Lean Management

Value Stream Mapping Process

 Learning Objectives

By the end of this lesson, you will be able to:

Overview of Value Stream Mapping (VSM)

VSM principles and Suppliers, Inputs, Process, Outputs, and

Customers (SIPOC) process map

VSM review in current and future state

Implementation and excellence road map

 Introduction

To reduce the stress at workforce, the lean system implementation needs discipline of high
degree.

For this,
• Operators and supervisors require high level of co-operation and trust between themselves.
• When a lean system is implemented, reward systems and classification of labor must often be
revamped.
• Changes in existing layouts are required.
• Extended periods of daily production schedules in high volumes and make-to-stock
environments must be stable.
• Small lot sizes must be used for the inventory advantages of a lean system.
• Frequent small shipments of purchased items that cannot be arranged with the suppliers and
large inventory savings for these items cannot be realized.
 What Is Lean Process?

A process is lean when it:

• Is driven by customer needs and mainly focuses on activities that the customer is willing to pay for
• Runs smoothly without delays or interruptions
• Produces only what is needed and when it is needed
• Has standardized and automated tasks and eliminates unnecessary activities

Create flow; Seek

Define value from the eliminates the perfection via
customer’s perspective root causes continuous
of waste improvement

Create pull
Map the
where flow
value
is difficult
stream
to achieve
 Benefits of Value Stream Mapping

Important tool for lean management implementation to make

processes and problems visible

Builds the basis for the improvement plan and having languages common

Highlights the Suppliers, Inputs, Process, Outputs and Customers

Important qualitative tool for identifying and removing waste

Value Arranges the organization’s processes by creating a sense of

Stream ownership and teamwork
Mapping
Necessitates planning for the current state, future state, and
implementation

Covers the entire value chain starting from raw material’s receipts to
finished goods delivery
Helps you understand and visualize linkage between the material and
the information flow
Focuses on maximizing the overall flow
 Value Added and Non-Value Added Process

Non-Value add is any activity that

Value add is any activity the consumes time and resources
customer values and is willing without adding value to the service
to pay for. For value add, a Value Add Non-Value Add or product for the customer. These
process step should have activities should be eliminated,
these points covered reduced, simplified, or integrated.

Does the customer really care?

If necessary, check legal/regulatory
requirements
Does it bring any change?
If unnecessary, check waiting time,
Is it done right at the first attempt? unnecessary processing, errors or
defects, motion (people), transportation
of products, and underutilized people
Is it required by law and regulations?
and inventory
 VSM Principles

Strategic Planning Activity

Diagnostic Tool • Assists to prioritize opportunities
Shows the hidden symptoms for required improvement
of bigger problems • Helps in preparing an
implementation plan

Macro-Level - Visual Relevant Metrics

Representation • Lead time:
• Flow of information Throughput/Turnaround/Flow
• People and material flow time
• Every process block depicts a • Cycle time: Touch/Process time
handoff or a break in the timeline
 SIPOC Process Map

Outputs Customers
The products or services that are O C The recipient of the
generated from the process output from the process

Inputs
Required materials, Process
resources, or data to I P A structured set of activities which
execute your process transforms a set of inputs into specified
outputs and providing value to customers

Suppliers
S Provides inputs to your process
 Lean Glossary of Terms

• Cycle Time: It is the time to finish a single unit of production.

• First Time Through: It is the percentage of units completed and met the quality criteria the first time
that they are processed.

• Batch Size: It is the size of a particular batch processed as a single unit.

• Demand: It is the average number of units complete per shift.

• Takt time: It is the average time between the start of production of one unit and start of production
of the next unit.

• Throughput Time: It is the measure of the time required for a material, part, or sub-assembly to pass
through the process of manufacturing followed by the release of an order to the manufacturing floor.

• Value Added Ratio: It is the total VAT/throughput time.

• Process Ratio: It is calculated as total process time/throughput time.

