Value Stream Mapping and Lead Times

© 2001 ConceptFlow

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Module Objectives
By the end of this module, the participant will be able to: • Discuss the difference between operations improvement and process improvement • Identify and map a value stream • Describe the components of lead time • Discuss the importance of lead time reduction

© 2001 ConceptFlow

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Processes And Operations
• Process - the flow of products/services/services from one worker to another • Operation - the discrete stage at which a worker may work on different products/services/services

© 2001 ConceptFlow

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Group Exercise
Brainstorm and write on a flip chart two lists - processes and operations, that exist in your organization(s)

© 2001 ConceptFlow

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B. Gilbreth © 2001 ConceptFlow 5 .Four Phenomena Of Process SHIP • Delay (Storage) • Transport (Handling) • Inspection • Processing – F.

delay of an entire lot between processes • Lot delays .occurs when individual items wait to fall in step with entire lots © 2001 ConceptFlow 6 .Two Types Of Delays • Process delays .

process phenomena should be given top priority © 2001 ConceptFlow 7 .Process Improvement Or Operation Improvement? • Production is a network of processes and operations • But in improving production.

What Is A Value Stream? All actions (value and non-value added) currently required: • To design a product/service from concept to launch • To produce a product/service from raw material into the arms of the client © 2001 ConceptFlow 8 .

Value Stream Management “.the process of increasing the ratio of value to non-value by identifying and eliminating sources of waste in the overall value stream for defined product/service families... ensuring that the value stream is profitable and meets or exceeds client requirements” – Lean Enterprise Institute © 2001 ConceptFlow 9 .

Problem Solving 2. Information Management 3.Identify The Value Stream • Value stream is all actions required to bring a specific service/product through three critical tasks: 1. Physical Transformation • The Lean Enterprise is the sum of all activities that perform these three tasks • Is often more than one organization – Lean Thinking © 2001 ConceptFlow 10 .

Benefits Of Value Stream Mapping • • • • • Provides a simple but true picture of what is happening in the process Calibrates your team to a common understanding of the process Helps analyze a process by breaking it down into its component steps Provides a structure to which specific data can be attached Includes the flow of material and the flow of information © 2001 ConceptFlow 11 .

2.Steps In Value Stream Mapping 1. 3. 4. Select one product/service family based on end client Have one person lead the mapping effort Map the current state at the “door to door” level Map the desired future lean value stream Develop an implementation plan to achieve the future state © 2001 ConceptFlow 12 . 5.

08 Hrs 6.63 Hrs 13 .Portfolio Review Duration E/T = Elapsed Time W/T = Work Time VA/T = Value-Added Time © 2001 ConceptFlow “As-Is” Process Cycle Time: E/T = W/T = VA/T = 249 Hrs 18.

Icons For Mapping The Current Process MATERIAL FLOW ICONS C/T = 45 sec ASSEMBLY XYZ Corporation C/O = 30 min 3 Shifts 2% Scrap 300 pieces 1 Day Manufacturing Process Outside Sources Data Box Inventory Mon + Wed FIFO Truck Shipment Push Arrow Finished Goods to Customer First-In First-Out Sequence Flow INFORMATION FLOW ICONS Weekly Schedule OXOX Load Leveling Manual Infomation Flow Electronic Infomation Flow Schedule Withdrawal Kanban Production Kanban Signal Kanban Kanban Post Kanban Arriving in Batches Sequenced-Pull Ball “Go See” Scheduling © 2001 ConceptFlow 14 .

Icons For Mapping The Current Process GENERAL ICONS UPTIME CHANGEOVER Kalzen Lightening Burst Buffer or Safety Stock Supermarket 1 Operator Withdrawal © 2001 ConceptFlow 15 .

Icons For Mapping The Current Process • • • • • • • • • Data box Process box Triangle (inventory) Shipping icon (truck.push movement of material Timeline showing value added and non-value added © 2001 ConceptFlow 16 . rail or air) Narrow line (information flow) Narrow line with wiggle (electronic information flow) Broad arrow .shipment of goods inbound or outbound Striped arrow .

Icons .Value Stream Map Office Data Box Process Box ASSEMBLY Inventory Shipping (Truck) Information Flow Electronic Information Flow © 2001 ConceptFlow 17 .

