"Value Stream Mapping How does Reliability play a role in making Lean Manufacturing a Success " Presented by Larry Akre May 17, 2007 LAKRE 2007 1
Lean Manufacturing What is Lean Manufacturing? A philosophy which shortens the timeline between the customer order and the shipment by eliminating waste which cause waiting and queues. The concepts can be applied up and down the Value Chain to create a Lean Enterprise LAKRE 2007 2
Lean Manufacturing Lean Manufacturing Where are we implementing Lean Manufacturing? LAKRE 2007 3
Lean Manufacturing Lean Manufacturing Why do we need Lean processes? Overall TOP 4 Customer buying priorities: Price/Value Customer only pays for what is value to meet their requirements. Product design is critical. Quality Quality is expected. It s the ante. Many customers no longer perceive quality as a positive differentiator (only negative) On-Time Delivery Customers want to do business with reliable suppliers. It costs the customer money if we re late (and sometimes early). Key for contractors & project orders! Lead Time SPEED to the customer is THE differentiator in the MRO and service world! Small P/D ratio requires contractors to forecast less. LAKRE 2007 4
Value Chain 5 days SUPPLIER S SUPPLIER 21 days BUFFER 7 days SUPPLIER 7 days BUFFER MANUFACTURER 21 days BUFFER 14 days 3 days CUSTOMER BUFFER Weekly MRP Forecast 7 days 13 weeks from demand 4 weeks capture time --- 9 weeks to cover forecast variation. Now CUSTOMER S CUSTOMER LAKRE 2007 5
Seven Pillars a Lean Six Sigma Model Establish a Foundation for Improvement Value Stream Lean Manufacturing Lean Business Processes Six Sigma Supply Chain Execution Demand LAKRE 2007 6
SUPPLIERS SUPPLY CHAIN EXECUTION Reliable Materials Forecasts Lean Ready E-signal MACHINE STRATEGY - Gaps - Goals VALUE STREAM Seeing the Whole Process Order to Cash Information and BUSINESS PROCESSES Fast, Error-free Transaction SIX SIGMA Eliminating / Managing Variation in Manufacturing and Business Processes Financial Targets Voice the Customer Forecasts Orders CUSTOMER Level Demand Consistent Orders Daily Sequential Schedule (Level Loaded) DEMAND PLATING SUB/ASSEMBLY SHIP Changeover FIFO 16% FPY MACHINE Equipment Uptime DOE MANUFACTURING Fast, Waste-Free Manufacturing Cycle Time 1% Scrap FOUNDATION ELEMENTS 5S+1, Employee Engagement, Problem Solving, Project FIFO 1-piece
SUPPLIERS MACHINE Work Breakdown structure STRATEGY Financial Targets Foundation ENTERPRISEElements Readiness for accelerated performance improvement Lean Ready PLATING SUB/ASSEMBLY SHIP 16% FPY Gaps Goals FIFO DOE Eliminating Eliminating / / Managing Managing Variation Variation in in Manufacturing Manufacturing and and Business Business Processes Processes Voice the Customer 5S + 1 --- Organized, clean, VALUE VALUE sustainable STREAM STREAM workplace plus a strong focus on SAFETY Employee Engagement Seeing Forecasts Seeing the the Whole Whole Process Process Order Order to to Cash Cash Forecasts Clear reasons for change Information Vision the Future State SUPPLY SUPPLY CHAIN CHAIN DEMAND Plan and resources to make it happen DEMAND EXECUTION EXECUTION and Education Orders Reliable and Reliable training to foster contribution Consistent Consistent Problem Solving Materials Materials Daily Sequential Orders Teamwork tools Orders Schedule E-signal Root cause identification (Level Loaded) Control / Sustain improvement BUSINESS BUSINESS PROCESSES PROCESSES Project Fast, Fast, Error-free Error-free Transaction Transaction Identifying / controlling the scope Milestone Project tracking SIX SIX SIGMA SIGMA CUSTOMER Level Demand FIFO Changeover MACHINE MANUFACTURING MANUFACTURING Fast, Fast, Waste-Free Waste-Free Manufacturing Manufacturing Cycle Cycle Time Time 1% Scrap 1-piece Equipment FOUNDATION Uptime FOUNDATION ELEMENTS ELEMENTS 5S+1, 5S+1, Employee Employee Engagement, Engagement, Problem Problem Solving, Solving, Project Project
