An Overview & “Teaser” - ASQ Orange Empireasqorangeempire.org/wp-content/uploads/2016/04/Adler... · 2016-04-14 · An Overview & “Teaser” Clinic B ASQ Orange Empire Monthly

1 April 2016 – v 1.0

Welcome to

Lean Value Stream Mapping

An Overview & “Teaser”

Clinic B

ASQ Orange Empire Monthly Dinner Meeting

April 11, 2016

Frank G. Adler, Ph.D.

Principal & Managing Partner

Operational Excellence Consulting, LLC

[email protected]

www.operational-excellence-consulting.com

2 April 2016 – v 1.0

Frank G Adler

Nokia Mobile Phones → 1994 – 2005

• Specialist, Global Operations & Supply Chain Development - Finland

• Manager, Operations & Quality Development - Fort Worth, TX

• Director, Lean Six Sigma & Quality Americas - Irving, TX

• General Manager, Mexico Operations - Reynosa, Mexico

• General Manager, US Operations - Fort Worth, TX

Magellan Navigation → 2005 – 2010

• Vice President, WW Quality & Customer Support - San Dimas, CA

Angelica Corporation → 2010 – 2011

• Corporate Director, West Coast - Operations, Logistics & Services

Operational Excellence Consulting (OEC) → 2009 – …

• M.S. Mathematics & Physics, Freie University of Berlin – Germany

• Ph.D. Operations Research & Industrial Economics, Helsinki University

of Technology – Finland

mailto:[email protected]



http://www.operational-excellence-consulting.com/





3 April 2016 – v 1.0

Agenda:

1. Discuss the Five Lean Management Principles and The

Seven Lean Wastes.

2. Review some of the key benefits and objectives of Value

Stream Mapping.

3. Discuss an effective step-by-step approach to Value Stream

Mapping.

General Objectives & Key Learning Points

4 April 2016 – v 1.0

Lean Management – Lean Thinking

“One of the most noteworthy accomplishments in

keeping the price of Ford products low is the gradual

shortening of the production cycle. The longer an article

is in the process of manufacture and the more it is

moved about, the greater is its ultimate cost.”

Henry Ford, 1863 – 1947

“All we are doing is looking at the time line, from the

moment the customer gives us an order to the point when

we collect the cash. We are reducing the time line by

reducing the non-value added activities.”

Taiichi Ohno, 1912 – 1990

5 April 2016 – v 1.0

Lean Management – Three Types of Process Activities

Non-Value Added

Business-Value Added

Value- Added

Customer is not willing to

pay for these activities

and they should be

eliminated, e.g. rework.

Customer are willing to

pay the organization

for these activities, e.g.

assembly.

Customers are not willing

to pay for these activities,

but the organizations

deems these activities as

necessary, e.g. preventive

maintenance.

Many process have

less than 20% value-

added activities.

6 April 2016 – v 1.0

Lean Management – Value-Added Work

Three criteria for Adding Value

1. Customer wants you to do it (or will pay for it)

2. The material / information is being processed or transformed into final

products or services

3. It is done right the first time

Key Lean Objectives:

Reduce Lead Time

→ Eliminate or Reduce Non-Value-Added Activities

7 April 2016 – v 1.0

Waste Typical Manufacturing Definitions Translation to Services Examples

Transportation An activity that moves materials or products more

than is required.

Handoffs or reviews, interoffice movement of

materials, offsite storage transport

Inventory Product in storage or waiting for further actions to

be carried out. All parts not immediately needed.

Requirements, Documents, WIP, Assets sitting

on the shelf (e.g. laptops, air cards, people),

excess emails

Motion Unnecessary movement of people, examples being

long distances between workstations, double-

handling of materials, poor tool placement.

Unnecessary travel, hunting for information or

people, manual workflow

Waiting People or product waiting for processes to finish or

materials/tools to arrive. All inventory build up or

delay between value adding steps for any product.

