Mapping Processes

Module Objectives

By the end of this module, the participant will be able to:

• Understand the hierarchy of “types” of process mapping tools
• Understand the relationship between “types” of process mapping
tools
• Describe the meaning of value
• Utilize Value-Added Flow Analysis and Value Stream Mapping to
identify Value-Added and Non-Value-Added steps in a process

2
Why Do We Map A Process And Analyze Its Flow?
• Mapping is the 1st step in documenting a process and understanding where
waste (Non-Value Added Activity) is present
• By mapping the process, we create a visual baseline that becomes a key
element in gaining group consensus of what the process is and where the
opportunities exist
• In many cases, this is our first chance to understand the “real” process vs. what
you think the process is…
• There are many ways to map a process – it all depends on the purpose and
level of detailed required
• We will focus on the following methods of mapping a process
• SIPOC
• Detailed Process Map
• Functional (Swimlane) Map
• Value-Added Flow Analysis (VAFA)
• Waste Map
• Value Stream Map (VSM)
• Spaghetti Chart
3
Hierarchy Of Process Mapping Tools

Top Level Data SIPOC SIMPLE

Process Flow Map

VAFA
Data Collection

VSM
(Current COMPLEX
State)

VSM
Detailed PMAP
(Future State)
4
Versions Of A Process

At Least 3 Versions

What you think it is... What it actually is... What you would
like it to be...

5
Levels Of A Process

Business Business Core

Development Functional
Process
Departments
(“Strategic”)
Business Customer
Sales Underwriting Contracting
Processes Service

Sub-process
High-level
Supplier Terms
Terms Docs Negotiate Close Customer
Process Map

Underwriters (ext.)
Customers
(int.) Cust.
Detailed Service Dept.
Sub-process Map Detailed
Sub-process
Tasks Procedures

6
SIPOC – A High-level Process Map
(Covered In Project Definition Module)

A high-level Process Map should describe:

• Major tasks and activities
• The boundaries of the process
• The Process Output Variables (POV)
• Who receives the outputs (customers)
• What does the customer require of the outputs
• The Process Input Variables (PIV)
• Who supplies the inputs (suppliers)
• What does the process require of the inputs

SIPOC: Supplier, Inputs, Process, Outputs, Customers

7
SIPOC Structure

S I P O C
Suppliers Inputs Process Outputs Customers
(Providers of (Resources (Top level description of (Deliverables (Anyone who receives a
the required required by activity) from the deliverable from the
resources) the process) process) process)
Requirements Boundary Requirements
7 2
Who is the 8 When does 5
supplier of What the Process What
each does the start? does each
input? process customer
expect expect
6 from each from each 4
1
What input? output? Who is the
What is
Inputs are the customer
3
required to process? of each
What are
enable output?
the
this
2 outputs
process to
When does from the
occur?
the Process process?
end?
Boundary
8
Common Process Map

A common Process Map should describe:

• All of the steps within the bounded process
• The flow relationship between the steps including loops and
decision points
• Distribution of material flow, e.g., 60% to machine A and 40% to
machine B
• This is a first step in building a detailed Process Map

This is sometimes referred to as a simple flow chart.

9
Common Process Map Example

Create
Receive Pull Raw
Work Start1 Orders of
Sales order Material
100 per Lot

Set Up
Mate Raw Material to
Miling Mill Chamfer
Production Paperwork
Machine

Widget Rew ork

Manufacture
Set Up Drill
Deburr Inspect OK Press

Scrap Scrap

Rew ork

Drill Hole Deburr Hole Final Inspect Scrap

OK Ship

10
Detailed Process Map

A detailed Process Map should describe:

• All of the steps within the scope of the project (frequently a subset
of what was mapped in the common Process Map)
• The flow relationship between the steps including loops and
decision points
• Distribution of material flow (60% to machine A, 40% to machine B)
• All inputs and outputs by step
• The classification of inputs – Noise (N), Standard Operating
Procedures (S), or Control (C)
• The Value-Add status of each step – VA, BVA, or NVA
• Optional metrics – DPU, DPO, Cycle, or YTP

One of the best tools to develop the list of PIVs

11
Detailed Process Map Example
Y - Outputs Y - Outputs
Positive stop set Hole location
Speed set Hole diameter
Feed set Hole profile (ovality) Y - Outputs
Coolant adjusted Tool Usage Log Clean hole - no burr

Set Up Drill
Work Start1 Drill Hole Deburr Hole
Press

X - Inputs X - Inputs X - Inputs

N: Drill Press N: Drill bit sharpness N: Part w ith burr
C: Drill Bit C: Drill bit angle C: deburr tool
C: Speed (RPM) C: Drill bit coating S: Proceedure
C: Feed (IPM) C: Drill bit alignment
N: Coolant type C: Drill bit gash
C: Coolant flow C: Coolant type
C: Positive stop position N: Chips
S: Fixture (jaw s) C: Positive stop rigidity

Widget
X - Inputs
Manufacture S: Gage pins
S: Calipers Y - Outputs
S: Blueprint Reclaimed copper
S: Inspection form Scrap report

Final Inspect Scrap X - Inputs

Rew ork Scrap
Y - Outputs N: Scrap parts
Good parts tagged S: Scrap Proceedure
Y - Outputs
Rew orked tagged
Parts packaged
Scrap parts tagged
Parts shipped
Filled inspection forms
Shippping documentation
OK Shipping log
X - Inputs
N: Good parts
Ship S: Customer's PO
C: Packaging
S: Shipping program

12
Functional Process Map

A functional Process Map should describe:

• The steps in the bounded process, separated into functional areas
• Internal customer-supplier relationships
• Sequential flow of process activities across functional areas
A functional Process Map may also include:
• A timeline
• External suppliers as functional areas
• Cycle Times of activities, as well as DPU, DPO, YTP

Helps each functional area understand its role

in the larger process, and identifies bottlenecks.

13
Functional Process Map Example
Business

Review
Define Receive &
Unit

Prepare &
needs paperwork use
approve

Review &
Configure
I.T.

approve
& install
standard
Procure- Top Mgt/ Finances

Review
Issue
&
payment
approve
Corporate

Review
&
approve

Acquire
ment

equipment

Supplier Supplier

17
21 days 6 days 15 days 5 days days 7 days 71 days

14
Value-Added Flow Analysis And Value Stream Mapping

…mapping the process by walking the path

“Value” Concepts Sequence

• Definition of “Value”
• “Process Mapping”
• “Value-Added” vs. “Waste”
• “Value-Added” Flow Analysis
• “Value Stream Mapping”

15
VAFA And VSM Characteristics

VAFA VSM
• Linear processes • Level of granularity increased
from VAFA
• Simplistic processes
• Complex, multi-level Process Flows
• Often used on a “portion” of
a process • Level of data/information deeper
• Easy to use • Can be used across entire
Enterprise Value Steams
• Typically done with some form
of a Waste Map • More complex than a Process Map
or VAFA

Process Map VAFA VSM

LOW MEDIUM COMPLEX

Level of granularity
16
Discussion

What is your perception of Value?