Icons .Value Stream Map Shipment of Goods (Inbound or Outbound) Push Movement of Material Timeline Lead Time Processing Time …Value Added © 2001 ConceptFlow 18 .

Tips For Mapping The Current Process • Collect data yourself by walking the pathways of material and information • „Walk the process‟ repeatedly • Begin with a quick “door-to-door” walk • Bring a stopwatch and gather your own times • Map entire stream yourself • Draw by hand in pencil © 2001 ConceptFlow 19 .

) Clients (int.) Cust.Levels Of A Process Business Process (“Strategic”) Business Processes Sales Business Development Core Functional Departments Contracting Client Service Underwriting Sub-process High Level Process Map Supplier Terms Terms Docs Negotiate Close Client Underwriters Detailed Sub-Process Map Tasks (ext. Service Dept. Procedures Detailed Subprocess 20 © 2001 ConceptFlow .

.. © 2001 ConceptFlow 21 . What It Actually Is.Versions Of A Process The “As-Is” Map Should Reflect The Actual Process At Least Three Versions What You Think It Is..... What You Would Like It To Be.

Relating The Versions Of Process Maps To Levels Of Performance Breakthrough Defects and Waste Q: Quick S: Simple C: Easy As-Is = Current State Q.S&C $$$ Should-Be = Process Entitlement Could-Be = Breakthrough State Improvement Period Time © 2001 ConceptFlow 22 .

Typical Process Data • • • • • • • • • Cycle time Uptime Inventory Batch Sizes Number of operators Number of product/service variations Working time Scrap/rework rate Defect rate (dpu) © 2001 ConceptFlow 23 .

start to finish • Changeover time (C/O): time to switch from producing one product/service type to another • Lead time (L/T): time it takes for one unit to complete the process (includes NVA time that unit or product/service waits between operations) • Total Cycle Time: cumulative time it takes for unit or product/service to complete all operations (does not include wait time between operations) • Uptime is calculated by dividing the actual time available to run by the time scheduled to run • Working time (W/T): time per period minus breaks… © 2001 ConceptFlow 24 .Time Definitions • Cycle time (C/T): how often a unit or product/service is completed by the operation.

Work Time Versus Value-Added Time “Cycle” Time “Work” Time “Value-Added” Time • Cycle Time .The shortest time currently possible for a task • Value-Added Time .The amount of the work time that is actually value-added… the rest is waste! © 2001 ConceptFlow 25 .The actual duration of a task from start to finish (the calendar time) • Work Time .

and Deploy - 3) Identify Lean Methods and Assign Action Items Lean Solution Responsibility Due Date Demo OK? © 2001 ConceptFlow 26 . Perform Demo.Step-by-Step Process For Waste Elimination 1) Map “As-Is” Process 2) Prioritize Waste Opportunities Level 0 Level 1 4) Map “Future State”.

Business Process Example . C/T = 30 min. Sales Pitch C/T = 10 min. C/T = 3 days ? Yes Work Order Issued C/T = 1 day No © 2001 ConceptFlow 27 . Configure Product/Service Complete Order Form C/T = 10 min.Identify The Value Stream For The Process The top-level value stream for a sales order process: Initial Contact C/T = 0 Wait for Sales Person C/T = 5 min. Pending Order Queue C/T = 7 days Batch Similar Orders C/T = 6 days Check Avail. Promise to Ship C/T = 5 min.

Portfolio Review Duration Step 1 .Map the “As-Is” Value Stream E/T = Elapsed Time W/T = Work Time VA/T = Value-Added Time © 2001 ConceptFlow “As-Is” Process Cycle Time: E/T = W/T = VA/T = 249 Hrs 18.63 Hrs 28 .08 Hrs 6.

you‟re just not going fast enough” – Mario Andretti “It used to be that the big ate the small.Speed “If things seem under your control. Institutional Venture Partners © 2001 ConceptFlow 29 . Now the fast eat the slow” – Geoff Yang.

08 Hrs 6.Cross Functional Team Prioritizes Opportunities Step 2 .63 Hrs 30 .Prioritize Waste / Defect Opportunities Red – Greatest Potential Benefit Yellow – Worthwhile Opportunity © 2001 ConceptFlow “As-Is” Process Cycle Time: E/T = W/T = VA/T = 249 Hrs 18.

