Creating a Value Stream Plan

Lean Enterprise Academy www.leanuk.org

David Brunt 5th June 2007

Lean Enterprise Academy Supply Chain Forum

Objectives of Mapping Extended Value Streams

Seeing the Whole Extended Value Stream

Raise consciousness in every firm & function touching the value stream of the enormous waste of time, effort & movement

Typical current state 9 out of 10 steps & 99% of elapsed time are wasted

Raise consciousness in every firm & function of the effect of its actions on every other firm & function touching the value streamLearn how a value stream team with representatives from every firm can envision a series of Future States & an Ideal State for their shared value streamLearn how the team can progressively implement:

A Future State 1 in which smooth, levelled pull & flow are introduced within every facility touching the value streamA Future State 2 in which smooth, levelled pull & frequent replenishment loops are introduced between every facility touching the value stream (eliminating warehousing & cross docking in theprocess)An Ideal State (providing a North Star for collectively steeringtowards the perfect value stream with zero waste) by compressingthe value stream & introducing right-sized technologies

Learn how value stream teams can share costs & gains to create win-win-win outcomes for every value stream participant

Your Check List

Is top management willing to lead lean?Is there a common language across the whole organisation for seeing processes and for root cause problem solving? Is there a common way to manage lean projects – and to sustain the results? Is someone responsible for reconfiguring each product value stream through the facility and beyond?Is there an active policy deployment process based on value stream plans to prioritise and resource them?

Current State Summary

Quality & Delivery

Demand Amplification

Consumption Map

Geography etc.

Purpose Select Product FamilySupply Chain Network & VS Selection

Alpha MotorsPlatform A

ApexWheels

Beta wipers

EpsilonFuel Pumps

CosmicBrakes

EclipseEngine

Computers

Gamma Stampers

AmpersandMagnets

UtopiaCastings

MichiganSteel

OdysseyFasteners

Smith HeatTreatment

Current State by FacilityPRODN.

CONTROL

Weekly

Schedule

Prod’nPlan

Forecast

Daily Call In

Forecast

Weekly Call

Weekly

Suppliers Customer

Mon.+ Wed.

PRESS ASSEMBLY SHIP

C/T = 30 sec.

C/O = 30 min.

3 shifts

2% Scrap

C/T = 90 sec.

C/O = 5 min.

2 shifts

3% Scrap

600 pieces2 Day

300 pieces1 Day

30 sec2 days

90 sec1 day

Total lead time 3 daysVA time 2 mins

LH Steering Bracket

RH Steering Bracket

InstrumentPanel Brace

SeatRail

BumperBrackets

X X XX

BLUES95%50%

Cumulative % Product RangeCumulative % of Sales

Last 1%

Supply Chain Current State

Summary

Supply Chain Ideal StateFuture State by Facility

Quality & Delivery

Demand Amplification

Consumption Map

Geography etc.

Purpose Select Product Family

Supply Chain Network & VS Selection

Alpha MotorsPlatform A

ApexWheels

Beta wipers

EpsilonFuel Pumps

CosmicBrakesEclipseEngine

Computers

Gamma Stampers

AmpersandMagnetsUtopia

Castings

MichiganSteel

OdysseyFasteners

Smith HeatTreatment

Current State by Facility

PRODN. CONTROL We

Schedule

Prod’nPlan

ForecastDaily

Call In

ForecastWeekly

Call InWeekly

Suppliers Customer

Mon.+ Wed.

PRESS ASSEMBLY SHIPI IC/T = 30 sec.

C/O = 30 min.

3 shifts

2% Scrap

C/T = 90 sec.

C/O = 5 min.

2 shifts

3% Scrap

600 pieces2 Day

300 pieces1 Day

30 sec2 days

90 sec 1 dayTotal lead time 3 daysVA time 2 mins

LH Steering BracketRH Steering BracketInstrument

Panel BraceSeatRailBumper

Brackets

X X XXX X XX

XXX XXXXXXPr

BLUES95%50%

Cumulative % Product Range

Cumulative % of Sales

Last 1%

Supply Chain Current State

Supply Chain Future State Action Plan

What is a Plan?

“The documented results of the planning process”Consists of: who, why, what, where, when, how?

Goals, objectivesDeliverables, tasks, actionsTimingResponsibilities (& roles)MeasuresReview process

What is Planning?

“Planning is a process considering”Goals, objectivesFactorsOptionsBarriersDeliverables, tasks, actionsTimingResponsibilities (& roles)Measures

What is a Lean Project Plan?

All the aboveA Gantt chart with bookends (goals, deliverables, schedule,review process, responsibilities)

Follows the PDCA processIs a contract - a commitment to actually accomplish something by a specific time

Ref: John Shook: Leadership for Value Stream Management

A Format for Planning & proposing - A3

A3 because it’s done on A3 paperOriginally used in Quality circlesPower lies in the process & thinking behind itAn A3 lays out an entire plan (large or small) on one piece of paperIt should be visual & conciseIt should tell a story - upper left to lower right that everyone can understand

Acme Stamping Steering Bracket Value Stream ImprovementBackground

Acme supplies stamped steel steering brackets (LH & RH) to State Street Assembly. The product goes through 5 manufacturing processes & shipping.

The customer uses 18,400 pcs/month & requires daily shipments in pallets of 10 trays of 20 brackets. A pallet is either all RH or LH.

Current SituationLead time for steering bracket from coil steel to shipment = 23.6

days.Of 23.6 days, only 188 seconds are spent making a bracket.Large inventories of material between each process.Long changeover times, downtime in welding.

State StreetAssembly

Michigan Steel Co.

