Future State Map

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 Contents
Product Family Selection................................................................................. 4

The Current State.............................................................................................. 5

Future State Mapping Versus Value Stream Design.................................... 7

Implementation.................................................................................................. 8

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 Operational Excellence is “When each and every employee can see
the flow of value to the customer, and fix that flow before it breaks
down.”SM In order to create flow, an operation must first design it, and
the way to do that is through value stream mapping.

Value stream mapping is a visualization method that allows operations

to map the flow of value from raw material to the customer so an
operation can understand flow from the customer’s perspective. And
there is a specific process operations follow when conducting the
exercise. Value stream mapping is performed in the following manner:

jj Select a product family (each family will have one value stream)

jj Create a current state map

jj Design a future state map using lean techniques

jj Develop an implementation plan for the future state

jj Implement the future state through structured continuous improvement

activities

IMPLEMENTATION
PLAN

FUTURE
STATE MAP

E S
E LIN
CURRENT
ID
STATE MAP
GU
E AN
L YL
P
AP
PRODUCT
FAMILY
DEFINITION

Figure 1: Value stream design stages

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 Product Family Selection
The first step in the value stream mapping process is to select a
product family. A product family is a group of products that pass
through similar processes or equipment and have similar work content.

A product family matrix is a useful technique for identifying product

families. It is a grid that contains a list of processes in the columns and
a list of products in the rows. Depending on the application, it can be a
simple visual tool or a complex mathematical tool.

PROCESS STEPS & EQUIPMENT

PRODUCTS
Injection Mech. Electrical Final Configure
Stamp Welding
Mold Assembly Assembly Assembly & Test
Sensor Activated Arm

Laser Activated Arm

Manual Activated Arm

Radon Detector

XS2 Servo Motor

XS4 Servo Motor

Figure 2: A simple product family matrix

After completing the product family matrix, it can be sorted visually,
so products with similar downstream processes are grouped together.
(Downstream means the point where continuous flow must end and pull
begins.) Operations should look for products that require about 80 percent
of the same downstream processing steps to be grouped into product
families. After this step concludes, the operation has potential product
families, but there are still more steps to complete.

An operation further defines product families by calculating the work

content of each product in a potential family. As a general rule, the
total work content for each part in the product family should be within
30 percent of each other. Total work content means the total operator
time required to build a product as if one person were to perform all the
processing steps, calculated by the following formula:

(Highest Value – Lowest Value) x 100

Highest Value

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 After applying the 80 percent process commonality and 30 percent work
content guidelines, an operation should always use its knowledge of the
products and processes to provide a final refinement of the family, taking
into account factors such as:

jj Specific tooling requirements

jj The condition of equipment and its ability to hold tolerances

jj Specifications of the parts produced

jj The skill of the operator or technician required

The important point here is that this step happens last, meaning after the
80%/30% guidelines have been applied.

Once product families are identified, the operation can begin creating a
current state map for each family.

The Current State

A map of the current state is created on the shop floor. By taking a tour
of the floor, an operation can identify process steps, then record the
data for each process.

Typical data needed includes: cycle time, changeover time, uptime, and
number of operators. An operation also records any inventory at the
process step and documents how material flows from one process to
the next. Information flows are recorded as well. A good way to capture
information flow is to ask the question, “How does the operator know what
to build next?” Information flow between customers and suppliers is also
shown.

The next step is to create a lead-time ladder at the bottom of the value
stream map that compares the amount of lead time (due to inventory)
to the process time to create the part. At the end of the ladder, the total
amount of lead time is summarized compared to the total amount of
process time.

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 Stanley 1x weekly
7 days
Steel
(coils)

6 week forecast
Weekly Fax

12 week forecast Production 6 week forecast

Aspen ABC Industrial
Plastics Monthly Fax
Control Daily Firm Order Fax Supply
MRP
6,000 pcs/mo.
2,600 Sensor
2x monthly 2,050 Laser
Weekly 1,350 Manual
Schedule
2 Shifts
12 days
10 Arms/Ctn.
(containers)
10 Ctns./Pallet

Stamping Welding

1 1 1x daily
260 “S” 350 “S”
200 “L” 275 “L”
P/T = 1s
170 “M”
P/T = 60s
160 “M” Daily Ship
C/T = 1s C/T = 60s
C/O = 45 min C/O = 5 min
Schedule
UP = 90% UP = 85%
7d 2.1d 2.6d
Daily Inspection
1s 60 s Schedule

