010 R Module 15 Waste Identification & Analysis v3

CPS FOR DEALERS
Waste Identification and Analysis

Chase Waste
VST Phase: Find-It

Module 15
Version 3 - 2010
Version 3 Caterpillar: Confidential Green
Definition
Chase Waste
Drive for the continuous and relentless elimination of waste in all
processes.
- Caterpillar Production System for Dealers Manual
CPS FOR DEALERS 3

Version 3.0 Caterpillar: Confidential Green
Objectives
At the end of this module, you will be able to:
 Recognize waste within a process and across a value stream

― Differentiate between value-add and non-value-add activities (work elements)
 Select appropriate methods to identify sources of waste in a value
stream
― Apply tools when needed to analyze specific wastes
• Value Added/Non Valued Added (VA/NVA) Analysis
• Day in the Life
• Spaghetti Mapping
• Communication Circle
 Explain how to quantify the improvement potential from waste reduction
CPS FOR DEALERS 4

Everything Flows to the Customer
 Customer Demand
― Everything starts and ends with the customer: quantity, quality characteristics,
lead time, and price
 Flow
― The goal is to implement continuous flow throughout the value stream so that
customers receive the right product, at the right time, in the right quantity
 Pull
― The vision is that all material flows are triggered by actual customer demand
• Pull is not appropriate in every situation
• Implementation may depend upon customer response requirements
CPS FOR DEALERS 5

Work Element Categories
Something that the

customer would actually
Waste does not add be prepared to pay for
value and is not (adds value)
necessary to meet
customer requirements Value
Added
Non-value (Process)
Added
Elements
(Waste)
of work
Non-value added,
but has to be done
Non-value Added to accomplish the
(Incidental Work) value-added work
CPS FOR DEALERS 6

Source: McKinsey
Value Added vs. Non-Value Added
VA NVA
Traditional: Improve cutting Exceptions (when you

speeds, etc. would make a capital
investment in a VA
VA NVA process):
Safety issues need to be
addressed
Quality issues need to be
addressed
VA NVA
CPS: Eliminate
Waste!!!
CPS FOR DEALERS 7

Value-Added (VA)
Value Added is a small piece of the pie
World Class Cycle Efficiency Benchmarks
are as follows:
· Assembly Environment: 20% - 30%
· Machine Shop/Fabrication: 5% - 15%
· Test/Continuous Process: 50% - 80%
· Transactional Business Process: 25% - 50%
5
Value Added
% · Cognitive/Creative Business Process: 12% - 25%
Transportation
Inventory Waiting
Over Processing Over Production

Excess Defects
Motion
CPS FOR DEALERS 8

Levels of Waste
LEVELS OF WASTE
Value Stream Waste Process Waste
 Easy to spot  Involves waste within the process or microwastes
 Big impact on Value Stream within a process
 High potential for improvement
Examples Examples
 Work-in-progress  Poor workstation design
 Poor facility dealer layout – transporting  Unsafe workplace or process
material  Bending and reaching
 Rejects  Double handling
 Returns  Temporary storage
 Rework  Paperwork
 Material not delivered to point of use  Speed and feed of the equipment
 Batch size
 Poor equipment maintenance
CPS FOR DEALERS 9

Identifying Waste on a Value Stream Map
Potential waste between process steps
Teardown & Repair Assembly & Test

Inventory
Inspection Inventory Rod, Tube, Piston Inventory
20 Units 40 Units 130 Units
Team Members 1 Staff Team Members 2 Staff Team Members 2 Staff
Available Time 480 Mins Available Time 480 Mins Available Time 480 Mins
Process Time 45 Mins Process Time 60 Mins Process Time 90 Mins
Cycle Time 60 Mins Cycle Time 80 Mins Cycle Time 110 Mins
Changeover Changeover Changeover
10 Mins 10-20 Mins 30 Mins
Time Time Time
OEE 60 % OEE 30 % OEE 50 %
Potential waste within process steps

