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Value stream mapping

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Value Stream Mapping is a key component of Value Stream Management – the process by which Lean concepts and tools are utilized to minimize waste and promote one piece flow pulled by customer demand through the entire operation.

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Value stream mapping

  1. 1. Operational Excellence Value Stream Mapping What is Value Stream Mapping? • Key component of Value Stream Management • Popularized by Mike Rother and John Shook in their book Learning to See: Value Stream Mapping to Create Value and Eliminate Muda, 2003, Lean Enterprise Institute • Simple pencil-and-paper tool which documents flow of material and information within a product family • Current State Map highlights opportunities to reduce waste through the application of lean production principles • Waste minimization activities are addressed through Kaizen Proposal (Continuous Improvement Plan) • This results in the Future State Map which depicts the optimized process 1/21/2017 Ronald Morgan Shewchuk 1
  2. 2. Operational Excellence Value Stream Mapping Operational Excellence Why is Value Stream Mapping Important? Lean Manufacturing Infrastructure Six Sigma The House of Quality Customer Satisfaction Market Leadership Our People Our Technology Our Shareholders Our Customers Our Community Waste Minimization VOC Standardized Work 5S+Safety TPM SMED Pull System Flow Value Stream Poka-yoke Variation Minimization DMAIC Process Map C&E Diagram MSA SPC ANOVA FMEA DOE Control Plan Value Stream Management is a Key Component of the Lean Six Sigma Tool Kit 1/21/2017 Ronald Morgan Shewchuk 2
  3. 3. Operational Excellence Value Stream Mapping Lean Six Sigma Tool Kit Phase Define 1. Define Problem Statement Project Prioritization Matrix Quality Function Deployment 2. Define Problem Scope Project Charter Template Voice of the Customer 3. Define Project Objective(s) Financial Analysis Kano Analysis 4. Define Project Metrics SIPOC Diagram Pugh Matrix 5. Calculate Financial Benefit 6. Select Team Members Measure 7. Measure Current State Process Flow Diagram Variable/Attribute Sampling Plan 8. Validate Measurement System Basic Flow Chart Pareto Chart 9. Establish Reporting and Communication Mechanism for Metrics Swim Lane Map Check Sheet Spaghetti Chart Run Chart Current State Value Stream Map Measurement System Analysis Analyze 10. Analyze Data to Identify Cause & Effect Relationships Scatter Diagram Histogram 11. Determine Process Capability and Speed Process Capability Analysis Hypothesis Testing 12. Determine Sources of Variation and Time Traps Supply Chain Accelerator Time Multiple Regression Analysis Supply Chain Trap Analysis Analysis of Variance (ANOVA) Affinity Diagram Cause and Effect Matrix Cause and Effect Diagram Defect Characterization Correlation Analysis Multivariate Analysis Box Plot Failure Mode and Effect Analysis Marginal Means Plot Statistical Process Control Chart Interactions Plot Takt Time Root Cause Analysis Theory of Constraints Improve 13. Develop Solution Alternatives Based Upon Validated Root Causes Benchmarking Production Leveling 14. Conduct Experiments to Validate Solution Alternatives PICK Chart Work Cell 15. Iterate Analyze/Improve Phases to Identify Optimum Solution Pull Systems/Kanban Fault Tree Diagram Setup Reduction Gantt Chart Total Productive Maintenance Pert Chart Reliability Centered Maintenance Critical Path Management Single Minute Exchange of Dies Future State Value Stream Map Design of Experiments 5S+Safety Evolutionary Operation (EVOP) Design for Lean Six Sigma (DLSS) Control 16. Sustain the Gains Control Plan Statistical Process Control 17. Develop Control Plan Check Sheet Training 18. Document New Work Standard Refresher Training Process Trouble-Shooting Diagram 19. Train Personnel on New Work Standard Process Trouble-Shooting Guide Poka-yoke 20. Monitor Performance Visual Controls Standardized Work 21. Mistake-proof Process ToolsActivity 1/21/2017 Ronald Morgan Shewchuk 3
  4. 4. Operational Excellence Value Stream Mapping Operational Excellence Is Value Stream Mapping Right for You? My process is complex with multiple material and information hand-offs. It seems like there are lots of delays. Can Value Stream Mapping help me? Yes – it sounds like you are a good candidate for Value Stream Mapping. 1/21/2017 Ronald Morgan Shewchuk 4