STRATEGY Gaps Goals Financial Targets Voice the Customer SUPPLIERS Lean Ready Forecasts SUPPLY SUPPLY CHAIN CHAIN MACHINE PLATING SUB/ASSEMBLY SHIP asset efficiency Forecasts CUSTOMER Level Demand Value EXECUTION Stream EXECUTION Strategic, Tactical Orders and Operational Reliable Reliable planning for Improvement Consistent Consistent Materials Materials E-signal VALUE VALUE STREAM STREAM Seeing Seeing the the Whole Whole Process Process Order Order to to Cash Cash Information and Daily Sequential Schedule (Level Loaded) DEMAND DEMAND productivity FIFO SIX SIX SIGMA SIGMA DOE Eliminating / / Managing Managing Variation Variation in quality in Manufacturing and and Business Business Processes Developing the Current Processes State; 16% identify FPY key performance drivers Envision the Future State to achieve the goals Changeover MANUFACTURING MANUFACTURING Develop an action Fast, Fast, planwaste-free with Waste-Free scope, Manufacturing Manufacturing time and resources Cycle Cycle Time Time required Allocate resources MACHINE Identify specific improvement actions and the tools to accomplish those actions 1% Scrap Orders Orders Identifying strategic priorities for the business Analyzing and identifying gaps BUSINESS BUSINESS in performance PROCESSES PROCESSES that must be closed Setting specific goals for Fast, Fast, improvement Error-free Error-free Transaction in: Transaction customer service FIFO 1-piece Equipment FOUNDATION Uptime FOUNDATION ELEMENTS ELEMENTS 5S+1, 5S+1, Employee Employee Engagement, Engagement, Problem Problem Solving, Solving, Project Project
ENTERPRISE SUPPLIERS Lean Ready MACHINE Mistake pro processes STRATEGY PLATING SUB/ASSEMBLY SHIP 16% FPY Gaps Goals Financial Targets Voice the Customer Lean Manufacturing producing products in a waste-free VALUE VALUE STREAM STREAM manner with the Seeing shortest Forecasts Seeing the the Whole cycle Whole Process time Process and Order investment Order to to Cash Cash Forecasts minimal resources Information SUPPLY SUPPLY CHAIN CHAIN Understand customer demand requirements DEMAND DEMAND EXECUTION EXECUTION and Design production to meet demand in the shortest possible Orders cycle time Reliable Reliable Identify and Materials eliminate non-value-adding activities Materials Develop standard work and flexible workforces E-signal Visual controls for quality and repeatability Pull materials and components BUSINESS BUSINESS through PROCESSES PROCESSES the process Reduce lot sizes with Fast, Set-Up Fast, Error-free Error-free reduction Transaction Transaction Improve equipment utilization with Total Productive Maintenance Instill a kaizen culture (continuous SIX SIX SIGMA improvement) SIGMA Consistent Consistent Daily Sequential Orders Orders Schedule (Level Loaded) FIFO DOE Eliminating Eliminating / / Managing Managing Variation Variation in in Manufacturing Manufacturing and and Business Business Processes Processes CUSTOMER Level Demand FIFO Changeover MACHINE MANUFACTURING MANUFACTURING Fast, Fast, Waste-Free Waste-Free Manufacturing Manufacturing Cycle Cycle Time Time 1% Scrap 1-piece Equipment FOUNDATION Uptime FOUNDATION ELEMENTS ELEMENTS 5S+1, 5S+1, Employee Employee Engagement, Engagement, Problem Problem Solving, Solving, Project Project
Lean Business Processes achieving the desired output from a business process in a waste-free manner in the shorter Possible cycle time Financial Targets STRATEGY Understand downstream customer demand requirements Gaps Voice the Design process flow to meet demand in the shortest possible cycle time Goals Customer Identify and eliminate non-value-adding activities Develop standard work and flexible VALUE VALUE workforces STREAM STREAM Visual controls for quality Seeing Forecasts and Seeing repeatability the the Whole Whole Process Process Order Order to to Cash Cash Forecasts Pull paperwork and transactions through the process Mistake SUPPLIERS pro processes Information SUPPLY CUSTOMER SUPPLY CHAIN CHAIN Deploy DEMAND Level Lean e-business tools to the new process DEMAND Demand EXECUTION Ready EXECUTION and Instill a kaizen culture (continuous improvement) Orders Reliable Reliable Consistent Consistent Materials Materials Daily Sequential Orders Orders Schedule E-signal (Level Loaded) BUSINESS BUSINESS PROCESSES PROCESSES Fast, Fast, Error-free Error-free Transaction Transaction MACHINE PLATING SUB/ASSEMBLY SHIP SIX SIX SIGMA SIGMA FIFO DOE Eliminating Eliminating / / Managing Managing Variation Variation in in Manufacturing Manufacturing and and Business Business Processes Processes 16% FPY FIFO Changeover MACHINE MANUFACTURING MANUFACTURING Fast, Fast, Waste-Free Waste-Free Manufacturing Manufacturing Cycle Cycle Time Time 1% Scrap 1-piece Equipment FOUNDATION Uptime FOUNDATION ELEMENTS ELEMENTS 5S+1, 5S+1, Employee Employee Engagement, Engagement, Problem Problem Solving, Solving, Project Project
