CSUN
Engineering
Management
Six Sigma Quality
Engineering
Week 10
Lean Enterprise
Continuous Improvements (Kaizen)
What is a Kaizen Blitz?
A Kaizen Blitz is a cross functional multi-level team of 5 to 10
members working intensely for 10 to 14 hours a day, to rapidly
develop, test and refine solutions to problems and leave a
new solution in place in just a few days. They don’t plan, they
don’t propose, they do.
A Kaizen Blitz, used in conjunction with the Toyota
Production System (TPS) and current Lean
Manufacturing principles, can serve as a catalyst for
the initial implementation of a plant wide Lean
Manufacturing initiative.
This focus on immediate change is what sets Kaizen activity
apart from other improvement tools.
Cycle of an Event
Schedule the
Event
Recognize the Need
Select System /
for Change
Process to Optimize
3
2
4
Our Way of Life
1
Formalize the
Change
5
12
Process Owner:
Accepts Change
11
10
Make the Change
6
9
8
7
Develop the Objectives
Process Owner: Review
& Explains Objectives
Learning the Tools
• 5S, Process Flow
• TAKT / Cycle Time
Capture the Details
Set Goals, • Data Gathering
Make a • Detail Analysis
Plan
Where do we start first?
Define the problem
Anywhere Work is being done…
THE CUSTOMER DOES NOT PAY FOR WASTE
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Waste is being generated
How Material Spends
Time In The Factory
Better
90's
80's
Large
opportunity
Value
Added
4%
NonValue
Added
96%
NonValue
Added
84%
Value
Added
16%
We can make
this better
but it is not
our focus
How Paper Spends Time
In An Office Process
VA 18%
We will also focus
on front end
throughput
opportunities
ref: Otis - NAD, 1991
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NVA 82%
Total Cost
This is not a
labor reduction
program
Direct Labor As a Percent of Total Cost.
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6%
The New Equation
Profit
Old View
Sales
Price
Mfg.
Cost
Sales
Price
Supplier Cost
Increases
Cost + Profit = Sales Price
Value
Profit
New Reality
Sales
Price
Mfg.
Cost
Profit = Sales Price - Cost
Supplier Cost
Increases
Either way
Mfg. Costs have
to decrease to
maintain or
increase profits
Process Layout And Flow
Mass Production System
Lay it out
Receiving
Inspection
WIP
WIP
Form
WIP
OP1 WIP
WIP
WIP
OP2 WIP
Trim
WIP
Clean
OP4 WIP
Inspection
WIP
Clean
Punch
WIP
Store
WIP
OP5 WIP
OP3 WIP
Heat Treat
WIP
OP6 WIP
Store
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Raw Material
Separating The Value Added
From Non-Value Added
Receive + Inspect + Move + Store + Count + Move
Anneal + Move + Wheelabrate + Inspect + Move
Mill to Face + Inspect + Move + Wash + Move + Store + Move
Grind Top Face + Inspect + Move + Wash + Move + Store + Move
Drill C’Bore, Through Hole & Venthole + Inspect +
Move + Deburr Venthole + Move
Mill Clearance + Inspect + Move + Wash + Degrease + Move
Carburize + Move
Anneal +
Move + Degrease + Inspect + Move + Wash
Hone Stem I.D. + Inspect + Move + Wash +
Move + Store +
Mill Nut Surface + Inspect + Move + Wash + Move
Move
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Inspect + Move + Wash + Move + Store + Move
Measure it
Turn Stem I.D. & O.D. +
Separating The Value Added
From Non-Value Added
REDRILL & TAP +
Move +
INSTALL SCREWS +
HARDEN +
Move +
Move
1. Why?
Degrease +
Move
2. Why?
Move
Move +
HONE STEM I.D. +
Degrease +
Move
REMOVE SCREWS +
TEMPER +
Wash +
Wheelabrate +
Inspect +
FINISH GRIND TOP FACE +
Inspect +
Move +
Inspect +
Move
Wash +
Move +
3. Why?
Move
Wash +
Move
Inspect "A" Dimensions + Move
Inspect "B" Dimensions + Move + Select Fatigue Test Samples + Store + Move
Audit + Move (If quality Audit is Acceptable) (Rejected - Rework) + Store
Receive in Finish Stock Room + Count + Store + Issue + Move
BAG +
Inspect (If Acceptable) +
Move
4.Why?
5.Why?
SUMMARY: 17 VALUE ADDED ELEMENTS / 93 NON-VALUE ADDED ELEMENTS
LEAD TIME: 345 HOURS/23 HOURS DAY = 15 DAYS
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SHIPPING
Crosshead Cell
Value Added Summary
PRE -JIT
17
EVENT
1
15
EVENT
2
EVENT
3
NONVALUE
ADDED
93
SQUARE LEAD
FEET % TIME
STAFFING
--
15 Days
19
26
30%
4.5 Days
15
12
21
65%
3.1 Days
13
10
11
75%
1.6 Days
7
Small change
The Lean focus
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VALUE
ADDED
Process Flow Summary
Sitting in a rack
or in queue
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Is lead-time important?…which should you attack first?
42%
39%
19%
Wait Time
Setup Time
Typical
U.S. Average
Process Time
was 4%
Process Time
Adding value
Process Layout Flow And
Mass Production Process
This could also be office structure process islands
HEAT
TREAT
RAW
MATERIAL
STORES
CLEANING
TRIMMING
PUNCHING
FORMING
TO
FINISHED
STORES
INSPECTION
CUTTING
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RAW
MATERIALS
The General Concept
Anywhere work is being done, waste is being generated.
1. Specify VALUE
From your customer’s perspective, not yours. What does the
customer want? What are they willing to pay for?
2. Identify the VALUE STREAM and Eliminate Waste
The entire value delivery process from inquiry to receipt of
cash.
3. Make value FLOW - Ideally One-Piece-At-A-Time
4. Let the customer PULL value through the process.
Not suppliers or machine technology
5. Pursue PERFECTION
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Critical Ingredients Of Lean Are:
Lean Thinking-Defined
Total Elimination of….