  5. 5. Operational Excellence Value Stream Mapping Definitions Value Stream: All the actions involved in bringing a product or group of products from raw material to finished goods accepted by a customer. Value-Added Time: The process time required to transform the product in a way that the customer is willing to pay for (eg the residence time of an oven in a bakery). Non Value-Added Time: The process time spent waiting in between value-added unit operations (eg the time a finished good spends in bulk inventory before filling into shipping containers). Cycle Time (Manufacturing): The residence time of the unit operation (continuous process) or the batch time of the unit operation (non-continuous process) or the time it takes an operator to go through all of their work elements before repeating them. Cycle Time (Service): The time required to complete a task assuming 100% devotion to the task completion. 1/21/2017 Ronald Morgan Shewchuk 5
  6. 6. Operational Excellence Value Stream Mapping Operational Excellence Lead Time (Manufacturing): The time it takes for one piece or one pound of material to move all the way through the process or value stream from start to finish. Consider a pound of material being “tagged” at the front of the process and then measuring the time for the “tagged” pound to appear at the end of the process. Lead Time (Service): The actual average time required to complete a task recognizing that personnel cannot devote 100% of their time to a single task completion. Change Over Time: The time required to change a unit operation from manufacturing one product at target yield to manufacturing a different product at target yield. Available Time: Total production time per day minus planned downtime. Up Time: Available Time minus un-planned down time divided by Available Time expressed as a percent. Same as process reliability. Takt Time: Synchronizes production pace to match the pace of sales. Calculated by dividing Available Time per day by Customer Demand per day. 1/21/2017 Ronald Morgan Shewchuk 6 Definitions
  7. 7. Operational Excellence Value Stream Mapping Operational Excellence Calculation Examples Customer Demand = 100 units/wk = 20 units/day 1 2 3 4 5 6 7 8 9 10 11 12 Operation 1 to Operation 2 Lead Time = Inventory Qty/Daily Customer Demand = 230 units/20 units per day = 11.5 days Operation 2 Takt Time = Available working time per day/Daily Customer Demand = 22 hr per day/20 units per day = 1.1 hr 1/21/2017 Ronald Morgan Shewchuk 7
  8. 8. Operational Excellence Value Stream Mapping Operational Excellence Lean Production Principles 1. Identify what is of value to the customer 2. Map the current state value stream 3. Identify opportunities for Lean Waste reduction 4. Act to reduce Lean Wastes 5. Identify new improvement opportunities Lean Production means one piece flow pulled by customer demand 1/21/2017 Ronald Morgan Shewchuk 8 Step 1 Define Customer Value Step 2 Map Current State Value Stream Step 3 Identify Lean Wastes Step 4 Act to Reduce Lean Wastes Step 5 Identify Next Improvement Opportunities
  9. 9. Operational Excellence Value Stream Mapping Operational Excellence Voice of the Customer 1/21/2017 Ronald Morgan Shewchuk 9 • Value is defined by the customer. • A preliminary step to starting the current state value stream map is to understand the needs of your customer. • This could be an internal customer such as a department which receives your work product, or an external customer, the one paying the bills. • In either case it is essential for you to define the product quality characteristics, performance requirements, service expectations, etc. which are important to the customer. This is called the Voice of the Customer. • The best way for you to understand customer requirements of your product and/or service is to go see them. • Observe how the product or service is being utilized within the customer’s operation. • Ask them what their top three frustrations with your product are. • Don’t make the bold assumption that you know what should be important to the customer. • The customer defines the quality and service characteristics which are important. • The information that you glean from your observations and simple questions can totally change the focus of your process improvement and ultimately lead to improved levels of satisfaction by both customer and supplier.
