IENG 451 - Lecture 06

1. IENG 451 - Lecture 06 Process Tools: Value-Added / Non-Value-Added, and Value Stream Mapping IENG 451 Operational Strategies

2. Value Stream Maps (VSM) • The VSM is derived from SIPOC and Swim Lane diagrams: • SIPOC and Swim Lane diagrams are high level maps • These high level diagrams should be validated before VSM • VSMs capture the details of the process, graphically • VSMs are used for: • Documenting the current state of the process, “AS-IS” • Documenting the planned state of the process, “TO-BE” • Identifying opportunities for improvement projects • VSMs require data collection and take some time IENG 451 Operational Strategies

3. VSM Illustration (AS-IS) • Shows information from SIPOC diagram • Suppliers / Customers • Inputs / Outputs • Process Steps • Shows information from Swim Lane diagram • Who does / functions • Physical flows • Communications • Shows information from data collection • Matl handling method • Inventory levels • Timing & performance data • Dennis, P. (2015) IENG 451 Operational Strategies

4. VSM Construction Steps • Determine the individual* product or service process that will be mapped*. Optimally, this: • Has high volume and cost • Meets criterial important to the company • Has the biggest impact on the chosen customers • *Has most common flow, if a family of products/services • Place the process steps / functions • Begin at the end of the process and work upstream • Use the identified main activities & sequence (SIPOC) • Use the agreed symbols (Suppliers/Customer factories, Activity/Process boxes, etc.) IENG 451 Operational Strategies

5. VSM Construction Steps • Add the physical flow • Show the physical flow going into / out of process boxes • Show the sub processes and flows, include % of flow • Use common symbols (Material flow arrows, material handling methods, …) • Add the information flow • Map the information flows • Document the associated production orders for the parts • Document the scheduling / tracking of the parts • Use common symbols (Manual communications, Electronic communications, Informal communications…) IENG 451 Operational Strategies

6. VSM Construction Steps • Collect the process data and add to the Process Boxes • Walk the process to capture reality • For each process step, capture • Trigger • Set-up & Process time • Production rate • Yield / Scrap rate • Crew size • Uptime • WIP upstream & downstream • Batch size • Cost data IENG 451 Operational Strategies

7. VSM Construction Steps • Add inventory levels, material handling equipment and process lead time data to the chart • Include queue times, etc. for material flows • Include the number of material handling equipment and personnel required for transport, if appropriate • Include the storage space required, if appropriate • Verify the Map • Use non-team, process-knowledgeable persons to validate IENG 451 Operational Strategies

8. VSM Illustration (TO-BE) • Shows expected SIPOC –type information • Suppliers / Customers • Inputs / Outputs • Leaner Process Steps • Shows expected Swim Lane –type information • Leaner Who does / Functions • Leaner physical flows • Leaner Communications • Shows expected process data for the future • Matl handling/storage methods • Leaner Inventory levels • Improved performance data • Dennis, P. (2015) IENG 451 Operational Strategies

9. VSM Illustration • Some typical symbols • The symbols at right are pretty common … • but there are no real standard symbols • Typical Data Box stuff: • Cycle Time C/T • Processing Time P/T • Changeover Time C/O • Uptime / Reliability • Batch Size • Crew Size • Available Time • Output Rate • Feed Rate, etc. • … whatever characterizes the process as it operates! • Dennis, P. (2015) IENG 451 Operational Strategies

10. Value-Added Concept • Value-Added things are identified from the customers point of view: • These are things our customers would pay for, if they knew we did it • If you stopped doing it, would your external / end customers complain? • Non-Value-Added are things our customers wouldn’t pay for, and fall into two categories: • Business Non-Value-Added • These are things the customer wouldn’t pay for, but are required to meet: • Business requirements (GAAP record keeping, shipping manifests, …) • Government requirements (OSHA record keeping, MSD sheet req.s, …) • If you stopped doing it now, would anyone internally notice? • Non-Value-Added • This is true Muda, Mura, or Muri • These are Japanese terms for waste, unevenness, and hard-to-do • If you stopped doing it now, would anybody notice? IENG 451 Operational Strategies

11. Value-Analysis • Starting at the end of the process (VSM), classify each step into one of the three categories: • Value-Added • These are tasks that should be optimized and standardized • Record the VA time and display at the bottom of the VSM for each step • Business Non-Value-Added • These are tasks that are required for now, but should be periodically reexamined to see if they can’t be eliminated with a change in the business environment (customer relationship) • Record the BNVA time for each step (and see below) • Non-Value-Added • This is true wasted effort and should be eliminated. Includes handling time! • These may be quantized – they cannot be eliminated until the SOURCE is completely eliminated – and elimination of the source may require redesign of other processes as well. • Record the NVA time, add BNVA time and display at the bottom of the VSM for each step – graphically, this provides a Time Value Map IENG 451 Operational Strategies

12. Adding VA / Time Value Map to VSM IENG 451 Operational Strategies

13. Questions & Issues IENG 451 Operational Strategies

14. Categories of Muda • Waste of Motion are identified from the customers point of view: • These are things our customers would pay for, if they knew we did it • Customers are often external, but are sometimes internal • Waste of Delay are things our customers wouldn’t pay for, and fall into two categories: • Business Non-Value-Added • Waste of Conveyance are identified from the customers point of view: • These are things our customers would pay for, if they knew we did it • Waste of Correction are identified from the customers point of view: • These are things our customers would pay for, if they knew we did it • Customers are often external, but are sometimes internal IENG 451 Operational Strategies

15. Categories of Muda • Waste of Overprocessing are identified from the customers point of view: • These are things our customers would pay for, if they knew we did it • Customers are often external, but are sometimes internal • Waste of Overproduction are things our customers wouldn’t pay for, and fall into two categories: • Business Non-Value-Added • Waste of Knowledge are identified from the customers point of view: • These are things our customers would pay for, if they knew we did it • Waste of Correction are identified from the customers point of view: • These are things our customers would pay for, if they knew we did it • Customers are often external, but are sometimes internal IENG 451 Operational Strategies