Series D

TQM Training Module on

Value Stream Mapping

Doc. No. D-01.03.20180522
Revision 03; 22nd May 2018
Authors: Praveen Hadagal

For further clarifications, write to praveen.hadagal@jsw.in © Total Quality Management, JSW Group
 TQM Training Series: 6 series with 66 training modules
This is a training module on Value Stream Mapping (D-01)

Series-A Series-C Series-D Series-F

Basic Problem Solving Tools Quality Management Basics Productivity & Efficiency Tools Advanced Statistical Tools
A-01 Flow Charts C-01 Quality Mgmt. Basics D-01 Value Stream Mapping (VSM) F-01 Sampling & Distribution
A-02 Cause & Effects Diagram C-02 Basic Statistics D-02 Time & Motion Study F-02 Hypothesis Testing
A-03 Stratification C-03 Statistical Process Control D-03 SMED F-03 Regression
A-04 Scatter Diagram C-04 KPI Drill Down D-04 Wrench Time Analysis F-04 Basics of DoE
A-05 Control Charts C-05 KPI Benchmarking D-05 Queuing Theory F-05 Factorial DoE
A-06 Check Sheets C-06 Strategic Analysis Tools D-06 Inventory Management F-06 Principal Component Analysis
A-07 Histogram C-07 Policy Management D-07 Linear Programming Problem F-07 Cluster Analysis
C-08 Policy Diagnosis F-08 Conjoint Analysis
A-08 Pareto Charts D-08 Game Theory
C-09 Daily Management F-09 Discriminant Analysis
A-09 Graphs D-09 OEE
C-10 Daily Mgmt. in Maintenance F-10 Factor Analysis
D-10 PERT & CPM
C-11 Cross Functional Mgmt.
Series-B F-11 Response Surface Method
C-12 Quality Assurance Basics
Basic Management Tools F-12 Taguchi DoE
C-13 MSA
B-01 Brainstorming F-13 Weibull Analysis
C-14 PFD, FMEA, Control Plan Series-E
B-02 Affinity Diagram Decision-making Tools
C-15 Cost of Poor Quality (COPQ)
B-03 Arrow Diagram C-16 Improvement Fundamentals E-01 Quality Function Deployment
B-04 Tree Diagram C-17 4i Methodology E-02 Fault Tree Analysis
B-05 PDPC C-18 5S E-03 AHP & Paired Analysis
B-06 Matrix Diagram C-19 Quality Circles E-04 Pugh Matrix
B-07 Matrix Data Analysis C-20 QC Story Approach E-05 Time Series Analysis
B-08 Relation Diagram C-21 Kaizen, OPL, Poka Yoke
Understanding the elements of Lean

Make it perfect
Identify Value / waste
 Breakthrough and continuous
 Identify the meaning / definition of value for
improvement, complete elimination of
customers
waste, variability, improved response time
 Tools – VOC, Standard Work, Muda, 5S
 Tools – PDCA, Kaizen, Jidoka (Man-
automation)
5 1

Establish Pull
Elements of Map Value Stream
 Ensure customer / downstream
 Map all process steps – value
process pulls the upstream
processes and makes it efficient
4 Lean 2 added or non-value added from
 Tools – Kanban, JIT, Point of Raw material to product
use storage  Tools – VSM, FMEA,

3
Create Flow
 Establish synchronized flow of services and products
 Tools – One piece Production Flow, SMED, Poka Yoke, Equipment Reliability, One piece flow 3
Why Value Stream Mapping & Analysis ?

 Develop a common understanding of the current process

– The relationship of process steps
– A true picture of the process
PURPOSE

 Create a baseline (“As-is” process) to measure improvements against

 Define a “To-be” of the future process
 Establish objectives
 Identify improvement potential
 Co-create an implementation plan for improvement

 The Value Stream Map provides visibility of the entire process

VALUE

– The process may cross functional boundaries

– Without the map, you may focus on the wrong areas to try to improve
– Sub-optimization may result

4
 Components of Value Stream Mapping

XYZ Org
Customer Orders
Supplier Orders
Internal
Information Scheduling
Flow
Supplier
Delivery Customer
Freq.

Delivery
Freq.

Material Flow Process 1 I Process 2 I

I
Inventory Process Time Process Time
Wait Time Wait Time
Material
Time Line Movement Lead Time
via PUSH
 Value Stream Map- Definitions

C/T
Cycle Time:
How often a part or product is completed by a
process.
(or: the time it takes an operator to go through all of
his/her work elements before repeating them.

Usually: VA
VAT<C/T<L/T Value Added Time:
Time for those activities that actually transform the
product in a way customer is willing to pay for.