Who defines it?

17
What Is Value? Who Defines It?

• Customer must think the task is important

• Is the customer willing to pay extra for it?
• Task must physically change the product or the information
• Movement does not add value
• The task must be done right the first time
• Continuous work loops do not add value

Any activity or task that transforms the “deliverables” of

a process in such a way that the customer is both aware
of it and willing to pay for it, is Value-Added.

18
The Three Categories of Value?

• Value Added Activity (VA):

• Physically changes the product or information
• Customer is willing to pay for it
• Done right the first time
• Business Value Added (BVA):
• Activities that do not add value, but are currently required by
regulation, law, or customer requests
• Non-Value Added Activity (NVA):
• An activity that uses time, resources or space, but does not add
value to the value of the product itself

Our goal is to eliminate NVA activities wherever possible and

minimize the BVAs through the use of Lean Methods.

19
Reference: VAFA Activity Steps
In many cases, this is done in a group, and below are some steps a leader
would take to conduct a group mapping activity.
•Create teams or sub-teams
•Use 2-4 people per sub-team
- Designate a guide and timekeeper
•Define start and end points of process
•Select item to “PRETEND” to be
•Review Waste Map and instructions
•Disburse Team for 30-60 minutes, to walk the process
- Everyone should fill-out form with a Pencil
- Follow General/Common/Average Flow
- Avoid branching into special cases
- Have teams calculate the ratio of VA Time to NVA Time
•Have team make overhead copies of Waste Map
•Have team “Show and Tell”

20
Some Practical Comments When Doing A VAFA
• Guide of area (process expert) gives tour of the area for realistic
perspective
• Introduce Process Flow team members to guide
• Ask to review processes, be polite…
• Ask these questions to understand operation:
• Where does the product come from?
• How long does it sit before processing?
• How long does the process take?
• How do we know what to process next?
• Where is the product placed when complete?
• How long does it sit before transferring?
• Where is the product transferred to?
• Note any issues raised by guide, (e.g., machine breakdown, capability,
etc)
• Ask for their input/solutions… How should we fix that?
• Thank them for their help…

21
Walking The Process and Documenting Process Steps
• Walk the process from beginning to end “pretending” you are the thing
going through the system. Record every step the thing makes and the
time it takes
• Option 1: Off-line, with the team, categorize each step as:
• Value-Added
• Non Value-Added (and ID as Type 1 or 2)
• Option 2: Off-line, with the team, categorize each step as:
• Processing (Value-Added)
• Handling (Non-Value-Added)
• Inspection (Non-Value-Added)
• Delay (Non-Value-Added)
• Storage (Non-Value-Added)
• Sum up Non Value-Added time and compare to Total Time. This
highlights your opportunities.

22
Example of a Process with Issues
Order Fulfillment – How much is Value-Add?

Customer Order

Sales CSR

Prod Control

OP #1

OP #3
OP #2
23
Waste Map – VAFA with More Detail (P,H,I,D,S)
(Generated From The Previous Order Fulfillment Example)
Process: Order Fulfillment
Date: 4/12/2003

P roc es s ing

Ins pec tion

D is tanc e
H andling

S torage
D elay

T im e
Step Description Remarks
1 Order is Called In x 10 min
2 Waits for CSR x 2 hours
3 CSR Processing x 10 min
4 SAP to Prod. x 2 min
5 Waits in Work Flow x 1 day
6 Processed x 5 min
7 Wait for Mat. x 10 min
8 Operation #1 x 1 hour
9 Waits for Transfer x 4 hours
10 Moves to Op #2 x 300' 10 min
11 Waits at Op #2 x 2 days
12 Operation #2 x 30 min
13 Waits for Transfer x 4 hours
14 Moves to Op #3 x 200' 10 min
15 Waits at Op #3 x 2 days
16 Operation #3 x 30 min
17 Waits for Transfer x 4 hours
18 Loaded on Truck x 120' 30 min
19 Shipped to Cust x 1 day
Total Distance 620'
Total Time 8 days,1 hrs,27min.

Value-Add Time is Approximately 3 Hours of the Total Time (~8 Days)

24
Value-Added Flow Analysis Review

• Definition of “value”:
• Customer must think the task is important
• Task must physically change the product
• The task must be done right the first time
• Non-Value-Added = Waste
• VAFA allows you to quickly identify Waste
• Data collection is a hidden area of waste in many business environments
• Major steps are:
• Pretend you are the THING moving through the system
• Record activities and categorize using Waste Map or Process Map
• Calculate ratio of Non-Value-Added time to Value-Added Time

Now let’s look at Value Stream Mapping . . .

25
What Is A Value Stream Map?

• A Value Stream Map provides a graphical “focus” of the material and

information flows needed to bring a product or service from order to
delivery
• It depicts major process steps associated with turning a customer
need into a delivered product or service
• It indicates how much value each of the steps adds to the product or
service
• It is a tool to expose waste

Source: Lean Six Sigma, Michael L. George

26
Value Stream Map Strategy

We can break up tasks into two overall categories...

Value-Added (VA) Non-Value-Added (NVA)

(Waste)

….it can then be broken down into two NVA categories

Essential Non-Essential
(Business-Value-Added)

Reduce Eliminate

27
What a Value Stream Map Looks Like

Information Flow
6-week Production Control 90/60/30/ day
Forecast Forecasts State Street
Michigan Assembly
Steel Co
weekly fax Daily
MRP Order
18,400 pcs/mo
500 ft coils Ð12,000ÒLÓ
Ð6,400ÒRÓ
Weekly Schedule
Tray = 20 pieces
2 Shifts

Daily Ship
Schedule

Tues +
Thurs 1 time
Daily

Material Flow
Stamping S. Weld #1 S. Weld #2 Assembly #1 Assembly #2 Shipping

200T Staging
Coils 4600 L 1100 L 1600 L 1200 L 2700 L
5 Days 1 2400 R 1 600 R 1 850 R 1 640 R 1 1440R 1

C/T = 1 second C/T = 39 seconds C/T = 46 seconds C/T = 62 seconds C/T = 40 seconds

C/O = 1 hour C/O = 10 minutes C/O = 10 minutes C/O = 0 C/O = 0

Uptime = 85% Uptime = 100% Uptime = 80% Uptime = 100% Uptime = 100%

27,600 sec. avail 2 Shifts 2 Shifts 2 Shifts 2 Shifts

EPT = 2 weeks 27,600 sec. avail 27,600 sec. avail 27,600 sec. avail 27,600 sec. avail

Production
= 23.6 days
Lead Time
5 days 7.6 days 1.8 days 2.7 days 2 days 4.5 days
1 second 39 second 46 second 62 second 40 second
Total
= 188 sec.
Cycle time

28
What a Value Stream Map Looks Like

Information Flow

Material Flow

29
Which tool to use?

Process Maps Value Stream Maps

•Provides detailed look at process •Identifies waste within processes

•Takes detailed look at each task •Takes high-level look at flow of material
•Identifies process inputs and outputs of and information
every step •Captures cycle times, wait times,
•Documents decision points headcount, quantities, etc.