Human activity that absorbs resources but creates no value.
Mistakes that require rework.
Production of items no one wants so inventory piles up.
Processing steps which aren’t actually needed.
Movement of employees/goods without any purpose.
Downstream people/processes waiting for upstream activity.
Goods/services which do not meet the needs of the customer
….Waste
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
Eliminate Waste Out Of Total Activities
Non Value
Added
Waste
Non Value
Added
Value Added
Non Value
Added
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Value Added
Value
Added
Lean Manufacturing
The Fundamental Concept
Make What is needed
When it is needed
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In the Amount Needed
New Competitive Realities
You need more than cost reductions to steal
customers away from your competition. You cannot
cost reduce yourself to prosperity, you need to grow.
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As Time is Compressed,
Quality, Productivity and Cost
are Improved
Lean Manufacturing
Is a Methodology for the Systematic
Elimination of Waste
Lean
Non-Lean
Rework
7 Types of Waste
Stores
Applies to all
business processes!
•
•
•
•
•
•
•
•
Overproduction
Waiting
Transportation
Unnecessary Processing
Inventory
Unnecessary Motion
Correction
+ A Person
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
Waste of Overproduction
THE PRIMARY WASTE
To produce more parts than necessary or at a rate
faster than required.
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(Both contribute to excess inventory and waste time
that could be spent making required product.)
Waste Of Correction
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To correct or repair a defect in materials or
parts adds unnecessary costs. (rework)
Waste Of Processing
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To process unnecessary work which does not advance
or improve the quality of the product.
(performing multiple transactions to receive material,
transacting parts into inventory... then take them out to
load machines.)
Waste Of Inventory
Inventory is a drain on an organization’s overhead.
The greater the inventory, the higher the overhead
costs become.
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(With excess inventory, we cover-up unacceptable
change over times, excessive downtime, and
operator inefficiency)
Waste Of Motion
Any movement of people or machinery which does
not contribute added value to the product.
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(excessive walking distance between operations)
Waste Of Waiting
Idle time between operations or events.
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(operator waiting for machine to finish cycling or
machine waiting for operator to load new parts)
Why Focus On Human
Instead Of Equipment?