Employee idle time, waiting on responses,

approvals, or service, delays in processing

(including client). All time between one value

adding step and the next.

Over

Production

Producing product that has not been ordered. This

is the worst offender of all as it includes some

elements of all of the other wastes.

Duplicative data entry, making extra copies,

producing data or reports that aren’t needed,

starting projects that won’t be moved forward.

Over

Processing

Activities carried out on materials/products which

do not add value

(more commonly referred to as Over processing)

Unnecessary extra steps, transactional

activities, or approvals. Excessive reporting,

unproductive meetings, expediting, firefighting,

changing priorities

Defects /

Rework

Making products that are not suitable for sale, or

require reprocessing to bring them up to standard

Client billing errors, defective client-server

systems, incorrect data entry, incomplete

requirements

Lean Management – The 7 Lean Wastes or “Muda”

8 April 2016 – v 1.0

Lean Management – Value vs. Non-Value Added Work

Work Time

Wait Time

Walking Time

A Typical Process or Process Step

It is not uncommon, when analyzing a process

or process step, to recognize that 60 to 70% of

the total work time is actual non-value added

work – waiting, transportation, walking, and

unnecessary motions.

Organizations often focus on the value added

activities to further improve productivity and

efficiency, ignoring the often huge opportunities

if they would focus on eliminating non-value

added activities.

Process

Start Process

End

9 April 2016 – v 1.0

Lean Management – The Five Lean Principles

Define Value - Specify value from the Customer

perspective.

Map Value Stream - Identify the value stream for

each product or service and challenge all of the

non-value adding steps (wastes) currently

necessary to create and deliver this product or

service. Add nothing than value.

Create Flow - Make the product or service creation and delivery process flow

through the remaining value-added steps.

Establish Pull – Introduce pull between all process steps where continuous flow

is possible.

Pursuit Perfection – Manage toward perfection so that the number of steps and

the amount of time and information needed to create and deliver this product or

service is optimized.

10 April 2016 – v 1.0

Value Stream Mapping – Definition & Benefits

• A Value Stream represents the sequence of activities required to design, produce, and deliver a product or service to a Customer, this includes the flow of material and information.

• Value Stream Mapping is a Lean Management technique used to analyze the flow of materials and information currently required to bring a product or service to a Customer.

• A sophisticated flow charting method that uses symbols, metrics, and arrows to help visualize processes and track performance. This method helps determine which steps add value and which do not.

• Three Types of Value Streams

– Full Value Stream - A good or service is requested by and delivered to an

external Customer

– Support Value Stream - Examples include annual budgeting process;

recruiting, hiring, and onboarding process; and performance review

process

– Value Stream Segment - In general a part of a Full Value Stream, e.g.

product design, new product introduction, and service delivery.

11 April 2016 – v 1.0

Value Stream Mapping – From Function to Process

Leadership Team

Customer

Requirements

=

INPUTS

Customer

Satisfaction

=

OUTPUTS

F

U

N

C

T

I

O

N

1

F

U

N

C

T

I

O

N

2

F

U

N

C

T

I

O

N

5

F

U

N

C

T

I

O

N

6

F

U

N

C

T

I

O

N

3

F

U

N

C

T

I

O

N

4

The Focus is on the Customer & Value Creation

Value Stream #1

Value Stream #2

Value Stream #3

Value Stream #4

12 April 2016 – v 1.0

Value Stream Mapping – The Development Process

1. Develop a Charter & Establish the Team

2. Document Current State → Kick-off

3. Document Current State → First Value Stream Walk

4. Document Current State → Map Layout

5. Document Current State → Second Value Stream Walk

6. Document Current State → Map Details

7. Document Current State → Information Flow

8. Document Current State → Map Summary

9. Document Current State → Analyze Current State

10. Design Future State

11. Create Transformation Plan

12. Manage Execution

13 April 2016 – v 1.0














14 April 2016 – v 1.0

Value Stream Mapping – Develop a Charter

The charter serves as planning, communication, alignment, and

consensus building tool.