© 2001 ConceptFlow 31 .Identify Lean Methods and Assign Action Items Waste Opportunity Conduct Portfolio Analysis Develop Financial Strategy Present Solution to Client Impact 5 Ease Priority 2 1 Six Sigma / Lean Method Provide Client a simple checksheet of information needed – call centers work as Concierge for this feature Using call centers in meeting with advisors.Process Blitz Action Items Step 3 . client return meeting is scheduled with confidence during first visit Work variation reduction project to understand how to get the client to yes at greater percentages at presentation 5 3 3 3 2 3 Execute Strategy 4 5 4 During Process Blitz the cross functional team identified standardization and technological solutions to waste issues. information is directly typed into website for immediate information flow to services Based on reduced variation. but not currently activated. Team recommended only those technology solutions that were available.

92 Hrs 6.Future State Map Previous Process Cycle Time: E/T = W/T = VA/T = 249 Hrs 18.Future State Map Step 4 .63 Hrs Red – Greatest Potential Benefit Yellow – Worthwhile Opportunity © 2001 ConceptFlow Future Process Cycle Time: E/T = W/T = VA/T = 146 Hrs 15.08 Hrs 6.63 Hrs 32 .

Future Lean Value Stream • • • • • • Produce to client demand Develop continuous one-piece flow Control production with pull systems Send the client schedule to only one process (the pacemaker) Level the production mix at the pacemaker Level the production volume at the pacemaker © 2001 ConceptFlow 33 .

step by step • Measurable goals • Clear checkpoints with named reviewer(s) © 2001 ConceptFlow 34 .Implementing The Future Lean Value Stream • Begin with completed map of future value stream. broken down into a series of connected flows or “loops” • Develop value stream plan • Exactly what you want to do by when.

Advantages Of Lead Time Reduction • • • • Short delivery time to client Quickly adapt to changes in demand Low work-in-process Minimize excess and obsolete advice/plans due to changes © 2001 ConceptFlow 35 .

Inc. Total cycle time (lead time) reduction drives three elements of competitiveness: • Responsiveness: Ability to meet client‟s latest need • Results Acceleration: Ability to accelerate all improvement • Resource Minimization: Focus resources on removing barriers to competitiveness © 2001 ConceptFlow 36 .Philip R. Thomas .Thomas Group.

Thomas Group.how long do steps take? • Shorter cycle time results in more cycles of learning for problem solving and process improvement (more feedback loops) © 2001 ConceptFlow 37 . Inc.Philip R. • Total cycle time can be measured and improved • Mapping the process has visual impact . Thomas .

Barriers To Cycle Time Improvement Business Process Barriers • ________________________ • ________________________ • ________________________ • ________________________ • ________________________ • ________________________ Culture Barriers • ________________________ • ________________________ • ________________________ • ________________________ • ________________________ • ________________________ © 2001 ConceptFlow 38 .

• Vision is shorter cycle time.Philip R.Thomas Group. Inc. less inventory combined with less risk • Cycle time is composed of actions in progress and processing speed • Key concept: Do fewer actions in progress. Thomas . do the remaining ones faster © 2001 ConceptFlow 39 .

Key Learning Points • • • • © 2001 ConceptFlow 40 .

the participant will be able to: • Discuss the difference between operations improvement and process improvement • Identify and map a value stream • Describe the components of lead time • Discuss the importance of lead time reduction © 2001 ConceptFlow 41 .Objectives Review By the end of this module.

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08 Hrs 6.63 Hrs 43 .Prioritize Waste / Defect Opportunities Red – Greatest Potential Benefit Yellow – Worthwhile Opportunity © 2001 ConceptFlow “As-Is” Process Cycle Time: E/T = W/T = VA/T = 249 Hrs 18.Cross Functional Team Prioritizes Opportunities Step 2 .

Future State Map Previous Process Cycle Time: E/T = W/T = VA/T = 249 Hrs 18.08 Hrs 6.63 Hrs Red – Greatest Potential Benefit Yellow – Worthwhile Opportunity © 2001 ConceptFlow Future Process Cycle Time: E/T = W/T = VA/T = 146 Hrs 15.Future State Map Step 4 .92 Hrs 6.63 Hrs 44 .