Equipment is a sunk cost; it depreciates
over time, wears out or becomes
obsolete.
Your competition can easily match
you machine for machine

The Operator is an ongoing resource
that should appreciate over time. They
gain skill and knowledge.
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Your competitive edge is in how you
deploy your value adding people
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How does lean specifically
attack the problem?
Tools Of The Lean Enterprise
*Cell layout(U shape)
*Takt time
*5 Why’s
*Right Sizing
*Single minute
exchange of die
(SMED)
*Quality at source
*Signal lights
*Visual Controls
*Process Mapping
*Multi-skills training *Kanban
*Autonomation
*Curtain
*POU inventory
*Right sizing
*1 part pull
*Time
observations
*Line stop
*% loading
*Mistake proofing *Normal/Abnormal
*Standard Work
*Value adding
*TPM
analysis
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*5’s
*Supplier Certification
5-S Workplace
Organization Steps
1.SORT
Clearly distinguish what is needed and what is not
Remove what does not support the least waste way
2.STRAIGHTEN
Organize the way things are kept, making it easier
for anyone to find & return items to their proper
location in the sequence used
3. SHINE
Keep things clean-floor, machines, desks, files
equipment-neat & tidy
4. STANDARDIZE Maintain & improve the first 3S’s
5. SUSTAIN
Achieve the discipline / habit of properly
maintaining the correct procedures
Lean Manufacturing

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Involves the precise definition of Normal in such a way that the
Abnormal is exposed in Real-Time and can be eliminated.
 The result is a Continuous Improvement Environment
Identify The Waste
Based on Observation:
Normal
Value-Added
vs.
Abnormal
Non Value-Added
Kaizen
Eliminate
Waste
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Eliminate
Don’t Forget

It is the not the person doing the work that is ugly. It is the
Waste that is ugly.
 We are not stripping people of their dignity.
 We are attacking Waste
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Waste
Monster
One Piece Flow Model
TRIMMING
CLEANING
Fixture
Fixture
PUNCHING
FORMING
Fixture
Fixture
CUTTING
Fixture
Fixture
FINISHED
STORES
RAW
MATERIALS
Fixture
Fixture
PART
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HEAT TREAT
Physical Layout

Each kaizen reduces the cell
size Kaizen after Kaizen after
Kaizen
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Supports one piece flow
 Supports Standard Work In Process
 Supports Standard Work
 Supports visual control
Visual Controls

The use of signals, lights, measurements, diagrams,
charts & signs to :
• Clearly define the normal or desired condition
• Expose the abnormal undesired condition - real time
Material Replenishment System

How they work
• This same shelf with additional Visual Controls becomes more
meaningful
Standard Work may be :
•
•
•
•
Cards
Green - normal
Yellow - reorder point passed
Red - replenishment past due, contact supplier immediately
Blue - abnormal, investigate - consumption changed, supplier
overshipped
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
Material Replenishment System
1. Ensures
• the right thing
• ( Instrument, supply, etc … )
•
•
•
•
Need :
Quantity :
Required :
Where :
valve - 636/11
2
10am
700 Cell
in the right quantity
at the right time
to the right location
in the right orientation
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2. Simple signs used to trigger material replenishment according
to usage at Takt time cadence
Standard Work
There can be no improvement … no Kaizen … without the
basis of Standard Work
Not
machine

Standard Work details the motion of the operator
& the process sequence in producing a part

It is the statement of the least waste way of production
through the best combination of people & equipment, the
least amount of Work In Process possible, showing where
to check for quality & where there are safety issues

It provides a routine for consistency of an operation & a
basis for improvement
It tells us how to make one
to our TAKT time
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
Single Minute Exchange Of Die
S.M.E.D.

A process for dramatically, logically & methodically reducing set
up or changeover time
 To enable the significant reduction of lot sizes & the approach
towards single piece flow
 Supports mixed model, daily production
The goal is to change a set up in one TAKT time
Level loaded demand (1A,1B,1A,1B)
In other words… PROFESSIONALISM
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Large machine centers set ups must be done during machine cycle time
Takt Time
From the German word for “meter”
• The time which reflects the rate at which customers buy one unit
We can work
with this
T.A.
TAKT Time =
=
S.U.
It is what it is
Time Available
Sold Units
Not much you
can do about
this
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
5 Why’s
Root Cause
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1. Why did the system fail?
A: The motor burned out
2. Why did the motor burn out?
A: The shaft seized
3. Why did the shaft seize?
A: There was no lubrication
4. Why was there no lubrication?
A: The line filter was clogged
5. Why was the line filter clogged?
A: It was the wrong sized mesh!
TPM
The lack of TPM results in Breakdowns
• Breakdowns are a result of undetected or ignored equipment
deterioration
• 75% of all equipment deterioration can be detected by a trained
operator
• The remaining 25% can be detected by trained maintenance
technicians performing preventative & predictive maintenance …
… therefore all breakdowns can be prevented
Do a careful analysis of when the machine does not need to be run( lunch
periods,breaks, second shift, weekends, holidays etc.)
75% of all machine downtime is due to dirt and lack of proper lubrication.
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
Process Mapping

