The Lean Enterprise

1. The Lean Enterprise Value Analysis/ Flow Analysis Lean Foundations Continuous Improvement Training

2. The Causes of Waste in most Processes Focus on reduction Types of Waste (7W’s) Problems/ Causes Incorrect layouts Lack of proximity of machines Off-line resources Waiting workers, machines, materials Long set-ups and lead times Large batches, raw material stocks High WIP, finished goods stocks Making for the sake of it Ignoring customer demands Long cycle times- process, itself Reduced efficiency- over processing High overall lead times Long delays for rectification Costly rework Dissatisfied customers Approvals of approvals High number of verification steps Reliance- Mass inspection techniques Unnecessary movement Extra handling Value Added Waste Motion Waiting time Overproduction Processing time Defects Inspection Transportation People Non- Value Added, but necessary Process Product freeleansite.com

3. Value AnalysisOverview

4. Methodology For Reducing Muda (waste) Value-Added Flow Analysis (VA/ FA) • A Group of Practices (using rigor and discipline) which evaluates the individual steps or activities in a process to determine if they ‘add value’ to the output • VA/ FA can be used to improve the process or aid in the creation of a new process freeleansite.com

5. Definitions • Value Added • Any activity or operation performed that helps transform a product or service from its raw state into its finished form. • Completed right the first time. • Any activity customer is prepared to pay for. Activity required to ensure that a product or service is delivered in conformance to specification. • Non-Value Added • Any activity that doesn’t help to transform a product or service into its final form. Activity not performed right. Activity customer not willing to pay for. • This includes: • Unnecessary process steps • Movement of inventory, paperwork, etc. • Re-work, corrections, etc. • Storage between operations, batching inventory • Queue – Wait times, delay times, idle times (reference: Time-Value Analysis ) freeleansite.com

6. VA/ FA Steps • Step 1 • Define and describe process to be analyzed • Project charter • Clearly define goals • Cost benefit analysis • Signatures – Champion, Controller, Belt (minimum) • Time Frame for completion freeleansite.com

7. VA/ FA Steps • Step 2 • Map the process and determine major and minor activities • Start with the customer • Customer – receiving department of an output, the next person in line, or the (external) Customer • Conduct detail inquiry of what occurs • Use investigative questions freeleansite.com

8. VA/ FA Steps • Step 3 • Identify value-added activities or processes • Utilize investigative questions • What does it do? • Why does it work? • What must it do or accomplish? • How does it relate to other systems, units, or components? • What requires this step to be done? freeleansite.com

9. VA/ FA Steps • Step 4 • Calculate the time spent on value-added activities or processes (Value Stream Map) • Spread Sheet Analysis (VA to NVA ratios) • Time-Value Analysis freeleansite.com

10. Value AnalysisInvestigative Techniques

11. VA/ FA Questions • DECISION POINTS • Does the decision point represent as appraisal, a review, or an inspection which could be eliminated if prevention were built into the process at an earlier point? • Is this a necessary decision or can the process proceed without a decision here? • Is there repetition of decision within the process? freeleansite.com

12. VA/ FA Questions • VALUE ADDED • Does each activity within the process add value to the output, the product, or service which the customer receives? • Is the activity necessary to meet the customer’s requirements and expectations? • Would the customer be willing to pay for that step of the process if the customer knew it existed? freeleansite.com

13. VA/ FA Questions • ACTIVITY FLOW • Does the process move frequently back and forth between various units of the organization? • Can any of these movements be eliminated? • DUPLICATION OF ACTIVITY • Are some of the activities duplicated or repeated? • Can any activities be removed from the process while meeting the customer’s valid requirements for outputs? freeleansite.com

14. VA/ FA Questions • TIME REQUIRED • What is the time required for each of the steps or activities within the process? • Can the time be shortened for any of the steps or activities? • Is unnecessary time wasted on transportation, storage, or delays? • How much time is used between activities? • Can time activities be reduced? freeleansite.com

15. VA/ FA Questions • MATERIALS • Are the supplies and materials used in this activity effective? • Have new materials been developed that would perform the function at less cost? • Has there been any price, delivery, or quality problems? • TECHNOLOGY • What is the cutting edge? • Is there related technology which could be adapted to improve this process? freeleansite.com

16. VA/ FA Questions • PROCESS USERS • Why are you doing this? • What document controls this activity? • How were you trained? • Was the training adequate? • How do you know you are performing the activity correctly? • Where do you get the inputs you need to perform this activity? • What types of errors come to you? • Do you have any problems related to this? • What makes the job difficult? freeleansite.com

17. VA/ FA Best Practices • KEY POINTS • ASK the person if they have any suggestions on how to improve to process! • Value can be viewed as a relationship of functionality or effectiveness over cost VALUE = Functionality Cost freeleansite.com

18. VA/ FA Best Practices • KEY POINTS • The VALUE of the output can increase by either reducing costs or by increasing effectiveness • EVALUATE alternatives based on their impact on both efficiency and effectiveness • Achieving a minor increase in functionality at a major cost is not justified • A major increase in functionality with a minor cost could be acceptable freeleansite.com

19. Value EngineeringOverview

20. Overhead Costs VA/ VE = Continuous ‘Cost’ Improvement Attacks the Total Cost of Producing a New Product Assembly Costs • Assembly Time • Parts Handling • Levels of Assembly • Labor Rate • Volume • Design • Standardization Manufacturing Costs Part Costs Assembly Costs Tooling Costs = + + + Overhead • Part Costs • Material • Finishing • Design • Dimensions & Tolerances • Tooling Type • Process • Volume • Standardization • Packaging • Tooling Costs • Volume • Process • Tooling Material • Dimensions & Tolerances • Standardization freeleansite.com

21. Approach for Reducing Costs Design for Assembly (DFA) • A Group of Practices which Minimizes Manufacturing Costs • Minimize the Number of Parts • Avoid Separate Fasteners • Establish Assembly Surfaces • Eliminate or Simplify Adjustments • Reduce Handling freeleansite.com

22. Design for Assembly Benefits • Fewer Drawings • Less Assembly • Less Handling, Inventory • Less Inspection • Improved Quality (Fewer Problems) • Less Purchasing freeleansite.com

23. Value Engineering Occurs During the Design Process. Examines the Function of the Design. Documents the Cost of Each Function. Explores Alternatives for how the Same Function can be Provided at a Reduced Cost. Maintains the Focus on Customer Satisfaction. Value Analysis Occurs on After the Design has been Completed or on Carryover Products. Existing Designs are Evaluated to Increase Function or Reduce Cost. Methodologies for Reducing Waste freeleansite.com

24. The Lean Enterprise Value Analysis/ Flow Analysis Lean Foundations Continuous Improvement Training