CSUN Engineering Management Six Sigma Quality Engineering Week

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 • 5 S, 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 Module 0013 Waste is being generated

How Material Spends Time In The Factory Better 90's 80's Large opportunity Value Added 4% Non. Value Added 96% Non. Value 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 Module 0013 NVA 82%

Total Cost This is not a labor reduction program Direct Labor As a Percent of Total Cost. Module 0013 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 Form WIP OP 1 WIP WIP OP 2 WIP Trim WIP Clean OP 4 WIP Inspection WIP Clean Punch WIP Store WIP OP 5 WIP OP 3 WIP Heat Treat WIP OP 6 WIP Store Module 0013 Raw Material

Separating The Value Added From Non-Value Added Count + Move Anneal + Move + Wheelabrate + Inspect + Move Mill to Face + Inspect + Move + Wash + Move + Grind Top Face + Inspect + Move + Wash + Drill C’Bore, Through Hole & Venthole + Inspect + Mill Clearance + Carburize + Anneal + Inspect + Move + Wash + Store + Move Deburr Venthole + Degrease + Move + Hone Stem I. D. + Mill Nut Surface + Degrease + Inspect + Move + Wash Move + Move Store + Move Measure it Turn Stem I. D. & O. D. + Store + Move Module 0013 Receive + Inspect + Move + Store +

Separating The Value Added From Non-Value Added REDRILL & TAP + Move + INSTALL SCREWS + HARDEN + Move + Degrease + Move 1. Why? Move 2. Why? Move + HONE STEM I. D. + Degrease + Move REMOVE SCREWS + TEMPER + Wash + Wheelabrate + Inspect + FINISH GRIND TOP FACE + Inspect + Move Wash + Move + 3. Why? Move Wash + Inspect "A" Dimensions + Move Inspect "B" Dimensions + Move + Select Fatigue Test Samples + Store + 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? Move 5. Why? SUMMARY: 17 VALUE ADDED ELEMENTS / 93 NON-VALUE ADDED ELEMENTS LEAD TIME: 345 HOURS/23 HOURS DAY = 15 DAYS Module 0013 SHIPPING

Small change The Lean focus Module 0013 Crosshead Cell Value Added Summary

Process Flow Summary Sitting in a rack or in queue Is lead-time important? …which should you attack first? Typical U. S. Average Process Time was 4% 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 Module 0013 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 Module 0013 Critical Ingredients Of Lean Are:

Lean Thinking-Defined Total Elimination of…. l l l 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 Module 0013 l

Module 0013 Eliminate Waste Out Of Total Activities

Lean Manufacturing The Fundamental Concept Make What is needed When it is needed Module 0013 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. Module 0013 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 Module 0013 l

Waste of Overproduction THE PRIMARY WASTE To produce more parts than necessary or at a rate faster than required. Module 0013 (Both contribute to excess inventory and waste time that could be spent making required product. )

Waste Of Correction Module 0013 To correct or repair a defect in materials or parts adds unnecessary costs. (rework)

Waste Of Processing Module 0013 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 is a drain on an organization’s overhead. The greater the inventory, the higher the overhead costs become. Module 0013 (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. Module 0013 (excessive walking distance between operations)

Waste Of Waiting Idle time between operations or events. Module 0013 (operator waiting for machine to finish cycling or machine waiting for operator to load new parts)

Why Focus On Human Instead Of Equipment? l Equipment is a sunk cost; it depreciates over time, wears out or becomes obsolete. Your competition can easily match you machine for machine l The Operator is an ongoing resource that should appreciate over time. They gain skill and knowledge. Module 0013 Your competitive edge is in how you deploy your value adding people

Module 0013 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 Module 0013 *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 3 S’s 5. SUSTAIN Achieve the discipline / habit of properly maintaining the correct procedures

Lean Manufacturing Involves the precise definition of Normal in such a way that the Abnormal is exposed in Real-Time and can be eliminated. l The result is a Continuous Improvement Environment Module 0013 l

Identify The Waste Based on Observation: Normal vs. Abnormal Value-Added Non Value-Added Kaizen Eliminate Waste Module 0013 Eliminate

Don’t Forget It is the not the person doing the work that is ugly. It is the Waste that is ugly. l We are not stripping people of their dignity. l We are attacking Waste l Module 0013 Waste Monster

One Piece Flow Model TRIMMING CLEANING Fixture PUNCHING FORMING Fixture CUTTING Fixture FINISHED STORES RAW MATERIALS Fixture PART Module 0013 HEAT TREAT

Physical Layout Supports one piece flow l Supports Standard Work In Process l Supports Standard Work l Supports visual control Each kaizen reduces the cell size Kaizen after Kaizen Module 0013 l

