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Value Stream Management

Value Stream Management. Principles of Lean. Value Stream Management. Value Stream Management is NOT just Lean Manufacturing! Value Stream = the set of all actions required to bring a product or service (or combination) through three critical business processes:

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Value Stream Management

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  1. Value Stream Management Principles of Lean

  2. Value Stream Management • Value Stream Management is NOT just Lean Manufacturing! • Value Stream = the set of all actions required to bring a product or service (or combination) through three critical business processes: • Problem solving task—running from conception to commercialization of the product or service • Information management task—forecasting, demand planning, order taking, master scheduling, etc. of the product or service • Physical transformation—proceeding from materials or assemblies to final product • Value Stream Management creates a Lean Enterprise(adapted from Lean Thinking-Womack and Jones) (slide name here) 2 .PPT

  3. Key Principles of VSM Thinking • Specify value in the eyes of the customer. • Identify the Value Stream for each product—this can be goods, information, services, critical business process, etc. • Make value flow without interruptions. • Reduce defects in products and deficiencies in processes. • Let customers pull value. • Pursue perfection. • Drive out variation (short and long term).(adapted from Lean Thinking-Womack and Jones) (slide name here) 3 .PPT

  4. The VSM Mission • Value Stream Management Creates: • The safest system • The shortest possible lead times • The optimum level of inventory • The highest practical customer order service levels • The highest possible quality (low defect rate) • The lowest possible waste (low cost)…throughout the entire supply chain VSM is used to win in the marketplace and drive business performance. (slide name here) 4 .PPT

  5. What Does This Mean for Companies? • Cutting inventories by 90% • Improving on-time delivery to >98% • Reducing lead time from months to days • Providing more and more value to customers, and getting paid for it • Creating greater profitability and expanded customer acceptance of products • Protecting jobs and establishing a rewarding work environment for employees (slide name here) 5 .PPT

  6. How Can Companies Do This? • Synchronize Processes • Internally • Externally • To the “beat” of the customer’s requirements • Drive Out Waste • Time • Material • Labor • Space • Motion • Reduce and Manage Variation • Improve Safety (slide name here) 6 .PPT

  7. What Is Value? • VSM starts with defining value in terms of products and capabilities provided to the customer—at the right time and appropriate place. • Value is created by the customer • This is why a producer exists (slide name here) 7 .PPT

  8. What is a Value Stream? Supplier Module Customer Module Inputs Module Outputs Module Process Module (slide name here) 8 .PPT

  9. Defining Values of VSM • Value Added Activity: An activity that transforms or shapes material or information to meet customer requirements. • Non-value Added Activity: Those activities that utilize time or resources, but do not add value to the customer’s requirement (but maybe to meet company requirements). (slide name here) 9 .PPT

  10. The Eight Deadly Wastes (continued) adapted from Taiichi Ohno • Overproduction—making or doing more than is required orearlier than needed. • Waiting—for information, materials, people, maintenance, etc. • Transport—moving people or goods around or between sites. • Poor process design—too many/too few steps, non-standardization, inspection rather than prevention, etc. • Inventory—raw materials, work-in-progress, finished goods, papers, electronic files, etc. • Motion—inefficient layouts or poor ergonomics at work-stations or in offices. • Defects—errors, scrap, rework, non-conformance. • Underutilized personnel, resources, and creativity—ideas that are not listened to, skills that are not utilized. (slide name here) 10 .PPT

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