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Value Propositions

Sept. 16, 2010
Don't 'waste' the value-stream mapping process by ignoring the customer.

Value-stream mapping (VSM) grew out of minor adaptations to a Toyota tool called material and information flow mapping, says John Shook, Lean Enterprise Institute CEO. The process was introduced in 1998 as a "system design tool" that maps product or work flow and the information that controls those processes, says Shook, who co-authored the value-stream mapping manual "Learning to See" in 1999.

But most manufacturers are not realizing the full benefits of VSM because they view the tool solely as a waste-reduction process, says Shook. "They're not taking advantage of what value-stream mapping can do for you, which is by beginning with the customer and not only focusing on distinguishing value creation from non-value creation but also the flow of information," Shook says.

Many problems manufacturers have at the process level have to do with a broken system design. VSM provides an opportunity to design or redesign their systems, Shook says. At the plant level, Shook and his co-authors suggest in "Learning to See" that manufacturers first determine the takt time or the customer's demand rate. But VSM can go beyond the plant floor to administrative functions where companies can identify their customers' needs. "Value-stream mapping gives us a lens so we can see operations differently. That's certainly true in the factory. A big surprise to me is how effective it's been when utilized off the factory floor," Shook says.

Laboratory equipment manufacturer Thermo Fisher Scientific Inc. has realized some significant benefits at its Asheville, N.C., plant by focusing on the customer during the initial stages of the VSM process, says Jeff Powers, the plant's site leader and director of operations. In fact, the plant follows similar techniques to those supported by the Lean Enterprise Institute, Powers says. The plant's value-stream team looks at customer orders and follows them through the entire value stream -- from the customer signaling to order entry that they need a unit to the planners who schedule the requests, Powers says. The VSM team follows by assessing the production flow and then walking through the actual processes to see how they move in the plant's system.

The VSM team consists of a value-stream manager who is responsible for a particular product across the entire enterprise, including sales, service, R&D and production, Powers says. Other team members include a production supervisor, buyer/planner, manufacturing engineer, process manager, maintenance supervisor and quality engineer. Shook says a common mistake manufacturers make in the VSM process is not involving all the proper stakeholders. "That means including the people who do the work, who know the work the best but also including the customer or some sort of surrogate for the customer so you can identify what the customer's requirements are," he says.

Wes Waldo: A pen and a piece of paper should be more than adequate for the VSM process.

Cross-functional teams from each major department can help workers understand how their processes impact a coworker in another area, says Wes Waldo, chief operating officer of continuous-improvement consulting firm BMGI. "It helps break down the silos between the different departments, and you can convert yourself from a vertically oriented company to a horizontally oriented company," he says.

The first value-stream map the Asheville Thermo Fisher plant conducted involved its refrigeration line. The plant wanted to improve time-to-delivery, on-time shipments and inventory levels on the refrigeration line. Over a five-day period, the VSM team assigned to the product mapped the key bottlenecks, drew a future-state map and created a plan in an A3 format to achieve its goals in six months, Powers says. (LEI defines the A3 report as another Toyota practice that involves writing the problem, the analysis, the corrective actions and the action plan on a single sheet of large paper.) Within three months, the plant was able to eliminate 40% of the refrigeration line's work-in-process inventory, reduced the lead times from 14 days to seven days and improved on-time shipments from 70% to 90%, according to Powers.

The plant utilized 5S to identify inventory levels and locations and implemented a kanban system to reduce excess stock. The kanban method involved looking at consumption history for a particular part and then using that data to signal the supplier when inventory levels fell below optimal levels. The plant also realized through the VSM process that work operations were not balanced so some workers had considerable downtime while others were overworked. VSM helped the line even the production pace, Powers says.

Identifying such bottlenecks doesn't have to come in the form of a fancy, computer-generated presentation, says BMGI's Waldo. Manufacturers sometimes spend too much time trying to create visually appealing maps for management presentations and lose sight of their initial goals. "Most people worry because they're not using the exact right symbols or the map is not pretty enough," Waldo says. A pen and a piece of paper should be more than adequate for the VSM process, he says.

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