Let’s Create a Future State Value Stream Map!

Let’s continue with our value stream mapping (VSM) series this evening by discussing the future state VSM. If you are just joining us, please feel free to read the previous articles before jumping into this one.

• Value Stream Mapping Overview
• How to Create a Product Quantity / Product Routing Matrix
• Let’s Create a Current State Value Stream Map!

I Have a Dream!

The process of creating a future state VSM can be quite exciting as creativity and excitement merge together. It’s time to dream a little as we work to create better, safer, more productive workplace. And, please be sure to have some fun during the process!

In the last article we documented the “current state” process of our fictitious peanut butter and jelly sandwich factory. We learned the following.

• We have a production lead-time (PLT) of 2.39 days
• The total value added time (VA/T) is 97 seconds
• The process cycle efficiency (PCE) is 0.15%

Obviously, we have room for improvement.  And while this is a completely fabricated example, I think you will find similar opportunities in your operation.

Let’s see what improvements we foresee.

Step 1: Create a Cycle Time / Takt Time Graph.

From the data collected and calculated during the creation of the current state VSM we are able to draw a cycle time / takt time graph. This graph simply compares the individual cycle times to the overall takt time of our process.

This is an important step as it will help us make decisions as to how and what to improve in future steps. Click the above picture to see what this looks like for our example.

As you can see, both the peanut butter and jelly application steps are under takt time. The packaging step, however, is over takt time and is cause for alarm. In its current state, we are not capable of meeting customer demand without the use of overtime.

Step 2: Decide if you will build to stock or make to order.

Next, we must decide what type of distribution model we will develop. Will we build to a finished goods supermarket or ship directly to the customer?

In our example, we only produce one product and customer demand is relatively stable. Therefore, it would make the most sense to develop a make to order model. This means we would only produce what the customer wanted, when they wanted it.

Now, since most companies produce more than one product and battle inaccurate sales forecasts, building to a finished goods supermarket often makes the most sense.

One normally asks, “Isn’t this just building up inventory… one of the 7 deadly wastes?” The answer is yes. But, the key difference is we are controlling the inventory levels instead of the inventory levels controlling us.

So, for sake of example, we will assume the folks at KB&R, Inc. decided to implement a finished good supermarket where they will hold 0.5 days’ supply of finished stock (a.k.a. PB&J sandwiches) before shipping as demonstrated in the picture.

Step 3: Calculate Optimal Crew Size and Implement One Piece Flow.

Currently, the operators at KB&R work in isolation. You could say they all work to their own drum beat. Whenever possible, our goal  as lean practitioners, should be to get all operations producing to the same beat – namely takt time.

As we learned in step 1, both the peanut butter and jelly application cycle times are under takt time while the packaging step is over. This needs to be addressed.

The solution is to rebalance the work and implement one piece flow. The team first determined the “optimal crew size” for the entire sandwich making process.

To do this, the team took the total cycle time to produce a sandwich (97 seconds) and divided it by the takt time (38.6 seconds). This resulted in an optimal crew size of 2.5 operators. Since we cannot have 0.5 persons they rounded up to 3.

If the team is ever able to reduce the total cycle time to less than 77 seconds the crew size could be trimmed to 2 persons, freeing up the additional resource for other value adding tasks.

Next, the team worked with their lean sensei and designed a u-shaped cell where all 3 operators would work in a one piece flow manner. Once the work was redistributed the team was able to produce a PB&J sandwich approximately every 32 seconds. The total time for the first sandwich to be complete is still 97 seconds.

Step 4: Pull when One Piece Flow is not Possible.

Anytime we build to supermarkets we must have a way of signaling when to produce and when not to produce. There are a variety of ways to accomplish this. The easiest way is to use kanban.

Without going into great details on how to size and implement kanban, let me explain it this way.

When a customer places an order for 10 PB&J sandwiches, which we will assume is the standard pack-out quantity, a “withdrawal” kanban for 10 sandwiches is sent to the finished goods supermarket. The shipping clerk pulls off a “pallet” of 10 PB&J sandwiches and ships them to the customer.

This now leaves a “hole” in the supermarket. Therefore, a production kanban (white on a VSM) for 10 sandwiches is sent back to the u-shaped cell. This production kanban basically says, “Hey, we just shipped 10 sandwiches and need to plug the hole! Make us 10 more please!”

Additionally, the supply chain team has worked with their supplier and negotiated frequent milk runs. This allows the team to only hold 0.5 days of “bread” in a WIP Supermarket before the u-shaped cell. Again, kanban and a kanban post (goal post symbol on VSM) are used to replenish this WIP supermarket.

Finally, the implementation of kanban has allowed the team to turn off the MRP portion of their ERP system… and leagues of lean angels sang “Hallelujah!”

Step 5: Improve Communication and Schedule a Pacemaker.

So far we have gone a long way to improve the flow of material and manpower. Now, let’s zoom in on the information side of the equation.

Rather than scheduling each process “on an island” the lean approach is to schedule one process. We call this process the pacemaker process since it sets the pace for the entire system.

By definition, the pacemaker is typically defined as the process step closest to the customer whereby everything after it flows. In our example, this would be shipping since the supermarket after the u-shaped cell technically impedes flow.

So, we will aim to schedule production at shipping. Once shipping gets the instructions as to what to do they will alert the upstream processes via kanban.

Additionally, the team has decided to ratchet up the communication with its customers and suppliers. This two-way communication will help all parties prepare for things like demand fluctuations.

Summary

On paper we have made some significant improvements. Production Lead-time (PLT) has gone from 2.39 days to 1 day, and the process cycle efficiency (PCE) has gone from 0.15% to 0.36%.

Next up, we will discuss action planning and how to go about closing the gaps between the current state and future state.  As always, if you have any questions or comments please do share them with us by clicking on the comments link below.

Value Stream Mapping Overview

If you want to dive deeper into this topic be sure to check out our Value Stream Mapping Overview video below.  This is the first video in our Transforming your Value Streams Course.

Keep Reading

Read the last article in this series: Introducing the Kaizen Newspaper

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