LT
Lead Time:
The time it takes one piece to move all the way
through a process or a value stream; from start to
finish
Steps for Creating VSM

We can describe the VSM methodology as a sequence of five steps, in which the initial
four are all leading up to the actual improvement of the process
Steps Details

Value Stream Scope Determine the Value stream to be Improved

Understanding How things currently operate.

Current State Map
This is the foundation for the future state

Future State Map Redesigning the process according to lean

principles

Implementation Plan
Developing a Plan of implementation to
realize Improvements

Implementation of
Improvement Plan
The Goal of Mapping!
Creating VSM: VSM Charter & Scope

 Creating a Charter which defines:

 Mission  Process Champion
 Improvement Objectives  Team Leaders
 Process Description  Team Members
 Management Information System  Facilitators
 Start / End Date  Risk & Tolerance
 Benefits Realization  Roles & Responsibilities

 Define Boundary:
 Before launching on VSM, define the Start and End points
– Prepare As-Is physical map – How / where (inputs to outputs)
– Prepare As-Is geographical map - area(s) where process is performed
– Add process control information flow to as-is physical map
 Capture the process as it is actually performed and include workarounds, rework,
informal activities, feedback loops etc
 Add As-Is process metrics - counts, rates
 Creating VSM: Commonly Used Symbols

Process Box Super Market Pull Kaizen Burst

Material Supplier/Customer Shipment

Operator First In First Out
Flow
Symbols

Data Box Inventory

Push ‘Go See’ Production
Schedule
 Creating VSM: Commonly Used Symbols

Manual Load Levelling Box Production Kanban

Information Flow

Information Electronic Sequenced Pull

Signal Kanban
Flow Information Flow
Symbols

Schedule Withdrawal Kanban Kanban Post

Creating VSM: Current State Map

The key to creating a current state VSM is to document what you

actually see with your own eyes . And not how the process is
supposed to work, or designed to work

Who do you talk with during VSM??

• People who use the process- the operators
• People who support the process.
• People who have input to the process
• Recipients of the process.
 Creating VSM: Current State Map

The Scenario considered:

An example of Simple Production process is considered. The process has three operations, i.e.
Stamping, Welding, Assembly followed by shipping to the customer

First Step Finding the Customer Requirements and Calculating the takt time
In the following example considered, the customer has a daily demand of 700 pieces of
finished products.

The other conditions with respect to the operations are:

 Hours per shift: 8
 Break minutes per shift: 30
 Shifts per day: 1
 Days per week: 5
Calculating Takt time,
we have, as defined: (8 x 60 x 60 – 30 x 60)/700 = 38.6 sec per piece
 Creating VSM: Current State Map

Walk the value stream - see the actual work place

Second
 Quickly walk the process with your team in order to understand the general flow.
Step
 Define the start and stop point of the process
Following need to be accomplished during process walk
 Identification of both seen and unseen wastes.
 See how the process actually is executed
 Understand how the problems are identified
 Hear the comments that are exchanged between process associates
 Determine how technology contributes to the execution of the processes

Note: Getting ready to map the process, have an A3 paper ready:

• Always draw the map on paper first.
• Equip yourself with Pencil and an eraser
• The best value stream maps have eraser marks all over them, Don’t use a pen when
drawing
Creating VSM: Current State Map

Third Map Basic Production Processes

Step
 Map from the end of the process and Begin drawing the map back to front
 Focus on the Material flow first, (Bottom portion of the map) This includes the process
boxes and data boxes.

 Draw the Customer Box with the details

 In the top right side of the paper, we draw the little saw topped box representing the
customer
 Also note their monthly and/or daily demand along with takt time as calculated in step 1
 Mapping
Production
Process Customer Demand
700 pieces per day
(Takt time = 39 sec)

Customer

Stamping Welding Assembly Shipping

I 1 I I
1 1 1
 Creating VSM: Current State Map

Fourth Define the data to be collected:

Step
• What Data is required..??
• The Data needs to be obtained by observation
For Example:
Line Items Data Line Items Data
Cycle Time (C/T) Raw Material Batch Size
Value Added Time (VAT) Shift
Lead Time L/T Operators
PCE % Inventory
Change over time (C/O) Distance
Down Time (%) Available time
…… ……
 Creating VSM: Current State Map

Fourth Collect and Map Data:

Step Adding the Inventory/Wait Times
I  The Yellow Triangles with ‘I’ in middle indicate the Inventories in between the processes.
During process walk, the number of pieces in between should be counted and noted under
the triangle.
 These pieces(inventories) in between processes can be converted to days supply.