(Look for difference between Cycle Time & Process Time)
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Cycle Time and Process Time
 Cycle Time is defined as a timed observation of how often a part or product is
completed by a process.
― Cycle Time consists of two elements:
• The time it takes to complete the Value Adding work elements
• The time it takes to complete Non Value Adding work elements
 Process time or Value creating time is defined by those elements that actually
transform the product or service in a way that the customer is willing to pay for.
― Process time is usually lower than cycle time.
 In some situations, cycle time and process time are equivalent,

Cycle time
can you give me an example when they may not be?Process time or value
creating time
CPS FOR DEALERS 11

Value Stream Waste Analysis
Methods to Identify Waste
 Review Area Metric & CI Board *
― Performance Data (PQVC metrics, expense statements, etc.)
― Conduct Process Improvement Dialogues (PID)
 Review Cultural Assessment & Employee Opinion Survey (EOS) data *
 Walk the Value Stream (Waste Walk)
― Talk to Team Members, Employees, Subject Matter Experts
― Update Current State Value Stream Map
 Analyze standard processes (Standard Work)
― Functional Deployment Map
― VA/NVA Analysis
― Day in the Life
 Conduct specific waste analysis
― Spaghetti Mapping (Noodle Chart)
― Communications Circle * If available
CPS FOR DEALERS 12

Review Area Metric & CI Boards
Overall Dealer Metrics

Process
Improvement
Dialogue
Service Operations
Metrics (Dealership)
Service Operations
(Store)
Hydraulics
Rebuild VS
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Review Cultural Assessment & EOS Feedback
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Walk the Value Stream – Waste Walk
 Waste Walk – formal value stream review by cross-functional team

with goal of identifying and documenting waste
― Conducted during VST Find-It phase, during a targeted RIW, and in
Sustain-It phase (Continuous Improvement process)
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Walk the Value Stream
Waste Walk Overview
 Begin at end nearest to customer
 List potential:
– Excess motion, inventory, product transportation, waiting
– Batch production
– “Rework” or “Scrap” inventory
– Machines down or material shortages
 Photograph obvious waste
 Add waste elimination items to Find-It project portfolio list
 Update Current State VSM with each waste found
 Conduct further waste analysis (refer to additional tools section)
 Document standard processes (Standard Work)
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Situation Possible Waste (Parts Operations Value Stream) Waste
Excessive  Uncontrolled Inventory – supply beyond customer
Parts forecasted demand
Inventory  Over Production – excess supply of exchange parts
Parts not at  Excess Motion – Parts employee or Service Tech does

point of use not have the right part for a customer
 Transportation – Store to Store, Cat to Store, or Store to
Field Technician
Parts Warranty  Over Processing – Parts department must supply
Reporting Caterpillar failed parts to improve future quality and
supplier recovery
 Defects – Part not inspected prior to delivery, incorrect
part ordered or damaged part received.
Emergency  Waiting – Parts & Service department waiting on part to
Back-orders supply to end customer job
 Unused Creativity – Parts & Service employees spending
time calling to source part vs. performing value add work
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Identify Waste Sources
Storage
Place of usage
Excess motion –
to retrieve parts Waiting – High Dyno
Change-over
Defects - Scrap
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Current State VSM – Record & Prioritize Improvements
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Analyze Standard Processes
Functional Deployment Maps
Engine Rebuild Quote

Preparation Functional
Deployment Map:
― Quote build cycle time
variation (0 – 14 days)
― Further analysis needed:
• Standard process elements
• VA/NVA analysis
CPS FOR DEALERS 20

Toolkit: Standard Work Analysis.xls
SWS worksheet
Document Current Work Elements (Total Cycle Time)
Current State – Standard Work Elements
Teardown &
Inventory
Inspection
20 Units
Team Members 1 Staff
Available Time 480 Mins
Process Time 64 Mins
Cycle Time 104 Mins

Changeover
10 Mins
Time
OEE 60 %
1. Compare CS VSM Process vs.