1x daily

ProductionControl

DailyOrder

WeeklyFax

6 WeekForecas

90/60/30 Day Forecas

Weekly Schedule

DailyShipping Schedule

RecommendationsCreate continuous flow through weld & assemblyEstablish TAKT time . Base the pace of work through weld & assembly

on customer demand.Set new weld - assembly cell as pacemaker for entire value stream.Establish EPE_ build schedule for stamping based on actual use of

pacemaker cell & pull steel coils from supplier based on actual usage by stamping.

Improve uptime in weld.Establish material handling routes for frequent withdrawal & delivery.Establish new production instruction system with Levelling Box.

AnalysisEach process operates as isolated islands, disconnected from the

customer.Push system, material builds up between each process.Each process builds according to its own operating constraints

(changeover, downtime etc.)Plans based on 90 & 30 day forecasts from customer. Weekly

schedule for each department. System is frequently overridden to make delivery.Goals

Improve profitability of steering bracket value stream.Reduce lead time - 23.6 days to 4.5 days.Reduce inventories:

Stamping 7.6 days to 1 day.Welding 6.5 days to 0 days.Shipping 4.5 days to 2 days.

ProductionControl

DailyOrde

DailyOrder

6 WeekForecas

90/60/30 Day

Forecast State StreetAssembly

Michigan Steel Co.

Daily Order

20OXOX

Current State MapFuture State Map

Deliverables Responsible ReviewCCF at pacemakerKaizen each CT to >TTWeld uptime to 100%CO reduction to < TT

Pull at pacemakerFG = 2 daysKBMatl handlingLevelling Box

Pull from StampingWIP = 1 dayCO < 10 min

Pull from supplierInfo flowDaily deliveryRM = 1.5 days

Action Plan

Follow UpReviews & involvement of related departments TBD.Other functions: Production Control Material Handling, Purchasing,

Maintenance, Human Resources, Finance.

Michigan Steel Co.

1x daily

ProductionControl

DailyOrder

WeeklyFax

6 WeekForecas

Weekly Schedule

ProductionControl

DailyOrde

DailyOrder

6 WeekForecas

90/60/30 Day

Michigan Steel Co.

Daily Order

20OXOX

Action Plan

Background/current situation

Historical/organisational/ business context

Goal/objectiveThe issue to be

addressed

Analysis/detailed Current StateThe specifics of the issues

FishbonesCauses5 Whys

Requirements, constraints & alternatives

Michigan Steel Co.

1x daily

ProductionControl

DailyOrder

WeeklyFax

6 WeekForecas

Weekly Schedule

ProductionControl

DailyOrde

DailyOrder

6 WeekForecas

90/60/30 Day

Michigan Steel Co.

Daily Order

20OXOX

Action Plan

RecommendationsWhat will we do to enact

the Future State

Measures/ReviewHow we will know

if the actions make the planned

difference

Plan/ScheduleWhat to do,

actions, deliverables

Manage your plan like a Value Stream

Focus on the timing and deliverables of the plan

Manage the exceptionsAsk “why” things went wrong in order to address root cause

Make sure someone is responsibleWatch that you perform reviews (even when things go wrong)

Project TimingProject Timing Sheet:Project: ofAfter-Sales 1 1

Proposed Start

Actual StartProposed CompletionActual Completion

ReviewProject Owner:

On Target

No Deliverable Metric Resp. Target Date. Reviews

1920 27 5 121369 16 23 3022326 2 9 1619125

Value Stream Map4/2/03DBMap Drawn- Develop C & F State14/2/03DBAction Plan- Identify Loops & Action Plan2

TechnicianHBTakt 3

techs- Develop flow to Takt & 30min cycles3

ST1 car wip- Develop pull system for Techs4STProductivity- Eliminate searching for tools5

23/2/03STProductivity- Eliminate waiting for W/S Control65/5/03JSKProductivity- Eliminate waiting for authority7

Booking & Direct Dialogue23/2/03DBLead Time- Develop pro-active booking process823/2/03DBOn-time Del- Develop a planning board99/3/03JSKOn time del- Develop process to highlight a/w10

Parts5/6/03GHProductivity- Develop pull for parts115/6/03GHProductivity- Pre-pick parts for each job12

Valet10/7/03JWC/T= 20m- Valet to standard cycle time13

Handover/Post-Handover10/7/03HBSpaces- Handover parking for finished cars1410/7/03HBSlots- Allocate handover times1510/7/03HBDebtors- Minimise debtors list16

5/2 5/3

Jan Feb Mar Apr May

3/4 7/5

Dave Johnson

Behind Target

Trouble

Ideal State:Value Stream KPI’s

Current State

Future State 1

Future State 2

Ideal State

Total Lead Time Value

% of time VA Steps

%Inventory

TurnsQuality ScreenDelivery Screen

Demand Amp’Index

Product travel distance

2.8days

15.8days

23.9days

44days

Make your Actions VisibleGlass Wall Mangement

A document board in a highly visible area

Current & Future State maps

Action Plan with timelines

Basic few metricsVaries from project to project

QDCP often useful as a framework

Other documentsLayouts, communications etc.

Using The Scientific Method: Plan, Do, Check, Act (PDCA)

PlanCommunicate, scope, discuss, set targets & agree the plan

DoCollect & analyse data, carry out the work

Check Are we performing to plan?If not, why not?

Act (Standardise)Standardise to sustain the gains

Your Check List

Is top management willing to lead lean?Is there a common language across the whole organisation for seeing processes and for root cause problem solving? Is there a common way to manage lean projects – and to sustain the results? Is someone responsible for reconfiguring each product value stream through the facility and beyond?Is there an active policy deployment process based on value stream plans to prioritise and resource them?

David Brunt 5th June 2007

Lean Enterprise Academy Supply Chain Forum

Creating a Value Stream Plan

Creating a Value Stream Plan

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