STRATEGY (Quality Improvement) Identify variation that causes waste Financial or defects Targets FUTURE STATE MAP Define the problem and desired outcome Gaps Voice the Goals Customer Measure the current output and key inputs Analyze the data to determine VALUE VALUE STREAM root causes STREAM and critical to quality inputs Improve the process Seeing by eliminating Forecasts Seeing the the Whole root Whole Process causes Process Order and Order to improving to Cash Cash Forecasts CTQ inputs Control the process to prevent recurrence Information SUPPLIERS SUPPLY CUSTOMER (Design) SUPPLY Identify CHAIN CHAIN Critical to Quality requirement customersdemand Level Demand EXECUTION EXECUTION and Orders Reliable Reliable Consistent Consistent Define the Materials project goals and customer deliverables Materials Daily Sequential Orders Identify customer needs and specifications Orders Schedule E-signal Design the product/process to meet the customer (Level Loaded) needs Optimize the design for performance BUSINESS BUSINESS and cost PROCESSES PROCESSES effectiveness Validate the design performance Fast, Fast, Error-free Error-free and ability Transaction Transaction to meet customer needs Lean Ready Six Sigma elimination variation to improve productivity and quality and create quality products the first time MACHINE PLATING SUB/ASSEMBLY SHIP SIX SIX SIGMA SIGMA FIFO DOE Eliminating Eliminating / / Managing Managing Variation Variation in in Manufacturing Manufacturing and and Business Business Processes Processes 16% FPY FIFO Changeover MACHINE MANUFACTURING MANUFACTURING Fast, Fast, Waste-Free Waste-Free Manufacturing Manufacturing Cycle Cycle Time Time 1% Scrap 1-piece Equipment FOUNDATION Uptime FOUNDATION ELEMENTS ELEMENTS 5S+1, 5S+1, Employee Employee Engagement, Engagement, Problem Problem Solving, Solving, Project Project
STRATEGY Gaps Goals Financial Targets Voice the Customer SUPPLIERS Lean Ready Forecasts SUPPLY SUPPLY CHAIN CHAIN EXECUTION EXECUTION Reliable Reliable Materials Materials E-signal VALUE VALUE STREAM STREAM Seeing Seeing the the Whole Whole Process Process Order Order to to Cash Cash Information and BUSINESS BUSINESS PROCESSES PROCESSES Fast, Fast, Error-free Error-free Transaction Transaction Forecasts DEMAND DEMAND Orders Consistent Consistent Daily Sequential Orders Orders Schedule (Level Loaded) CUSTOMER Level Demand Supply Chain Execution ensure a reliable, quality flow materials into production MACHINE PLATING SUB/ASSEMBLY SHIP Measure Supplier Performance FIFO SIX SIX SIGMA DOE FIFO Identify required flow SIGMA Eliminating materials / / Managing Managing Variation Variation in in Joint Value Stream Manufacturing Mapping and and Business Business Processes Processes 16% FPY Determine appropriate method to release orders (kanban, MRP, combination) Create MACHINE Changeover Pull environment MANUFACTURING Deploy e-business as appropriate MANUFACTURING 1-piece Fast, Fast, Waste-Free Waste-Free Manufacturing Manufacturing Cycle Cycle Time Time Train Suppliers in Lean and Six Sigma Identify Joint Projects 1% Scrap Equipment FOUNDATION Uptime FOUNDATION ELEMENTS ELEMENTS 5S+1, 5S+1, Employee Employee Engagement, Engagement, Problem Problem Solving, Solving, Project Project