A visual representation of a process that can include:
•
•
•
•

process steps
sequence
duration
distance
A process map can be constructed at a “high level - broad
process steps
…or at a lower level - with process detail
You have to do more than just ask someone how long an
operation takes. Generally, they will not include walking and
waiting, and will give highly inaccurate set up times.
One Part Pull

The opposite of batch production
 Processing product one at a time at the unit level at which the
product is sold
 Lean Manufacturing delivers its greatest improvements,
maximizes its problem exposure, and enables constant top
quality when one part pull is relentlessly applied
Exposes the problems (Makes it ugly). It is hard to
hide problems in the system with no buffer stock
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Repairs are made on 1 part
rather than the entire batch
Mistake Proofing
Mistake proofing goal - Zero defects
• Mistake Proofing is a method that uses simple, low cost devices to
check each part at each operation to prevent mistakes from
occurring
1. Built into product design
2. Built into process
3. Automatic check system
Work to achieve defect prevention
not defect detection
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
Right Sizing
Only the right amount of resources …
•
•
•
•
equipment
space
work surface
material
… to support one piece flow
Must first improve the operation, then improve the
equipment. You do not want to size the equipment to
accommodate a wasteful cell
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
Right Sizing

Module 0013
Buy only the minimum amount of equipment, preferably built in
house
 Do not always think that expensive, high performance machines
are always the best, but consider a consistency of the whole
production
 First “improve operation” and afterwards carry out “improvement
of equipment”, otherwise it might cause the mechanization of
waste.
Multi-Skilled Workers

Especially important to 1 part flow in an
assembly operation
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The leanest process may require workers to provide effort in a
variety of tasks
 Rigid job classifications & definitions are in direct conflict with
teamwork & reduce flexibility to meet customer needs
 Multi skilled workers are capable of maximizing teamwork &
performance
Curtain Operation
A Curtain Operation :
•
•
•
•

Is often out of the cell/build flow area
Does not lend itself to one piece flow
Could be a “batch type” operation such as heat treat or cure
Is often a monument
A Curtain Operation done effectively enables one piece flow
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
Curtain Operation
Curtain
Operation
Inbound
Outbound
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The rabbit chase
Supplier Certification

Requires a good deal of homework done
on your specifications and drawings
to make sure you are not the problem.
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A tool designed to make suppliers take the full responsibility for
the quality of their product, such that incoming inspection by the
purchasing firm may be eliminated
 Suppliers with proven track records of excellent performance
are certified & expected to guarantee defect - free products
Design For Manufacturing
And Assembly
A conscious process of making design decisions only after
fully evaluating the manufacturing processes, tools, quality
control measures & equipment impacts
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
Quality Function Deployment

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A technique where product performance features and the
characteristics which deliver them are determined by the Voice
of the Customer & paid heed to by the producer ( by listening &
acting )
 The quality responsibility is then deployed throughout the
organization by tying compliance activities directly to the
fulfillment of these customer requirements
Standard Work
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Standard work is a tool that defines the interaction of the
operator and machine in producing a part.
It details the motion of the operator and the sequence of
the machine. It provides a routine for consistency of an
operation and a basis of improvement.
Time Observation