For Eg: If the average daily demand is 10 pieces and the inventory between Process
Step A and Process step B is 20 pieces. Then,
Days Supply = (Inventory b/w A & B)/ Average Daily Demand
= 20/10 = 2 days Supply.
 As an Example; there are 486 sub assemblies b/w the welding and assembly stations.
This equates to 0.694 days’ supply (486 units/700 daily demand)
 Creating VSM: Current State Map

Collect and Map Data:

Fourth
Step Calculating Inventory/Wait time explained:
Assuming the Customer demand is 100 pieces/day, converting this to time scale

Process XX
I I
1
300 Pieces 200 Pieces

C/T = 4 min
C/O = 20 min
Yield = 98%
Batch = xx
? ?

4 min
 Adding
Inventory/Cycle
time Data Customer Demand
700 pieces per day
(Takt time = 39 sec)

Supplier Customer

I
700 Pcs

Stamping Welding Assembly Shipping

1 I 1 I 1 I 1
359 486 128
Pcs Pcs Pcs
Total C/T= 25 Sec Total C/T= 30 Sec Total C/T= 42 Sec
 Creating VSM: Current State Map

Fifth Step Mapping Information Flow:

 A Step that differentiates between a traditional process maps and Value stream mapping
 In Value Stream Mapping, in addition to learning about how material flows, we also get to
understand how information flows
 For Eg, if the information flows electronically; we use a lightening bolt looking arrowed line. If
communicated manually; we use a straight arrowed line.
 In this step, we also draw production control box.
 In the scenario considered, it is seen that production schedules each step in isolation. Each
work station gets its unique production schedule. The same is represented using straight
“manual” information lines.
 Also, the information flow the customers and suppliers is also added. In our case, customer
sends 30 days electronic forecasts as well as electronic daily orders. Conversely, company
sends its supplier an electronic weekly forecast.
 Adding
Information flow Production 30 Days
Weekly
Control Forecast Customer Demand
Forecast
700 pieces per day
(Takt time = 39 sec)
Daily Order

Supplier Customer

Daily Schedule

I
700 Pcs

Stamping Welding Assembly Shipping

I 1 I I
1 1 1
359 486 128
Pcs Pcs Pcs
Total C/T= 25 Sec Total C/T= 30 Sec Total C/T= 42 Sec
Creating VSM: Current State Map

Sixth Adding Timeline and Calculating Current State:

Step  The timeline is added to the bottom of the value stream map.
 The saw tooth looking line helps us separate the value added cycle time (taken from data
boxes) from the non value added time (days’ or hours)

Stamping Welding Assembly Shipping

I 1 I I
1 1 1
359 486 128
Pcs Pcs Pcs
Total C/T= 25 Sec Total C/T= 30 Sec Total C/T= 42 Sec

1 Day 0.513 Days 0.694 Days 0.183 Days

25 Sec 30 Sec 42 Sec

Creating VSM: Current State Map

 Calculating Current State:

 Summing up all the ‘value-add’ cycle times, i.e. for Stamping, welding and assembly.
Hence Value Added Cycle time/process time = 25+30+42 = 97 seconds
 Summing up all the ‘inventory’ times.
Hence Inventory time (also called Production lead time) = 1 + 0.513+0.694+0.183 = 2.39 days!!
Calculating Process Cycle Efficiency
= (∑Process Time/ ∑Lead Time)*100
= [97Seconds/2.39 days*8 Hours Shift*60Mins*60Secs]*100
= 0.14 %

Indicates what.??
‫ ۔‬Only 0.14 % of the total lead time is adding value, the rest wasted on waiting in inventory!!
‫ ۔‬Our Production processes have the potential of shortening the lead time significantly if we
can work reduce the amount of inventory.
Adding timeline &
calculating Production
Weekly 30 Days
Process Cycle Control Customer Demand
Forecast Forecast
Efficiency 700 pieces per day
(Takt time = 39 sec)
Daily Order

Supplier Customer

Daily Schedule

I
700 Pcs

Stamping Welding Assembly Shipping

I 1 I I
1 1 1
359 486 128
Pcs Pcs Pcs
Total C/T= 25 Sec Total C/T= 30 Sec Total C/T= 42 Sec
PLT = 2.39 Days
1 Day 0.513 Days 0.694 Days 0.183 Days
VA/T = 97 Secs
25 Sec 30 Sec 42 Sec
PCE = 0.14 %
Common Current State Issues

 Lots of waiting
 Lots of travel
 Lack of communication (or lots of poor communication)
 Lack of skills/relevant training
 Too many handoffs
 Too many approvals
 Too many workarounds
 Different prioritization rules in different departments
Analyzing Current State Map

When analyzing current state map, we look for one

thing, BALANCE..!!
 Balance between the customer demand and the total
capacity of the process
 Balance between operations, mainly in terms of process
time
 Balancing in the sequencing of the products, to assure a
predictable and steady production pace.
 Types of activities in a process: VA/NVA/NNVA