 Challenges in Current Process

1. Lots of waiting and travel time

2. Lack of communication and skilled personnel
3. Too many handoffs, approvals, and workarounds
4. Lots of duplication of work
5. Lots of instances where work flow is on hold or lost (dead zones)
6. Broken interfaces which becomes ineffective or non-existent interfaces
7. Lost time due to employees looking for work and/or re-work looping back to correct errors
8. Low CT/LT ratio due to lots of waiting
9. Different prioritization rules with respect to different departments
10. High WIP due to waste in process like bottlenecks/backlogs
11. High lead time due to slow throughput/turnaround
 Conceptual Overview

Charter / Scope 1. VSM Charter and Scope

• Process boundaries or scope
• SIPOC
Product • Roles and responsibilities
family
2. Start with a single product family

Current state
drawing 1. Current and Future State
2. Collect data on process and system
3. Being specific about how many finished
Future state part numbers in family and how much is
drawing demanded and how often.
4. Verify and repeat the process if needed

Work plan and

implementation Develop implementation plan
 Value Stream Mapping Charter

• Vision • Benefits Realization

• Mission • High Level Scope
• Strategic Plan • Process Champion
• Improvement Objectives • Team Members
• Drivers • Team Leaders
• Critical Success Factors • Facilitators
• Process Description • Roles and Responsibilities
• Start or End Date • Risk and Tolerance
• Management Information System
 Define Boundaries

• Prior to launching on VSM, you can define the start and end points
• Create as-is physical map: How and where from inputs to outputs
• Create as-is geographical map: Areas where processes are performed
• Add process control information flow to as-is physical map

• A logical startup point where the inputs cannot be returned to the preceding step.

• Capturing steps of how the processes are actually performed which may include workarounds, re-
work, informal activities, feedback loops.

• In lean management, we generally define work-in-process that is something you cannot ship to the
customer or return to the supplier.

• Add as-is process metrics based on counts and rates

• Number of parts required by the customer
• Number of operators and machines available to work on the parts required by the customer
• Rates of the processes required to work on the parts
 Value Stream Mapping Boundaries

Current State
• Describe boundaries/value
• Analyze tasks/flows of material and information between them and resources for each task
and flow
• Create map for the current

Future State Design

• Visualize ideal state and design map for the future state
• Recognize value added and waste from current state
• Re-configure the process to eliminate waste/add value

Implementation Plan
• Build action plans and track the actions plans
 Boundary: Start and End Points Example

START

Inputs Identify
Review
Market Research Define Go-to Risks,
Objectives,
Data - Competition Market Assumptions,
Goals &
Drivers and
Firm’s Strategy Strategies
Constraints

END

Outputs
Conduct What
Evaluate Approve Go-to Marketing Plan
If
Scenarios Market Plan KPI
Scenarios
Team
16
 Material and Information Flow

• Utilize the scope document to map the product/service flow.

• Map the entire value stream by performing a walkthrough of the actual process and then
collect information by starting with the final step and then walk backwards based on
customer’s perspective. Now, outline all the major process blocks and remove activities
occurring before a handoff.

• Stay focused on the norm to be followed by using the 70% rule to avoid exceptions

• Retrieve information from workers to obtain data of cycle time and lead time

• Use stopwatch and avoid relying on information which is not personally seen

• Use pencil and draw by hand

 Resource Identification

• VSM uses strategies in such a manner that the resultant implementation plan has a
tactical component.

• Companies should nominate a VSM head who has the Top Management support with
power to influence changes.

• The team composition should have:

• Team and Process Leaders
• Team members having in-depth process knowledge
• Facilitators or management consultants
 Data Collection

• Size of packs at each process • List of activities

• Number of working hours and breaks • Information about department performance
• Inventories based on location and • List of IT systems used
size • Number of people/operators
• List of operations scheduled per week • Information on current backlog/WIP
• List of process cycle times • Information on demand rate
• List of overtime per week • Information on work time
• Number of instances of rework • Information on prioritization rules
• Number of scraps • Quality percentage (first pass yield)
• Information on downtime • Information on batch size
• Demand rates by process (Takt Time) • Information on run frequency
• Number of product variations at each • Number of equipment available
step
• Cycle (touch) time (observed & effective)
• List of shipping and receiving
schedules • Changeover time and frequency
 Design Future State: Blueprint

• Prepare a blueprint on how the plant will operate in future

• Apart from the waste/nonvalue add activities:

• Understand if the process followed currently at each stage is necessary
• Identify the impact when superfluous tasks are removed
• Check if the process can be rearranged efficiently like a different flow layout or a new
transport route can be introduced

• Validate all the demands of the customer

• Map the future state material and information flow

• Plan future state process flow

• Calculate the total product cycle time

• Detail all the off-line activities and outline a detailed implementation plan
 Define Customer’s Demand: Example

• Demand = 3200 pieces per week

• Type L = 1000 pieces per week
• Type S = 2200 pieces per week

• Plant Operation Schedule: 1 shift per day

• Packaging Per Day = 60 pieces per tray

• Shipment to Customer = 1 truck per day

• Shipment to Supplier = 1 truck per week