Value Stream Mapping: Theory & Cases

Transcription

1 Value Stream Mapping: Theory & Cases Professor Peter Hines Value Stream Mapping 1

2 Lean Enterprise Research Centre Cardiff Business School Formed in 1994 by Prof Dan Jones & Prof Peter Hines 30 staff now Researching, applying, & communicating lean thinking Value Stream Mapping 2

3 Overview Value Stream Mapping Background Some of the Value Stream Maps Cases and Examples Value Stream Mapping 3

4 Value Stream Mapping Background Value Stream Mapping 4

5 My Involvement with VSM Supply Chain Development Programme * Process Activity Mapping * Brown Paper Mapping 1997 Paper: The Seven Value Stream Mapping Tools * Codified Mapping Approach 1997 First Rother & Shook publication * Big Picture Mapping 1999 Corus-Forge-Volvo Transmission VSM work 2000 Going Lean publication * see Lean Profit Potential * see Value Stream Mapping 5

6 What Have I Learned? Don t be a happy mapper Start by understanding what you are trying to achieve Can anyone tell me the 4 Lean Principles? And what about a link to Strategy? Involve the recipients in the mapping Don t do mapping to people Don t Just Map Internally Don t Just Map Order Fulfilment No one map will do the job Chose the right maps Value Stream Mapping 6

7 Relation of Value, Cost & Waste Customer Perceived Value 2 1 x Cost-Value Equilibrium Creating Lean Solutions: Reduce Internal Waste Develop Customer Value Waste/Cost 7

8 We need to find the waste first Over Production PROCESS ACTIVITY MAPPING SUPPLY CHAIN RESPONSE MATRIX BIG PICTURE MAPPING FOUR FIELDS MAPPING DEMAND AMPLIF- ICATION MAPPING L M L M M DECISION POINT ANALYSIS PHYSICAL STRUCTURE VOLUME VALUE Waiting H H L H M M Transportation H H L Inappropriate Processing Unnecessary Inventory Unnecessary Motion H M M L M H M L H M L H L M Defects L H H H = Highly useful, M = Medium, L = Low Value Stream Mapping 8

9 Awareness Stage: Theme Focus Business Process Industry Sector Gaps Shop Floor Practice JIT Techniques, Tools Shop Floor Manufacturing Automotive Assembly Outside Shop Floor Outside Single Firm Narrow Focus Value Stream Mapping 9

10 Quality Stage: 1990-mid 1990s Theme Focus Business Process Industry Sector Gaps Best Practice Benchmarking Cost, Quality, Reengineer Manufacturing & Mat. Mgt Automotive Ass./ Supply Human Element Supply Chain Systems Perspective Value Stream Mapping 10

11 Quality, Cost, Delivery Stage: Mid 1990s-2000 Theme Focus Business Process Industry Sector Gaps Lean Enterprise Cost / Process QCD Order Fulfilment: Val. Str. (Repetitive) Manufacture (Other) Process Integrate Relationships Integrating Industries Value Stream Mapping 11

12 Value System: Theme Focus Business Process Industry Sector Gaps System Capability Value & Cost Integrated Processes All Manufacturing/Service Low Volume Manufacture Strategic Integration Total Systems Capability Value Stream Mapping 12

13 Lean Network Systems Demand Variability High Stranger Variety/Complexity Avoid? Stock? Medium Variety/Complexity Repeater Make To Order Runner Low Variability/ Complexity Kanban Adapted from: Fisher, 1997 Volume

14 Inventory Profile of the UK Automotive Supply Chain Max Average Min First Tier Suppliers Inbound Logistics Vehicle Manufacturers Outbound Logistics Distribution & Retail Raw Material Bought-out Parts In-house built Parts Pre-Assembly WIP Assembly WIP Finished Components Inbound Transit On-site Part (VM) Vehicle Production WIP Loading & Despatch Outbound Transit Marketplace Customer Days of Inventory Source: Holweg (2002) Value Stream Mapping 14