Value Added Activities are those activities for which the customer is ready
to pay. Those steps help to bring about transformation in the product or
service and add a feature or trait that the customer values and wiling to
Value Added
pay.
Activities • It should change the form feature, feeling or function that the customer
VA “adds”
desires
to the profit • It should be done correctly the first time
line, NVA
“subtracts” Necessary Non- Necessary Non value activities are those activities for which customer is
from the Value Added not willing to pay but that cannot be avoided.
profit line Activities

NVA activities refer to activities or tasks that consume time (people,

Non-Value Added expenses) but doesn’t physically advance the product or increase its
Activities value and the customer would not want to pay for it. Falls under the seven
categories of the waste.
 VA/NVA Table and Analysis

Activities Time Spent Cumulative Adds Value Changes Right the First VA/NAVA
(Hours, Days, time Spent (Not Inspection Product or Time(not waste
Week, Month) or Fix it work) Service or rework)
physically
Identification of Seven Activity 1 30 Mins 30 Mins Y Y Y VA
Wastes Activity 2 70 Mins 100 Mins N N N NVA
1. Transportation
2. Inventory Activity 3 25 Mins 125 Mins Y Y Y VA
3. Movement Activity 4 50 Mins 175 Mins N N N NVA
4. Waiting
Activity 5 10 Mins 185 Mins N N N NVA
5. Overproduction
6. Over-processing Activity 6 20 Mins 205 Mins Y Y Y VA
7. Defects …… …… …… …… …..

Calculating Time
Total Time
Objective of the Exercise.!!
Value Added Time
 Eliminate NVAs
Non Value Added Time
 Optimize VAs
Creating VSM: Future State

Eliminate unnecessary NVA Steps

Objective Reduce necessary NVA steps
Optimize VA Steps

Eliminate/merge steps
Create Parallel Paths
Implement Pull, if continuous flow is not possible
Future State Reduce or eliminate batches
Design
Considerations Create standard work
Create an organized visual place
Eliminate unnecessary approvals
Identify and stop performing NVA tasks from customer point of view
Creating VSM: Future State Questions

 What are the customer requirements?

 Where can continuous flow be put in place?
 Where should pull systems be implemented?
 What is the single point of scheduling?
 How do we level the load?
 How will you make the progress and delays of the work visible?
 What process improvements are necessary to achieve the future
state?
 Creating VSM: Future State

 After analyses of current state map, we will have a number of improvement ideas that can be
implemented.
 Before doing this, it is useful to illustrate what process would look like after we make the
changes.
Some useful principles to be considered when creating the future state map are:

‫۔‬ The most important principles of lean and the key to an efficient value stream is the goal of
continuous flow.
Move ‫۔‬ I.e. Continuous production without inventory or waiting time.
towards ‫۔‬ Since continuous flow is difficult to achieve, the principle of pull production has achieved
continuous more attention.
flow ‫۔‬ Flow should not be seen as binary characteristics; there are degrees of flow, ranging from
continuous flow through sequenced flow to pull and finally push production.
‫۔‬ Kanban is a well known method for pull production.
 Creating VSM: Future State

‫۔‬ Considering the example, or any real scenario, the work content differs between operations.
‫۔‬ The cycle time for stamping is nearly half the assembly.
Rebalancin ‫۔‬ This imbalance b/w operations will either result in overproduction or idle time in operations.
g the ‫۔‬ We should aim to reduce the waiting time and fill up the takt so that the operations will have
Process: equal work content.
‫۔‬ Reorganizing the work, combining activities should be evaluated and planned accordingly.
‫۔‬ Results in more compact layout with less transportation and less inventory.

Changing ‫۔‬ Advantages of increased batch size is that we increase the total capacity of the operations
Batch in which we have changeovers
Sizes: ‫۔‬ Higher batch sizes, results in lower change overs. (mainly physical changeover of
equipment, but also the mental changeover of personnel)

Reducing ‫۔‬ Reduction of Changeover using SMED (Single Minute Exchange of Die)
Changeover ‫۔‬ Converting ‘internal’ changeover to ‘external’ changeover, meaning that more of changeover
times is done while the equipment is in use
 Future State: Production 5,15 & 30 Days Customer Demand
Representational Twice a day 700 pieces per day
Control Forecast
order (Takt time = 39 sec)

Daily Order
Supplier 10 Customer

10
10 10

Envisaged Improvements: Assembly Cell Shipping

• Changes in the distribution of 1
work 3
• Pull System
• Reduction in inventory 0.5 Days
• Reduction in Lead times etc. Total C/T= xx Sec
PLT = xx Days
0.5 Days
VA/T = xx Secs
xx Sec
PCE = x.xx %
 Improvement Plan and Implementation

Process
Step or Original Person Due Metrics and
# Function Problem Action Items Responsible Date Comments
1
2

Putting 3

Plan into 4

motion.!! 5
6
7
8
9

10
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