VSM Smart Manufacturing

VALUE STREAM
MAPPING
Smart Way Training Material

Version 1.5
CMO/DS/IM/Richard Lindroos
COMPANY CONFIDENTIAL
Value Stream and Value Stream

Mapping
A Value Stream is all the value adding (VA) and non-value
adding (NVA) activities currently required to bring a
product through the main production flows essential to the
product
Value Stream Mapping (VSM) is about drawing these

streams on a big board to get an overview of the big
picture
VA activities are those activities that the customer is ready to pay for
NVA activities examples include transportation, waiting, buffering etc
of the product or its parts
7-Wastes
Overproduction
Inventories
Motion
Waiting
Defects
Over Processing
Transportation
Purpose & Benefits

The purpose of Value Stream Mapping is to highlight
sources of waste and eliminate them by implementation of
an ideal future state value stream that should be strived
towards
Benefits:
Reduction of complexity & lead time of material flow
Better targeted information flow
Visible and focused improvement opportunities
Widely usable overall picture, shows how material is
really flowing through the whole factory
Two Approaches to reducing lead time

Percent of Lead Time
5
10
15
20
25
30
35
40
VA
45
50
55
60
65
70
75
80
NVA
1. Making value adding processes twice as

fast
NVA
VA
2. Reducing half of the non-value-adding

processes
VA
NVA
VA = Value adding
NVA = Non-value adding
85
90
95
100
Example of a Value Stream Map
Value Stream Mapping Cycle

Current state
map
Remove waste
Future state map
Implementation
plan
Basics before Mapping starts
Where to start
The first mapping is at a micro (factory door-to-door) level
Once the overall factory flow is known it is easier to map at
macro (DSN) level
Micro level
Macro level
Demand
Supply
Components
Manufacturing
Channel
Partner
POS
Consumer
Material flow icons
SMT TOP
DND SUPPLIER
Cycle time
20
Secs
Changeover
Hrs
MFR
0,87
ENGINEBUFFER
S1E
Manufacturing
Process
Outside
Sources
Data Box
Max. 20 pieces
Mon.
+ Wed.
Truck
Shipment
Inventory
FIFO
Finished Goods
to Consumer
PUSH
Arrow
First-In-First-Out
Sequence Flow
Name
Value
Unit
Name
Value
Unit
Name
Milk Run
Transport
Material Flow
Value
Unit
Supermarket
Withdrawal
(Pull)
Information Flow Icons
Daily
schedule
OXOX
Manual
Information Flow
Electronic
Information Flow
Schedule
Load Leveling
Withdrawal
Kanban
Production
Kanban
Signal Kanban
Kanban Post
Kanban Arriving
in Batches
Sequenced-Pull Ball
Go-See
Scheduling
General Icons
Name
Value
Unit
Name
Value
Unit
CHANGEOVER
Name
Value
Operator
Unit
Buffer or Safety
Stock
Improvement Needs
- Ideas
DSN Icons
Cross-Dock
IHUB
Crossdocking
Plane Shipment
Warehouse
Current State Mapping
Step 1 Decide scope of mapping

Guidelines:
Starting point: Production order release
End point: Materials loaded on trailer
Step 2 Indicating customer on map

The customer is drawn with a green factory box in the
upper right corner of the map
When we map a whole product family it is wise to not
distinct between any certain customer, but look at all
orders for that product during a time period
Some metrics that can be used to describe the customer
are:
Daily demand
Nr of PO:s (during a time period)
Average order size
Customers
Daily demand 14 000 Pcs
Daily nr of
prod. orders
65
Pcs
Avg order size
220
Pcs
Step 3 Drawing Production

Processes
Process boxes are drawn horizontally from left to right on
the bottom of the map according to their order in the
material flow
The process boxes are drawn in blue colour, with a name
indicating what the process is
There are no strict rules on what to indicate as a separate
production process, but some guidelines are given in the
following pages
PROCESS 1
PROCESS 2
ASSEMBLY
SHIPPING
Flow of material
Note: this example map is simplified


Processes
Guideline 1:
If the material can flow physically through a process entity
such as the ATO cell, then this is shown as one separate
process box
ATO cell

Processes
Guideline 2 continued: Choosing split btw processes
Instead, the process boxes should be shown as separate
process boxes as shown beneath
Whole engine line
SMT TOP
SMT TOP Material Stock

