Value Stream Capacity
Understanding Value Stream Decision
Making
© BMA Inc. 2008. All rights reserved.
Understanding Value Stream Capacity
• The production quantity that can be achieved at each
step in the value stream or production process.
• There are usually one or two production steps (cells,
machines, or work centers) that constrain the flow
through the value stream or business unit.
• We need to identify the production capacity at each step
in the value stream (or production flow) so that we can
understand the flow through the entire process.
• Where is the data required for this analysis?
– On the Value Stream Maps
© BMA Inc. 2008. All rights reserved.
Analyzing the capacity
Productive capacity
Value added activities
Provides value to the customer
Comes directly from customer pull
Non-productive capacity
Non-value-added activities
Change-overs, unplanned maintenance, making for stock,
defects/rework, etc. Also meetings, 5S, improvement activity
Available capacity
Capacity that is not currently being use for productive or non-productive
activities.
© BMA Inc. 2008. All rights reserved.
OEM Value Stream Map
Purchase Forecasts
Supplier
S&OP
Demand Forecasts
Customer
3,000
per Month
Kanban
DATA BOXES
© BMA Inc. 2008. All rights reserved.
Machine
Machine
Machine
Shop
Shop
Shop
Welding
Assembly
Assembly
Assembly
Qty = 30,000
C/T = 70s
Batch = 1500
Set Up = 10,800s
Scrap = 10%
Rework = 20%
Downtime = 15%
Inspection = 10%
Insp Time = 120s
# cells = 8
Crew Size = 4
# of people = 34
Shifts = 1
Qty = 15,000
C/T = 180s
Batch = 600
Set Up = 1200s
Scrap = 5%
Rework = 10%
Downtime = 5%
Inspection=100%
Insp Time = 30s
# cells = 5
Crew Size = 1
# of people = 10
Shifts = 2
Qty = 3,000
C/T = 210s
Batch = 20
Set Up = 600s
Scrap = 0%
Rework = 10%
Downtime = 0%
Inspection=100%
Insp Time = 60s
# cells = 2
Crew Size = 5
# of people = 10
Shifts = 1
Order
Shipping
Shipping
Shipping
Qty = 3,000
C/T = 120s
Batch = 1
Set Up = 0s
Scrap = 0%
Rework = 2%
Downtime = 0%
Inspection=0%
Insp Time = 0s
# cells = 1
Crew Size = 1
# of people = 1
Shifts = 1
Standard Cycle Time
Cycle Time:
C/T
•
•
•
•
How often a part or product is
completed by a process. (or: the time
taken for an operator to go through all
his/her work elements before
repeating them.)
Cycle time includes all processes VA & NVA
Cycle time is measured by tracking it with a stop watch
We match the cycle time to the customer takt time
The process is “under control” if the cycle time is consistent
© BMA Inc. 2008. All rights reserved.
Crew size and number of cells
•
•
Crew size - the number of people in the cell or operation required to
produce to the cycle time recorded on the Value Stream Map
# of cells = the number of cells running in parallel. Similar cells,
working on the same products and performing the same process step.
Crew size = 5
# of cells = 1
© BMA Inc. 2008. All rights reserved.
Calculate the Capacity for the Machine Shop
Purchase Forecasts
Supplier
S&OP
Demand Forecasts
Customer
3,000
per Month
Kanban
DATA BOXES
© BMA Inc. 2008. All rights reserved.
Machine
Machine
Machine
Shop
Shop
Shop
Welding
Assembly
Assembly
Assembly
Qty = 30,000
C/T = 70s
Batch = 1500
Set Up = 10,800s
Scrap = 10%
Rework = 20%
Downtime = 15%
Inspection = 10%
Insp Time = 120s
# cells = 8
Crew Size = 4
# of people = 34
Shifts = 1
Qty = 15,000
C/T = 180s
Batch = 600
Set Up = 1200s
Scrap = 5%
Rework = 10%
Downtime = 5%
Inspection=100%
Insp Time = 30s
# cells = 5
Crew Size = 1
# of people = 10
Shifts = 2
Qty = 3,000
C/T = 210s
Batch = 20
Set Up = 600s
Scrap = 0%
Rework = 10%
Downtime = 0%
Inspection=100%
Insp Time = 60s
# cells = 2
Crew Size = 5
# of people = 10
Shifts = 1
Order
Shipping
Shipping
Shipping
Qty = 3,000
C/T = 120s
Batch = 1
Set Up = 0s
Scrap = 0%
Rework = 2%
Downtime = 0%
Inspection=0%
Insp Time = 0s
# cells = 1
Crew Size = 1
# of people = 1
Shifts = 1
Calculate the employee capacity
Step 1. Calculate the Total Available Employee Time
(#employees x #days x Labor Hrs per shift)
Step 2. Calculate the Employee Productive Time
(Qty per Month x Cycle Time x Crew Size)
Step 3. Calculate the Emp. Productive Capacity Percentage.