  10. 10. Operational Excellence Value Stream Mapping Operational Excellence The Hallmark of Lean Production • The hallmark of Lean Production is the reduction of waste • Taiichi Ohno of Toyota identified the following seven sources of waste 1. Mistakes/ Defects – Errors requiring correction 2. Over Production – Items not immediately needed 3. Over Processing – Steps not actually needed 4. Transportation – Movement of materials not adding value 5. Motion – Unnecessary movement of equipment and/or people 6. Inventory – Work In Process and finished goods excess 7. Waiting – Production delays These are the things you will want to identify and document during your Value Stream Mapping walk-through 1/21/2017 Ronald Morgan Shewchuk 10
  11. 11. Operational Excellence Value Stream Mapping Operational Excellence Value Stream Mapping – Step 1 1 2 3 4 5 6 7 8 A X X X X X B X X X X X X C X X X X X X D X X X X X E X X X X X F X X X X X G X X X X X PRODUCTS Assembly Steps & Equipment Select a Product Family  A product family is a group of products which pass through similar processing steps and over common equipment  The product family defines the scope of the Value Stream Map  The following example matrix is a useful way to identify product families Product Family 1/21/2017 Ronald Morgan Shewchuk 11
  12. 12. Operational Excellence Value Stream Mapping Operational Excellence Value Stream Mapping – Step 2 Select a Value Stream Leader  Value Stream Leader has the responsibility for understanding a product family’s value stream and improving it  Value Stream Leader Requirements  Hands-on person with the capability to make change happen across functional and departmental boundaries  Leads the creation of the current-state and future-state value stream maps and the implementation plan for getting from the present to the future state  Monitors all aspects of implementation  Walks and checks the flow of the value stream daily or weekly  Makes implementation a top priority  Maintains, updates and communicates the Kaizen Improvement Plan 1/21/2017 Ronald Morgan Shewchuk 12
  13. 13. Operational Excellence Value Stream Mapping Operational Excellence Value Stream Mapping – Step 3 Select the Value Stream Team  One representative from each functional area of the process  Have intimate process knowledge  Stake-holders within the process, ie they will benefit from the implementation of the kaizen improvement plan  Open to new ideas  Good communicators especially with shop floor Operators  No more than six (6) members per team 1/21/2017 Ronald Morgan Shewchuk 13
  14. 14. Operational Excellence Value Stream Mapping Operational Excellence Value Stream Mapping – Step 4 Walk the Process Backwards  Begin at the most downstream operation (typically shipping)  Introduce yourself and the value stream mapping team to the Operators  Explain your objectives  Ask which parts of the process are particularly frustrating to the Operators  Ask if they have any recommendations for improvement  Measure and record process attribute data per the next slide  Note the mechanisms of information flow – both electronic and hardcopy  Record any opportunities for waste minimization through Lean Manufacturing principles 1/21/2017 Ronald Morgan Shewchuk 14
  15. 15. Operational Excellence Value Stream Mapping Operational Excellence Process Attributes The Following Template May Be Used for Process Data Collection Process Attribute Cycle Time Change Over Time Up Time Batch Size # of Operators # of Shifts/day Total Time per Shift Planned Downtime - Breaks & Lunch Planned Downtime - Maintenance # of Product Variations Yield Scrap Rate Customer Demand Pack Size Inventory Qty Lean Opportunities Mistakes/Defects Over Production Over Processing Unnecessary Transportation Excess Motion Excess Inventory Production Delays Other Observations Process Description 1/21/2017 Ronald Morgan Shewchuk 15
  16. 16. Operational Excellence Value Stream Mapping Operational Excellence Value Stream Mapping Tips Guidance for the Value Stream Leader...  Always collect current-state information while walking along the actual pathways of material and information flows yourself  Begin with a quick walk along the entire door-to-door value stream  Begin at the shipping end and work upstream  Bring your stopwatch and do not rely on standard times or information that you do not personally obtain  Map the whole value stream yourself with input from team members and operations personnel  Use your team observations to supplement and complement your own  This will ensure that nothing gets missed Genchi Genbutsu: Go and See with your own eyes! 1/21/2017 Ronald Morgan Shewchuk 16
  17. 17. Operational Excellence Value Stream Mapping Operational Excellence Value Stream Mapping – Step 5 Draw the Current State 1/21/2017 Ronald Morgan Shewchuk 17 PRODUCTION CONTROL MRP 500 ft coils 18,400 pcs/mo 12,000 L 6,400 R 2 Shifts Tray = 20 pcs Tues & Thurs 1 x Daily STAMPING S. WELD #1 S. WELD #2 ASSEMBLY #1 ASSEMBLY #2 SHIPPING 200T Staging Coils 4,600 L 1,100 L 1,600 L 1,200 L 2,700 L 5 days 1 2,400 R 1 600 R 1 850 R 1 640 R 1 1,440 R C/T = 1 seconds C/T = 39 seconds C/T = 46 seconds C/T = 62 seconds C/T = 40 seconds C/O = 1 hour C/O = 10 minutes C/O = 10 minutes C/O = 0 minutes C/O = 0 minutes Uptime = 85% Uptime = 100% Uptime = 80% Uptime = 100% Uptime = 100% A/T = 27,600 sec 2 Shifts 2 Shifts 2 Shifts 2 Shifts EPE = 2 weeks A/T = 27,600 sec A/T = 27,600 sec A/T = 27,600 sec A/T = 27,600 sec Total Lead Time 5 days 7.6 days 1.8 days 2.7 days 2 days 4.5 days 23.6 days 1 second 39 seconds 46 seconds 62 seconds 40 seconds 188 seconds Total Cycle Time Operator Operator Operator Operator Operator I I I I II Weekly Schedule Daily Ship Schedule State Street Assembly Truck Transport Truck Transport Michigan Steel Co. weekly Daily 90/60/30 day6-week WAITING INVENTORY MOTIONOVER PROCESSING OVER PRODUCTION MISTAKES DEFECTS TRANSPORTATION Adapted from: Rother, M. & Shook, J., Learning to See: Value-Stream Mapping to Create Value and Eliminate Muda, Version 1.3, 2003, Lean Enterprise Institute, Cambridge, MA, pp 32-33.