Key element of a Value Stream Mapping Charter include:

• Scope → Value Stream – Specific Conditions – Demand Rate –

Trigger – First Step & Last Step – Boundaries & Limitations –

Improvement Time Frame – …

• Current State Issues & Business Needs

• Measurable Target Conditions

• Benefits to External Customers & Benefits to Business

• Accountable Parties

• Logistics

• …

15 April 2016 – v 1.0

Value Stream Mapping – Establish the Team

Value Stream Mapping teams must include leaders who can influence and authorize

change along the value stream to be improved.

• Executive Sponsor → An individual who oversees the entire value stream. May or

may not participate in the event.

• Value Stream Champion / Owner → An individual who oversees a significant part of

the value stream and is accountable for the performance of the entire value stream.

• Event Facilitator → An individual neither overseeing nor working in the value

stream, serving as teacher, timekeeper, skilled change agent, provocateur, … .

• Logistics Coordinator → An individual responsible for booking the room, ordering

lunches, organizing supplies, … .

• Briefing Attendees → Individuals (no more than 5 to 7) participating in the daily

briefing sessions to ensure common understanding of the current state, and

alignment of the organization around the future state value stream map and

transformation plan.

• Mapping Team Members → Individuals (no more than 10) from all key functions

across the value stream participating in the event full-time.

16 April 2016 – v 1.0














17 April 2016 – v 1.0

Value Stream Mapping – First Value Stream Walk

The First Value Stream Walk focuses on obtaining basic information:

• The processing steps & activities that form the value stream

• The sequence of these processing steps & activities

• The functions performing each processing step & activity

• The key inputs and outputs of each processing step & activity

Talk with the people that perform the processing steps & activities to get

first a high-level understanding of what is being done to transform an

input to an output.

This is the time for learning, not judging.

Everyone participates in the interviewing process and takes notes.

A critical step in creating a current state value stream map – “Going to the Gemba.”

18 April 2016 – v 1.0














19 April 2016 – v 1.0

Value Stream Mapping – Map Layout

The objective is to build a rudimentary view of the value stream.

• Customers & Customer Requirements (TOP 3 – 5)

• Suppliers & Supplier Constraints (TOP 3 – 5)

• Processing Steps – “Verb-Plus-Noun” (5 – 15 Steps)

• Function(s) performing each processing step

• Sequence & Numbering of all Processing Steps

Value Stream Mapping is as much art as it

is science – as long as the art doesn’t

interfere with the science!

20 April 2016 – v 1.0

Value Stream Mapping – Process Icons

21 April 2016 – v 1.0

Value Stream Mapping – May Layout Example

Customer

Function A

2

Process 1

Function B

4

Process 2

Function D

1

Process 3

Function E

2

Process 4

Supplier

22 April 2016 – v 1.0














23 April 2016 – v 1.0

Value Stream Mapping – Second Value Stream Walk

The Second Value Stream Walk focuses on gaining a deeper understanding about

how the value stream currently performs and identify significant barriers to flow:

• Assess value stream performance in terms of TIME – Takt Time, Lead Time,

Cycle Time, Processing Time, Available Time, Changeover Time, …

• Assess value stream performance in terms of QUALITY – % Complete &

Accurate (%C&A)

• Assess value stream performance in terms of RESOURCES – # of People

• Assess value stream performance in terms of INVENTORY – Raw Materials,

Work-in-Process (WIP), Finished Goods

• Assess Process Efficiency, e.g. Conversion Rates of RFPs, and Work

Triggers

• Identify Barriers to Flow !!!

Collect or verify your own data !!

24 April 2016 – v 1.0

Value Stream Mapping – Making Work Flow

• Create Flow - Make the product or service creation and delivery process flow

through the remaining value adding processing steps.