STRATEGY Gaps Goals Financial Targets Voice the Customer SUPPLIERS Lean Ready Forecasts SUPPLY SUPPLY CHAIN CHAIN EXECUTION EXECUTION Reliable Reliable Materials Materials E-signal VALUE VALUE STREAM STREAM Seeing Seeing the the Whole Whole Process Process Order Order to to Cash Cash MACHINE Information and BUSINESS BUSINESS PROCESSES PROCESSES Fast, Fast, Error-free Error-free Transaction Transaction Forecasts DEMAND DEMAND Orders Consistent Consistent Daily Sequential Orders Orders Schedule (Level Loaded) CUSTOMER Level Demand Demand ensure frequent, consistent flow orders PLATING SUB/ASSEMBLY SHIP Analyze Order PatternsFIFO SIX SIX SIGMA SIGMA DOE FIFO Identify root causes for Eliminating Eliminating inconsistent / / Managing Managing demand Variation Variation (internal, external) Identify Consumption Manufacturing Patterns and and Business Business Processes Processes 16% FPY Joint Value Stream Mapping MACHINE Create a Changeover Pull environment MANUFACTURING MANUFACTURING 1-piece Deploy e-business Fast, as Fast, Waste-Free appropriate Waste-Free Manufacturing C/T = 45 Manufacturing Cycle sec Cycle Time Time Train/ Participate with Customers in Lean and Six Sigma Identify Joint Projects Equipment 1% Scrap FOUNDATION Uptime FOUNDATION ELEMENTS ELEMENTS 5S+1, 5S+1, Employee Employee Engagement, Engagement, Problem Problem Solving, Solving, Project Project
How To - The Path to Lean Six Sigma Planning and Preparation Value Stream Mapping Project and Execution Update Operations Strategy Value Chain Mapping Project and Execution Operations Strategic Planning -Product Family - Gaps -Goals Executive Education - - - - - - Current State Baseline Metrics Volume / Mix (ABC) Material / Process Work Content Analysis Information Inventory Future State Action Plan Lean Manufacturing -- Line Balancing / Design - TPM - Set-Up Reduction - Error Proing - Kaizen Daily Level-Loaded Scheduling, Kanban pull Business Strategic Planning -Customer Priorities -Supplier Priorities -Track and Assess Demand Patterns Expand Education Internally - - - - - - Current State Baseline Metrics Volume / Mix (ABC) Material / Process Work Content Analysis Information Inventory Future State Action Plan Supply Chain Execution - Lean Supplier Development - Pull Systems Demand Organizational Education Target Design Six Sigma Lean Business Process Design Expand Education Externally Target Design - Smooth Demand - Pull Systems Establish Foundations: Employee Involvement 5S + 1 Structured Problem Solving Project
Lean Implementation Stages Stage 1 Define product families that have similar market expectations, process flows, and engineering content By product family, establish the Lean vision and operations strategy Educate and involve everyone Stage 2 Map the current state process material & information flows Establish baseline metrics for lead time, On-Time-Delivery, productivity, quality, etc. by product family Develop the future state, an ACTION PLAN and a schedule for implementation! LAKRE 2007 16
Lean Implementation Stages Stages 3-5 From the future state action plan/schedule, start to apply Lean tools Link processes together to minimize queues and establish flow Identify and eliminate/minimize waste in our processes Keep materials and information moving from start to finish Operate processes to customer demand vs. MRP Improvement focus on speed to the customer rather than speed my operation/process Improve and perfect the process flow Link customers and suppliers to our processes LAKRE 2007 17
Start By Linking Processes What are linked processes? Linked processes are driven by actual consumption and WIP is controlled by sequenced & synchronized replenishment signals Why do we link processes? To generate desired flow, process steps must be linked together Isolated islands working efficiently may not come together to make a product Component and subassembly flows must be synchronized to satisfy the customer LAKRE 2007 18
Tools to Pull & Perfect - Value Stream Mapping What is a Value Stream? All the actions required to bring a product through the material, information, and resource flows essential to fulfilling every customer s order What is Value Stream Mapping? A tool that provides a pictorial look to help understand the process see the value and envision a future state. LAKRE 2007 19