15 Some of the Maps Big Picture Level Value Stream Mapping 15

16 Spaghetti Diagram Customer Car Park In-Servicing Vehicle Storage Valeting Area Used Car Storage Area Back Office Area Sales Staff Desks Parts Store Service Workshop Customer Delivering Car Technician & Valeter Activity New Car Storage Area Coffee Area New Car Showroom Service Desks Customer Collecting Car

17 Big Picture Map: Current State Blocks R Us Random Supply Numerous Variety Batches Operator Planning Manager s Schedule 30 round Forecast 15s Order Lean Ltd. 30 pieces per 7.5 min 1 every 15 sec Variety = 3 1 piece per time Operation 1 Operation 2 Operation 3 Operation 4 I I I I I Red Blocks 510 sec 510 sec C/T = 5 sec Uptime = 100% 450 sec av Batch = 10 Variety = 3 5 blocks C/T = 7 sec 4 blocks C/T = 7 sec Uptime = Uptime = 4 blocks 100% 100% 450 sec av 450 sec av Batch = 7 Batch = 9 Variety = 3 Variety = 3 75 sec 60 sec 60 sec C/T = 5 sec Uptime = 100% 450 sec av Batch = 1 Variety = 3 2 blocks 30 sec Prodn Lead Time = 735 sec 5 sec 7 sec 7 sec 5 sec VA Time = 24 sec

18 Big Picture Map: Future State Blocks R Us Supply to Pull Standard Number Changeover Forecast Order Milk Round Planning Daily Order 30 round Forecast 10s Order 1 Lean Ltd. TAKT = 15 sec Variety = 3 1 piece per time Red Batch Blocks White Blocks 20 sec Operation 1 Operation 2 C/T = 5 sec Uptime = 100% 300 sec av Batch = 1 Variety = 1 20 sec C/T = 5 sec Uptime = 100% 300 sec av Batch = 1 Variety = 1 Cycle Time 20 sec Operation 3 C/T = 5 sec Uptime = 100% 300 sec av Batch = 1 Variety = 1 Waste Elimination 20 sec Operation 4 C/T = 5 sec Uptime = 100% 300 sec av Batch = 1 Variety = 3 R Y G 60 sec Prodn Lead Time = 160 sec 5 sec 5 sec 5 sec 5 sec VA Time = 20 sec

19 Some of the Maps Detailed Level Value Stream Mapping 19

20 Process Activity Map Step Flow VA % Area Dist Time People C/T Up/T Avail. T Batch Var Value Stream Mapping 20

21 Quality Filter Map Identifies where quality problems exist in the supply chain 3 types of quality defect Product defects - defects in goods that are not caught by in-line or end-of-line inspection and are therefore passed on to customers Service defects - problems given to a customer not directly related to the product but to the level of service Internal scrap - defects produced in a company that have been caught by in-line or end-of-line inspection Value Stream Mapping 21

22 Quality Filter Chart Parts Per Million Product Defects Service Defects Scrap 0 Blanking Pressing Assembly Paint Despatch Value Stream Mapping 22

23 Product Variety Funnel YARN GAUGE KNIT SIZE COLOUR PIECE PART CUT (SIZING) PACK GREY FABRIC PIECE PARTS YARN KNIT DYE CUT SEW PRODUCT PACKED PRODUCT (FGS) COLOURED FABRIC VARIANT FLEXIBILITY LEAD TIME (TUBE) PACK SIZE COLOUR GAUGE Value Stream Mapping 23

24 Value Analysis Time Profile cost reduction opportunity Horizontal plateau show opportunities for lead-time reduction Assembly operations WIP store Post-Assembly decanting, inspecting etc 0.5 receive goods in store goods in Press operations cum cost total cum cost val add Time (hours) RS Components Course

25 Value Analysis Time Profile * * 2.29 Total 2.01 VA 337hrs * * * cum cost total cum cost val add * Time (hours) RS Components Course