• Ideally, the “work item” passing through the value stream never stops. It

moves effortlessly from person to person, work team/station to work

team/station, department to department, … without hang-ups, hiccups, or

(unnecessary) delays.

• Ask yourself – “What is preventing the lead time from being the same as the

processing time for each and every processing step or activity?”

25 April 2016 – v 1.0

Value Stream Mapping – Barriers to Flow

Barriers to Flow include:

1. Quality Issues

2. Shared Resources & Inaccessible Staff

3. Task-switching

4. Large Batch Sizes – Raw Material Purchasing, Order Processing, …

5. System and Equipment Downtime & Performance Issues

6. Prioritization Rules

7. Searching & Waiting for Parts, Information, Requirements, …

8. Long Set-up & Changeover Times

9. Poor Work Area Layout → Excessive Motion & Transportation

10. …

26 April 2016 – v 1.0














27 April 2016 – v 1.0

Value Stream Mapping – Map Details

The objective is to add now the information obtained from the second value stream

walk to our value stream map.

• Add performance in terms of TIME – Takt Time, Lead Time, Cycle Time,

Processing Time, Available Time, Changeover Time, …

• Add performance in terms of QUALITY – % Complete & Accurate

(%C&A)

• Add performance in terms of INVENTORY – Raw Materials, Work-in-

Process (WIP), Finished Goods

• Add RESOURCES – # of People

• Add Barriers to Flow !!!

• …

28 April 2016 – v 1.0

Value Stream Mapping – Material Icons

29 April 2016 – v 1.0

Value Stream Mapping – May Details Example

Customer

Function A

2

Process 1

Function B

4

Process 2

Function D

1

Process 3

Function E

2

Process 4

Supplier

45 Items

LT = 16 Hours

PT = 5 Minutes

%C&A = 90%

LT = 8 Hours

PT = 10 Minutes

%C&A = 75%

LT = 12 Hours

PT = 15 Minutes

%C&A = 99%

LT = 16 Hours

PT = 25 Minutes

%C&A = 90%

75 Items

65 Items 75 Items

30 April 2016 – v 1.0














31 April 2016 – v 1.0

Value Stream Mapping – Information Flow

The objective is to visually demonstrate the technology-related disconnects,

voids, and redundancies that exist in many value streams.

• Identify all IT systems and applications in use across the value stream

• Connect IT systems and processing steps with arrows – Arrow head

indicates the direction of the information flow

• Lightning bolt-type arrows indicate automated information flow from one

IT system to another, e.g. auto-upload

• Identify over-processing, errors, and operational complexity caused by

system disconnects, gaps, and redundancies

• …

32 April 2016 – v 1.0

Value Stream Mapping – Information Icons

33 April 2016 – v 1.0

Value Stream Mapping – Information Icons

34 April 2016 – v 1.0

Value Stream Mapping – Information Flow Example

Customer

Function A

2

Process 1

Function B

4

Process 2

Function D

1

Process 3

Function E

2

Process 4

Supplier

45 Items

LT = 16 Hours

PT = 5 Minutes

%C&A = 90%

LT = 8 Hours

PT = 10 Minutes

%C&A = 75%

LT = 12 Hours

PT = 15 Minutes

%C&A = 99%

LT = 16 Hours

PT = 25 Minutes

%C&A = 90%

IT - 1 IT - 2 IT - 3

75 Items

65 Items 75 Items

35 April 2016 – v 1.0














36 April 2016 – v 1.0

Value Stream Mapping – Performance Indicators

Process Efficiency Ratio (PE)

Process Activity Ratio (AR)

Rolled % Complete & Accurate

where n is the number of processing steps.

Total Labor Processing Time

• The average time it takes to actually perform the entire process - from start to

finish - if one is able to work on an item uninterrupted.

