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Last time we discussed how to start a second pass assessment where we capture a more detailed analysis of the metrics, flows, and constraints and document them in a Value Stream Map. This week we will look at how to finish the analysis so we can propose possible solutions. First, let’s look at the value stream map we created.
Value Stream Map
Visual Space Analysis
Did you ever stop to wonder whether the floor space you have is being used for value added work or not? Using a Visual Space Analysis you can determine how effective your plant layout is. Start by shading in or blocking out the space usage by category on a plant layout or CAD drawing. Note categories and colors as follows:
- Raw Material – Orange
- Work in Process – Blue
- Finished Goods – Red
- Tooling – Brown
- Aisles – Yellow
- Offices – Purple
- Empty Space – White/Pink
- Value-added activity – Green
(Includes 3-4 ft working space around cell)
Next calculate the square footage of space used by category and enter the results into a pie chart of space used. You now have a visual diagram of your space usage. You will probably find that most of your space is dedicated to non-value added materials or activities.
Material Flow Analysis
Next we can create a Material Flow Analysis, also known as a “spaghetti diagram“. Your material flow analysis is made by following your raw material through your plant until it becomes a finished good.
Use another copy of your CAD drawing to draw a line to highlight each material movement. Use a triangle at each point where material stops. Poorly organized plants with functional layouts will show a number of lines in a crazy pattern that begins to resemble spaghetti, hence the name spaghetti diagram. A plant organized by value streams will have neat flow lines with few stoppages to the flow.
Future State Value Stream Map
In lean thinking we look at all process interfaces and customer touch points for waste production, introduction, or handling (automation or institutionalizing). Then work to reduce or eliminate all waste/non-value add activities.
Ranked Improvement Opportunities
The last step is to produce a list of your improvement opportunities. We start by comparing the future state with the current state. Improvements are identified with a starburst. In the example above, four opportunities were noted.
- Design kanban for raw materials
- Lot size set-up reduction
- Work cell redesign
- Design kanban for finished good
Estimate cost reduction potential and difficulty and then rank the opportunities. We are looking for an easy starting point to build confidence in lean. We need a fast solution. Long periods of analysis could kill the momentum we are trying to build. Typical improvement opportunities are included in the table below.
|Raw Material Reduction||
|Finished Goods Reduction||
|Material Flow Reduction||
|Vendor Base Reduction||
|Improved QUality (scrap/rework)||
You will notice that as we implement lean the focus is not on the lean tools but instead we try to focus on our own thinking and what the customer needs and wants. We look for ways to build flexibility into the system to handle the variation in customer demand instead of forcing the customer to fit their demand into our system. Minimum order quantities, quantity price breaks or making the customer wait for delivery are signs of forcing customer demand into a rigid system.
Look for solutions that increase flexibility and create a more agile system. Focus the organizations metrics on process capability measures. And change the thinking. Your thinking governs your performance. So, if you fail to change the thinking, you have failed to truly implement lean.
Learn more about developing policies, procedures and processes, or improving your organization by attending the next How to create well-defined processes, How to Implement Lean Thinking, or ISO 9000 Lead Auditor training classes.