One of the critical tools for documenting reality
 One time observation form per operator
 Two observers for each operator.
• One operates time piece
• One records the information
Focus on the operator, not part flow or machine cycle time
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
Standard Work Sheet
Master Cylinder
12345-678909
Scope of
From Pick up raw material
Operations
To
Finished product
L210
M110
4
2
5
6
Finished Product
7
Inspect
T420
Quality
Check
1
Safety
Precaution
Standard Workin-Process
Raw Material
# of Pieces of Std.
Work-in-Process
5
TAKT
Time
40”
Cycle
Time
40”
Operator
Number
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3
L310
Date prepared
or revised: 3-5-97
OPERATOR
NUMBER
MODEL NUMBER
AND NAME
WORK
SEQUENCE
STEP
NUMBER
STANDARD WORK
COMBINATION SHEET
Spec. Steel
Fin. Grind O.D.
OPERATION NAME
TIME
Man.
Auto.
1/22/98
QUOTA PER
SHIFT
690
Manual
DEPT.
123
TAKT TIME
40”
Walking
OPERATION TIME (IN SECONDS)
Walk
1
p.u. & blow off part
3
--
--
2
unload, load, cycle start
5
23
--
3
gage 2 dia. - go/no go
3
--
2
4
load drill hopper
3
15
2
14
38
TOTALS
DATE
PREPARED
5
4
WAITING 22
10
15
20
25
30
TT 45
35
40
50
12
Automatic
wwwwww
Standard Work Sheet
Ideally, the Cycle Time should
equal the Takt Time
TT
then not enough work has
been assigned
TT
CT =TT
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In the case where the cycle
time does not come up to the
Takt Time...
Tools To Document Reality





Time Observation Sheet
Standard Work Sheets
Standard Work Combination Sheet
Percent Loading Chart
Process Capacity
5S Worksheet
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
Lean Manufacturing

Module 0013
Involves the precise definition of Normal in such a way that the
Abnormal is exposed in Real Time and can be eliminated.
 The result is a Continuous Improvement Environment
Takt Time
Analysis
Visual
Controls
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Make It Ugly
The Goal
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Total Elimination of
Waste
 The 5’s
 Right sizing
 Cell layout
POU
 Time observations
 Signal lights
Kanbans
 Value adding analysis
Takt time
 Visual controls
 1 part pull systems  Curtain
 Process
 Standard work
mapping
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Typical Lean Activities Initiated
At A Kaizen Event
Two Steps Forward,
One Step Back

Two steps forward, one
step back is OK
No steps forward is not



Bad news is
good news

Implementation errors will
occur, these should be
rewarded if done for the right
reason
Anchor Dragging is
unacceptable
Steady State in our industry,
or any other, will lead to
failure
“It’s not OK to do nothing to
improve our operation on the
grounds that the risk of
failure, (step backward)Management
is
must monitor
too high”
To Lean Implementation
One piece flow
Step One

Choose Your Project Well
•
•
•
•
•
High Probability For Success
Good Visibility
Short In Duration
Requires Several “Lean Tools”
Is Measurable
Step Two

Choose Your Team Well
• Open Minded And Enthusiastic
• Select People Who Work With The Product
•
•
•
•
•
Operators
Maintenance People
Supervisors
ME/IE
Planners
Step Three

Train! Train! Train!
• Overview Of Six Sigma
• Continuous Improvement
• Single Piece Build (Use The “Stockless Production” Video Made
By Hewlett Packard
• Use Your Black Belts
Step Four

Calculate Takt Time
• This Is The Customers Drum Beat
• Takt Time = Units Purchased Per Day Divided Into Actual Time
Available In A Shift
• Example: 27,000 Seconds / 20 Units = 1350 Seconds Per Unit Or
(1) Unit Every 22.5 Minutes
Takt Time
The time (pace) required to produce a
product based on customer demand.
Often expressed as: TAKT TIME = Time Available
Customer Demand
Example: Elevator Manufacturer
-Customer Demand:
-Daily Demand:
-Time Available:
50 Hydraulic Elevators / Week
10 Hydraulic Elevators
435 Minutes / Day (480 min less cleanup, breaks)
435 / 10 = 43.5 Minutes per elevator = TAKT TIME
This pace must be maintained in order to satisfy customer demand!
Cycle Time
The time for an operator
to do a prescribed task
and return to his/her
original stance.
Lead Time
The amount of time it takes
to convert raw materials into
finished goods (External Customer)
or to move goods from one part
of the process to another
(Internal Customer)
Cycle Time vs. Lead Time
Lead Time
Task
1
MOVE
Task
2
WAIT
Task
3
Task
4
Task
5
SET-UP
RUN
Cycle Time
Takt Time vs. Lead Time
>TAKT Time is a rate of demand
>Lead Time is how long the whole process takes
>They are NOT related!
Lead Time
1 Unit / Minute
TAKT Time
WIP
PROCESS
Can a process have a 1 hour TAKT Time and a 6 month Lead Time?
Step Five