(Employee Productive Time / Total Available Time)
Step 4. Calculate the change-over time, scrap & rework time,
downtime, inspection time.
C/O = (quantity/batch size) x Change-over time
Scrap/rework = (Qty produced / (1- (scrap + rework %) ) *
(scrap + rework%) x Cycle Time x Crew Size
D/T = Downtime% x Total Available Time
Inspection= (Total produced + scrap/rework) x Inspection % x
Inspection time
Over-production = OP Qty x Cycle Time * Crew Size
5S & Clean-up = 5S Time x #Employees x #days
Meetings = Meeting Time x #Employees x #days
TPM = TPM Time per day * #days
Step 5. Calculate the Total Non-Productive Time
Sum of Step 4
Step 6. Calculate the Emp. Non-Productive Capacity
Percentage
Total Non-Prod Time / Total Available Time
CELL DESCRIPTION
Employee Productive Capacity
Employee Non-Productive Capacity
Employee Available Capacity
Quantity Required per Month
Quantity Produced in the Cell
Over Production
Unit of Measure
Employee Cycle Time (per Crew)
Maximum Pieces per Hour (per Crew)
Internal Change Over Time Sec
External Change-Over Sec
Labor Hours per shift
# Shifts per day
Average Batch Size
Number of Change-Overs
Scrap Rate
Rework Rate
Scrap/Rework Quantitiy
Downtime %
Inspection %
Inspection Time Sec
5S & Clean Up Time per Day
Meetings & reporting per day
TPM Time per Day
Other Non-Productive - User defined
Other Non-Productive - User defined
Crew Size
# cells
Number of Employees
Machine
Shop
46%
47%
8%
30000
31500
1500
Units
70
51
10800
0
7.50
1
1500
20
10%
20%
13,500
15%
10%
120
600
600
1800
0
0
4
8
34
Step 7. Calculate the Emp. Available Capacity Percentage.
100% - (Prod. Capacity + Non-Prod Capacity)
© BMA Inc. 2008. All rights reserved.
Days per month
20
Machine Shop Capacity - employees
Step 1
Total Employee Time
34 * 20 * 7.5 *3600 seconds
18,360,000 sec
Step 2
Productive Time
30,000 * 70 * 4
8,400,000 sec
Step 3
Productive Percentage
8,400,000 / 18,360,000
46%
Step 4
Non-Productive Time
Change-Over: 20 * 10,800
Scrap/Rework: (31,500 / 70%) * 30% * 70 * 4
Downtime: 15% * 18,360,000
Inspection Time: (31,500+13,500) * 10% * 120
Over production: 1500 * 70 * 4
5S & Clean Up: 600 * 34 * 20
Meetings & reports: 120 * 34 * 20
TPM: 1,800 * 20
216,000 sec
3,780,000 sec
2,754,000 sec
540,000 sec
420,000 sec
408,000 sec
408,000 sec
36,000 sec
Step 5
Total Non-Productive Time
8,562,000 sec
Step 6
Non-Productive Percentage
8,562,000 / 18,360,000
47%
Step 7
Available Capacity
100% - (46% + 47%)
7%
© BMA Inc. 2008. All rights reserved.
Machine Shop Capacity
EMPLOYEE
CAPACITY
CELL DESCRIPTION
Employee Productive Capacity
Employee Non-Productive Capacity
Employee Available Capacity
Quantity Required per Month
Quantitiy Produced in the Cell
Over Production
Unit of Measure
Employee Cycle Time (per Crew)
Maximum Pieces per Hour
Internal Change Over Time Sec
External Change-Over Sec
Labor Hours per shift
# Shifts per day
Average Batch Size
Number of Change-Overs
Scrap Rate
Rework Rate
Scrap/Rework Quantitiy
Downtime %
Inspection %
Inspection Time Sec
5S & Clean Up Time per Day
Meetings & reporting per day
TPM Time per Day
Other Non-Productive - User defined
Other Non-Productive - User defined
Crew Size
# cells
Number of Employees
Days per month
© BMA Inc. 2008. All rights reserved.
