Role of Value Stream Mapping in Lean Six Sigma Nigel Nelson & Chris Harris 9 th November 2010

1. Role of Value Stream Mapping in Lean Six Sigma Nigel Nelson & Chris Harris9th November 2010

2. Agenda What is Lean six sigma? What is Lean? What is Waste? What is Value Stream Mapping? Drawing a Value Stream Map What makes a Value Stream Lean? Achieving the future State Examples of Output from recent McC VSM Workshops

3. A quality standard of just 3.4 defects per million opportunities 99.9996% perfect Six sigma methodologies emphasise mathematical and statistical tools to improve the quality of processes that are already under control Application follows a five step process DMAIC: Define Measure Analyse Improve Control I. What is Lean Six Sigma? Six Sigma

4. I. What is Lean six sigma? Lean andsix sigma– the differences Lean Six Sigma Focus on eliminatingnon-value added stepsin the process. Focuses on reducingvariation from the value added steps. Ensures the right activitiesare being worked on. Ensures the right thingsare done right the first time.

5. The key principles: I. What is Lean six sigma? • Focus on the customer • Identify and understand how the work gets done – the value stream • Manage, improve and smooth the process flow • Remove non-value add steps and waste – the seven wastes • Manage by fact and reduce variation • Involve and equip the people in the process – High Performance • Undertake improvement in a systematic way – DMAIC framework.

6. Agenda What is Lean six sigma? What is Lean? What is Waste? What is Value Stream Mapping? Drawing a Value Stream Map What makes a Value Stream Lean? Achieving the future State Examples of Output from recent McC VSM Workshops

7. Lean production was pioneered by Toyotaafter World War II The term was first coined by John Krafcik,a research assistant at MIT with theInternational Motor Vehicle Program in thelate 1980s It became widely used after publication of The Machine That Changed the World byJim Womack and Dan Jones in 1990. II. What is Lean?

8. II. What is Lean?

9. Toyota Production System Goals: Highest Quality, Lowest cost, Shortest Lead Time Just-in-time Jidoka • Continuous Flow • Takt Time • Pull System • Stop and notify of abnormalities • Separate human work and machine work Heijunka Standardised work Kaizen Stability

10. Toyota Production System Sakichi Toyoda (1867-1930) Founder Toyota Group 1900’s Goals: Highest Quality, Lowest cost, Shortest Lead Time Just-in-time Jidoka • Continuous Flow • Takt Time • Pull System • Stop and notify of abnormalities • Separate human work and machine work Heijunka Standardised work Kaizen Stability

11. Toyota Production System Kiichiro Toyoda (1894-1952) Leader of Toyota 1930’s Sakichi Toyoda (1867-1930) Founder Toyota Group 1900’s Goals: Highest Quality, Lowest cost, Shortest Lead Time Just-in-time Jidoka • Continuous Flow • Takt Time • Pull System • Stop and notify of abnormalities • Separate human work and machine work Heijunka Standardised work Kaizen Stability

12. The Structure of Production Production is a network of processes and operations – a process – transforming material into product - II. What is Lean? is accomplished through a series of operations.

13. II. What is Lean? Operation “Village” Layout vs. Process Sequence Layout Operation village layout. Process sequence layout by product family.

14. Lean production: II. What is Lean? “a competitive advantage strategy of just-in-timeproduction and the elimination of non-value addingwaste and maximum flow” “the use of minimum resources – manpower, Machinery, materials, space and time to Manufacture and supply the product” “Production is seen as product based with alignment to processes NOT distinct operations.”

15. Lean Thinking II. What is Lean? • A five-step thought process by Womack & Jones in 1996 to guide • managers through a lean transformation. The five Principles are: • Specify value from the standpoint of the end customer by product family • Identify all the steps in the value stream for each product family, eliminating whenever possible those steps that do not create value • Make the value-creating steps occur in tight sequence so the productwill flow smoothly towards the customer • As flow is introduced, let customers pull value from the next upstreamactivity • As value is specified, value streams are identified, wasted steps areremoved, and flow and pull are introduced, repeat this process again, and continue it until a state of perfection is reached in which perfect valueis created with no waste.

16. Agenda What is Lean six sigma? What is Lean? What is Waste? What is Value Stream Mapping? Drawing a Value Stream Map What makes a Value Stream Lean? Achieving the future State Examples of Output from recent McC VSM Workshops

17. III. What is Waste? • Work – Human actions involved in producing products: • Value Creating: Actions directly necessary for making products • Incidental Work: Actions that operators mustperform to make products but do not createvalue from the standpoint of the customer • Waste: Actions that create no value and can beeliminated.