•Shows rework loops •Provides a baseline for the team

•Identifies bottlenecks
•Value Added Flow Analysis

Resources, Timeframe and Goals Impact the Choice of Tool

30
Why Do We Map A Value Stream ?
• Calibrates team to a common understanding of the process
• Provides a deep understanding of process relationships and how flow
of material works with flow of information
• Mapping is the first step in understanding where waste is in a process
• Assesses Value-Add (VA), Business Value-Add (BVA) and Non-
Value Add (NVA) process steps in a value stream
• Identifies the Type of Waste in the process (TIMWOOD)
• Helps identify areas in the process that need improvement
• Show key metrics for all process steps and queues (waiting times)
• In many cases, it is the first chance to understand what is actually
happening in the process
• Provides a structure to which specific data can be attached
• Identifies alternate process flows

31
Steps In Value Stream Mapping

1. Map the “As-Is” state, collect needed data (Cycle Time, Defects,
Manual Journal Entries, etc.)
2. Map the “Ideal Future State”, evaluate where you wish to be by
elimination of Non Value-Added tasks and minimizing Business Value-
Added tasks
3. Evaluate gap between “As Is” and “Ideal Future State”. Evaluate which
opportunities offer the most value, which issues (X’s) are key.
Determine the meaningful changes that can be readily implemented
and which will move the process towards the “Ideal Future State”
4. Make the selected changes (“Target State”). Evaluate the
improvement. [Analyze, Improve phases]
5. Continuous improvement/vigilance. Institutionalize the gain.
Make sure that the improvement does not decay. [Control]

32
Value Stream Mapping Progression

1. Develop Current State Map

Review Flow, WIP, and Bottlenecks – Identify opportunities
Brainstorm immediate changes
2. Create Future State Map
3-6 months improvements
Develop a Value Stream Plan
Progress from current to future states
3. Create Vision or Ideal State Map
2-3 year vision of improvements
The “Perfect Value Stream”
Review advanced improvements

33
Current State Mapping: Process Walk Guidelines

….map the process by walking the path

• Ask Process Owner for OK to review process

• WALK the process with your team!
• “Pencil and Paper” tool (use flip charts, post-it notes to
switch things when interacting with the team)
• Look for waste, take notes
• Interview the Process Experts (suggested questions in
Appendix)
• Time Where Possible
• Look for Averages, Note Exceptions (may have
ranges)
• Get 80% Answers, Avoid Analysis-Paralysis

34
Steps To Create a Current State VSM
• Show Title at Top of Map
• Product/Service Family or Name of Process
• Current State Value Stream Map
• Date Created

• Step 1 -Capture the Process Flow; Include Flow of Material and

Information
• Step 2 - Add Data to Each Block of the Process
• Time, quantity, yield, etc.
• Step 3 - Create Timeline; Convert Metrics to Time

Clearly identify the Unit or “thing” to map

Now let’s walk through Steps 1-3.
35
VSM Step 1: Frame The Process Flow

Sales Order Processing

Current State VSM
April 9, 2007
Customer

Computer Date
system Needed

Specs. Price

•Identify the Customer and Customer requirements

•Start and end Steps in process

Receive phone Work through

call and route call Pending Order
to sales Queue and ship

36
VSM Step 1: Capture The Process Flow

Sales Order Processing

Current State VSM
April 9, 2007 Customer

Computer Date
system Needed

Specs. Price

Receive phone Configure system Fill out order form Issue work order Work through
Deliver sales
call and route call per customer and give customer to system Pending Order
pitch
to sales specs. promise date assembly Queue and ship

37
VSM Step 1: Capture The Process Flow (Cont’d)

• Map Entire Stream with your team

• If applicable, use your Process Flow Maps as a guide
• Keep the number of steps to a manageable level
• List work areas or function
• Look for material and information movement
• Link functions – what Departments – what Associates
• Note work queues and number of Units in Process

A large wall map with post it notes is most effective way

to capture information with the team

38
Common Mistakes To Avoid

• Did not capture the “as is” process – used anecdotal or procedural
documentation
• What you think the process is may be very different than what the
process really is
• Value Stream Map too detailed
• Queues / Waiting not identified
• Information flow not captured
• Not starting and ending with the customer

Make sure that the Team knows what the “unit”

is and who the customer is for the VSM

Map should study one UNIT going through the

process to correctly identify Wait times

39
 Basic Icons For Mapping The Process
Material Flow Shapes

Outside Process
Source Decision

Value Value
Value Value
Value Value Connector
Queue or Wait WIP
Customer or Vendor Value

Value

Information Flow Shapes Process Step

Phone Computer Mail Courier

Misc. And Time Shapes

Problem
xx Days
xx Secs
Kaizen Opportunity
Processing time + Waiting time Electronic Data Flow

Thought

Manual Data Flow

Thought
40
VSM Step 2 – Add Data

Sales Order Processing

Current State VSM
April 9, 2007

Legend
Customer
P/T = Processing Time
W/T = Waiting Time
Computer Date
SLA = Service Level Agreement
system Needed

Specs. Price

Receive phone Configure system Fill out order form Issue work order
Deliver sales Build computer
call and route call per customer and give customer and check
pitch system and ship
to sales specs. promise date material avail.
P/T 1.5 min P/T 10 min P/T 30 min P/T 15 min P/T 120 min P/T 120 min
W/T 3 min W/T 0 min W/T 30 min W/T 12 min W/T 2 days W/T 7 days
SLA .5 min SLA 10 min SLA 45 Min SLA 10 min SLA 2 days SLA 3 days

Let’s discuss the data we can add to the VSM…

41
 Process Metrics Options
• Time: Process Time, Cycle Time, Value Added Time
• C/O: change over (set up time; i.e. switch from an appl. to another)
• Information Technology or System Used
• Demand Rate
• Working Time per Day or Shift
• Takt Time or Service Level Agreements
• Number of Staff in process
• Department where work is being completed Admin
• Number of Available Workstations
• Units / Amount of Work-In-Process (WIP) P/T = 5 min
• Batch size C/O = 2.3 hrs
• % completed and accurate Takt = 7 min
Shifts = 2
• Unit cost # per = 2

What Data is Important to your Business Process?