Mech. Electrical Final Final

Molding Testing Shipping
Assembly Assembly Assembly Inspection

1 1 1 1 1 1
760 “S” 460 “S” 380 “S” 460 “S” 720 “S” 440 “S”
530 “L” 255 “L” 265 “L” 325 “L” 464 “L” 315 “L”
P/T = 30s P/T = 165s P/T = 210s P/T = 135s P/T = 150s P/T = 1200s
420 “M” 235 “M” 140 “M” 270 “M” 285 “M” 175 “M”
C/T = 30s C/T = 165s C/T = 210s C/T = 135s C/T = 150s C/T = 120s
C/O = 60 C/O = 0 C/O = 0 C/O = 0 C/O = 0 C/O = 0
UP = 80% UP = 100% UP = 100% UP = 100% UP = 95% UP = 95% 29.0 d L/T
S+PT
35.0 d L/T
12d 5.7d 3.2d 2.6d 3.5d 4.9d 3.1d M+PT
1,921 s P/T
30 s 165 s 210 s 135 s 150 s 1,200 s S
1,890 s P/T
M

Figure 3: A sample current state

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 Future State Mapping Versus Value
Stream Design
After a good current state is established, an operation moves to
Mixed Model creating a lean future state with less waste. But unlike a traditional
approach to this exercise based on opinions, brainstorming, or running

Guidelines kaizens, to achieve Operational Excellence, the new future state map is
created by following advanced lean guidelines.

This difference between value stream “mapping,” where the objective is

Do you have the right product to eliminate waste, and value stream “design,” which allows employees to
families? identify the difference between normal and abnormal flow, is a significant
What is the takt time at the distinction because good value stream design can yield a high level of
pacemaker? improvement within as little as a few months.

Can the equipment support The guidelines that an operation applies, in order, to each product family
takt time? are:

What is the interval? 1. Takt time

2. Finished goods strategy
What are the balance charts
for the products? 3. Continuous flow
4. FIFO
How will you balance flow for
the mix? 5. Pull
6. Schedule only one point
How will you create standard
work for the mix? 7. Interval

How will you create pitch at 8. Pitch

the pacemaker?
The first five guidelines are well-established. However, the sixth through
How will you schedule the mix
eighth are what really make the difference in design.
at the pacemaker?
jj Scheduling One Point: By scheduling only one point in the value
How do you deal with changes
in customer demand? stream, work flows downstream from this point to the customer. This
point is called the pacemaker and it determines the speed at which
the value stream will operate. To create a pacemaker, an operation
dedicates equipment to run the specified family. The equipment is
moved together to form a cell or line through which parts continuously
flow, one piece at a time, without stoppage.

jj Interval: The interval is a key concept that should be used to monitor

value stream performance and improvement. In short, it is how long
it will take (what time interval) to produce every part in the family. It is
really a measure of batch size, and obtaining shorter intervals is better.

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 That is because as intervals shrink, flexibility is increased, on-time
delivery to customer improves, changeover times become very small,
and inventory is almost nonexistent.

Selecting the interval is not an exact science. Operations should start

by choosing an interval according to how long it is expected to take

Shared
to cycle through all the products in the family based on the number of
changeovers per day, then determine if the machines can support and

Resources meet it. If not, the team should estimate a new interval.

Guidelines
jj Pitch: Pitch refers to how often an operation releases and takes away
work from the pacemaker. It is a measure of how the value stream, or
more specifically, the pacemaker, is performing to schedule and has
1. Can the product families be four main characteristics: physical, visual, binary, and anticipated. The
extended? pitch increment should be small enough to allow operations to react to
2. Can process families be problems and still ship to customers on time. Pitch also means leveling
created with dedicated the volume of work at the pacemaker. While creating a physical pitch is
equipment? not always an easy thing to do, it is extremely important to implement
3. Can flow be created through pitch in lean manufacturing since it provides a visual method to see
the true shared resource? waste and the discipline to reduce it.
4. Can an operation balance to
This set of guidelines is only the beginning. Depending on the operation,
create continuous flow?
there are 10 guidelines for developing a mixed-model pacemaker, six for
5. How will the shared designing flow through shared resources, and nine for creating flow in
resources know what to business processes or office operations.
make next?
6. How will the shared
resource be managed?

Implementation
Office
Guidelines After the future state is complete, the operation develops an implementation
plan. This is done by taking the future state and breaking it down into
implementation loops:
1. Takt or takt capability
jj Draw loops around areas where flow and pull are needed in the future
2. Continuous flow
state
3. First In, First Out (FIFO)                                 
4. Workflow cycles jj List kaizen events needed in each loop in a project plan, tying each
improvement to a business objective
5. Integration events
6. Standard work jj Establish a physically measurable goal that lets an operation easily
7. Single-point sequence know when the goal is attained
initialization To gauge the success, value stream reviews should be conducted,
8. Pitch ideally at least at a two-week pitch. The value stream champion in the
9. Changes in demand organization should walk the flow with the value stream plan, identifying
items that are not yet complete. The senior person on site should take part
in the reviews and provide the assistance to enable needed change.

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