Study The Project
• Team Meetings To Discuss The Project
• Set Objectives
•
•
•
•
•
25% Improvement In Through Put
50% Reduction In Floor Space
65% Reduction In Inventory
Meeting The Takt Time
Establish The Metrics
Batch vs. One-Piece Flow
(Process oriented layout with Lot Size = 5)
Processing Time = 1 Minute / Unit
Process Flow
0
5
10
15
TIME ELAPSED (MINUTES)
20
Manufacturing Lead Time
NOTE: Typically, the distances between process is long in a
process oriented layout, making difficult to transfer units
one-by-one.
Batch vs. One-Piece Flow
(Process oriented layout with Lot Size = 1)
Processing Time = 1 Minute / Unit
Process Flow
0
1
2
3
TIME ELAPSED (MINUTES)
Manufacturing Lead Time
8
4
Add the
Balance of
Units (4 x
1’/Unit)
Boeing 737 Lean Cell
Boeing 737 Lean Cell
One 737 airplane
every 9 days
Value Stream Analysis
What you can Expect
“Value Stream Analysis Kaizen Training” contains what you
need to know to get the job done, not everything you need to
know to be an expert.
 Part 1

• Lean concepts and terminology

Part 2
• The process by which we create future states
Lean Thinking
• Value in the Eyes of the Customer
• The Value Stream
• Flow
• Pull of the Customer
• Perfection
Value Added
 Value is added any time we physically change our
product towards what the customer is buying
 If we are not adding value, we are adding cost or waste
 Lean Manufacturing drives the systematic elimination of
waste
ORDER
Value-Added Time : Minutes
Time in Plant :
Weeks
CASH
KEY QUESTION – Are my customers willing to pay for this ????
Value Added vs. Non-Value Added
Value added
5%
LEAN = ELIMINATING THE 7 WASTES
 Overproduction





Non-value added

Waiting
Transportation
Non-value added
processing
Excess inventory
Excess motion
Defects
Typically 95% of Total Lead Time is Non-Value Added!!!
WAITING
OVERPRODUCTION
TRANSPORTATION
7
Wastes
PROCESSING
MOTION
DEFECTS
INVENTORY
7 Basic Types of Waste (Toyota)







Overproduction – producing more than what is demanded by the
customer
Inventory – Storing more than the absolute minimum needed
Transportation – the unnecessary movement of materials
Waiting – waiting for the next process step
Excess processing – due to poor tool or product design
Wasted motion – unnecessary reaching, walking, looking for parts,
tools, prints, etc
Defects – scrap and rework
What is Flow ?

Producing and moving one item at a time (or a small and
consistent batch of items) through a sequence of process steps
as continuously as possible, with each step making just what is
requested by the next step.
TRADITIONAL
Lean Lexicon Version 1 p9
CONTINUOUS FLOW
Continuous Flow – More Efficient & Faster
Traditional Batch Layout
Continuous Flow Layout
Supermarket Pull System
“Production” KANBAN
“Withdrawal” KANBAN
Supplying
process
Customer
process
A
B
product
product
SUPERMARKET
CUSTOMER PROCESS goes to supermarket and withdraws what it
needs when it needs it.
SUPPLYING PROCESS produces to replenish what was withdrawn.
PURPOSE: Controls production at supplying process without trying to
schedule. Controls production between flows.
Mike Rother
Learning to See
Takt Time
Takt time paces production to the pace of customer
requirements.
Total daily operating time
Total daily customer requirement
Takt Time =
1 shift x 8 hours – (2) 20-min. breaks =
mins/day
Operating time =
Customer
Requirement
Takt time
=
=
880 units/month
20 days/month
440 mins/day
44 units/day
440
= 44 units/day
= 10 mins/unit
What is a Value Stream ?