Visual Controls l 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 l 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 Module 0013 l

Material Replenishment System 1. Ensures • the right thing • ( Instrument, supply, etc … ) • • in the right quantity at the right time to the right location in the right orientation Need : Quantity : Required : Where : valve - 636/11 2 10 am 700 Cell Module 0013 2. Simple signs used to trigger material replenishment according to usage at Takt time cadence

Standard Work l There can be no improvement … no Kaizen … without the basis of Standard Work Not Standard Work details the motion of the operator & the process sequence in producing a part machine l 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 l It provides a routine for consistency of an operation & a basis for improvement It tells us how to make one to our TAKT time Module 0013 l

Single Minute Exchange Of Die S. M. E. D. A process for dramatically, logically & methodically reducing set up or changeover time l To enable the significant reduction of lot sizes & the approach towards single piece flow l Supports mixed model, daily production l The goal is to change a set up in one TAKT time Level loaded demand (1 A, 1 B, 1 A, 1 B) In other words… PROFESSIONALISM Module 0013 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 TAKT Time = It is what it is T. A. S. U. = Time Available Sold Units Not much you can do about this Module 0013 l

5 Why’s Root Cause Module 0013 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. Module 0013 l

Process Mapping l A visual representation of a process that can include: • • l 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 l Processing product one at a time at the unit level at which the product is sold l Lean Manufacturing delivers its greatest improvements, maximizes its problem exposure, and enables constant top quality when one part pull is relentlessly applied l Exposes the problems (Makes it ugly). It is hard to hide problems in the system with no buffer stock Module 0013 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 Module 0013 l

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 Module 0013 l

Right Sizing Buy only the minimum amount of equipment, preferably built in house l Do not always think that expensive, high performance machines are always the best, but consider a consistency of the whole production l First “improve operation” and afterwards carry out “improvement of equipment”, otherwise it might cause the mechanization of waste. Module 0013 l

Multi-Skilled Workers The leanest process may require workers to provide effort in a variety of tasks l Rigid job classifications & definitions are in direct conflict with teamwork & reduce flexibility to meet customer needs l Multi skilled workers are capable of maximizing teamwork & performance Especially important to 1 part flow in an assembly operation Module 0013 l

Curtain Operation A Curtain Operation : • • l 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 Module 0013 l

Curtain Operation h Outbound The rabbit chase Module 0013 Inbound

Supplier Certification 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 l Suppliers with proven track records of excellent performance are certified & expected to guarantee defect - free products Requires a good deal of homework done on your specifications and drawings to make sure you are not the problem. Module 0013 l

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 Module 0013 l

Quality Function Deployment 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 ) l The quality responsibility is then deployed throughout the organization by tying compliance activities directly to the fulfillment of these customer requirements Module 0013 l

Standard Work Module 0013 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 l One time observation form per operator l Two observers for each operator. l • One operates time piece • One records the information Focus on the operator, not part flow or machine cycle time Module 0013 l

Standard Work Sheet Master Cylinder 12345 -678909 Scope of From Pick up raw material Operations To Finished product L 210 M 110 4 2 5 6 7 Inspect T 420 Quality Check 1 Safety Precaution Standard Workin-Process # of Pieces of Std. Work-in-Process 5 Raw Material Finished Product TAKT Time 40” Cycle Time 40” Operator Number Module 0013 3 L 310 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. Walk p. u. & blow off part 3 -- -- 2 unload, cycle start 5 23 -- 3 gage 2 dia. - go/no go 3 -- 2 4 load drill hopper 3 15 2 14 38 1 TOTALS DATE PREPARED 1/22/98 QUOTA PER SHIFT 690 DEPT. 123 TAKT TIME 40” OPERATION TIME (IN SECONDS) 5 4 WAITING 22 10 15 20 25 30 TT 45 35 40 50 12 Manual Automatic Walking wwwwww

Standard Work Sheet In the case where the cycle time does not come up to the Takt Time. . . Ideally, the Cycle Time should equal the Takt Time TT CT =TT Module 0013 then not enough work has been assigned TT

Tools To Document Reality l l l Time Observation Sheet Standard Work Sheets Standard Work Combination Sheet Percent Loading Chart Process Capacity 5 S Worksheet Module 0013 l

Lean Manufacturing Involves the precise definition of Normal in such a way that the Abnormal is exposed in Real Time and can be eliminated. l The result is a Continuous Improvement Environment Module 0013 l

waste Visual Controls Module 0013 Takt Time Analysis s es oc w Pr Flo ing pp Ma Ob Ti se me St rv ud ati ie on s Make It Ugly