  18. 18. Operational Excellence Value Stream Mapping Operational Excellence Value Stream Map Template 1/21/2017 Ronald Morgan Shewchuk 18
  19. 19. Operational Excellence Value Stream Mapping Operational Excellence Value Stream Mapping – Step 6 Define Lean Metrics and Targets  Total Lead Time, Total Cycle Time, Total Inventory Value are typical Lean Metrics  Alternative Lean Metrics could be Operational Asset Utilization, Yield, Safety Incident Rate, Unscheduled Downtime, Total Change Over Time, Number of Customer Complaints, Inventory Turns/Month, On-Time Delivery Rate, etc.  Base = Current State, Proposed = Target after implementation of Kaizen Improvement Plan  Fill in lower left hand corner of Value Stream Map template 1/21/2017 Ronald Morgan Shewchuk 19
  20. 20. Operational Excellence Value Stream Mapping Operational Excellence Value Stream Mapping – Step 7 Create Kaizen Improvement Plan  Based upon the opportunities for improvement identified on the Current State Value Stream Map create a Kaizen (Continuous Improvement) Plan  Each improvement task must have a unique item #, date observed, description of the waste, action to address the waste, assignment to a single person responsible for the improvement, current status of the item, target completion date and actual completion date  See next slide for Continuous Improvement Plan template  Fill in lower right hand corner of value stream map template with top 5 items of the Continuous Improvement Plan 1/21/2017 Ronald Morgan Shewchuk 20
  21. 21. Operational Excellence Value Stream Mapping Operational Excellence Continuous Improvement Plan Key Date of Update In Process Complete Open Action Items Hold Item # Date Identified Observation Action Assignment Status Target Completion Date Actual Completion Date Value Stream Mapping – Step 7 Continuous Improvement Plan Template Living and breathing document which tracks your team’s continuous improvement efforts 1/21/2017 Ronald Morgan Shewchuk 21
  22. 22. Operational Excellence Value Stream Mapping Operational Excellence Value Stream Mapping – Step 7 Continuous Improvement Plan Example 1/21/2017 Ronald Morgan Shewchuk 22 Item # Date Identified Observation Action Assignment Status Target Completion Date Actual Completion Date 1 Jan 15 Excess inventory accumulation due to coil steel delivery only on Tues and Thurs Request that Michigan Steel delivery daily based upon planned production control schedule Emily Purchasing Jan 19 Update: Michigan Steel will use their smaller truck and begin daily shipments on Jan 26. Jan 31 Jan 26 2 Jan 15 Stamping Process change over time is excessive (sometimes over one hour) Modify change over jigs to permit single minute exchange of dies SMED). Phil Maintenance Feb 16 Update: Three new changeover jigs are being fabricated at contract machine shop. Expected delivery date Mar 1. Mar 31 3 Jan 15 Stamping Process produces inventory which S. Weld # 1 does not consume in one day Reduce Stamping Process batch size to 1.5 days worth of material rather than 7.6 days of material Henry P. Control Feb 6 Update: Weekly production schedule eliminated and replaced with daily schedule. Schedule is issued to shipping which initiates production via Kanban system. Feb 13 Feb 6 4 Jan 15 There is excess motion of people and material between the two welding and assembly operations Combine welding and assembly operations into one work cell Frank Production Feb 16 Update: New work cell has been fabricated and installed Feb 9. Standard Operating Procedures have been written and Operator training on new work cell will be complete Feb 20. Feb 27 5 Jan 15 Welder number 2 has high downtime which slows down part throughput Replace MIG welder with TIG welder and provide operator training Phil Maintenance Feb 16 Update: TIG welder installed on both S. Weld # 2 and new work cell Feb 11. Operator training complete Feb 13. Feb 20 Feb 13 Continuous Improvement Plan Key In Process Complete Open Action Items Hold