42
VSM – Add Information and Material Flow

Sales Order Processing

Current State VSM
April 9, 2007

Legend
Customer
P/T = Processing Time
W/T = Waiting Time
Computer Date
SLA = Service Level Agreement
system Needed

Specs. Price

Receive phone Configure system Fill out order form Issue work order
Deliver sales Build computer
call and route call per customer and give customer and check
pitch system and ship
to sales specs. promise date material avail.
P/T 1.5 min P/T 10 min P/T 30 min P/T 15 min P/T 120 min P/T 120 min
W/T 3 min W/T 0 min W/T 30 min W/T 12 min W/T 2 days W/T 7 days
SLA .5 min SLA 10 min SLA 45 Min SLA 10 min SLA 2 days SLA 3 days

43
VSM Step 3 – Create Timeline
Sales Order Processing
Current State VSM
April 9, 2007

Legend
Customer
P/T = Processing Time
W/T = Waiting Time
Computer Date
SLA = Service Level Agreement
system Needed

Specs. Price

Cycle time = 4664.5 min or 9.7 days

Processing Time = 296.5 min or .6 days

Receive phone Configure system Fill out order form Issue work order
Deliver sales Build computer
call and route call per customer and give customer and check
pitch system and ship
to sales specs. promise date material avail.
P/T 1.5 min P/T 10 min P/T 30 min P/T 15 min P/T 120 min P/T 120 min
W/T 3 min W/T 0 min W/T 30 min W/T 12 min W/T 2 days W/T 7 days
SLA .5 min SLA 10 min SLA 45 Min SLA 10 min SLA 2 days SLA 3 days

3 m 3m 0 m 30 m 12 m 960 m 7 d
1.5 min 10 min 30 min 15 min 120 min 120 min

Time might have to be captured as a range for some steps if there is variation

44
Time Breakdown example

Cycle Time = Total Processing Time + Total

Waiting Time
Wait Time Wait Time Wait Time Wait Time Wait Time Wait Time

Receive Review for Issue

Customer Enter Claim Archive Customer
Claim Payment Payment

Processing Processing Processing Processing Processing

Time Time Time Time Time

Wait Time may also be referred to as Queue Time

45
Why capturing Time is Important

Baseline Cycle Time

Value-Added Time
Processing Time
Wait Time

Improved Cycle Time

• Total Cycle Time – The actual duration of a task from start to finish (the calendar
time)
• Process Time – The time currently required by processing steps (excluding wait)
• Value-Added Time – The amount of the work time that is actually Value-Added…
the rest is waste!

46
VSM Step 3: Create Timeline (Cont’d)

• Draw timeline under the process boxes and inventory or queue

triangles to compile the Cycle time
• Show Wait times on upper level
• Show Processing times on lower level
• Show value stream summary information
• Commonly shown information:
•Total Processing Time
•Total Cycle time
•Total Value-Added time
•Percent Value-added time (VA time / Total Cycle Time)

Maps may show all or part of the information above

47
Value Stream Mapping Exercise (optional)
• Working in your groups, create a Value Stream Map of the process of
given to you by your instructor.

• Create a Current State Value Stream Map in 7-10 steps

• Identify process times, wait/queues, and VA/NVA/BVA steps.

• Calculate Cycle Time and %VA time

• Since no data is readily available in class, come to a consensus based

on each other’s experiences.

Value Stream Map the process of waking up

(start boundary) and getting to work in the
morning (end boundary)

48
Review - Steps To Create a Current State VSM
• Show Title at Top of Map
• Current State Value Stream Map
• Product/Service Family or Name of Process
• Date Created

• Step 1 - Capture the Process Flow; Include Flow of Material and

Information
• Step 2 - Add Data to Each Block of the Process
• Step 3 - Create Timeline; Convert Metrics to Time

49
Example Current State Value Stream Map
• Mapped the process and information flow as it currently exists
• Identified value-added, business-value-added, and non-value-added activities
• Included cycle-times and queue times for each process-step

50
VSM Example 2
Credit
Decisioning
Screen X107 X108
X108Q
Oscar
Sign and Drive and auto approval Supervisor: Manager: High-Level Metrics
X109 Reviews and decides Reviews and decides
applications Supervisor and Count of Count of Percentage of Average Q C AP Fe a sib ility – Curre nt Env iro n me nt Asse ssm e n t Ba se line Da ta CAP Fe a sibility – Curre nt Enviro nme nt Asse ssme nt Ba se line Da ta CAP Fe a sibility – Curre nt Enviro nme nt Asse ssme nt Ba se line Da ta
Contract Acquisition
Focus
Funded Apps Funded & Concurrence Time
Manager reviews
Fast Data/ Concur Apps Days Tou ch Time 50 Sec TFS sp e nt $55 4M in FY0 6 to sup p o rt *1.4M o ffe re d c o ntra c ts tha t re sulte d in *1 .1M
TFS - Concolidated DSSO View
Alerts and Touch Time 45 Sec TFS c urre ntly ha s a *42 4 p e o p le sup p o rting in-sc o p e C A P Fe a sib ility func tio ns TFS p ro c e sse d o ve r ~1.1M lo a ns a nd le a se s b a se d o n FY06 p ro d uc tio n vo lum e s
Credit Annual
communicates back to p urc ha se d c o ntra c ts. The fo llo w ing d ia g ra m d e p ic ts the m a jo r c om p o ne nts a nd w ith *87% o f tho se b o rro w e rs c o m p rise d o f Tie r 2 o r b e tte r c re d it.
Performance Metrics
Oscar iLytics Annual 94872 # a c ro ss 3 0 DSSO site s.
Screener for 583 89 15.27% 237,180 # Volume
Credit Applications Analyst Volume
Bureau Alerts Annual Cost 120 $K hig hlig hts o f the sp e nd .
Discounting Level III VSM Annual
Touch Time 40 Sec Annual Cost 189 $K
Annual Contra c t Vo lum e (000 ’s) by Re gion** Contrac ts Se gm e nta tion b y Cre dit Tie r***
1.58M # Annual Average Q Qu ality 0 % RO LES TO TAL
$ 554 M* OObse
bserv rva a tio
tio nsns::
Application 158.100 # Quality 0 % We s t C e ntra l Ea st
Volume Quality = Time • C SC •• 2/
2/33 of o f ccoontrolla
ntrolla ble b le ee xp
xpe e nse
nse ddireire c tly
tly ttie
ie d tto o p e rsonne
rson ne l We st
We C
Cee ntra l Ea s t To
To ta
ta l
Ann ual Cost 133 $K Reviewer Agrees
with Decision
Days
A dm inis tra tiv e As s t.
C re d it A na ly s t
9
33
11
37
9
30
29
1 00
Ind
Indire
ire cc t
Allo c a tio n
• BTS
• Fina nc e
•• Te mm p & ove o ve rtim
rtim ee w wee rere $3.1M
$3.1M oout ut of o f p a yroyroll ll Le a se 7 6.6 665.
5.99 9 2.9
92 .9 2235
35 .4 Avg Cycle Time
•• Portion
Portionss of o f tthe
he dire
d ire cc tt aa nndd ind
ind iire
re cc tt aa llo
llo cc aa ttion
ionsscc ould
o uld bbee
Encore test for returning
Analyst Quality 80 %
C re d it Inve stig a to r 8 7 7 22 ($424M)
($424M)
• H um a n Re so u rc e s
• O t he r ind ire c t
a llo c a tio ns
a ffe
ffe cctte
e dd byb y C AP Fe Feaa sibsib iility
lity iinitia
n it ia ttive
ive ss (e
(e .g.g.. BT S a ppp
BTS p
Re ta il
To ta l
2 88.9
88 .9
3 65.5
65 .5
2292
92 .4
3358
58 .3
2 89
28 9
3 81.9
38 1.9
8870
70 .2
11,1
,1005.
5.66
Contract 14.58 Days
customers sends an Alert Dis c o unte r** 70 67 76 2 13
Dire c t • Ba n k C ha rg e s
m
m aa iinte
•• Ind
Indire
n t e na
na ncnc ee cc osts)
ire c tt aa lloc
ost s)
llo c a ttions
io ns m maa ke ke up *75% *75% of to t otata l spsp e nd
nd
Acquisition
Average Q
Time
X101Q
Concurrence
Ma n a g e m e nt*** 20 22 18 60
Allo c a tio n
• C olle c tio ns
• St a te m e nt C e nte r •• Se rvi c iing
rvic n g e xpe xp e nse
nse c ha rge rge d ba b a cckk to t o tthe
he DSSOs
DSSO s to m aa tc t chh Apps Offered = 1.43M Avg Cycle Time
Gra n d To ta l 1 40 144 14 0 4 24 e xpe
xp e nse with oorig rig iina
n a ting
t ing ee ntity
n tit y
Decisioning 2.02 Hrs
• O t he r d ire c t a lloc a tio ns A = 1.18M (82%)
Mins
($40M) A C R C = 0.08M (6%)
Average Q R = 0.17M (12%)
Time Dire c t, • W ho le sa le “**C o ntro lla b le ” Exp e nse De ta il
Pur chased = 1.11M
(including Auto)

