Low Hanging Fruit

I was with a client today, talking about value stream mapping their current process. It prompted me to put a few of these thoughts down and share what it’s all about. So why Value Stream Map? Why would you participate in Value Stream Mapping?

 

Set the scene

One of the things that Value Stream Mapping is fantastic for is identifying one or more constraints or wastes in your business or your value stream. People quite often underestimate the power of the value stream as being a great way to set the scene for your Lean implementation or your Lean improvement in business. This is because when you’re looking for something like a constraint in a value stream, you are often able to identify a quick win within your process. Quick wins are great when you’re trying to implement more Lean and Kaizen type culture and habits. They allow you to have buy-in with your team, buy-in with your employees and, and also make sure that your management team and your Kaizen teams are focused on what’s really, really important.

Quick wins I usually see have a lot to do with making value flow. Subsequently, when I value stream map, I’m usually looking for a constraint in a business that lengthens the lead time through their process, when working to get a high-quality product to the customer. Now, if you know anything about long lead times, you’ll know that they hide a multitude of wastes: defects, inventory, excess motion- pretty much all of the eight wastes are hidden within long lead times. Alternatively, if you have a very short lead time, it’s extremely hard to hide anything. You have no option but to get on top of problems and stop and fix in a very, very timely manner.

 

Case Study

Let’s take a look at an example that is definitely worth discussing – bespoke manufacturing and bespoke service delivery.

Firstly, it’s important to understand that the example product is not significant when looking at the merits of value stream mapping. Whether it be a service or physical product, with long or short cycle times, high volume repeatable manufacturing or one-off bespoke manufacturing- it doesn’t matter. Regardless of your product, value streams are a valuable tool for your business.

In this case, it’s a large manufacturing environment with quite a lot of work in progress going on. The value stream has to work on some fairly high-level averages because they have a very bespoke product- every job is different. This is not an uncommon situation. Building a bespoke product or providing a bespoke service resulting in slightly different outcomes for the client is a common scenario in Australia these days.

In this particular case, when we did the value stream map and collected data around inventory and lead times, we identified that an average job could take anywhere from nine days through to 23 days lead time through the entire process. This resulted in huge amounts of inventory on their factory floor. In addition to excessive inventory, utter confusion, double handling, excess motion, and defects were present everywhere. In fact, 43% of the defects were identified as coming from one area and consistently failed to be identified until the end of the job. It was a pretty bad situation!

This value stream map helped us to identify one major problem; there was a large bottleneck before their assembly process. This came from the large batch of product being created at one time, that then had to be assembled. In addition to the large batch size, it would all be given to one person. Batches were not clearly thought out or planned, and subsequently full of errors and mistakes. This not only generated a large amount of inventory before that assembly process but created huge amounts of work in progress within the assembly process.

Progress was made when we established our takt time and we came to understand what the true pacemaker was in the value stream. This is when we made one really significant change in our process. Thanks to the value stream map, we were able to identify that in fact, it was ultimately the machinery involved in this manufacturing process that set the pace. We could modify what people were doing around the machinery to an extent, but the machines, well, they could only run at an upper limit, and that’s about it. So we said, “Well, that’s our pacemaker!”

Rather than just building in large batches, we now realized we could bring our batches down to an amount which created a lead time that equaled our takt time, which was about an hour and a half’s worth of machine processing. We then needed to take that hour and a half’s worth of machine processing of parts and assemble them. Rather than giving large amounts of parts to one person, we split those parts and assembled across several people. This way we had roughly an hour and a half lead time in assembly. This allowed us then to expand and contract what we needed to do, according to the job, which was consistent with the nature of the bespoke product- some jobs were big, some jobs were small.

Further action resulting from the value stream map was that by following our takt time, the bottleneck was removed from the assembly, unconstraining the rest of the process. The bottleneck, constraint or pacemaker was now only the machinery, which has a natural limit that was very high. So what was the result?

 

Harvest the rewards

Lead time reduced to just a couple of days. It was between nine and 23 days before, and it reduced to just a couple of days. As a result of this, their capacity and throughput increased quite dramatically. They created the ability to, at times, more than double the revenue produced by that factory in a week! This was a fantastic outcome.

So, this is the value of a value stream map: you can quickly identify the low hanging fruit and the really big items that can make a huge difference. The flow-on effect is that everybody then feels a lot more comfortable and at ease with continuing on their Lean and Kaizen journey, moving the team towards more cultural changes, habits and behaviours such as 5S, Visual Management, Standard Work, and a good strong Kaizen or continuous improvement behaviour.

 

Want to know how we can map your value stream? Contact us!

 

Respect,

Daniel.