Cycle time
2. Document standard process work
elements and element times.
CPS FOR DEALERS 21

Standard Work Analysis.xls
Analyze Standard Processes Waste Analysis worksheet
Document VA/NVA Work Elements
VA Necessary NVA NVA - waste
Work Element Resource CT
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Analyze Standard Processes Standard Work Analysis.xls
VA/NVA Chart Results Waste Analysis worksheet
CPS FOR DEALERS 23

Day in the Life (DITL)
 Spending a day working in a process area as an employee of that
area (or working alongside an employee of that area) to
understand where their time is spent
― Entails actually performing the process steps
― The goal is to ‘experience’ and not just observe
CPS FOR DEALERS 24

VA/NVA Analysis Data Collection Methods
 Analysis methods:
― Activity Sampling – record what a Team Member in a workgroup is
doing at random times
― Shadowing – follow Team Member and record tasks they do and how
long each one takes
― Self-Recording – ask Team Member to record what they spend their time
doing
 Waste analysis tool:
― Enter times into VA / NVA excel tool to chart results
CPS FOR DEALERS 25

Analyze Processes DITL Chart Presentation Tool.xls
DITL Current State: PSSR Where Time Spent
20%
25% Phone Call to Customers
Service Quote Prep Time
Parts Quote Prep Time
Invoice / Acc Queried / Collections /

5% Disputes
20% Product Problem Follow-up
Paper Work
15%
CPS FOR DEALERS 26
15%
Analyze Processes DITL Chart Presentation Tool.xls
DITL Future State of PSSRs Time Spent
5% Phone Call to Customers

5%
5% Service Quote Prep Time
Parts Quote Prep Time

10%
Invoice / Acc Queried / Collections /
Disputes
Product Problem Follow-up
10%
65% Paper Work
CPS FOR DEALERS 27

Waste Example – 992 Axle
Play Video
CPS FOR DEALERS 28

Current State Spaghetti Map 992 Axle
One Piece Axle Spaghetti Diagram
Wheel – Blue
992 Axle ~ 3.1 mi
Axle Shaft – Red
Housing – Purple
Differential – Orange
Finished Axle – Green
L 2533
G UPM
2496 2504
2491
2498
2520
SM
2589 2517
L
2541 B UPM
2539 L
2534 IC
P
T
N
A
L
O
S
R
E
T
IL
F
D
N
A
S
IV
R
D
C
X
E
2596 2595
L L L
2598 2597 R
G Paint Line G Paint Booth L Test e
2516 2558 p
L Kitting a
L 2591 c
4 2 41 4 0 3 9 38 37 36 35 34 33 32 3 1 30 29 28 27 27 26
2 6 25
25 2 4
24 2 3
23 22 2 21 2 0 1 9
19 18 18 171 71 6
16 1 5 14 13 1 2 11 10 09 0 8 0 7 06 05 0 4 0 3 02 01 0 0
T
E
V
R
D
G
W
/S
L
A
IN
F
2511 k
A A
2540
B
B
C
C
Tool 2581 2581

D
D
Room P
E
E
3395 L L
F F
1
8
G
G
2516 L PL13
H
H
( Z1
)
42
4 2 41 41 44
00 39
J
J J J
( Z2
)
K
K K
K
B Paint 2581
( Z3
)
L
L
L L
( Z4)
M M
M M
( Z5
)
N
N
N N
( Z6)
P
P
P P
( Z7
)
Q
Q
Q Q
( Z8
)
R R
R
( Z9
)
H Paint
S
S
S S
T T
39 3 8 3 736 3 5 26 25 2 4 2 3 22 21 2 0 1 9 18 17 1 6 1 5 14 13 1 2 11 10 9 8 7 6 5 4 3 2 1
34 33 32 3 1 30 29 28 27
CPS FOR DEALERS 29