Tools to Pull & Perfect - Value Stream Mapping Why Map the Value Stream? Shows the linkage (or lack linkage) between information flow and the material flow Develops the ability to see the total process flow and relationships beyond the single process level Formulates a picture the total process that all levels the company can understand how each group fits into the total process Helps identify the sources overproduction & other waste Helps establish priorities based on barriers to overall process flow Forms the basis the implementation plan LAKRE 2007 20
Tools to Pull & Perfect - Kaizen Blitz Kaizen Blitz Events Aggressive, short time frame team improvement projects Small focused team attacks a specific problem and implements improvement during 3-5 day focused event Areas requiring kaizen events should be identified from value stream map Isolated kaizen events alone will not move dollars to the bottom line in a major way To gain and sustain full benefit the kaizen tool, there must be a vision the Future State flow and understanding how kaizen will help achieve Future State LAKRE 2007 21
Value Stream Vision Strategic Business Plan Customer to supplier (whole value chain) For developing new, or improving old and existing products Includes all information flows and delays Includes all material flows and delays Value Stream Mapping Process Value stream your product families Current state(baseline, Identify Opportunities) Future state (Lean plan) Prioritize improvement plans to get there Measures to assess your journey LAKRE 2007 22
Value Stream Mapping What are the benefits? - Visualize the entire material & information flow a product family (Current State) - See the sources waste - Identify improvement opportunities - Create a vision an ideal or at a minimum improved state - Focus Priorities - Prioritize the opportunities into a door-todoor implementation plan (Future State).the expected results being dramatic improvements in cost, quality, & throughput in both manufacturing and business processes - Ties together lean concepts and techniques helps avoid cherry-picking - Measure - Match the improvement plan against your Strategic objectives LAKRE 2007 23
Value Stream Mapping Business Model Approaches Build to Stock Generally high volume/low mix products requiring very short lead-times Assemble to Order Platform type products standard components with some variation that can be configured to order Build to Order Generally highly engineered products with high component & design variation Combination techniques.abc LAKRE 2007 24
Determine Product Families First, select the product line based on Strategic Implications.Growth, Market share, pritability etc Group by Similarities : Similar Product / components Engineering content Products that pass through similar processing steps Similar Work Content (ABC stratification) Similar Market Expectations LAKRE 2007 25
Value Stream Mapping Current State Map At minimum, Main or Key processes Identify similar processing needs Identify process bottlenecks Determine work capacity needs Analyze needs (Takt time) LAKRE 2007 26
Mapping Icons Material Icons ASSEMBLY Internal Processes XYZ Corporation Outside Sources Data Box Weekly Truck Shipment WIP Waste Computer WIP Push Arrow General Icons Operator Information Icons Material to/from Outside Sources Uptime 1 Pc Improvement Burst max 20 pieces FIFO First-In-First-Out Sequence Buffer or Safety Stock Supermarket Operation A B C Withdrawal Heijunka Box Manual Information Electronic Information Withdrawal Kanban Production Kanban Kanban Arriving in Batches Weekly Schedule Information OXOX Load-Leveling Sequenced-Pull Go-See LAKRE 2007 Kanban Post Ball Scheduling 27 Signal Kanban
Value Stream Mapping What do we need to know about the upstream processes? Key Process data - Data collection box Understanding Work - Requires data collection - Understand SEQUENCE work - Understand cycles - Capture waiting time LAKRE 2007 28
Add the information flow to the Current State Supplier Forecast Monthly Orders Production Control MRP Forecast Weekly Orders Customer Weekly Schedules Shaft Mach Daily Sched Assembly Test Shipping Hsg. Mach LAKRE 2007 29