26 Value Analysis Time Profile Total 1.96 VA 225 hrs 1.0 cum cost total cum cost val add Time (hours) RS Components Course

27 Customer Service Team Finance Charge C/W Non Charge C/W Filing Reception Senior Finance C/W Time Resource Standards & Comments Monica s Table hrs 2 hrs Variance depends on Case Worker, variable location of sort No Finance Legal/Means Phase 2 Finance Phase 2A Yes Yes Charge No Charge Non Charge No Need File Four Field Map: Current State Yes Pull Get File Tag 2 hrs 1 wk - 34 wks 1 hr 3 9 hrs 1 hr 0.25 hr Backlog calculated using oldest date (worst case scenario) Not FIFO Reception Tag & Filing All file requests dealt with at the same time Assume 1 person processing post Yes Skills No Yes Skills No 4 Senior Case Work hrs Unable to quantify referral time Process Post Process Post 1 wk 0.5 hr Post Bucket Post Bucket Post Bucket 13 to 3:20 to 248 5:15 Total Value Stream Mapping days hrs 27

28 Charge Non Charge Filing Senior Case Worker Time Resource Standards & Comments Charge with files Read Letter Non Charge With files Read Letter Four Fields Map: Future State mins mins Training needed / cultural issues to be addressed Charge post is sent to C/W with File (no need to pull file at later stage) Finance Phase 2A Yes Skills No Yes Skills Need File Yes Get File No No Referral Need File Yes Get File No 5 mins 5 mins Referral process: Matter would always be passed back to C/W after the Senior C/W has considered it, either with a work solution or guidance notes. This box to be emptied once daily (allocation rota) Pull File Process Process Process 2 hrs if rqrd 5 mins 10 mins10 mins 2 hrs 2 hrs Non Charge post, where file needed, files to be supplied by filing 4 times daily (2 am, 2 pm) from a tray in each pod. This activity is a priority Post Bucket Post Bucket Post Bucket 5 mins 5 mins Calculated per piece of post Post split into 1 st, 2 nd, Dx 30 mins 30 mins to 4 hrs to 2 hrs Total Value Stream Mapping 25 mins 30 mins 28

29 Cases and Examples #1 Internal: Main Motors Value Stream Mapping 29

30 The Research Model Strategic Level Operational Level Business Strategy Formation and Policy Deployment Business Strategy Validation and Action Planning Customer Understanding Process Activity Understanding Process Costing Understanding Value Stream Mapping 30

31 Critical Success Factors Continue to grow markets share in the 3 channels Recruitment, development and retention of skilled & motivated workforce External influenced innovation Developing the right balance between the 3 channels Close existing & new customer relationships Keep the franchise Long term focus & profitability Continuing to develop brand presence Value Stream Mapping 31

32 Key Business Targets Vision KPIs Unit Now Year 1 Year 2 Year 3 Year 4 Year 5 Gross Profit/New Car % 2.0% 2.3% 2.6% 2.9% 3.2% 3.5% Gross Profit/Used Car % 7.0% 7.6% 8.2% 8.8% 9.4% 10.0% Finance Penetration New Cars % 23.0% 23.0% 23.0% 23.0% 23.0% 23.0% Finance Penetration Used Cars % 16.0% 17.8% 19.6% 21.4% 23.2% 25.0% Admin Expenses % 0.9% 1.0% 1.1% 1.0% 0.9% 0.9% Market Share: Region vs Nation % 6.8/ / / / / /8.0 Retention New: First Service % 80% 80% 80% 80% 80% 80% Retention New: 3 years % 30% 36% 42% 48% 54% 60% Retention Used: First Service % 25% 26% 27% 28% 29% 30% Return on Total Turnover % 1.4% 1.9% 2.4% 3.0% 3.5% 4.0% Volumes: New Cars # Volumes: Used Cars # Service Parts Absorption % 60% 68% 76% 84% 92% 100% Stock Turn: Used Cars # Stock Turn: Parts # OCE: New Cars % 39.5% 41.0% 42.5% 44.0% 45.5% 47.0% OCE: Used Cars % 38.4% 45.6% 52.8% 60.0% 67.2% 74.5% OCE: Service % 51.1% 55.2% 59.3% 63.4% 67.4% 71.5% Value Stream Mapping 32 ILU skills/competency % 45.20% 65% 75% 85% 95% 100%