Future State Layout – 992 Axle Assembly
Future State LWL Spaghetti Map Wheel – Blue
Axle Shaft – Red
Display Area
Lunch Housing – Purple
Room
Differential – Orange
Finished Axle – Green
3395
2496 2595
2491
Kitti
Paint Line Test 2597 ng
B UPM
L
L C O OL A N T
I
P
AND FI L
S
R
E
T
EXC D R IV
S
E
2581 2596 Pack

aging
2598 2581
CMM
2533
Maint. 2511 Over

2591 sized
2516 2558
2511 L
2520
2504
PL
18
Tool Room 2504
2541 2534
2539 LWL Expansion 2581

2498
CPS FOR DEALERS 30

Waste Analysis Tools
Spaghetti Mapping example Excess Motion – Engine Packaging Yard
Engine Staging CT time: 2:45
Serial number: BFM01645
ID number: 04435
Distance Traveled: est. 4,000 ft
Engine selected randomly - ship loose box not located (not in inventory)
A B
Fork Lift
C Ready to Ship
A = Packaging Office
B = Shipping & Receiving
C = Packaging
E = Engine
CPS FOR DEALERS 31

Spaghetti Mapping – Observe and Record
Path # Trips
A to B II
B to C I Machine
Computer
C to B I IBM Compatible
A
B to A I C
B to D III
B D Tool Box
D to B III
D to E I G
Packing Box
E to B I
B to E II
E
Machine
E to D I
F
D to C I
C to D I Gage
E to F I
F to E I
E to G I
G to A I
CPS FOR DEALERS 32

Spaghetti Mapping - Calculate Excess Motion
 Multiply the number of trips by the distance
 Record the reason with the distance ** When mapping
 Create summary for one cycle transactional processes,
measure in time, not
 Create summary for one shift or day distance **
 Convert into local units (Miles, Kilometers)
Distance / Total
Path # Trips Reason
trip Distance
B to A I 5 ft 5 Go to machine 51 ft/pc *
B to D III 7 ft 21 Get Tool 100 pcs/shift
D to B III 7 ft 21 Take tool to machine = 5,100 ft/shift
D to E I 4 ft 4 Take tool to machine
51
CPS FOR DEALERS 33

Waste Analysis Tools GF
Communication Circle CT MS
 Tracks communications between team

members
― Do ahead of floor layout moves – helps SM YC
identify people who need to be in close
proximity
 Useful for database tracking, such as

a request or notification, as it walks EM MW
through the system
 Measures the amount of time a RS VA
“product” stops at each location, and Number Of Steps = 20

whether it backtracks, before reaching
its destination
Example generated by eVSM software
CPS FOR DEALERS 34

Eight Wastes
Waste reduction sounds easy but there is actually much to it. The
purpose is not to simply make one pass over your operation to seek
and destroy waste. The purpose is to create a connected value stream
in which all team associates are being forced to think, solve problems,
and eliminate waste.
J. K. Liker and D. Meier
CPS FOR DEALERS 35

Chase Waste
GMMCo Waste Elimination Process
Mr. Ed Melicor (left) and Mr. Jayaram (right) during the

release of a detailed “Safety Policy Manual” and “Waste
Elimination Policy manual” on 25th Nov’09
Process Manual Process Map of Waste Elimination in Gmmco

Waste Elimination Process Map
CPS FOR DEALERS 36

Waste Improvement Potential Analysis
Resource: Waste Analysis Checklist
CPS FOR DEALERS 37

Team Exercise – Waste Analysis Methods
Using the Waste Analysis Checklist as a
resource, determine the following for the Rental
value stream wastes assigned to your team:
 What method or tool would uncover the waste?

