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Value-stream mapping to create value andeliminate muda
Richard Herczeg and Dr. Guru ChadhaASQ Princeton NJ SectionDinner MeetingSep 13, 2017
(c) 2017 Richard Herczeg, Guru Chadha1
Dr. Guru Chadha
2
Dr. Guru ChadhaTransformation Expert. Coach. Facilitator.
Global Project Manager: Transforming Performance, Development, and Learning (2016 to present)
Process Engineer: Lean Practitioner for the Boeing Production Systemnationally for Defense and Commercial Aircraft Production (2009 – 2014)
Director Business Transformation: Deployed and sustained Lean globally(2014-2016)
Senior Manager Business Transformation: Corporate Six Sigma Team(2006-2009)
Quality Systems Engineer: Management System (2002-2006)
Process Improvement Coach: (2013 to present)
(c) 2017 Richard Herczeg, Guru Chadha
D.B.A. and M.S.Quality SystemsManagement, 2012 and 2004
B.E.Mechanical Engineering, 1992
ExecutiveCoaching, 2017-18
3
Richard HerczegProject Manager, Business Analyst, Black Belt, Coach
• 8 year volunteer of ASQ Princeton Section. Roles included Chair (Twice), Education Chair, Program Chair & Treasurer
• 5 year Project Manager at IEEE HQ - leading efforts on the design, development and implementing of learning events for local IEEE sections at Global level
• 17 years at Johnson & Johnson Consumer, in area of Business Process Improvement
• 3 years of experience in Health Care & Manufacturing• B.S. Economics - College of NJ : 1994 • M.B.A in Org. Behavior - Georgian Court University: 2000• M.B.A. in Quantitative Methods - Northcentral University: 2011• Certified Six Sigma Green Belt - Johnson & Johnson: 2002• Certified Six Sigma Black Belt - CSSBB ASQ - 2007• Certified Lean Six Sigma Master Blackbelt - Villanova University: 2010• Project Management Professional (PMP) – PMI : 2010• Certified Business Analyst Professional - CBAP: In Progress
(c) 2017 Richard Herczeg, Guru Chadha
Agenda Lean Methodology / Mindset
VSM Fundamentals
VSM Journey & Gemba: Current State Future State Ideal State
VSM Applications
Utilizing VSM as a key strategic tool
Q&A (Interactive session)
4(c) 2017 Richard Herczeg, Guru Chadha
Process Improvement Methodologies
5
Quality Progress 2002 : How to Compare Six Sigma, Lean and Theory of Constraints. David Nave.
(c) 2017 Richard Herczeg, Guru Chadha
Lean Principles
1. Specify value
2. Map the flow of value
3. Make value flow
4. Establish pull
5. Pursue perfection
Lean is primarily focused on maximizing value flow in the process through the elimination of waste
6(c) 2017 Richard Herczeg, Guru Chadha
Value
CPR:• Will the customer pay for it?• Are we processing / changing form,
fit, and function?• Are we doing it right the first time?
(c) 2017 Richard Herczeg, Guru Chadha
Value
Value-Added (VA):Activities that must be performed to meet customer requirements.
– Submit a proposal– Create a computer program– Create a design– Answer a tech request
Non Value-Added (NVA):Activities that do not contribute to meeting customer requirements.
– Review and Approval– Movement to other organizations– Rework– Waiting in an inbox
Business Value-Added (BVA):Activities that are essential to conducting business, but could be eliminated without impacting the product functionality or service to the customer.
– Order supplies– Update Personnel Records– Maintain copiers, faxes– Prepare Financial Reports
(c) 2017 Richard Herczeg, Guru Chadha
Muda – 8 deadly wastes
9(c) 2017 Richard Herczeg, Guru Chadha
8
1
36
5
2
4
7
Excess production
Transportation
Over-processing
Waiting
Inventory
Defect
Motion
Not utilizing intellect
Tasks done in large batches rather than to match demand (typically leads to inventory)
Maintaining two processes (one for ‘urgent’ and one for ‘normal) increases wait times for ‘normal’ cases
Lack of correct ‘right first time' inputs drives multiple ‘touches’ of file
Hundreds of service requests are backlogged (which also leads to customers waiting)
Employee movement to reach for files
Paperwork delivered from admins desk to manager´s office
Rechecking order accuracy or check-the-checker activities
Experts working low priority case, not listening to SME ideas
Value-StreamStream:• FLOW is a beautiful thing!• Spiritual – in the zone!• Make the flow uninterrupted• Interruptions in the FLOW create problems
(c) 2017 Richard Herczeg, Guru Chadha
Value-Stream Map (VSM)
(c) 2017 Richard Herczeg, Guru Chadha
A VSM is a visual representation of material and information flow for a particular Value Stream.
VSM is hence a graphical tool
Start from the closest point to the customer, and work your way upstream through the various processes.
Process 2 Process 3Process 1
Upstream Downstream
Supplier CustomerInformation
Flow (Right-to-Left)
Process FlowFlow (Left-to-Right)
12
CANALETA VSM
(c) 2017 Richard Herczeg, Guru Chadha
13
SAND,ROCK,CEMENT
va 25 Min. 5 Min. 2 Min. 2 Min. 1 Min. 3 Min. 480 Min 40 Min. nva 0 Min. 0 Min. 0 Min. 0 Min. 150 Min. 375 Min. 0 Min. 0 Min.
30 Feet 1 Feet 1 Feet 0 FEET 2 FEET 10 Feet 0 Feet 10 Feet TWICE TWICE 150 TIMES 150 TIMES 150 TIMES 150 TIMES
STAGE CEMENTCT = 15 Min.
