VALUE STREAM MAPPING. Heidi Stark- LSS Black Belt, Mercury Marine 1/19/2015

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1 VALUE STREAM MAPPING Heidi Stark- LSS Black Belt, Mercury Marine 1/19/2015

2 Agenda VSM overview VSM work flow Mercury s journey Lessons learned, best practices and how they were applied Results 2

3 What is a value stream? The VALUE STREAM is the entire set of activities performed to transform the products and services into what is required by the customer

4 What can VSM do for you? A value stream map (VSM) is a road map to reducing waste in the value stream Would you build a house without a blueprint? Would you take a road trip to an unknown place without a map? A VSM brings cross functional teams together to ensure that the organization is working on the most important things

5 Value Stream Mapping Work Flow Identify high potential opportunities for improvement Select and scope opportunities into actionable projects Generate program momentum at the site level through local engagement Focus Area Self Assessment Overview of Process and Deliverables Training Sessions Process Tour and Data Collection Current State Map Creation Verify Data Define Problem Statements Prioritize, Assign and Create Charters Complete Future State Map Report Out

6 Simple Product/Process Family Matrix Focus Area Self Assessment

7 Product Quantity Analysis Focus Area Self Assessment 2. List High Level Process Steps 4. Identify Product Families Product Annual Process Steps Product Family Family Volume Saw Turn Drill Weld WiringAssemblyPaint Finish Family Volume Pct A 14,000 X X X X X 1 B 1,500 X X X X X 1 15,500 81% C 2,000 X X X X X 2 D 100 X X X X X 2 E 50 X X X X X 2 F 150 X X X X X 2 G 300 X X X X X X 2 2,600 14% H 100 X X X 3 I 250 X X X X X 3 J 400 X X X X 3 K 300 X X X X 3 1,050 5% TOTAL 19, List of Products and Annual Volumes 3. Fill out the matrix, marking which process steps are related to each product.

8 What Problem Are You Trying to Solve? Overview of Process and Deliverables Define the problem Customer demand exceeds current capacity Rework and scrap costs are too high Current capacity is unknown Set the goal and make it time bound (three to six months) Increase capacity Reduce rework and scrap Define current capacity and identify areas to improve

9 Lean and Value Stream Map Training Overview of Training Process and Sessions Deliverables Training Session #1 Goals and expectations 8 types of waste Process mapping vs value stream mapping Training Session #2 Material flow Information flow Lead time and processing time Scrap vs first pass/ rolled throughput yield Data collection

10 Observe the process Process Tour and Data Collection Data collection training Assign data collection tasks Use a waste walk form Data examples: WIP FPY Setup/changeover time Cycle time Batch size Machine downtime Distance travelled

11 Current State Value Stream Map Current State Map Creation 1. Identify Customer(s) and Supplier(s) 2. List Process Steps 3. Collect Process Data 4. Add Flow of Information and Material 5. Measure or Estimate Lead Time 6. Validate Your Current State Map

12 Current State Value Stream Map Current State Map Creation It takes us 39 days to complete 27 hours of work with a rolled first pass yield of 14%

13 Verify observed data with actual data Verify Data Compare observed data with current systems Highlight discrepancies Calculate potential improvements

14 Create actionable problem statements Define Problem Statements Focus on the customer Focus on the process What is the problem? Identify the goal associated with the problem (quality, delivery, cost) Name the business metric associated with the problem? What is the magnitude of the problem? How do you know this is a problem? What target is not being met?

15 Describe the Business Problem Define Problem Statements

16 What happens after a VSM is created? Prioritize, Assign and Create Charters Establish priorities Focus on what matters How confident are you that the projects you are working on are the right projects to be working on? How often is your method of prioritization checked to ensure your priorities continue to match the strategic direction of the organization? Identify projects Build your pipeline by chartering future work Define problem statements Populate with data you have on hand

17 What happens after a VSM is created? Prioritize, Assign and Create Charters Continue to update the map as projects are completed Report out to management on a consistent basis

18 What happens after a VSM is created? Prioritize, Complete Assign and Future State Create Map Charters Future state goals: 1) Increase RFPY by 43% 2) Decrease lead time by 10%

19 Track progress with weekly report outs Prioritize, Assign and Report out Create Charters

20 Mercury CD VSM The problem: Customer demand rate exceeded capacity The objective: Engage employees in the end-toend process of 4 key components of the assembly line The tool: Cross department value stream map (CD VSM) was used to analyze the material flow of the current state and flush out critical areas for improvement The goal: Complete action items by December 3,2014 It takes us 39 days to complete 27 hours of work with a rolled first pass yield of 14%

21 Challenge accepted!!! Step 2: Record the data Step 1: observe the process When the part stops, we stop Step 3: Put it together Step 4: Assign action items Step 5: Report progress

22 76 areas of improvement identified 13 duplicates/ combined 63 action items assigned 16 in process Analyze: 6 Improve: 7 Control:3 14 deferred to 2015 or not started 6 cancelled 27 items completed Overall Results Key areas of improvement: Increased FPY Improved material flow Identified hidden factories Other benefits: Developed people Encouraged growth Motivation by celebrating success