How to Use the Current-State Drawing Improve the whole instead optimizing parts See & understand the flow material and information STOP -- Do not go fix it Envision the Future State remove wasted steps, get remaining steps to flow, let the customer pull LAKRE 2007 30
Value Stream Mapping The Future State Map THE MANUFACTURING GOAL: To get each process to make only what the next process needs when it needs it - by linking all processes together by either continuous flow or pull from the customer back to raw material - resulting in the shortest possible lead time, highest quality, and lowest cost. LAKRE 2007 31
Mapping the Future-State Design a lean value stream. Don t wait until the current-state map is perfect Begin by drawing on the current-state map First iteration assume existing product designs, process technologies and plant locations are given Future-state should continuously evolve into the ideal state Forms foundation for the implementation plan--like a blueprint Always need a future state and a plan to get there LAKRE 2007 32
Key Questions for Future State 1) What are your key performance gaps from both a Customer and Supplier perspective? 2) Re-assess your business model Should you build to stock, assemble to order, or make to order, or in some combination? 3) What is your Takt time? 4) Where can we continuously flow production? 5) Where will you use Supermarket pull systems in order to trigger and control production upstream processes? 6) Where in the production chain will you schedule production(the pacemaker Process)? 7) How will you level production at the pacemaker Process? 8) What Increment work will you release and take away from the pacemaker process? 9) What process improvements will be necessary to achieve your future state design ie setup reduction, kaizen, increased uptime? LAKRE 2007 33
Key Questions for Future State Where can we continuously flow production? Continuous flow refers to producing one piece at a time. It is the MOST efficient way to produce. If the processes are dedicated and the work content can be balanced to Takt time then continuous flow may be possible BATCH To FLOW Raw ABC ABC ABC XYC XY XY A ABC ABC ABC Raw A X B X C Fin BEH BE BE B C ABC ABC ABC Fin LAKRE 2007 34
Planning to Achieve the Future State What s the process? Develop a prioritized implementation plan with measurable goals and timelines. Within each loop strive to: - develop a continuous flow based on takt time - establish a pull system to control production - introduce leveling - practice kaizen to continually eliminate waste, reduce batch sizes, shrink supermarkets, & extend the range continuous flow LAKRE 2007 35
Planning to Achieve the Future State Where do you start? Divide your value stream map into segments or loops - the pacemaker loop - the various manufacturing supply loops - the planning / scheduling loop - the supplier loop Start with the pacemaker loop, follow with the critical path loop LAKRE 2007 36
Current State Value Stream Map LAKRE 2007 37
Modified Current State Value Stream Map LAKRE 2007 38
Analysis Modified Current State Value Stream Map PO Process Enhancement Material Enhancement Load Leveling Enhancement Material Inventory Enhancement LAKRE 2007 39
Future State Value Stream Map LAKRE 2007 40
Summary Production paced to customer demand rate using Balanced work content and linked processes Daily sequential schedules Synchronized flows for subassemblies and components /Pull/Perfect Remove barriers to flow line scheduling vs. Work center loading Progressive Improvements vs. Quick Fix Question the current situation - don t make excuses. Question why we do what we do. Is there a better way? NOTHING CHANGES, IF NOTHING CHANGES! Focus on removing barriers to achieve single piece flow Look for things that cause batching which lead to uncontrolled queues! Look at the WHOLE process vs. optimized / efficient individual operations LAKRE 2007 41
Lean Six Sigma Any Questions?? A couple final thoughts - Insanity is doing the same things over and over again - and expecting different results. Don t put f until tomorrow what you can do today. It is not necessary to change. Survival is not mandatory. - W. Edwards Deming LAKRE 2007 42