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Value Stream Capacity. Understanding Value Stream Decision Making. Understanding Value Stream Capacity. The production quantity that can be achieved at each step in the value stream or production process.

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value stream capacity

Value Stream Capacity

Understanding Value Stream Decision Making

understanding value stream capacity
Understanding Value Stream Capacity
  • The production quantity that can be achieved at each step in the value stream or production process.
  • There are usually one or two production steps (cells, machines, or work centers) that constrain the flow through the value stream or business unit.
  • We need to identify the production capacity at each step in the value stream (or production flow) so that we can understand the flow through the entire process.
  • Where is the data required for this analysis?
    • On the Value Stream Maps
analyzing the capacity
Analyzing the capacity

Productive capacity

Value added activities

Provides value to the customer

Comes directly from customer pull

Non-productive capacity

Non-value-added activities

Change-overs, unplanned maintenance, making for stock, defects/rework, etc. Also meetings, 5S, improvement activity

Available capacity

Capacity that is not currently being use for productive or non-productive activities.

oem value stream map

Supplier

Supplier

Customer

Customer

Machine

Shop

Machine

Shop

Machine

Shop

Machine

Shop

Assembly

Assembly

Assembly

Machine

Shop

Machine

Shop

Machine

Shop

Assembly

Assembly

Qty = 30,000

C/T = 70s

Batch = 1500

Set Up = 10,800s

Scrap = 10%

Rework = 20%

Downtime = 15%

Inspection = 10%

Insp Time = 120s

# cells = 8

Crew Size = 4

# of people = 34

Shifts = 1

Qty = 15,000

C/T = 180s

Batch = 600

Set Up = 1200s

Scrap = 5%

Rework = 10%

Downtime = 5%

Inspection=100%

Insp Time = 30s

# cells = 5

Crew Size = 1

# of people = 10

Shifts = 2

Qty = 3,000

C/T = 210s

Batch = 20

Set Up = 600s

Scrap = 0%

Rework = 10%

Downtime = 0%

Inspection=100%

Insp Time = 60s

# cells = 2

Crew Size = 5

# of people = 10

Shifts = 1

Qty = 3,000

C/T = 120s

Batch = 1

Set Up = 0s

Scrap = 0%

Rework = 2%

Downtime = 0%

Inspection=0%

Insp Time = 0s

# cells = 1

Crew Size = 1

# of people = 1

Shifts = 1

DATA BOXES

OEM Value Stream Map

Purchase Forecasts

Demand Forecasts

S&OP

3,000

per Month

Order

Kanban

Welding

Shipping

Shipping

Shipping

standard cycle time

C/T

Standard Cycle Time

Cycle Time:

How often a part or product is completed by a process. (or: the time taken for an operator to go through all his/her work elements before repeating them.)

  • Cycle time includes all processes VA & NVA
  • Cycle time is measured by tracking it with a stop watch
  • We match the cycle time to the customer takt time
  • The process is “under control” if the cycle time is consistent
crew size and number of cells
Crew size and number of cells
  • Crew size - the number of people in the cell or operation required to produce to the cycle time recorded on the Value Stream Map
  • # of cells = the number of cells running in parallel. Similar cells, working on the same products and performing the same process step.

Crew size = 5

# of cells = 1

calculate the capacity for the machine shop

Supplier

Supplier

Customer

Customer

Machine

Shop

Machine

Shop

Machine

Shop

Machine

Shop

Assembly

Assembly

Assembly

Machine

Shop

Machine

Shop

Machine

Shop

Assembly

Assembly

Qty = 30,000

C/T = 70s

Batch = 1500

Set Up = 10,800s

Scrap = 10%

Rework = 20%

Downtime = 15%

Inspection = 10%

Insp Time = 120s

# cells = 8

Crew Size = 4

# of people = 34

Shifts = 1

Qty = 15,000

C/T = 180s

Batch = 600

Set Up = 1200s

Scrap = 5%

Rework = 10%

Downtime = 5%

Inspection=100%

Insp Time = 30s

# cells = 5

Crew Size = 1

# of people = 10

Shifts = 2

Qty = 3,000

C/T = 210s

Batch = 20

Set Up = 600s

Scrap = 0%

Rework = 10%

Downtime = 0%

Inspection=100%

Insp Time = 60s

# cells = 2

Crew Size = 5

# of people = 10

Shifts = 1

Qty = 3,000

C/T = 120s

Batch = 1

Set Up = 0s

Scrap = 0%

Rework = 2%

Downtime = 0%

Inspection=0%

Insp Time = 0s

# cells = 1

Crew Size = 1

# of people = 1

Shifts = 1

DATA BOXES

Calculate the Capacity for the Machine Shop

Purchase Forecasts

Demand Forecasts

S&OP

3,000

per Month

Order

Kanban

Welding

Shipping

Shipping

Shipping

calculate the employee capacity
Calculate the employee capacity

Step 1. Calculate the Total Available Employee Time

(#employees x #days x Labor Hrs per shift)

Step 2. Calculate the Employee Productive Time

(Qty per Month x Cycle Time x Crew Size)

Step 3. Calculate the Emp. Productive Capacity Percentage.

(Employee Productive Time / Total Available Time)

Step 4. Calculate the change-over time, scrap & rework time, downtime, inspection time.

C/O = (quantity/batch size) x Change-over time

Scrap/rework = (Qty produced / (1- (scrap + rework %) ) * (scrap + rework%) x Cycle Time x Crew Size

D/T = Downtime% x Total Available Time

Inspection= (Total produced + scrap/rework) x Inspection % x Inspection time

Over-production = OP Qty x Cycle Time * Crew Size

5S & Clean-up = 5S Time x #Employees x #days

Meetings = Meeting Time x #Employees x #days

TPM = TPM Time per day * #days

Step 5. Calculate the Total Non-Productive Time

Sum of Step 4

Step 6. Calculate the Emp. Non-Productive Capacity Percentage

Total Non-Prod Time / Total Available Time

Step 7. Calculate the Emp. Available Capacity Percentage.

100% - (Prod. Capacity + Non-Prod Capacity)

machine shop capacity

MACHINE

CAPACITY

Machine Shop Capacity

EMPLOYEE

CAPACITY

Cell output is driven by Employee

Time rather than Machine Time.

There is more machine capacity

than employee capacity

capacity calculations when you have multiple product families
Capacity Calculations when you have Multiple Product Families

Calculate the weighted average of the cycle time, change-over, etc.

value stream capacity1
Value Stream Capacity
  • Value Stream demand = 3,000 units/month
  • Takt Time = 180 sec
  • Average product has 5 welded sub-assy
  • Average sub-assy has 2 machined components
  • Machine Shop makes 30,000 items
  • Welding Shop welds 15,000 sub-assy
  • Assembly assembles 3,000 units
  • Shipping ships 3,000 units

Maximum Capacity is

3,000 units because

Machine Shop can only make 30,000 parts

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