A Value Stream is all the actions, value creating and nonvalue creating, required to bring a product from order to
delivery
• Starts with raw materials
• Finalizes at the end-customer
• Involves several businesses
Value Stream Mapping

Helps you to see the sources of waste in the value stream
• Shows the flow of information and material
• Forms the blueprint for lean implementation (Imagine trying to
build a house without a blueprint).
• Helps you to see more than just the single process level
• Provides a common language for talking about manufacturing
processes
• Makes decisions about the flow apparent, so they can be
discussed
• Ties together lean concepts and techniques, which helps to avoid
“cherry picking” Improvement projects
Mike Rother
Learning to See
What is Value Stream Analysis?

Value stream maps describe a value stream
 Value stream analysis is a planning process
• Uses value stream maps to communicate
• Information Flow
• Material Flow

Three value stream maps are created
• Current state
• Ideal state
• Future state (3 months from now)

Action plans are developed for the future state map
The Value Stream Analysis Process

Phase 1-Pre-event work

Phase 2-The Main Event

Phase 3-Accountability Process
Value Stream Analysis Process
Phase 1
Pre-event Planning
Pre-Event Work

Three weeks prior to the event
•
•
•
•
•
•
Determine team members
Define the objective of the team
Select the area and topic
Logistics (conf. Rm., times, facilitator supplies, etc.)
Invite team members to the event
Clarify roles and responsibilities
• Event leader-value stream manager from the area (owns
resources and results)
• Event facilitator-CI Leaders who manage the improvement
process and share in ownership of results
• Subject matter experts
Pre-Event Work

Two weeks prior to the event
•
•
•
•
•
•

Part/quantity analysis (select representative part number)
Gather and review data (Yield, job closures, CONC, etc.)
Determine future demand
Review prior event data
Review any customer issues
Review any requirements for capital equipment
One week prior to the event
• Verify customer demand
• Review above data
Value Stream Analysis Process
Phase 2
The Main Event
The Main Event
1.
2.
3.
4.
5.
6.
7.
Training
Gemba Walk
Value Stream Map-Current State
Develop Ideal State Map
Develop Future State Map (3 months out)
Develop Future State Plan
Management Report Out
VSM Event Steps 1 &2
Training and Gemba Walk
1.
Training
•
The concepts of Lean need to be applied to classroom training
as well as our other processes
•
•
2.
This is a learn by doing process
We will minimize classroom learning
Gemba Walk
•
•
Gemba means, “shop floor” or “where the process is”
We need to go there so we know what we are mapping
VSM Event Step 3
Current State Map
3.
Value Stream Map-Current State
1.
2.
3.
4.
Map the physical flow (manufacturing loop, customer loop,
supplier loop)
Map the information flow
Complete the lead time data bar
Visually identify waste
1.
2.
5.
Identify value added/non-value added (red, yellow, green
dots)
Visually identify the most significant opportunities with kaizen
bursts.
Summarize all information and metrics (date, P/N, times,
inventory, OTD, quality, etc.)
Elements of Value Stream Maps
30 Days
Monthly Orders
MRP
880
Customer
Supplier
Customer Loop
Supplier Loop
Takt Time = 440 min/44
= 10 min/unit
Information
Bi-Monthly
Manufacturing Loop
Op 1
45 Days
Op 2
1 Day
S/U = 0.08 hr
CT = 0.9 min
S/U = 1 hr
CT = 1.6 min
45
1
1.6
Op 3
2 Days
S/U = 0.08 hr
CT = 0.9 min
2
0.9
Op 4
2 Days
S/U = 0
1
60
Lead Time Data Bar
Op 6
5 Days
S/U = 0.08 hr
CT = 1.2 min
CT = 60 min
2
0.9
Op 5
1 Day
1 Day
S/U = 1.95 hr
CT = 40.3 min
5
1.2
1
40.3
Total = 57 Days
Total = 1 Hr. 44.9 Min.
Manufacturing Loop Questions








What are the changeover times?
What are the quantity of machines per process?
Count all work in process (WIP)
Look for evidence of quality problems
Look for processing waste
Is there great distances between processes?
Is the product flexible or made to order?
Is there obvious batch processing?
Customer Loop Questions

Who and where are your customers?

What are the product lines or families?

Future marketing plans? Review growth

potential.

What is the total yearly order requirement? Quantity by product family or
product type

What is the high, low and mean ordering pattern? Monthly or quarterly
high & low for several periods

How often do we deliver to our customer?