𝐴𝑅 = 𝑇𝑜𝑡𝑎𝑙 𝑃𝑟𝑜𝑐𝑒𝑠𝑠𝑖𝑛𝑔 𝑇𝑖𝑚𝑒

𝑇𝑜𝑡𝑎𝑙 𝐿𝑒𝑎𝑑 𝑇𝑖𝑚𝑒× 100%

𝑃𝐸 = 𝑇𝑜𝑡𝑎𝑙 𝑉𝑎𝑙𝑢𝑒 𝐴𝑑𝑑𝑒𝑑 𝑇𝑖𝑚𝑒

𝑇𝑜𝑡𝑎𝑙 𝐿𝑒𝑎𝑑 𝑇𝑖𝑚𝑒× 100%

𝑅𝑜𝑙𝑙𝑒𝑑 %𝐶&𝐴 = %𝐶&𝐴1 × %𝐶&𝐴2 × ⋯ × %𝐶&𝐴𝑛

37 April 2016 – v 1.0

Value Stream Mapping – Other Icons

38 April 2016 – v 1.0

Value Stream Mapping – Map Summary Example

Customer

Function A

2

Process 1

Function B

4

Process 2

Function D

1

Process 3

Function E

2

Process 4

Supplier

45 Items

LT = 16 Hours

PT = 5 Minutes

%C&A = 90%

LT = 8 Hours

PT = 10 Minutes

%C&A = 75%

LT = 12 Hours

PT = 15 Minutes

%C&A = 99%

LT = 16 Hours

PT = 25 Minutes

%C&A = 90%

5 Minutes

16 Hours

10 Minutes

8 Hours

15 Minutes

12 Hours

25 Minutes

16 Hours

Total Lead Time = 32 Hours

Total Processing Time = 55 Minutes

Total Value-Added Time = TBD

Process Activity Ratio = 2.86%

Process Efficiency Ratio = TBD

Rolled %C&A = 60.1%

Total Labor Processing Time = 55 Minutes

IT - 1 IT - 2 IT - 3

75 Items

65 Items 75 Items

39 April 2016 – v 1.0














40 April 2016 – v 1.0

Value Stream Mapping – Focus of the Future State

During the current state analysis and future state development activities, the

team shifts now from fact-finding (current state) to the discovery, innovation and

creativity phase (future state).

In terms of priorities, the mapping team should follow the following general rule:

1. Remove unnecessary non-value adding activities

2. Reduce the work effort (or need) to perform necessary non-value adding

3. Find ways to convert todays necessary non-value adding to unnecessary

non-value adding in tomorrow's environment

4. Reduce the work effort to perform value adding activities

Creativity before Capital !!!

41 April 2016 – v 1.0

Value Stream Mapping – Common Findings

Loopbacks No documented standard work

Unnecessary handoffs Excessive inspection (review, approval,

audits, …)

Rework due to errors and lack of clarity Overspecialization of staff

Batching Existing technology not fully leveraged

Functions missing or getting involved too

early or too late in the process Underutilization of skills

Redundant activities Compliance overkill

High variation in how work is performed Delays due to juggling multiple

responsibilities

Push and overburden …

Based on our experiences in leading and facilitating Value Stream Mapping

events and activities, common non-value adding activities and improvement

opportunities include:

42 April 2016 – v 1.0

Value Stream Mapping – Kaizen Events or “Bursts”

Raw Material Supplier

Tues. + Thurs.

250 ft rolls

TOP 1-3

Customer

7.5k pcs/day -- 2.5k red -- 5.0k green 25 pcs/box

1X Daily

TOP 1-3

CUTTING

C.T. – 1.5sec C.O – 0 Up-Time – 75% 2 shifts 25,200 sec avail.