  23. 23. Operational Excellence Value Stream Mapping Operational Excellence Value Stream Mapping – Step 8 Use DMAIC Process to Facilitate Continuous Improvement Plan 1/21/2017 Ronald Morgan Shewchuk 23 Phase Define 1. Define Problem Statement Project Prioritization Matrix Quality Function Deployment 2. Define Problem Scope Project Charter Template Voice of the Customer 3. Define Project Objective(s) Financial Analysis Kano Analysis 4. Define Project Metrics SIPOC Diagram Pugh Matrix 5. Calculate Financial Benefit 6. Select Team Members Measure 7. Measure Current State Process Flow Diagram Variable/Attribute Sampling Plan 8. Validate Measurement System Basic Flow Chart Pareto Chart 9. Establish Reporting and Communication Mechanism for Metrics Swim Lane Map Check Sheet Spaghetti Diagram Run Chart Current State Value Stream Map Measurement System Analysis Analyze 10. Analyze Data to Identify Cause & Effect Relationships Scatter Diagram Histogram 11. Determine Process Capability and Speed Process Capability Analysis Hypothesis Testing 12. Determine Sources of Variation and Time Traps Supply Chain Accelerator Time Response Surface Regression Supply Chain Trap Analysis Analysis of Variance (ANOVA) Affinity Diagram Cause and Effect Matrix Cause and Effect Diagram Defect Characterization Correlation Analysis Multivariate Analysis Box Plot Failure Mode and Effect Analysis Marginal Means Plot Statistical Process Control Chart Interactions Plot Takt Time Root Cause Analysis Theory of Constraints Improve 13. Develop Solution Alternatives Based Upon Validated Root Causes Benchmarking Production Leveling 14. Conduct Experiments to Validate Solution Alternatives PICK Chart Work Cell 15. Iterate Analyze/Improve Phases to Identify Optimum Solution Pull Systems/Kanban Fault Tree Diagram Setup Reduction Gantt Chart Total Productive Maintenance Pert Chart Reliability Centered Maintenance Critical Path Management Single Minute Exchange of Dies Future State Value Stream Map Design of Experiments 5S+Safety Evolutionary Operation (EVOP) Design for Lean Six Sigma (DLSS) Control 16. Sustain the Gains Control Plan Statistical Process Control 17. Develop Control Plan Check Sheet Training 18. Document New Work Standard Refresher Training Process Trouble-Shooting Diagram 19. Train Personnel on New Work Standard Process Trouble-Shooting Guide Poka-yoke 20. Monitor Performance Visual Controls Standardized Work 21. Mistake-proof Process ToolsActivity
  24. 24. Operational Excellence Value Stream Mapping Operational Excellence Value Stream Mapping – Step 9 Draw the Future State 1/21/2017 Ronald Morgan Shewchuk 24 PRODUCTION CONTROL 500 ft coils 18,400 pcs/mo 12,000 L 6,400 R 2 Shifts Tray = 20 pcs 1 x Daily 1 x Daily STAMPING WELD & ASSY. SHIPPING 200T Staging Coils 1.5 days 2 days (at the press) 1 3 C/T = 1 seconds C/T = 55 seconds C/O < 10 min C/O = 0 minutes Uptime = 85% Uptime = 100% A/T = 27,600 sec 2 Shifts EPE = 1 shift Takt Time = 60 sec Total Lead Time 1.5 days 1.5 days 2 days 5 days 1 second 165 seconds 166 seconds Total Cycle Time Operator Operator DailyOrder State Street Assembly Truck Transport Truck Transport Michigan Steel Co. weekly Daily 90/60/30 day6-week Work Cell Kanban Post bin 20 20 20 20 coil coil OXOX L R 20 batch Adapted from: Rother, M. & Shook, J., Learning to See: Value-Stream Mapping to Create Value and Eliminate Muda, Version 1.3, 2003, Lean Enterprise Institute, Cambridge, MA, pp 78-79.