DSSO + Te c h. Co sts
• A re a Sa le s Ma n a g e rs
60 Mins no
no tt in sc o p e A = A c c e p te d , C = Co n d itio n a l, R = Re je c te d
O
Obbsseerv
rvaatio
tio ns
ns: • D SSO M a na g e rs
X106 ($32M)
Ca te g ory $ millio ns %of total
Avg Held Cycle
X102 X103 X104 X105 •• He
He aa ddcc ount
o unt isis sp
spre
re aa dd ee ve
ve nly
n ly aa cc ross
ro ss re
re ggion
ionss aa nd
nd DSSO
DSSOssw
with
ith aa nn aa ve
ve rr aa ggee DSSO
DSSO size
size ooff 14
14 FT
FTEs
Es (i(in
n sc
sc oop
pee ).).
Pa yro ll $40.2M 70% 8.2 Days
X101 Credit Decisioning:
TTY (Bureau) scores Type reason code and •• CC urre
urre nt
nt num
nu mbbe
e rr ooff DSSO
DSSOss drive
d rive nn bbyy ddee aalele rr gro
g roup inggss aa nd
upin nd re
re la
la tion
t io nss hhip
ip s,s, no
n ott oo pt im aa ll op
p tim o pee ra
ra tion
tio nss size
size .
Dire c t
In -sc o ppee
In-
(S a la rie s , Be n e fits , Te m p , O T)
O bse rva
Obse rvatio
•• ~80%
tions
ns:: Time
Auto Decisioning Analyst Reviews the Analyst forms a Credit Decisioning: Brief internal notes on Decision Accept (82%) send Fax/RouteOne Te c hn olog y $X.XM X% ~80% of of tthe
he busi n e ss
b usine ss isis drive
d rive nn by
b y ReRe tta
a ilil cc ontra
ont ra cc ts.
t s.

DSSO Bl itz Decision to review No •• Ea

Ea cc hh DSSO
DSSO oo pe p e ra
rattee ss ind
indee pp ee nd
ndee ntly
nt ly w it hh sim
wit simila
ila r,r, bbut
ut dd iffe
iffe re
re nt
nt,, pprr oc
o c e sse
sse s aa nd
nd o rg
rg a n iiza
z a tion a l ststruc
tio na ruc tture
ure s.s. “Contro
“Controllab
lla ble
le ” Allo c a tio n fro m BTS ( O rig in a tio n s )
Credit Decisioning: why decline/approval •• LLe
e aa se
se ssaa cc ccoount
unt for for oonly
nly 20% 20% of of tthe
he volum
volumee s,s, but b ut m maa ke
ke up up aa m moore
re ss ign ific aa nt
ig nific nt pp ortio
ort io nn ooff the
the workwork ee ffortffort
“front screen” for general impression Applicant Summary
Investigate? NO Review: Address,
OFAC? Reject (12%) Decision to Dealer O
Oveve rr 12
12 se
se ppaa ra
ra te
t e jojobb role
ro le ssee xi
st aa cc ross
xist ross the
the frafra nc
nc hise
h ise totodda a y.
y. Oc c up a nc y $4.9M 9%
Analyst goes to Q to (XX%)
(XX%) ddue ue ttoo the
the irir ccom
ompplelexity.xity.
Advance, Collateral, Debt/ Income, Review
Annual
pick work in Oscar
PMT/ Income, Internal Score, Bureau
Score, Residence, Employment
SSN, Errors….
Touch Time 19.9 Sec
Counter (6%)
Touch Time 10 Sec •• FT
FTEE we
w e re
re loo
loose selyly m
maa pp p pee dd ttoo tth
hee ro le ss aa bo
role b ove ve ddue
ue tto
o no
nonn -sta
-sta nd
ndaa rd
rd job
jo b dde e sc
sc ript
rip tio
io ns aa nd
nd ro le struc
role struc ture
t ure s.s.
($58M)
(p lus te c h. c ost)
os t)
(R e n t, Fa c ilitie s , S e c u rit y, e tc .)