33 New Car Value Attributes Importance vs Satisfaction Importance Satisfaction Brand Product Characteristics Price Payment Terms Order/Delivery Time Dealer Reputation Staff at the Dealer Dealer Facilities After Sales Service Value Stream Mapping 33

34 The Service Process Process Activity Mapping Example Process Activity: Car collection & Work division FLOW (O/T/I/D/D') ACTIVITY (FVA/VA/SA /W) AREA DIST MTS TIME MIN PEOPLE Customer comes through the door Customer arrives to Service desk and sits T SA Showroom Customer waits D W' Showroom Identify the customer I SA Showroom Control if job card information are correct I W Showroom Customer signs O SA Showroom Collect customer's keys O SA Showroom Arrangement to return car I SA Showroom Write arrangement on job card O SA Showroom Find a place for job card D W Showroom Waits for workshop controller D W' Showroom Ian checks job cards I W Showroom Ian informs Darren who is going to do the service O SA Showroom Darren up-dates Time Sheet O W Showroom Ian hands out work between technicians T SA Showroom/Workshop TOTALS Value Stream Mapping 34

35 Car Collection 90% customer brings the car 10% car collected at home/work 35 cars = 1 day Work division Continue scheduling during day Parts storage Mechanical Work 5 operators The Service Process Big Picture Map Prepare Service Job Cards 5 min - the day before service Check parts &Pre-picking 3,5 min Hot orders PC Replenish System 24h - Local cur storage center rier 48h -From other dealer 30% Found more repairs Call customer 70% Final Road Test 1/1,5 hours 2 days later 3 cars = 1 h Understanding Requirements & Booking 90% phone call 10%personal visit 5 min Large Repair Small Repair Done immediatly Automatic replenishment Valeting Service 95% 22 min 5% 1,5 h Routine Regular service Concerns :break 5% down, warranty Investigation & Paperwork 95% Custom.collectio n&payment 50% customers come back later 25% waits at dealer 15% pick up from 75% 25% Service at Dealer Lead Time 3,6 3,6days inv oic e Accountant (invoice registr.) the day after Quality Feed -back Ring 3-5 Value 2Stream valeters Mapping city centre days later 35 10% courtesy car

36 The Costing Model New Car Sales Process Activities VA FVA SA W Activity cost % Visit at Dealer & take order???????? 0.0% 0.0% 0.0% 0.0%?? Source car 0.0% 0.0% 0.0% 0.0% Car arrival, Delivery arrang. & Service Booking 0.0% 0.0% 0.0% 0.0% Invoice&AFRL 0.0% 0.0% 0.0% 0.0% PDI - Mechanical Work&Road Testing 0.0% 0.0% 0.0% 0.0% Valeting 0.0% 0.0% 0.0% 0.0% Customer Collection 0.0% 0.0% 0.0% 0.0% Totals Value Stream Mapping 36

37 The Process Costing Perspective ASC Area Storage Centre Source New Car Finalise Deal & Take Order Dealer Visit & Test Drive Decision to Purchase Sales DP - 3 Sales DP - 2 Sales DP , % 4, % 6, % Other Dealer Stock Own Stock Factory Order Think &/or Visit Other Dealer General Invoice Emission Stock & AFRL - Trigger Mantaining VW Payment >> Sales DP General Costs 58, , Administration DP - 1 >> Commission 26, , % Car Arrival & Delivery Check Delivery Arrangement PDI Valeting Customer Collection Sales DP - 5 Sales DP - 6 Mech.Service DP - 6 Mech.Service DP - 1 Sales DP - 4 7, % 2, % 5, % 2, % 8, % Value Stream Mapping 37