  25. 25. Operational Excellence Value Stream Mapping Operational Excellence Value Stream Mapping – Summary 1. Select a Product Family 2. Select a Value Stream Leader 3. Select the Value Stream Team 4. Walk the Process Backwards 5. Draw the Current State Value Stream Map 6. Define Lean Metrics and Targets 7. Create Kaizen Improvement Plan 8. Use the DMAIC Process and the Lean Six Sigma Tool Kit to Facilitate Kaizen Improvement Plan 9. Draw the Future State Value Stream Map Value Stream Mapping Steps 1/21/2017 Ronald Morgan Shewchuk 25
  26. 26. Operational Excellence Value Stream Mapping Operational Excellence 1/21/2017 Ronald Morgan Shewchuk 26 Case Study: ABC Molding Co. is a manufacturer of gear assemblies in the northeastern United States. A typical gear assembly consists of four plastic gears and six stamped metal parts fixtured within an ultrasonically welded plastic housing. ABC Molding produces more than eighty different varieties of gear assemblies. ABC Molding's largest customer is the Precision Motor Co. also located in the northeastern United States. In a typical month, Precision will order 25,000 gear assemblies. Precision and ABC have had a long history together and their businesses have enjoyed consistent growth. Precision has difficulty to forecast their customer demand. They provide 30 day product/volume forecasts to ABC by email but they are not worth the paper they are printed on. Weekly purchase orders are issued to ABC electronically but they are frequently revised and sometimes canceled. ABC customer service considers it bad business to reject an order and thus accepts every order from Precision even if it will result in a production run interruption and/or weekend overtime. ABC purchases a special grade of spring steel with superior anti-corrosive properties from the Brazilian Steel Co. It is the finest specialty steel available but the lead times are rather long - the combination of ocean freight, customs clearance and truck freight is typically 30 days. ABC provides a three month forecast to the Brazilian Steel Co. based upon historical customer demand and releases monthly purchase orders electronically. Plastic pellets used for gear extrusion are purchased from the Minnesota Polymer Co. Monthly purchase orders are transmitted electronically and deliveries arrive once per month. Chemicals used for cleaning the coil steel are purchased locally from the New Jersey Chemical Co. Releases against an annual blanket order are transmitted electronically and delivered weekly from the New Jersey Chemical Co. to ABC. The production group at ABC consists of sixteen Operators and two Production Supervisors. Work time is one or two shifts per day (depending on the process), 8 hrs/shift, 30 minute lunch and two ten-minute breaks. The plant operates on a Monday through Friday schedule. Overtime work is typically scheduled for Saturdays which of late seems more like the norm rather than the exception. They are a close-knit group with long tenure. The most senior of the group is Joe. He operates the coil cleaning process and the 20 ton stamping press (nicknamed the beast). The stamping press is difficult to change over to other products and frequently goes down resulting in extended periods of downtime. Somehow Joe always gets it running though. Due to the poor reliability of the stamping press and the unpredictability of Precision's ordering pattern multiple stamped components must be held in inventory. The coil clean and stamping process operates for one shift per day. Since it is an automated process, Joe does not need to shut it down when he goes on break or to lunch.
  27. 27. Operational Excellence Value Stream Mapping Operational Excellence 1/21/2017 Ronald Morgan Shewchuk 27 Case Study: The metal subassembly process works 2 shifts per day and is a manual operation staffed with two Operators. Cycle time per part is approximately 80 seconds and change over between models takes about 15 minutes. Quality control checks have found this part of the process to be prone to assembly errors. The plastic gear extrusion process is automated and uses a four cavity extrusion tool. One Operator works on each of the 2 shifts per day. Operators need not shut the equipment down during their lunch or breaks. Cycle time is approximately 45 seconds per extrusion. Since change over and start-up routinely take 2 hours a rather large collection of pre-extruded gears is held in inventory. The plastic/metal final assembly process is manual, works 2 shifts per day with one Operator per shift. Cycle time is approximately 85 seconds per part. A large portion of this time is spent collecting the necessary components for the final assembly. Change over time between models is typically 20 minutes. The ultrasonic welding process is rather new and utilizes state of the art welding technology. Consequently, this process has the highest uptime at 97%. Cycle time is 35 seconds per gear assembly with change over time of 30 minutes between models. The ultrasonic welder is a semi-automated process working two shifts per day with one Operator per shift. Due to the high reliability of this process and the relatively low cycle time it is common for this part of the process to be starved for product. The Operators use their time constructively, however, by assisting other Operators when this occurs. The labeling and packaging process is manual, works 2 shifts per day with one Operator per shift. Cycle time is approximately 15 seconds per gear assembly with change over time between models of 10 minutes. The ink-jet system used for product bar coding frequently gets clogged but Operators have learned how to purge the system and unclog the nozzles. Operators maintain the label data file and generate thermal transfer labels on demand. There have been customer complaints about label and packaging errors in the past. When Operators get caught up with their work they help out in the warehouse and shipping department getting pallets ready for shipment to customers. The shipping department is staffed by one Operator working one shift per day. Customer shipments are made by truck every Monday, Wednesday and Friday. There are over 18,000 gear assemblies held in finished goods inventory. It is generally felt that this is the bare minimum required to accommodate changes to Precision's weekly purchase order.