Crew = 1SPACE = 12SQFT
Available Min = 480
Sales Rep
SALES ORDER
LOAD MIXERCT = 5 MinCrew = 1
SPACE= 3 SQFT
Available Min.= 480
Customer
MONTHLY SCHEDULE
CUSTOMERPICKUP
I
= inventory
I
1 Month
MONTHLY PICKUP DAILY
SCHEDULE
LOAD SHAKERCT = 2 MinCrew = 1
SPACE= 3 SQFT
Available Min.= 480
SHAKINGCT = 2 MinCrew = 1
SPACE= 3 SQFT
Available Min.= 480
FORM REMOVECT = 1 MinCrew = 2
SPACE= 2 SQFT
Available Min.= 480
MOVE DRYINGCT = 3 MinCrew = 2
SPACE= 100 SQFT
Available Min.= 480
DRYINGCT = 480 Min
Crew = 0SPACE= 100 SQFT
Available Min.= 480
SHIPPING STAGINGCT = 40 Min
Crew = 2SPACE= 200 SQFT
Available Min.= 480
WEEKLY PICK-UP
SCHEDULE
5 % Waste
300
REMOVE 2 AT AT TIME
NEED 300 BRICKS DAILY TO MEET
DEMAND
300 300
Monthly Pickup, Sales Rep, Scheduling, Operator, Form
Removal , Move to Drying and Staging all done by same 2
People
Kaizen KaizenKaizen
VSM EXAMPLE
(c) 2017 Richard Herczeg, Guru Chadha
Let’s practice how to see
(c) 2017 Richard Herczeg, Guru Chadha
Working as a table team, create a bulleted list of the high-level process steps based on what you see in the video
Create Current State VSM at home (in the interest of time during our session!)
https://www.youtube.com/watch?v=tyeJ55o3El0
VSM as an analytical tool
15(c) 2017 Richard Herczeg, Guru Chadha
Lead Time
Move Wait“Gather
Data”“Create Document"
Cycle Time
Step #1 Step #2 Step #3Input Order
Step #4 Step #5 Step #6
Process Time
VSM is not only a graphical tool but also an analytical tool.
VSM as an analytical tool
16(c) 2017 Richard Herczeg, Guru Chadha
Collect during Gemba Walk: • Cycle time• Changeover/information gathering/log on time• Process reliability (uptime) – computer, phones, copier, etc.• Scrap/Rework/Defect rate (turn backs in the process)• Number of operators performing the step• Batch sizes produced at the step • Working time (minus breaks) – how many shifts?• Pack size – What does the customer want in quantity delivered?• Document the inventory at each process step
VSM as a line balancing tool
17(c) 2017 Richard Herczeg, Guru Chadha
VSM is not only a graphical and analytical tool but also a line balancing tool.
Source: http://www.lean.org
Seeing Opportunities for Improvement during Gemba Walks – 3 M’s
18(c) 2017 Richard Herczeg, Guru Chadha
Source: http://www.lean.org/lexicon/muda-mura-muri
Seeing Opportunities for Improvement during Gemba Walks – 8 deadly wastes
19(c) 2017 Richard Herczeg, Guru Chadha
8
1
36
5
2
4
7
Excess production
Transportation
Over-processing
Waiting
Inventory
Defect
Motion
Not utilizing intellect
Tasks done in large batches rather than to match demand (typically leads to inventory)
Maintaining two processes (one for ‘urgent’ and one for ‘normal) increases wait times for ‘normal’ cases
Lack of correct ‘right first time' inputs drives multiple ‘touches’ of file
Hundreds of service requests are backlogged (which also leads to customers waiting)
Employee movement to reach for files
Paperwork delivered from admins desk to manager´s office
Rechecking order accuracy or check-the-checker activities
Experts working low priority case, not listening to SME ideas
Capturing Opportunities for Improvement – Kaizen Starbursts
20(c) 2017 Richard Herczeg, Guru Chadha
PROBLEM AREA ON the
CHART
Scrap Rate 11%
Set-up 55 minutes
Excessive Inventory 3,450 pcs
Lead-time 5 weeks
Post at the appropriate spot on your Value Stream Map Current State
Prioritizing Opportunities for Improvement –Impact vs. Effort Matrix
21(c) 2017 Richard Herczeg, Guru Chadha
• Root Cause Problem Solving for high complexity problems / opportunities
• Quick Wins for low high complexity problems / opportunities
• Action Plans for implementation
Source: http://www.asq.org
Solutioning for Opportunities for Improvement – ECRSS
22(c) 2017 Richard Herczeg, Guru Chadha
E
ECRSS
• Simplify-Take complexity out of the process
• Eliminate-Identify steps that can be quickly and easily eliminated
•Combine-Combine steps without any negative impact
• Standardize-Create standard work using checklists and templates
•Rearrange-Rearrange steps i.e. change work sequence
C
RS
S
S
S
Let’s practice how to solution
(c) 2017 Richard Herczeg, Guru Chadha
Working as a table team, create a bulleted list of solutions for the wastes that you saw in the video
Create Future State VSM at home (in the interest of time during our session!)
https://www.youtube.com/watch?v=tyeJ55o3El0
VSM as a key strategic tool
24(c) 2017 Richard Herczeg, Guru Chadha
Advanced Lean companies utilize VSM not only as graphical, analytical, and line-balancing tool but also as a key strategic tool
Key VSM’s are directly linked to strategic and tactical plans
Key improvements in VSM’s are synced up with annual business planning and budgeting cycle
In addition to operational metrics, financial metrics are linked and shown on VSM’s
In addition to Current and Future State VSM’s, Ideal State VSM is created to visualize and achieve improvements strategically over 3 – 5 years timeframe
Q&A and Thank You!Richard Herczeg
732-557-1908
Guru Chadha, DBA
609-752-9408
25(c) 2017 Richard Herczeg, Guru Chadha