38 The Strategic Change Programme Value Creation Infrastructure Used Car Loyalty Scheme Service Customer Care Service Pricing incl. Courtesy Car Used Car Replacement Cycle Annualised Hours Measurement Scheme Skills/Competency Scheme Waste Reduction External Scheduling of Service Bay incl. PDI Scheduling of Valeting Right First Time Lean Servicing Improved Supplier New Car OTD Cycle Value Stream Mapping 38

39 The Profit Potential ( annually by end 2002) Level 1 (Internal Waste Reduction) 49.6K Level 2 (Customer Value Added) 62.5K Level 3 (Multiplier Effects) 43.2K Annual Profit Potential by end K Equivalent to a 105% increase in profitability Value Stream Mapping 39

40 Cases and Examples #2 Supply Chain: Corus - Automotive Value Stream Mapping 40

41 LEAP: Participating Companies Steel Mill Steel Service Centres First Tier Component Producers Automobile OEM s Albion Pressed Metal Steel & Alloy Tallent Engineering Corus LDV GKN Sankey British Steel Distribution Krupp Camford Wagon Group

42 Specific Improvement Targets Improvement Area British Steel Strip Products Steel Service Centres Metal Processing Customers 1. Lead Time Reduction 40% 40% 40% 40% Total for the Three Tiers 2. Time to Market Reduction 30% 30% 30% 30% 3. Stock Reduction 10% 20% 20% 15% 4. Quality Improvement 50% 20% 50% 45% 5. Productivity Improvement 6. Increased Mutual Business 5% per annum 5% per annum 5% per annum 15% over 3 years 30% 30% 30% 30% Value Stream Mapping 42

43 Demand Amplification Blanking plan Blanking Actual Pressing Plan Quantity Week number RS Components Course

44 Demand Amplification Tonnes Enduser Demand Wide coil orders BSSP Deliveries 50 0 RS Components Course

45 Current State Map for a Larger part of of Value Stream Check vs Production Plan STEEL MILL SCHEDULING Check vs Sales Plan COMMERCIAL Order (3 months in advance) Promise (Negotiation) Call off weekly or by day Steel Service Centre Coils 2 shifts 3 Month Forecast Weekly Order Fax Revision PRODN. CONTROL 5 Month Forecast Daily Order With Time slots Vehicle Assembler 12,000 pcs/mo Tray = 14 off 2 shifts Iron & Steel Making Individual Schedules Revisions to Missed Deliveries Weekly Schedule & Revisions Coils 3 Days Weekly Schedule by Day Shipping Schedule 1 x hours Hot roll Pickle Pack Dispatch Slit Dispatch Blanking Pressing Assembly Paint Assembly Dispatch I I I I I I I I I I I C/T = 120 hrs (includes cooling) 2 Days 2 Days C/T = 15 min C/O = 10 min 3 Days1 Day 16 Days C/T = 4min/coil C/O = 45 min Uptime = 55% 2 shifts 27,000 secav 10 Days 3 Days to 32 Days C/T = 1 sec C/O = 20 min Uptime = 70% 27,000 secav EPE 10 Days 2 Days C/T = 1 sec C/O = 30 min Uptime = 70% 27,000 sec av EPE 10 Days 6 Days C/T = 13 min C/O = 0 min Uptime = 85% 2 shifts 27,000 secav 1200 Sec. 900 Sec. 240 Sec. 1 Sec. 1 Sec. 780 Sec. C/T = 1 hour C/O = Uptime = 65% 2 shifts 27,000 secav 0.6 Days 0.27 Days C/T = 9 min C/O = 0 min Uptime = 85% 2 Shifts 27,000 secav 3600 Sec. 540 Sec. 1.2 Days Lead Time = 47 to 69 days VA Time = 7262 sec (121 min)