18. The Three Categories of Work III. What is Waste? • Examples: • Cooking • Filling Value- Creating Work • Examples: • Walking to get parts • Waiting time Waste Motion Work • Examples: • Loading cartons • Maintenance Incidental Work

19. Over Production Defects Physical Resources Over Processing Transport Motion Storage Inventory Waiting III. What is Waste? • Taiichi Ohno’s “Seven Deadly” Wastes:

20. III. What is Waste – Over Production Ten? Make it twenty …a couple of dozen to be on the safe side! Ten please!

21. III. What is Waste – Over Production

22. This happens when companies create products or work-in-process (WIP) for which they do not currently have orders It is one of the worst forms of waste, because it generates another waste – excess inventory. III. What is Waste – Over Production

23. Large-lot production Anticipatory production (producing product in advance of demand) Inability to achieve short changeover times with the large equipment used in mass production systems Creating enough stock to replace the number of defective parts produced Overstaffing, or too much equipment Machines that turn out parts too quickly. III. What is Waste - Causes of Overproduction

24. III. What is Waste - Causes of Overproduction • Apparent efficiency vs. True Efficiency

25. £ £ £ £ £ £ £ £ £ £ £ £ III. What is Waste - Storage / Inventory

26. III. What is Waste - Storage / Inventory

27. Inventory is an accumulation of products, WIP, orextra materials at any state of the process Extra inventory covers problems such as – equipment downtime, long set-up times, defects In causes other wastes, including transportation, storage, damage and delay It also ties up people, equipment, materials and energy that could be used for more productive work. III. What is Waste - Storage / Inventory

28. Acceptance of inventory as normal or as a “necessary evil” Poor equipment layout Long changeover times Large-lot production Obstructed flow of goods Anticipatory production Defective parts Upstream process is too fast for the downstream process. III. What is Waste - Causes of Inventory

29. III. What is Waste - Transportation

30. III. What is Waste - Transportation

31. Poor Layout Excessive distances or height to travel Large lot production Single skilled workers Sitting to perform operations The need for conveyance systems is assumed. III. What is Waste - Causes of Transportation

32. III. What is Waste - Defects / Rejects / Re-work

33. III. What is Waste - Defects / Rejects / Re-work

34. Emphasis on downstream inspection No standards for inspection work Omission of standard operations Material handling and conveyance. III. What is Waste - Causes of Defects

35. III. What is Waste - Over-Processing How do you spell that?

36. Inadequate study of processes Inadequate study of operations Ill-suited jigs Incomplete standardization Materials are not studied. III. What is Waste - Causes of Overprocessing

37. III. What is Waste - Motion

38. III. What is Waste - Motion

39. III. What is Waste - Motion

40. Isolated operations Low employment morale Poor work layout Lack of training Underdeveloped skills Instability in operations Increase in staff or worker hours. III. What is Waste - Causes of Motion Waste

41. III. What is Waste - Waiting

42. III. What is Waste - Waiting

43. Obstruction of flow Poor equipment layout Trouble at the upstream process Capacity imbalances Large-lot production. III. What is Waste - Causes of Waiting Waste

44. Examples of Energy / Utilities wastes are: Excessive water usage Leaking water hoses Leaving lights switched on when not required Leaving machines / conveyors switched on whennot in use Compressed air leaks. III. What is Waste - Energy / Utilities

45. Work is value added activity in the supply chain It is everything that waste is not So when you can’t see the waste, find the work Everything else is waste! III. What is Waste - How to Discover Waste

46. Find the work: 1. Look at the three real things: The factory The facts Work-in-process 2. Ask “What?” Ask what the operation is about 3. Ask“Why?” Ask why the operation is necessary 4. Everything that is not work is waste Once you have found out what the operation’s essential function is, you can properly identify as waste everything in the operation that does not directly execute that function 5. Ask“Why?”at least five times to find root causes Ask why at least five times concerning each wasteful part of the operation. This will lead you to the real waste Draft an improvement Plan Ask“How?” III. What is Waste - How to Discover Waste

47. Agenda What is Lean six sigma? What is Lean? What is Waste? What is Value Stream Mapping? Drawing a Value Stream Map What makes a Value Stream Lean? Achieving the future State Examples of Output from recent McC VSM Workshops

48. A simple diagram of every step involved in the material and information flows needed to bring a product from order to delivery In Toyota it is called “Material and information flow Mapping” In Lean manufacturing the information flow is treated with as much importance as material flow. IV. What is Value Stream Mapping?

49. Lean Implementation Sequence: IV. What is Value Stream Mapping? • Find a change agent • Find a sensei (a teacher whose learning curve you can borrow) • Seize (or create) a crisis to motivate action across the Company • Map the entire value stream for all your product families • Pick something important and get started removing waste quickly, to surprise yourself how much you can accomplish in a very short period. “But then they have jumped to step five” “Yet the overlooked Step Four is actually the most critical” Lean Thinking (1996) – Jim Womack & Dan Jones

50. Why Value-Stream Mapping is an essential tool: It helps you visualise more than just the single operations Mapping helps you see the sources of waste in your value stream It provides a common language It makes decisions about the flow apparent Ties together lean concepts and techniques, avoids ‘cherry picking’ It forms the basis of an implementation plan It shows the linkage between the information and material flow Value-Stream mapping is good for describing what you plan to do. IV. What is Value Steam Mapping?