B_1
SMT BOT
SMT BOT Material Stock
xx k
B_2
xx k
HaFA
HaFA Material Stock

B_F
xx k
Step 4 Drawing Supplying Sources

The iHub is drawn as a yellow warehouse in the upper left
corner co-located and off-located iHubs are drawn with
the same symbol
Supplying sources, such as the CEMs, DND supplier,
subcontractors are drawn with the same symbol as the
customer a green factory
IHUB
DND SUPPLIER
CEM/ OTHER SITE

ENGINE SUPPLIER
SUBCONTRACTOR
Step 5 Drawing Inventories/buffers

Inventory triangles are drawn in between the process
boxes to indicate the location of a physical inventory in the
material flow
The inventory triangles are drawn in yellow colour
Beneath the triangle an open box is drawn with a
describing name of the inventory as well as the storage
location (e.g. S1C or 205)
Later on, the value of the material in the inventory can also
be recorded in the inventory box
I indicating Inventory
Engine buffer
System name for inventory
(101)
xx k
Describing name for inventory

Value of material in inventory
Step 5 Drawing Inventories/buffers

Guideline 1: What inventories should be drawn?
Draw an inventory triangle for each location of inventory
between processes
If there are two inventories between processes draw
triangles for both
Note: it might be wise to leave out some inventories that are for
very low-valued materials, such as plastic bags or carton
Note: in the pilots, the inventories for re-work has also been left
unmapped as their influence on the material flow is quite
marginal
Step 6 Inbound & Outbound

shipment
Shipment types and frequencies for both outbound and
inbound shipments are mapped with arrows
The form of transportation can be indicated by a symbol
iHub
Customer X
2 x/shift
Volume
10 000
pcs
Nr of variants
pcs
Blue
4000
pcs
Red
6000
pcs
12 x daily
3 x daily
3 x daily
weekly
SMT TOP
SMT BOT
ASSEMBLY
SHIPPING
Engine Buffer
C/T
15
Secs
C/T
30
Secs
C/O
Hrs
C/O
Hrs
Uptime
86
Uptime
75
Duration
MFR
0,5
MFR
0,9
Del. Freq.
Staff
Staff
C/T
20
Secs
Duration
Hrs
Min
C/O
16
Mins
Delivery freq
25
Mins
18
Hrs
Uptime
72
Pallet size
460
pcs
Sh
MFR
1,2
Staff
Staff
max. 6600
Pcs
Av. Size
Step 6 Process Data Box

Information
In the data boxes beneath the production process boxes
the following information are good to measure:
Total cycle time of process
Manual cycle times
Automatic cycle times
Real output of process (e.g.per shift)
Non value added time in process (Throughput time of
process - total cycle time)
Changeover time
OEE (if available)
SMT BOT
Example:
Output (qty/
shift) mean
Capacity (qty/
shift theoret.)
Throughput
time
Normal cycle
time
2400
Pcs
2756
Pcs
Value Secs
Value
Unit
Step 7 Inventory Data Box

Information
In the data boxes beneath the inventory boxes the
following information are good to measure:
Buffer level
Replenishment cycle
Duration (hours of supply)
Material turnover rate
Handover times/confirmation
ENGINEBUFFER
S1E
Example:
Replenishment
cycle/one line
Buffer level
mean
Buffer duration
450
Mins
46200
Engin
es
79
Hrs
Step 7 Type of flow between

processes
Now we insert push, pull or FIFO techniques used
between the processes
Max. 200 pieces
I
4 000 pcs
4 days
I
400 Blue
200 Red
Step 8 Information Flows

Information flows explain how much and when each
process should produce
Information flows are indicated by red narrow lines
There are separate lines for forecasts and orders
3 week
forecast
i
PRODUCTION
CONTROL
2 week
forecast
HUB
Weekly
Order
Daily
Order
MRP
2 week
Schedule
Shipping
schedule
Workqueue
CUSTOMER
Step 8 Mapping timelines

We will now indicate all lead times for processes and
duration times for inventories on a timeline beneath all
processes boxes and inventory triangles
Lead times for each inventory triangle are calculated as
follows: inventory quantity divided by the daily customer
requirement (=DOS)
If the lead time and the actual value adding time for a process
differ, we indicate it in the following way:
12 min
10 seconds
3 days
Inventory DOS
Step 9 Summarizing production

and value adding times
With data from observation of current operations in factory
we can summarize the current condition of this value
stream
By adding the lead times for each process and inventory
we get a good estimate of the total production lead time
Similarly we can summarize the value adding times of
each process
Compare value added with total lead time
Current State Map

