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Value Stream Mapping Brings Quick Rewards

In these days of economic uncertainty and increased competition, boosting the bottom line is critical to long-term success. One way to do this is through value stream mapping.

Value stream mapping is a key method of implementing "lean manufacturing" to reduce waste and streamline both material and information flow.

A value stream map identifies all the actions that take a product through the manufacturing process, from obtaining raw materials to delivering the final product. The idea is to draw, on one page, a "map" of the flow of material through production and the flow of information from the customer back to each production process and key supplier.

Pointe Precision LLC in Stevens Point undertook value stream mapping in February 2001. "I learned about it when I attended one of WMEP's 'lean' workshops," says president Joe Kinsella. "Many of our customers come back year after year for price concessions, and we realized we had to reduce waste and become more efficient in order to do this. Value stream mapping was a great place for us to start."

Once the value stream is identified, steps are taken to optimize the manufacturing process by identifying waste. This adds value to your products and services that can easily set you apart from the competition. Value stream mapping is a low-tech, pencil-and-paper tool that enhances communication, business planning, and overall management. It's not just for the shop floor either-it can be applied to every part of the organization.

The first step is drawing a detailed picture of each part of your operation to produce a "current state map"-the situation as it exists today. The entire manufacturing process is mapped out, including cycle times, down times, in-process inventory, material moves, and information flow paths.

The second step is identifying ways to improve your process flow that will eliminate waste and utilize time, talent, and equipment more efficiently. This invariably results in a better understanding of the entire manufacturing process. These improvements define the "future state map"-where you want to be in one month or a year from now.

The third and final step is implementing the process improvements, which leads to reduction of work-in-process and production lead times, fewer defects, and faster responses to demand changes.

"The initial training took about eight hours," indicates Randy Stroik, Pointe Precison's manufacturing manager. "The process itself wasn't difficult, but creating the action plan after seeing the future is extremely critical."

Results can be immediate and dramatic. Stroik and Kinsella were pleased that their early projections for improvement were quickly surpassed. "We reduced work-in-process from 24 working days to 16 days, an improvement of 32%," says Stroik. "On-time delivery jumped from 10% to 95%. And our defective parts/1,000,000 opportunities dropped 39%."

"The improved performance on deliveries has helped cement long-term relationships with customers who are looking to consolidate suppliers," adds Kinsella. WMEP guided Pointe Precision through the training and several of the mappings. "Jeff Moore and Jerry Thiltgen are fantastic facilitators who are very confident they can improve any value stream, regardless of complexity," says Kinsella. "But if you're dedicated to making the necessary changes, the return on investment is extraordinary," says Kinsella.

It is important that value stream mapping is embraced at all levels of the company. Management must demonstrate that each employee can contribute to productivity by facilitating change. Stroik indicates that "everyone has taken ownership of the plan. They see the success, feel empowered, and come to us with great ideas." Pointe Precision is not resting on its recent successes. Management realizes that value stream mapping is an ongoing process.

"We want to do six more value stream maps this year, including in our accounting department," reports Kinsella. "By December 2002 we want to reduce lead time again, from 16 days to 10 days. We expect to get defective parts down by another 30%. Until you do a value stream map seven times on the same process, you aren't really lean."

For more information on WMEP's value stream mapping workshops, call 877-800-2085

Value Stream Mapping Definitions

Current State Map - Map of the situation as it exists today ie. "the current state" and use it to identify sources of waste and the degree of (or more often the lack of) flow within the production system.

Future State Map - Map that shows how value could flow in a very short period of time.

Value - The reliable performance of a product at the lowest possible cost. Value is the relationship of function to cost.

Value Stream - The specific activities required to design, order, and provide a specific product, from concept to launch, order to delivery, and raw materials into the hands of the customer.

Value Stream Mapping (VSM) - Identification of all the specific activities occurring along a value stream for a product or product family.

Value Stream Manager - Person responsible for creating a future state map and leading door-to-door implementation of the future state for a particular product family. Makes change happen across departmental and functional boundaries.

Waste - Any activity that consumes resources but creates no value for the customer.

Copyright 2003 by WMEP.org

WMEP provides technical expertise and hands-on implementation assistance to small and midsize manufacturing firms on advanced manufacturing technologies and business practices includinglean manufacturing, ISO, value chain management, and strategic repositioning services for manufacturers and manufacturing facilities located in Wisconsin.

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