What takt time do we supply to?
G.M.
AT&T
Production Control Questions

Where in the production chain
do we trigger production?

How much work do we release
at one time?

How long does it take to go from
customer order to production order?

How do we physically schedule production?

How do we react to customer emergencies?
Supplier Loop Questions

#1 question, how do you tell suppliers
what to ship, make, etc.?

When and how often do they get purchase
orders from Customers?

When and how do we change the purchase order?

When and how often do suppliers ship product and how?
Is it level? (Truck, train, etc.)

Do we have standard pack quantities?

Are suppliers aware of our inventory quantities?

Are we sure of suppliers inventory? How?

Do we have a supplier training program?
Information Flow Questions

How are the manufacturing and procurement orders
distributed?
• Who gets them
• How frequently
• What is the process of generating them

How are the shop order schedules generated and
revised? Are there “shortage meetings”? What parts of
the manufacturing loop are scheduled by MRP? Make
sure to document the informal (hot lists) as well as formal
(MRP) information channels.
Current State Lead Time Data Bar
Cycle Time
(CT)
Lead
Time
Total
DOH Inventory
8 Days
4 Days
4 Hrs
12 Days
(1 Hr.)
4 Hrs
VA Time (yes/no)
CT Total
Mapping Icons
COMPUTER WIP
Visually Identify Waste

As a team, review each process step for elements that
are value added and non value added
Each step can have any combination of value added,
type 1 waste and/or type 2 waste

•
•
•


Identify value added with a green dot
Identify type 1 waste (waste but unavoidable in the current
state) with a yellow dot
Identify type 2 waste (pure waste, eliminate immediately)
with a red dot
As type 2 waste is identified, generate the actions to
remove it (this will be the beginning of the future state
implementation plan)
Prioritize the waste opportunities and identify the biggest
opportunities on the CS map with kaizen bursts
VSM Event Step 4
Ideal State Map

Avoid shared resources
Assume that anything is possible

•
•
•
•

Our customers are happy
Our profits are up
High job satisfaction
Capital is available if needed
Create an ideal state map
•
•
•
Map the physical flow
Map the information flow
Complete the lead time data bar
VSM Event Step 5
Future State Map (3 months out)

What of the ideal state map can be implemented in 3
months?
 Identify short term goals
•
•
•
•
•

LEAD TIME
INVENTORY
PRODUCTIVITY
QUALITY
CAPACITY
Work from your current state map
VSM Event Step 6
Future State Plan

This plan answers the question, “what actions need to be completed in
the next 90 days to achieve the future state?
• Think back to the “visually identify waste” step
• Plan addresses all “red dots” and Kaizen bursts
Activity
GOAL/
OPPORTUNITY
ACTION
PRIORITY
LEADER
OPEN
DATE
EST
COMP
Test
The electrical
station is located
away from the
test area.
Re-locate
electrical station
closer to test
area.
Short Term
TEAM
1/5/2005 1/10/2005
2
Assy
Only three
technicians are
certified
solderers.
Train and certify
more technicians
to perform
soldering
Short Term
Joe
1/5/2005 4/30/2005
3
Details are being
issued in the
Review kitting
Plan'g
middle of the
process
process
1
Long Term
John
1/5/2005 3/15/2005
ACT
COMP
STATUS/REMARKS
THE ELECTRICAL TEST
STATION HAS BEEN
1/7/2005
RELOCATED NEAR THE
TEST AREA
3/18/2005
4 MORE TECHNICIANS
HAVE BEEN TRAINED
Most of the detail parts
are part of POU inventory.
The leftovers will be
looked at case by case.
VSM Event Step 7
Management Report Out

This report out is how the team publicly commits to
management
•
•
•
•
•
•
What the goal of the event was
What was learned
What was accomplished during the event
What the outcome is. How much better will we be?
Description of the future state
Commitment of the action plan
Value Stream Analysis Process
Phase 3
Accountability Process
The Accountability Process



The momentum for improvement is never higher then at
the end of the event when everyone can really see the
waste. As a result the accountability process must start
immediately following the event (next day).
Display the current state map, future state map and
future state plan in the the affected area.
Commit to a stand up meeting in front of the maps and
plan (daily at first, and then less frequent as applicable)
•
Focus on Due date control. Not meeting dates is letting
the team down
Questions? Comments?