PRODUCTION
CONTROL
3 week
forecast
i HUB
Weekly
Order
I
400 pcs
6 hours
Daily
Order
MRP
8x
Daily
6x
Daily
2 week
forecast
2 week
Schedule
Daily
Schedule
Weekly
PROCESS 1
400 Blue
200 Red
Production
Lead Time
6 hours
30 min
10 sec
6 hours
30 min
4 days
16 sec
4 hours
14 sec
6 hours
4,8 days
40 seconds
Processing Time
Future State Mapping
Future State Mapping

Goal:
To build a chain of production where the individual
processes are linked to their customers either by
continuous flow or pull, and that each process gets as
close as possible to producing only what its customer
needs when they need it
Hints for Mapping Future State

Dream about perfection
Think outside the box
Develop alternatives to the current state map - waste free
Focus on shortening production lead time
Test if each new idea support:
Takt time
One-piece flow
Pull
Be Open minded and Smart !
Key Questions for the Future State

1. What is the Takt time?
2. Where can we use continuous flow processing?
3. Where will we need to use kanban controlled pull
systems?
4. Will we build to a finished goods supermarket from which
customer pulls, or directly to shipping?
5. Where will the production scheduling point be?
6. How will we level the production mix?

7. What process improvements will be necessary?
1. What is the Takt Time ?

Takt time is the rate at which products must be produced
to fulfil customer orders
Example:
Breaks
Available production time: 28 800 1800 = 27 000 seconds per

shift
Available production time:
27 000
seconds
Customer demand:
450 units per shift
Takt time =60 sec
-> Each unit must be produced in 60 seconds
2. Where can we use continuous flow

?
Is it possible to produce one product at a time without
interruptions?
This thinking can also be applied to material replenishment
Continuous Flow
Continuous flow continued
Line Balancing
Assemble
Assemble
Packing
Weld
TAK
T
Packing
Assemble
Assemble
Weld
Weld
TAK
T
Weld
To create continuous flow we are often required to balance

the flow of operations inside a cell or along a line
3. Where will we need to kanban

controlled pull system ?
The general guideline given is: Use supermarket where
continuous flow is not possible (e.g. ENO -> ATO)
Example:
4. Build to supermarket or directly

to shipping ?
Building to a
supermarket
The supermarket
schedules assembly
Building Directly to
Shipping
Production control
schedules assembly
5. Where will the production

scheduling point be ?
The more we customize, the more upstream the scheduling point
need to be pacemaker process
If you have a pull system this is the only scheduling point you need
Downstream
scheduling point
Upstream
scheduling point
6. How will we Level Production ?

Levelling means to completely even out the production
of product types and volumes in relation to customer
shipping batches and real customer needs
Mass
Production
Monthly
schedule
(160 000
units per
month)
Model A
80 000 units
(280 units
per hour)
A B C
hour 1
week 3
week 4
140
140
140
70 70
Model C
40 000 units 40 000 units
week 2
week 1
Levelled
Production
140
Hourly
schedule
Model B
70
70 70
A B C
A B C
A B C
hour 3
etc
70
hour 2
70
70

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VALUE STREAM

Smart Way Training Material

Value Stream and Value Stream

Value Stream Mapping (VSM) is about drawing these

Purpose & Benefits

Two Approaches to reducing lead time

1. Making value adding processes twice as

2. Reducing half of the non-value-adding

NVA = Non-value adding

Example of a Value Stream Map

Value Stream Mapping Cycle

Future state map

Basics before Mapping starts

Material flow icons

Information Flow Icons

Current State Mapping

Step 1 Decide scope of mapping

Step 2 Indicating customer on map

Avg order size

Step 3 Drawing Production

Note: this example map is simplified

Step 3 Drawing Production

Step 3 Drawing Production

SMT TOP Material Stock

SMT BOT Material Stock

HaFA Material Stock

Step 4 Drawing Supplying Sources

CEM/ OTHER SITE

Step 5 Drawing Inventories/buffers

Describing name for inventory

Step 5 Drawing Inventories/buffers

Step 6 Inbound & Outbound

Step 6 Process Data Box

Step 7 Inventory Data Box

Step 7 Type of flow between

Step 8 Information Flows

Step 8 Mapping timelines

Step 9 Summarizing production

Current State Map

Future State Mapping

Future State Mapping

Hints for Mapping Future State

Be Open minded and Smart !

Key Questions for the Future State

6. How will we level the production mix?

1. What is the Takt Time ?

Available production time: 28 800 1800 = 27 000 seconds per

-> Each unit must be produced in 60 seconds

2. Where can we use continuous flow

Continuous flow continued

To create continuous flow we are often required to balance

3. Where will we need to kanban

4. Build to supermarket or directly

5. Where will the production

6. How will we Level Production ?

40 000 units 40 000 units

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