Prod uc t Drive n $4.3M 8% • TToyo

o yota ta ha ha ss aa ve
ve ryry sta
sta bble le aa nd
nd cc re
re ddit
it wwortorthy hy cc ustom
usto mee rr bba a se
se with
wit h 87
87 %% ofof those
t hose ccustom
ust omee rsrs ra ra tte
e dd TTieierr 22 or
or Quality %
6010 00 # DSSO
DSSO Q Qua ua lity
lit y Initia
Initia ttive
iv e w
willill p ro
rovide
vid e aa ddee tat a ile
ile d m
ma pppping
in g of
o fwwoork
rk tto
o role
role ss inin July/
J uly/Aug
August ust.. (G S T, Bur e a u Inv e s t., O u ts o u rc e d ) be
b e tte
tt er.r.
Volume Touch Time 110 Sec Data rolled into X102 Data rolled into X102 Annual Ann ual
980345 # 980345 # Oth e r Exp e nse s $8.2M 14% • IFIFTTooyota
yot a cc aa nn imimpple le m
mee nt nt the
the nene cc ee ssa
ssa ry ry cc ontro
on trolsls aa nd
nd aa ut om aa ttion
utom ion aa rr ound
ound cc re ddit it de
d ecc iisioning
sioning aa nd nd
Tou ch Time 7 Sec Annual Volume Volume •• Sp
Spaa nn ooff cc oon
ntro
troll for
for sup e rviso
supe rvisorsrs to
t o ststaa ff
ff isis a bboout
ut 11 ttoo 6,
6, w
whhicic hh isis lolow
w by
b y org
o rgaa niza
niza ttio
io na
na lldde
e sig
signn sta
sta nd
ndaa rd
rds.s.
980,345 # $ $ in (Tra ve l, Ta xe s , P ro m o s, C o mm .)
pric
p ric ing
in g itit ha
ha ss aa nn ooppppoortunity
rt unit y to
to bbro
roaa ded e nn ititss cc ust
ustoom mee rr bb aa se
se to
t o so
so m
mee ooff the lowelo werr cc rereddit
it tie
t ie rs.
rs.
Annual Volu me Annual Cost 120 $K Annual Cost 129 $K Millio ns Tota l $57.6 M 100%
980,345 # *- a p p ro xima te
Volume Annual Cost 1,52 5 $K ** FY06 Ac tua ls *** FY06 Ac tu a ls
Annual Cost 93 $K
Quality 100 %
Quality 100 %
Qu ality 32 %
DRAFT - For Discussion Purposes Only
*
**
In c lu d e s Disc o u n tin g Sp e c ia lists
In c lu d e s C re d it Su p e rviso rs a n d De a le r DRAFT - For Discussion Purp oses Only
* - a p p ro xim a te
** FY0 6 a c tua ls . So urc e : Re g io n – 12 M o View FY06, FP &A
DRAFT - For Discussion Pu rp oses Only
4
So u rc e : FY0 6 Vo lu me
Ac tu a ls, FP&A
So u rc e : Re g io n – 12 Mo
Vie w FY06, FP&A RAROC 10.18 %
70% of all RedeciDecisioning Quality 100 %
Yes Yes Quality = 68% will be
1
Se rvic e s O p s M a n a g e rs o n ly 2 (June 20 th)
AutoDecision is redecisioned
redecisioned
(Included in Z101) Annual

α-β
4200 00 #
Volume
X110 X111
X112
87% %
Dealer Agent
Investigation Follow Perform OFAC review
Reject (12%)
Up (25%) within iLytics Request for rehash
Counter (6%) Contracts 422 #
Touch Time
Annual
391 Sec
Touch Time
Annual
123

31,624
Sec

#
Touch Time 600 Sec PEPM
252,992 # Volume
Volume Annual
Annual Cost 55 $K 158120 #
Volume
Annual Cost 947 $K
Quality 100 % Annual Cost 1,587 $K Quality = 25%
Quality 35 % Quality =
First time answer Quality 75 % of deals still
Oscar
not purchased

Route One
ADP Dealer
Customer Purchases Management
Car Software

Lemans/ FED EX
Shaw DMS
WEBSITE

Host
Lemans/Shaw

TMS Host
(Hyperlink to Host
Oscar)