46 Future State Map for a Larger part of of Value Stream STEEL MILL SCHEDULING Forecast Transmission (Supply Chain Syvchronisation) Orders Coil 600 Steel Service Centre Coils 2 shifts Daily Order Coil 600 PRODN. CONTROL 5 Month Forecast Daily Order With Time slots OXOX Vehicle Assembler 12,000pcs/mo Tray = 14 off 2 shifts Iron & Steel Making coil coil Batch tote Batch tote x hours Hot roll Pickle Pack Dispatch Slit Dispatch Assembly Blanking Pressing Dispatch & Paint F I F O C/T = 120 hrs (includes cooling) RFT = 85% C/T = 15 min C/O = 10 min C/T = 4min/coil C/O = 5 min Uptime = 85% 2 shifts 27,000 secav C/T = 1 sec C/O = 5 min Uptime = 85% 27,000 secav EPE Day C/T = 1 sec C/O = 5 min Uptime = 85% 27,000 sec av EPE Day C/T = 60 min C/O = 0 min Uptime = 65% 2 Shifts 27,000 secav 1 Day 1 Day 7 Days 1 Day 1 Day 1200 Sec. 900 Sec Sec. 1 Sec. 1 Sec. 1 Day 3600 Sec. 4 Hours Lead Time = 11.5 days VA Time = 6902 sec

47 LEAP Targets & Results Area Target Results Lead Time 40% u 20-90% u Stock Reduction 15% u 20-75% u Quality 50% t 50 ppm Productivity 15% t 8-33% t Increased Business 30% t 40-50% t Design Time 30% u 30% u Value Stream Mapping 47

48 Cases and Examples #3 An Information Based Process: Insurance Company Value Stream Mapping 48

49 The Twelve Phases Map 1. Planning 2. Pre-audit 3. Initial visit 4. Billing 5. Cert. production 6. Tech. Cert. review 7. Outsourcing 8. Cert. completion 9. Visit cycle 10. Billing Amf 11. Visit Strategic review Mapped at the point of activity Value Stream Mapping S A Partners,

50 Completing the Flow Current State Maps Paper work flow Value Stream Mapping S A Partners,

51 Current state map Start Value Stream Mapping S A Partners,

52 Current state map Finish Value Stream Mapping S A Partners,

53 Current State Phases Time Line (calendar days) Minimum Maximum Minimum Resource Maximum Days Hours Days Hours Hours Mins Hours Mins 1. Planning process Pre-audit Initial audit Billing Cert. Production & proof reading Tech. cert. review Outsourcing Cert. completion Visit cycle Billing AMF Visit Strategic review Total of process Value Stream Mapping S A Partners,

54 Phase 1 Resource Planning Root Cause Opportunities Major Wastes Process Culture Process Culture Print of (sales brief) Comfort factor Read electronically Validation of data Information not right Lack of trust Review format of data sales brief and sales application checklist. Planning to fail (brief may say 6-8 months) Ownership from sales resp/training to get it right Single point of contact (1 st time) Planning to fail Always done it this way Obtain alternative contacts from client (education of client re: status of registration) Use of planning spreadsheet/correspondence log Current systems do not allow for monitoring as per s/s Comfort/lack of trust Investigate system capability Readiness of client Sales target driven. Communications/Edu cation of client. Information not right Always done it this way Modules for clients. Education of client. Staff training (pick up on buying signals/leads etc). Opportunity to influence ass via financial incentives etc [1] S A Partners 2004 Value Stream Mapping S A Partners,

55 Future State Phases Time Line (calendar days) Minimum Maximum Minimum Resource Maximum Days Hour s Days Hour s Hour s Min Hour s Min Planning Pre-Audit visit and Reports Visits and reports Post visit support service Total % reduction in time 50% reduction in resources Value Stream Mapping S A Partners,

56 What Have You Learned? Don t be a happy mapper Start by understanding what you are trying to achieve Can anyone tell me the 4 Lean Principles? And what about a link to Strategy? Involve the recipients in the mapping Don t do mapping to people Don t Just Map Internally Don t Just Map Order Fulfilment No one map will do the job Chose the right maps Value Stream Mapping 56