  28. 28. Operational Excellence Value Stream Mapping Operational Excellence 1/21/2017 Ronald Morgan Shewchuk 28 Process Coil Clean & Stamp Metal Subassembly Plastic Gear Extrusion Plastic/Metal Final Assembly Ultrasonic Welding Labeling & Packaging Shipping Brazilian Steel Co. Minnesota Polymer Co. New Jersey Chemical Co. Precision Motor Co. Process Type Automated Manual Automated Manual Semi- automated Manual Manual Supplier Supplier Supplier Customer # Operators/shift 1 2 1 2 1 1 1 # Shifts/day 1 2 2 2 2 2 1 3 2 1 2 Cycle Time (sec) 1 80 45 85 35 15 Change Over Time (min) 240 15 120 20 30 10 Reliability 80% 95% 90% 93% 97% 95% Available Time (sec) 28,800 25,800 28,800 25,800 25,800 25,800 Observed Inventory (eq GA's) 12,500 3,625 8,750 4,250 1,500 18,750 40 days 30 days 7.5 days ABC Molding Current State Data Set Data Summary
  29. 29. Operational Excellence Value Stream Mapping Operational Excellence 1/21/2017 Ronald Morgan Shewchuk 29 ABC Molding Current State Value Stream Map PRODUCTION CONTROL 25,000 GA's/mo 2 Shifts Once/2 months Once/month 3 times/week Mon/Wed/Fri Once/week COIL CLEAN & STAMP METAL SUBASSEMBLY PLASTIC GEAR EXTRUSION PLASTIC/METAL FINAL ASSEMBLY ULTRASONIC WELDING LABELING & PACKAGING SHIPPING 4 cavity tool Coils Pellets Chemicals 12,500 3,625 8,750 4,250 1,500 18,750 40 days 30 days 7.5 days 1 2 1 2 1 1 1 C/T = 1 second C/T = 80 seconds C/T = 45 seconds C/T = 85 seconds C/T = 35 seconds C/T = 15 seconds C/O = 4 hours C/O = 15 minutes C/O = 2 hours C/O = 20 minutes C/O = 30 minutes C/O = 10 minutes Uptime = 80% Uptime = 95% Uptime = 90% Uptime = 93% Uptime = 97% Uptime = 95% 1 Shift 2 Shifts 2 Shifts 2 Shifts 2 Shifts 2 Shifts A/T = 28,800 sec A/T = 25,800 sec A/T = 28,800 sec A/T = 25,800 sec A/T = 25,800 sec A/T = 25,800 sec Total Lead Time 40 days 10 days 2.9 days 7 days 3.4 days 1.2 days 15 days 79.5 days 1 second 40 seconds 45 seconds 42.5 seconds 35 seconds 15 seconds 178.5 seconds Total Cycle Time Operator Operator Operator Operator Operator I I I I II Weekly Ship Schedule Precision Motor Co. Truck Transport Brazilian Steel Co. Monthly 30 day 3 month INVENTORY MOTION OVER PRODUCTION MISTAKES DEFECTS TRANSPORTATION INVENTORY Weekly Truck Transport Truck Transport Ship Transport I I Minnesota Polymer Co. New Jersey Chemical Co. Monthly Weekly Releases against Blanket Truck Transport Computer Assisted MRP Operator I Operator Weekly Production Schedule WAITING INVENTORYINVENTORY MISTAKES DEFECTS
  30. 30. Operational Excellence Value Stream Mapping Operational Excellence 1/21/2017 Ronald Morgan Shewchuk 30 ABC Molding Kaizen Improvement Plan Continuous Improvement Plan Key In Process Complete Open Action Items Hold Item # Date Identified Observation Action Assignment Status Target Completion Date Actual Completion Date 1 Sept 15 Long lead time from Brazilian Steel Co. results in high coil inventory tying up cash flow. Negotiate consigned stock agreement with Brazilian Steel for on-site warehouse. We pay for only the coils we withdraw per month. Emily Purchasing Sept 22 Update: Have begun negotiations with Brazilian Steel. Currently investigating customs implications of consigned stock. Oct 31 2 Sept 15 Once per month delivery of plastic pellets from Minnesota Polymer results in average inventory holding quantity of 30 days. Ask Minnesota Polymer to combine northeast deliveries with other customers and deliver once per week. Emily Purchasing Sept 22 Update: Minnesota Polymer will begin to use their weekly northeast distributor shipment truck effective Sept 28th. Sept 30 Sept 28 3 Sept 15 Stamping Process produces excess inventory which Metal Subassembly does not consume in one day. Create production schedule based upon one week "no-fly zone" for customer orders. Any changes to customer orders affect the following week's production. Henry Sales Sept 25 Update: Discussed with Precision Purchasing Manager. They are not happy with it but they understand our cost control objectives. Oct 15 4 Sept 15 Metal Subassembly has high defect rate which is not detected until final gear assembly QC check after final assembly. Combine Metal Subassembly and Plastic/Metal Final Assembly into one work cell