The Goal Module 0013 Total Elimination of Waste

Ø The 5’s Ø Right sizing Ø Cell layout ØPOU Ø Time observations Ø Signal lights ØKanbans Ø Value adding analysis ØTakt time Ø Visual controls Ø 1 part pull systems Ø Curtain Ø Process Ø Standard work mapping Module 0013 Typical Lean Activities Initiated At A Kaizen Event

Two Steps Forward, One Step Back u Two steps forward, one step back is OK No steps forward is not u u u Bad news is good news u 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) is Management must monitor too high”

To Lean Implementation One piece flow

Step One l Choose Your Project Well • • • High Probability For Success Good Visibility Short In Duration Requires Several “Lean Tools” Is Measurable

Step Two l Choose Your Team Well • Open Minded And Enthusiastic • Select People Who Work With The Product • • • Operators Maintenance People Supervisors ME/IE Planners

Step Three l 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 l 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. Available Often expressed as: TAKT TIMETime = Customer Demand Example: Elevator Manufacturer -Customer Demand: 50 Hydraulic Elevators / Week -Daily Demand: 10 Hydraulic Elevators -Time Available: 435 Minutes / Day (480 min less cleanup, 435 / 10 = 43. 5 Minutes per elevator = TAKT TIME This pace must be maintained in order to satisfy customer

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 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 tak >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 l 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. l Part 1 l • Lean concepts and terminology l 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 l Value is added any time we physically change our product towards what the customer is buying l If we are not adding value, we are adding cost or waste l 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 l Overproduction l l l Non-value added l 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) l l l l 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 ? l 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 p 9 CONTINUOUS FLOW

Continuous Flow – More Efficient & Faster Traditional Batch Layout Continuous Flow Layout

Supermarket Pull System “Production” KANBAN “Withdrawal” KANBAN 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 = Operating time = Customer Requirement Takt time 1 shift x 8 hours – (2) 20 -min. breaks = mins/day = = 880 units/month 20 days/month 440 mins/day 44 units/day 440 = 44 units/day = 10 mins/unit

What is a Value Stream ? l 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 l 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 l Value stream analysis is a planning process l • Uses value stream maps to communicate • Information Flow • Material Flow l Three value stream maps are created • Current state • Ideal state • Future state (3 months from now) l Action plans are developed for the future state map

The Value Stream Analysis Process l Phase 1 -Pre-event work l Phase 2 -The Main Event l Phase 3 -Accountability Process

Value Stream Analysis Process Phase 1 Pre-event Planning

Pre-Event Work l 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 l Two weeks prior to the event • • • l 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 Supplier 880 Customer Loop Supplier Loop Takt Time = 440 min/44 = 10 min/unit Information Bi-Monthly Manufacturing Loop 45 Days Op 1 1 Day 1 1. 6 2 Days S/U = 0. 08 hr CT = 0. 9 min S/U = 1 hr CT = 1. 6 min 45 Op 2 Op 3 S/U = 0. 08 hr CT = 0. 9 min 2 0. 9 2 Days Op 4 S/U = 0 Op 5 1 60 Lead Time Data Bar 5 Days S/U = 0. 08 hr CT = 1. 2 min CT = 60 min 2 0. 9 1 Day Op 6 S/U = 1. 95 hr CT = 40. 3 min 5 1. 2 1 Day 1 40. 3 Total = 57 Days Total = 1 Hr. 44. 9 Min.

Manufacturing Loop Questions l l l l 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 l Who and where are your customers? l What are the product lines or families? l Future marketing plans? Review growth l potential. l What is the total yearly order requirement? Quantity by product family or product type l What is the high, low and mean ordering pattern? Monthly or quarterly high & low for several periods l How often do we deliver to our customer? l What takt time do we supply to? G. M. AT&T

Production Control Questions l Where in the production chain do we trigger production? l How much work do we release at one time? l How long does it take to go from customer order to production order? l How do we physically schedule production? l How do we react to customer emergencies?

Supplier Loop Questions l #1 question, how do you tell suppliers what to ship, make, etc. ? l When and how often do they get purchase orders from Customers? l When and how do we change the purchase order? l When and how often do suppliers ship product and how? Is it level? (Truck, train, etc. ) l Do we have standard pack quantities? l Are suppliers aware of our inventory quantities? l Are we sure of suppliers inventory? How? l Do we have a supplier training program?

Information Flow Questions l How are the manufacturing and procurement orders distributed? • Who gets them • How frequently • What is the process of generating them l 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 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 l l • • • l l 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 l l • • Our customers are happy Our profits are up High job satisfaction Capital is available if needed Create an ideal state map l • • • 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? l Identify short term goals l • • • l LEAD TIME INVENTORY PRODUCTIVITY QUALITY CAPACITY Work from your current state map

VSM Event Step 6 Future State Plan l 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

VSM Event Step 7 Management Report Out l 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 l l l 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 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?