Rumba
Dealer

Total A101Q
1.28M #
Contracts
Runners,
Retail 998400 # DHL, UPS etc A101 A108 R 100 R101 R103 R104 R108 R109 LR110 P100
A103 A107 R102 R105 R106 R107 P101 P102 P103 P104
Average A104Q
LR100 RETAIL Complete Pre-
Lease 281600 # A107Q A108Q Q Discounting: Log onto Fed Ex and
Queue Time Discounting Pull up application in Pre-Discount Discounting: Discounting: No Discounting:
Mail Sort by Place in Colored Check Wholesale Lease/ Retail? Pre-Discount – Start Pre-Discount Stips / Pre-Discount Cross Complete Pre- Enter Application # Correction create shipping label,
7 .5 Day Logging in Draft (Screening) Checklist Oscar Collateral Check / Get Makes changes and Redecision Type Information into Print Booking Screens ACH? Sort paperwork/Carry Collect 100 files and Scan Documents into Ship once a week
Credit Section Folders & Add DMS Payout Worksheet Structure Tier Check Contract $ and Discounting Process Held? Pull information on Letter Paperwork stored in
(Discounter) Ave rage Q and Verify within Toyota App Fill in Oscar Required host from Host and DMS to Investigator Average Q box for shipment DMS Average Q
Average Q Separator Sheets Average Q Average Q Complete Checklist screen Required? boxes, Tape Box
Time Time Time Time Oscar Time Time
Fedex?
Tou ch Time 5 Sec 2 Hrs Touch Time 10 Sec 4.9 Days Touch Time 301 Sec Touch Time 74 Sec Touch Time 10 Sec Touch Time 28 Sec 3.5 Days Touch Time 139 Sec 1 Days Tou ch Time 120 Sec
Touch Time 72 Sec Days Touch Time 14 Sec Days Touch Time 30 Sec Touch Time 13 Sec Touch Time 5.1 Sec
Annual Annual Annual Annual Annual Annual Annual Annual
2.5M # Annual Ann ual 678400 # 998,400 # Annual R108 998,400 # 1280 000 # 1280000 # Annual Annual 12800 # 7500 #
Volume 1280 000 # 1280000 # Volume Volu me 67 8,91 2 # Volume Volume Volume 1280 00 # 12 80000 # Volume Volu me
Volume Volume Volume Average Q Volume Volume
Annual Cost 122 $K Annual Cost 73 $K Annual Cost 3,46 1 $K Quality = No Time Annual Cost 851 $K Annual Cost 147,422 $ K Annual Cost 420 $K
Annual Cost 883,000 $K Annual Cost 200 $K Annual Cost 235 $K Ann ual Cost 156 $K Annual Cost 63 $K Annual Cost 17 $K Ann ual Cost 8 $K
Helds
Quality 90 % Quality 78 % 2.1 Days LR111
Quality 100 % Quality 100 % Quality 95 % Quality 10 0 % Quality 100 % Quality 100 % Quality 100 %
Quality 10 0 % Quality 0 % Quality 100 % Quality 100 % Cedar Rapids
Quality = First time R100 includes all times for Count of Funded & Count of Total # of Mailroom scans and
Concur Apps (89 Concurrence Reviews
A103Q “checked” it was paid R100 to R105 Total) ACH Processing destroys documents
Z104 Z103 Z102 Z101
47 1 47 Discounter verifies Average Q
Time Average Q
31 2 62
redecision / Concurrence Credit Analyst Notes and Forward to Time
Average 9 3 27 Average Q Touch Time 80 Sec
1 concurrence is reperformed on Time Redecisions Average Q Credit Analyst for Re- .5 Days
.5 Days
Queue Time A105Q 4 4
Time Annual
1 5 5 cleared redecisioned deals Days Decisioning Volu me 64000 #
Day Days
Touch Time 15 Sec Touch Time 33 Sec Annual Cost 59 $K Approx
Touch Time 47 Sec Touch Time 17 Sec Average # of
Average
98/42=2.33 Co un t of Cou nt of Fu nd ed Pe rcen tag e of 5%
Queue Time Fu nd ed Ap ps & Con cu r Ap ps Co ncu rren ce
Annual
870400 # Annual Annual
1280000 # Annual decisions on Quality 100 %
Volume 214733 # Volume 1280000 #
M ultiple T imes Volume Volume funded LR113 LR112
2 Hours
Annual Cost 153 $K Annual Cost 21 0 $K Annual Cost 594 $K Ann ual Cost 249 $K contract is 2
Discounting: Sends
Quality 0 % Quality 0 % Quality 0 % Quality 0 % Discounting: Send
Oscar Sample 583 42 7.20% Correction letter if
Appro x Cont racts 1280000 921 60 7.20%
3082 if needed.
A102 A104 needed
A110 A105 A106
Identify correction ReC oncurrence
Give “other” Tou ch Time 60 Sec Touch Time 63 Sec
from Dealer and sort 20% Other Mail Cashier Fed-X Multip lier 92160 2. 33 214733
Hand over checks to Specialist Processes Annual Annual
and deliver to paperwork to Checks to Cedar 25,600 # 140,800 #
appropriate person cashier buydown checks Volu me Volume
appropriate Analyst/ Average Q Average Q Rapids Approx
Time Time Ann ual Cost 18 $K Annual Cost 102 $K
Discounter 2%
Touch Time 30 Sec Tou ch Time 300 Sec Touch Time 180 Sec 3 Hours Touch Time 117 Sec 3 Hours Touch Time 529 Sec LEASE Quality 0 % Quality 0 %
Annual Annual 7500 # Annual Annual Annual L100 L101 L102 L103 L104
128000 # Volume 7500 # 50,000 # 7500 # L105 L106
Volume Volume Volume Volu me Complete Pre-
Annual Cost 22 $K Discounting Pre-Discount – Start Pull up application in Pre-Discount Pre-Discount Cross
Annual Cost 37 $K Annual Cost 13 $K Annual Cost 68 $K Annual Cost 13 $K L107 L108 L109
(Screening) Checklist Oscar Pre-Discount Stips / Collateral Check / Get Check Contract $ and Makes changes and
Worksheet Discounting:
Qu ality 0 % Quality 100 % Quality 100 % Quality 100 % Quality 100 % and Verify within Structure Tier Toyota App Complete Checklist Fill in Oscar Discounting:
Redecision Complete Pre- Enter Application #
Oscar Held? Type Information into
Required Discounting Process Pull information on
Touch Time 397 Sec host
Touch Time 30 Sec screen
Annual
281600 # Annual
Volu me 19 1488 # Touch Time 111 Sec
Quality = No Volu me
Average Q Annual Cost 1,28 9 $K L108Q Annual
Helds Annual Cost 66 $K Volume 281,600 #
Time
Quality 78 %
1 Days Quality 0 % Annual Cost 358 $K
Average Q
L100 includes all times for Time Quality 95 %
L100 to L105 2.6 Days

C101Q

Cedar Rapids, IA
CSC Processes Average Q
Checks
Helds = 22% Time
.5 Days

H103 H105
Prepare mail package
Make Copy of the
(Contract & Held H106 H107 H108 H109 H110
H101 H102 Contract before H111
Letter) and ship to MANUAL BILLING -
6% Yes sending to the Dealer
Dealer
Discounter reviews
Access Word and Discounter walks the Helds: Analyst verifies held Forwards contract packet and confirms Discounter receives
creates the Held Print Helds Touch Time 30 Sec Touch Time 63 Sec
Held file to the Analyst Credit Analysts reason is resolved back to Discounter Average Q Time that all Held issues check from Dealer
Letter for follow-up follows up on Helds have been removed and processes check
Annual Ann ual
Contract must Volume 16051 # Volume 1605 1 # 2 Hours in system and Focus
Average Q Time Touch Time 30 Sec Touch Time 20 Sec Touch Time 90 Sec
Touch Time 73 Sec Touch Time 5 Sec be returned? Annual Cost 6 $K Annual Cost 12 $K Touch Time 22 Sec Touch Time 37 3 Sec Touch Time 600 Sec
Annual Annual Annual Annual Annual Identify additional
40% Held Annual Annual 281600 # 281600 # 4 Hours 281600 # 281600 # 28 1600 # Annual
281600 # 281600 # Quality 0 % Qu ality 0 % Volume Volume Volume Volume Volu me 13200 #
Volume Volume Average Q rework issues Volume
Estimate Annual Cost 12 0 $k Annual Cost 85 $k Ann ual Cost 292 $
Annual Cost 236 $K Annual Cost 16 $K No Annual Cost 70 $K Time Annual Cost 1,485 $K that would not Ann ual Cost 92,000 $
allow the initial
94% H104 1.5 Days Quality 0 % Quality 0 % Quality 0 %
Quality 0 % Quality 0 % Quality 0 % Quality 0 % hand-off of held Quality 0 %

Fax Held Letter to the

Dealer

Touch Time 68 Sec

Annual
279995 #
Volume
Annual Cost 220 $K

Quality 0 %

Dealer Reviews Helds

and Responds
Average CT to
8 Days
Close Held

Headcount:
Credit Analysts – 4.5
Discounters – 9+ 1 Discounting Specialist

Dealers Work Through Distributor:

TMS

Value Stream Maps can be Complex and Could Take up an Entire Large
Wall – Work to the level of detail you need to understand the process

Note: the above example is a series of Value Streams interconnected

– each individual Value Stream is represented with a different color

51
Current VSM State Checklist

• Customer or Process Specific • Information Source

• Critical Path View • Information Flow
• Single or Multiple Product Focus • Machine Times vs. Operator Times
(Product Families) • WIP Queues
• List of Tasks • Value Chain
• Metrics • Takt Times
• Material Source • Possible Improvements
• Material Flow

52
Top Level Analysis Of Current State VSM

•Review map and highlight (yellow marker) potential issue areas

• Common issues: Waiting, Movement, Resources, Flow, Setup
Times, Queues
• 7 Types of Waste: Transportation, Inventory, Motion, Waiting,
Over production, Over processing, Defects.
•Write down issues on yellow Post-it® notes and place on VSM
•Find impact of issue (Lead Time/Throughput Effect)
• A = Big Issue, B = Minor Issue, C = Non Issue

53
Spaghetti Chart To Identify Waste
• Differ from Detailed Process Maps and other Value Stream Maps
‒ Do not require sequential process steps
‒ Seek to highlight wasted motion
‒ Built around specific work area layouts
• Construction
‒ Sketch current work area arrangement in detail
‒ Draw a line to describe every trip each person or unit makes from one point
to another
‒ As more trips are made, more lines are added
‒ The more wasteful/redundant trips, the thicker the chart is with lines

Spaghetti Charts make poor layouts and

wasted motion obvious in the Value Stream
Analysis.