and implement Sourced Quality Inspection with QC Audit. This will also address the excess motion searching for components currently experienced in final assembly. Frank Production Oct 9 Update: New work cell has been fabricated and installed Oct 2nd. Standard Operating Procedures have been written and Operator training on new work cell was completed Oct 9th. We will begin using the new work cell Oct 12th. We also found that we could achieve target cycle times using three Operators instead of 4. This allows us to provide two Operators to the Pilot Plant for new product development. Oct 15 5 Sept 15 Plastic Gear Extrusion Process produces excess inventory which Final Assembly does not consume in one day. Implement fixed weekly production schedule based upon "no-fly zone" weekly customer order. Only produce daily gear requirement. Frank Production Oct 9 Update: Plastic gears will be produced in parallel with stamped parts based upon weekly fixed production schedule effective Oct 19th. Oct 19 6 Sept 15 Operators are frequently waiting for parts at Ultrasonic Welding. No Action - it is expected that the improvements of Action Items 4 & 5 above will improve product flow and reduce waiting time. Frank Production 7 Sept 15 Excess finished goods inventory in warehouse - ties up cash flow and hides mistakes. Only carry inventory to meet one week firm production order. Susan Production Control Oct 9 Update: On schedule pending Precision's acceptance of one week "no-fly zone". Oct 19 8 Sept 15 We don't have real-time visibility of unit operation output and production to plan. Install 3 network computer terminals on production floor tied into ERP system software and provide training for shift personnel. Cynthia IT Oct 5 Update: Fiber optic cable run Sept 22nd. Terminals installed Sept 24th. All Frank's people have been trained as of Oct 2nd. Sept 30 Oct 2
  31. 31. Operational Excellence Value Stream Mapping Operational Excellence 1/21/2017 Ronald Morgan Shewchuk 31 PRODUCTION CONTROL 25,000 GA's/mo 2 Shifts Once/2 months Once/week 3 times/week Mon/Wed/Fri Once/week COIL CLEAN & STAMP ASSEMBLY ULTRASONIC WELDING LABELING & PACKAGING SHIPPING Coils Pellets Chemicals 625 500 375 6,250 Consigned Inventory 7.5 days 7.5 days 1 3 1 1 1 1 day C/T = 1 second C/T = 120 seconds C/T = 35 seconds C/T = 15 seconds C/O = 4 hours C/O = 15 minutes C/O = 30 minutes C/O = 10 minutes Uptime = 80% Uptime = 95% Uptime = 97% Uptime = 95% 1 Shift 2 Shifts 2 Shifts 2 Shifts A/T = 28,800 sec A/T = 25,800 sec A/T = 25,800 sec A/T = 25,800 sec PLASTIC GEAR EXTRUSION 4 cavity tool 375 1 C/T = 45 seconds C/O = 2 hours Uptime = 90% 2 Shifts A/T = 28,800 sec Total Lead Time 7.5 days 0.5 days 0.4 days 0.3 days 5 days 13.7 days 45 second 40 seconds 35 seconds 15 seconds 135 seconds Total Cycle Time Operator Operator Operator Operator I I I II Precision Motor Co. Truck Transport Brazilian Steel Co. Monthly 30 day 3 month Weekly Truck Transport Truck Transport Ship Transport I I Minnesota Polymer Co. New Jersey Chemical Co. Weekly Releases against Blanket Truck Transport Computer Assisted MRP Operator I Operator Weekly Releases against Blanket Work Cell Kanban Post Computerized Kanban Post Computerized Kanban Post Computerized ABC Molding Future State Value Stream Map
  32. 32. Operational Excellence Value Stream Mapping Operational Excellence Reference Materials Rother, M. and Shook, J., Learning to See: Value-Stream Mapping to Create Value and Eliminate Muda, Version 1.3, 2003, Lean Enterprise Institute, Cambridge, MA Learning to See Tapping, D., Luyster, T., Shuker, L., Value Stream Management: Eight Steps to Planning, Mapping, and Sustaining Lean Improvements, 2002, Productivity Press, New York, NY Lean Manufacturing | Productivity Press | Lean books| Lean Production | 5S | Six sigma | Toyota Production System Dennis, P., Lean Production Simplified: A Plain-Language Guide to the World’s Most Powerful Production System, 2007, Productivity Press, New York, NY Lean Manufacturing | Productivity Press | Lean books| Lean Production | 5S | Six sigma | Toyota Production System 1/21/2017 Ronald Morgan Shewchuk 32

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