Machine
Shop
46%
47%
8%
30000
31500
1500
Units
70
51
10800
0
7.50
1
1500
20
10%
20%
13,500
15%
10%
120
600
600
1800
0
0
4
8
34
20
MACHINE
CAPACITY
CELL DESCRIPTION
Machine Productive Capacity
Machine Non-Productive Capacity
Machine Available Capacity
Quantity per Month
Quantitiy Produced in the Cell
Over Production
Unit of Measure
Machine Cycle Time
Change Over Time
Machine Hours per Shift
# Shifts per day
Average Batch Size
Number of Change-Overs
Scrap Rate
Rework Rate
Scrap/Rework Quantitiy
Downtime %
5S & Clean Up Time per Day
Meetings & reporting per day
TPM Time per Day
Other Non-Productive - User defined
Other Non-Productive - User defined
# Machines per Cycle
Number of Machines
Days per month
Cell output is driven by Employee
Time rather than Machine Time.
There is more machine capacity
than employee capacity
Machine
Shop
31%
35%
33%
30,000
31,500
1,500
Units
30
10800
8
1
1500
20
10%
20%
12,858
15%
600
120
9,600
0
0
2
10
20
Capacity Calculations when you have
Multiple Product Families
Calculate the weighted average of the cycle time, change-over, etc.
WEIGHTED AVERAGE CALCULATION
PRODUCT FAMILY TOTAL
Quantity Required per Month 10,500
Employee Cycle Time (per Crew)
131
Total Cycle Time 5,520,000
Internal Change Over Time Sec
8,293
External Change-Over Sec
0
Average Batch Size
375
# Batches
28
Total Internal 928,800
Total External
0
Total Change Over Time 928,800
Scrap Rate
13%
Rework Rate
18%
Total Scrap
1,514
Total Rework
2,257
Total Scrap & Rework
3,771
Inspection %
10%
Inspection Qty
1,050
Inspection Time Sec
91
Total Inspection Time 384,000
Crew Size
4
© BMA Inc. 2008. All rights reserved.
Product
Family A
2,500
240
2,400,000
10,800
0
400
7
302,400
0
302,400
20%
20%
625
625
1,250
10%
250
120
120,000
Product
Family B
5,000
120
2,400,000
5,400
0
400
13
280,800
0
280,800
10%
15%
556
882
1,438
10%
500
60
120,000
Product
Family C
3,000
60
720,000
10,800
0
400
8
345,600
0
345,600
10%
20%
333
750
1,083
10%
300
120
144,000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Value Stream Capacity
CELL DESCRIPTION
Employee Productive Capacity
Employee Non-Productive Capacity
Employee Available Capacity
Quantity Required per Month
Quantitiy Produced in the Cell
Over Production
Unit of Measure
Employee Cycle Time (per Crew)
Maximum Pieces per Hour
Internal Change Over Time Sec
External Change-Over Sec
Labor Hours per shift
# Shifts per day
Average Batch Size
Number of Change-Overs
Scrap Rate
Rework Rate
Scrap/Rework Quantitiy
Downtime %
Inspection %
Inspection Time Sec
5S & Clean Up Time per Day
Meetings & reporting per day
TPM Time per Day
Other Non-Productive - User defined
Other Non-Productive - User defined
Crew Size
# cells
Number of Employees
Days per month
© BMA Inc. 2008. All rights reserved.
Machine
Shop
46%
45%
9%
30000
31500
1500
Units
70
51
10800
0
7.50
1
1500
20
10%
20%
13,500
15%
10%
120
600
120
1800
0
0
4
8
34
Welding
Shop
50%
26%
24%
15000
15000
0
Units
180
20
1200
0
7.50
2
600
25
5%
10%
2,648
5%
100%
30
600
120
0
0
0
1
5
10
Assembly
58%
10%
32%
3000
3000
0
Units
210
17
600
0
7.50
1
20
150
0%
10%
334
0%
0%
0
600
120
0
0
0
5
2
10
Shipping
67%
4%
29%
3000
3000
0
Units
120
30
0
0
7.50
1
1
3000
0%
2%
62
0%
0%
0
600
120
0
0
0
1
1
1
20
20
20
20
• Value Stream
demand = 3,000
units/month
• Takt Time = 180 sec
• Average product has
5 welded sub-assy
• Average sub-assy
has 2 machined
components
• Machine Shop
makes 30,000 items
• Welding Shop welds
15,000 sub-assy
• Assembly assembles
3,000 units
Maximum Capacity is
• Shipping ships 3,000
3,000 units because
units
Machine Shop can only
make 30,000 parts