PRINTING

C.T. – 2.5sec C.O – 65min Up-Time – 95% 2 shifts 25,200 sec avail

X 3

BINDING

C.T. – 4.0sec C.O – 25min Up-Time – 55% 2 shifts 25,200 sec avail

X 4

SHIPPING

Staging

4.5 days 0.8 days 0.2 day 2.0 days

60 s 25 s 45 s % PE = 0.07 % VA

NVA

Production Planning

MRP

30-60-90 Days Forecast 6-weeks

Forecast

Weekly Schedule Daily Ship

Schedule

Daily Orders

I I I I

4,500 R 1,500 G

600 R 900 G

8,500 R 6,500 G

3 Rolls 4.5 Days

Rapid

Changeover

Kanban

Scheduling

Kanban

Scheduling Uptime

Improvements

Standard

Work

43 April 2016 – v 1.0

Value Stream Mapping – Performance Targets

Key Performance

Indicator (KPI)

Current State Projected Future

State

Projected %

Improvement

Total Lead Time 30 Days 10 Days 66.7%

Total Cycle Time 480 Minutes 440 Minutes 8.3%

Total Processing Time 125 Minutes 100 Minutes 20.0%

Total value adding Time 60 Minutes 80 Minutes 33.3%

Process Efficiency 0.42% 1.25% 312.5%

Rolled Throughput Yield 82.3% 92.0% 9.7%

User defined ... … …

Based on the decisions made during the “Design Future State” phase, the Value

Stream Mapping Team should develop a transformation plan (next section) and

calculate the projected future state performance metrics utilizing the performance

matrix initially developed during the “Document Current State” phase (see above).

44 April 2016 – v 1.0














45 April 2016 – v 1.0

Value Stream Mapping – Transformation Plan

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

3Reduce Changeover Time for

Process X by 25%

Perfrom series of Kaizen events to

implement countermeasuresKE Tim Ward Jesse Altadonna

Agreement

Value Stream Mapping Faciltator

Date:

Signature:

Status (0 - 100%)

Value Stream Transformation PlanScheduled Review Dates

July 3, 2015

Signature:Signature:

Date: Date:

Date Last Updated: January 21, 2015

Executive Sponsor Value Stream Owner/Champion

May 29, 2015

May 1, 2015

March 27, 2015

February 27, 2015

January 30, 2015

ChampionExecution

MethodProposed CountermeasureMeasurable Target

Planned Timeline for Execution

November 17, 2014

Frank Adler (Operational Excellence Consulting)

Tim Ward (EVP Supply Chain & Operations Management)

Eva Martinez (Value Stream Manager)

Order Management (from order entry to order delivery)

Future State

Value Stream

Map Block #

Project Leader

Date Created:

Value Stream Mapping Facilitator:

Executive Sponsor:

Value Stream Owner/Champion:

Value Stream Name:

The final step after the transformation plan has been developed, is the briefing to get buy-in from

all relevant leaders about the path forward, the time and resources required to properly execute

the plan, as well as the organization’s ability to absorb the planned changes.

46 April 2016 – v 1.0














47 April 2016 – v 1.0

Value Stream Mapping – Transformation Plan Execution

• Final approval of Transformation Plan within one week of final briefing session

• Executive Sponsor and Value Stream Champion/Owner lead the socializing of

the Future State Map and the Transformation Plan

• Value Stream Champion/Owner

• drives overall implementation & change initiative,

• support work teams working on realizing the future state map,

• troubleshoots roadblocks & obstacles, and

• runs scheduled review meetings.

• Value Stream Champion/Owner also provides periodic updates to Executive

Sponsor (more frequent than review meetings)

• Executive Sponsor remains fully engaged, attends review meetings, monitors

transformation progress, “goes to the gemba”, address policies, resolve

political issues, …

• No Execution – No Improvement !!!

48 April 2016 – v 1.0

Workshop: Lean Management - Value Stream Mapping

Location: Brandman University

16355 Laguna Canyon Road

Irvine, California 92618

Date: April 30, 2016

Time: 09:00 – 04:30

Thank You & Join Us …

http://asqorangeempire.org/