 What is a potential cause of this waste?
 Optional: What are potential resolutions?
– Note: many of the resolutions discussed later in training.
 What is the primary metric impact for this waste?
– Does it Impact People, Quality, Velocity or Cost targets?
Toolkit: Waste Analysis Checklist.xls
CPS FOR DEALERS 38

Waste Examples
Rental Value Stream
Defects: Wrong system machine status

– unable to rent
Safety: Need flammables storage
Excess Motion: Inspector distance

Waiting: Units waiting for service between work areas
CPS FOR DEALERS 39

Review
 What is a non-value added activity?

 What is a value added activity?
 What are some methods of waste identification?
CPS FOR DEALERS 40

Questions?
CPS FOR DEALERS 41

Appendix
 Spaghetti Mapping Process
 Day in the Life Tool Overview
 Waste Analysis Tool Instructions

― Standard Waste Analysis.xls
CPS FOR DEALERS 44

Spaghetti Mapping
 Basics:
– Observe the current process and area
– Create a simple map of the area
– Observe the operation and record on your simple map
– Capture one cycle only
– Measure the area and calculate the distances from the simple map
– Analyze the data
– Brainstorm ideas for improvements
– Use the information to map the new process
– Simulate the new process (using tools such as Cardboard City)
CPS FOR DEALERS 45

Spaghetti Mapping – Create the Simple Map
 Super accuracy not needed IBM Compatible

A
 Get the major items and C
working points from the Team B D
Member G
 Make it big enough to E

understand F
 Label the working points
CPS FOR DEALERS 46

Day in the Life Tool (DITL)
 To understand what a work area employee experiences on a daily basis (discover the
‘invisible story’)
 To identify how schedule can be more focused on value-added activities
 To help build a relationship with work area people
Purpose
 To demonstrate that the role of the work area is important and valued
 To demonstrate you are prepared to ‘get involved’
 Spending a day working in the shop, parts warehouse or in a process area as a work
area employee (or working alongside a work area employee)
What is it?  It would entail actually maintaining or repairing products, meeting customers, etc
attending the daily meetings, taking breaks, and lunches with the work area team
 The goal is to ‘experience’ and not just observe what goes on in the work area
 Can be used in the Prework phase to understand operational, managerial, mindset issues.
 Can be used in the Find-It phase to gain deeper understanding of area to be transformed.
Context
 Can be used in the Fix-It and Sustain-It phases to understand impact of changes
 Experiencing rather than observing uncovers valuable insights into what it feels like to
actually work in that environment
Why it works
 Understanding the frustrations ‘first-hand’ enables a better understanding of what needs
to be improved and why
CPS FOR DEALERS 47

VA/NVA Analysis
Process waste
 Indicates proportion of team member’s time spent on Value-Added
activity
 Helps indicate where largest areas of Non-Value Added activity
exists
 Uses “indicative sample” not precise quantification
 Larger sample size is better (avoids “you saw us on a bad day”)
 Review observations with team members and explain that analysis
is process-focused, not personal criticism
 Requires relatively stable and standardized work sequence for
valid analysis
CPS FOR DEALERS 48

Focus on Value-Added Activities
Approximate percent of time
100% 100%
Problem-solving, Commit to a schedule
people development, 20
20 that includes robust
people development Improvement opportunities
long-term planning
activities.
Supervisors identify all
unnecessary paperwork and
Integrate performance
activities.
management and 80
80
problem-solving into
Management gives
Process and activities.
‘permission’ to eliminate
fire-fighting 80
useless reporting.
Core team clarifies new

Streamline and filter section manager roles and
out non-value added shadows to teach new ‘day’.
process management 20
Typical supervisor schedule Improved supervisor schedule
CPS FOR DEALERS 49

Comparison of Techniques
Shadowing/
Interview Activity log direct observation
BB time required Low Low High
Supervisor time
required Medium High Low
Level of detail in
output Low Medium- High
high
Potential
disruption to Low Medium Medium
facility process
CPS FOR DEALERS 50