54
 Example Spaghetti Chart

Before

Could be:
• Movement of people walking around
• Movement of documents through an office After

Spaghetti Charts make poor layouts and

wasted motion obvious.

55
Example - Spaghetti Map From Cyclone Rebuild

A Lot of Movement and Repeated Trips

56
 Example - Spaghetti Map From Belt Peel Project
Current State:
• Identified Hot Spots for Clean up
• Traffic Flow Issues
• Location of “Piles” of Belt Peel
• Access Issues
• Safety Issues

Current State

Future State:
• Reduced transportation loop for loader/rock
truck
• Improved layout
• Safer work environment
• Developed designated areas for groups
Future State

A Lot of Movement and Piles of Material 57

Example - Organizational Alignment Spaghetti Chart
ASA Toronto
Site Mgr

Mfg. Ops Mgr Product Quality Systems Materials Programs

Dev. & Technology

Prod PMGS Proc Planning Process & Test Software Mechanical Purchasing Master Sched Logistics
Ctrl Mgr Mgr & ME Reliability Engi. Design Design Leader Leader

Designer Designer QCE

Cell Cell Cell Process Process Test Commodity PMCS Gen’l Stores New -8/400
Leader Leader Leader Planner Eng Eng Buyer Mast. Sched Picker
MD90 G4 All Else
Designer Designer
Process Process Test Commodity Stores New 737
Planner Eng Eng Buyer Picker APU
Prod Cell Cell Cell
Controller Direct & Direct & Direct & Process Test Commodity New MD90 Old MD90
Inspect Inspect Inspect Planner Eng Buyer

Mech. Commodity New 737X Old w 737X

Eng Buyer APU APU

Prod Mech. New G4 Old G4

Controller Eng

Alignment among functions is poor - support not

consistent with lean structure

58
Spaghetti Chart Advice
• Don’t just draw one line for a route; draw a line for every trip
• Color code to distinguish different people or products
• Look for differences by time of day, person, job function, etc.
• Assign someone to do Spaghetti Chart as you walk the process

Use whatever is useful to aid communication and understanding.

59
Advanced Improvements Brainstorming
There are many Breakthrough Tools that can be applied to improve the Current
State VSM following identification of waste…
These could include:
• Pull systems
(Direct, Signal, Supermarkets)
• Rearrange for optimized flow
• Visual management
• Cross-training
• Setup reduction
• Scrap reduction
• Standardized procedures
- Takt Time/Cycle Time analysis
- Standardized work
- Process capacity table

Now let’s look at Future State Maps . . .

60
Future State Value Stream Map

61
Future State Value Stream
(Also Referred To As “To-Be” State)

• Produce to customer demand

• Develop continuous 1-piece flow
• Control production with pull systems
• Send the customer schedule to only one process (the pacemaker)
• Level the production mix at the pacemaker
• Level the production volume at the pacemaker
• Shorten changeovers and produce in small lots upstream from
the pacemaker

62
Future VSM State Checklist
 Customer Specific
 New Critical Path
 Cellular Product Movement
 Optimized Tasks
 Improved Metrics
 New Material Flow
 New Info. Flow
 Connected Info. Source
 Balanced Mach/Oper Times
 Surpassed Takt Times
 Kaizen Events
 Lower Inventory
 Less Wait Times
63
Priority Criteria Matrix
A = HIGH impact, implement NOW
B = LOW impact, implement NOW
Impact C = HIGH impact, implement LATER
Low High D = LOW impact, implement LATER
E = Out of Scope
Now B A
Time

Later D C

E = Out of Scope

64
Action Items Development For Future State Mapping

Action Items to Achieve Future State

Starting Lead Time = 48.0 hours
Item # Action Item Impact on L.T. Item Priority

1 Setup Reduction in Area “B” - 2.0 hours #3

2 Rearrange flow to reduce waiting - 4.0 hours #2
3 Pull Systems to reduce queues - 12.0 hours #1

Future Lead Time = 30.0 hours

65
Implementing The Future State 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, step-by-step
• Measurable goals
• Clear checkpoints with named reviewer(s)
• Review changes with management
• Schedule change in flow and process
• Implement
• Training and follow-up

66
Vision State Map

• Create a Vision State Map

• 2-3 year vision of improvements
• The “Perfect Value Stream”
• Review advanced improvements
• Compressing the Value Stream and introducing
“right-sized” technologies
• Investigating “new” technologies
• Utilizing all “best-practices”

67
Hints: When You Lead A VSM Activity...

Following is a list of items useful to step through when you lead a VSM activity on
your project:
• Describe Current State Icons
- Use board examples or simulate a flow
• Using the flow analysis tools, have the Teams Capture Flow
- Step 1: (Flow) Only
- Optional: Use VSM Handpad for team practice
- Use Post-it® notes for Process Blocks and WIP Blocks
- Assist as required
• Describe metrics
• Have team collect and apply metrics and complete Steps and 3
• Brainstorm Issues using Post-its®
- Different color Post-it®
• Write with markers so issue can be seen

68
VSM Summary Concepts

5 Steps
1. Map “as is” process
2. Prioritize waste opportunities
3. Brainstorm and develop waste removal plan with action items
4. Map future state and deploy
5. Create a 2-3 year “vision state”

69
Objectives Review

The participant should now be able to:

• Understand the hierarchy of “types” of process mapping tools
• Understand the relationship between “types” of process mapping
tools
• Describe the meaning of value
• Utilize Value-Added Flow Analysis and Value Stream Mapping to
identify Value-Added and Non-Value-Added steps in a process

70
Appendix

Current State Mapping

Guidelines
VSM Hand Pad
Value Stream Map for: Date:
Current-State
Map Icons
Process
Customer
or Source

I
Inventory Data Box

O
Order WIP Shipments

Push Material

Manual Information

Electronic Information

Finished Goods Flow

Future-State
Map Icons

Improvements Direct Pull

Make or Buy
Signal Pull Kanban

Move Kanban
Kanban Post

Buffer Stock Supermarket

FIFO

Load Leveling First-In

First-Out

72
Waste Map

Component Activity Analysis

g
sin

e
e
lin

nc
ct
es

ag
lay
pe
Operation Action Study

nd

sta

e
oc

or

Tim
Ins
Ha

De
Pr

Di
St
Step Description Remarks
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Team
Date Comments

73