Toolkit: Standard Work Analysis.xls

Standard Work Wastes Analysis Tool
1. List the process steps
2. Observe the process and record observations
3. Determine number of team members needed
4. Determine if individual work elements can be accomplished within takt
5. Develop a strategy to remove waste
6. Analyze interferences
Instructions to complete the Standard Work Analysis tool
CPS FOR DEALERS 51

1. List process steps (work elements to analyze)
(Copy and Paste Special (Values) SWS /SWES elements into SWS tab)
Cycle Time format:

H:MM:SS
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Observation Form: Fill in Non-Work Element Data
(Yellow Boxes)
 These are used to identify the work area as well as document other wastes not
captured during work element observations.
CPS FOR DEALERS 53

2. Observe the process and record observations
Observe each step and indicate how much time of each step is in each category.
Note: if you don’t know

exactly which column to
use, make a note of what
was observed and adjust
later
CPS FOR DEALERS 54

Non-Simultaneous Motion
Used mainly for

very short cycle
time operations.
Indicate if there is
an opportunity to
accomplish two
work elements at
the same time
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Ergonomics
If you notice
ergonomic issues,
note them in this
column.
CPS FOR DEALERS 56

3. Determine number of team members needed
Document Resources Involved in the Process
 On the Resources tab, type the names of the

resources
 The tool provides space for seven
CPS FOR DEALERS 57

4. Work Element Analysis
VA/NVA calculated
Populate these fields

(remainder calculated)
CPS FOR DEALERS 58

Document Observations on Waste Analysis Sheet
 Select a resource for each

work element
 Type times for each work
element
 Totals and percentages will
calculate automatically
― By default, the tool adds
all the times to get the
total cycle time.
― It may need to be
adjusted if multiple items
happen at the same time.
Populate these
fields
CPS FOR DEALERS 59

Total Waste Waterfall
(Another way to look at total amount of waste in process)
Waste Analysis
700
4.4
600
500
Minutes
400 504.0
659.9
300
200
0.0
100 63.0
8.5 9.5 0.5 5.0
65
0
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ng
VA
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CPS FOR DEALERS 60

Determine if Resources can Meet Takt
 Do we have machine capacity?

― In this example, all machines are below
takt, so not a capacity issue.
 Do we have enough people?
― Team Member 1 had 88 minutes of work.
― With a 42 minute takt, process will need at least 2 people.
• 88 ÷ 42 = 2.1 people
 Do we really need more people?
― 63 minutes of Team Member 1’s time is waiting.
― Process improvement can get time below takt, and waiting is probably our best
opportunity
CPS FOR DEALERS 61


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CPS FOR DEALERS

Waste Identification and Analysis

VST Phase: Find-It

- Caterpillar Production System for Dealers Manual

CPS FOR DEALERS 3

 Recognize waste within a process and across a value stream

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Something that the

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Traditional: Improve cutting Exceptions (when you

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Over Processing Over Production

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Teardown & Repair Assembly & Test

Process Time 45 Mins Process Time 60 Mins Process Time 90 Mins

Potential waste within process steps

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 In some situations, cycle time and process time are equivalent,

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Overall Dealer Metrics

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 Waste Walk – formal value stream review by cross-functional team

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Parts not at  Excess Motion – Parts employee or Service Tech does

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Engine Rebuild Quote

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Available Time 480 Mins

Process Time 64 Mins

Cycle Time 104 Mins

1. Compare CS VSM Process vs.

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Service Quote Prep Time

Parts Quote Prep Time

Invoice / Acc Queried / Collections /

5% Phone Call to Customers

Parts Quote Prep Time

CPS FOR DEALERS 27

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Tool 2581 2581

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2581 2596 Pack

Maint. 2511 Over

2539 LWL Expansion 2581

CPS FOR DEALERS 30

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 Tracks communications between team

 Useful for database tracking, such as

through the system

 Measures the amount of time a RS VA

“product” stops at each location, and Number Of Steps = 20

010 R Module 15 Waste Identification & Analysis v3

010 R Module 15 Waste Identification & Analysis v3