In part 1 of our series on value stream mapping (VSM) we were introduced to what a value stream is. We also discussed the roadmap I personally use when working with this powerful tool.
In this installment, we’ll take a deeper dive into another very important tool that should actually kick off any VSM activity – the product quantity / product routing (PQPR) matrix.
Product Quantity Matrix
In order to garner maximum benefits from your value stream mapping efforts, it is important to take some time up front in order to identify the product family you wish to study and improve.
The first tool I recommend you look at is a product quantity matrix. The basic premise here is that you should target your higher volume products for improvement first. Here is a 2 step roadmap for doing just this.
- Collect production output data – both in units shipped and sales figures. As a starting rule of thumb I recommend attempting to collect 6 to 12 months worth of data.
- Create a Pareto chart with this data in attempts to identify where to focus first (e.g. highest volume products).
In some cases you may have two results. The first place “winner” based on units shipped may be product ABC. However, the first place “winner” based on sales dollars may be product XYZ. In these situations it is up to the management team to make the call as to where to focus.
Since this is all based on historical facts, you can tweak this method ever so slightly by including forward looking forecasts. But be careful… since the only thing certain with a forecast is that it’s certain to be wrong.
Product Routing Matrix
If the results of the product quantity matrix are inconclusive we can look at another tool – the product routing matrix.
With this tool we are interested to learn how each product family moves through the process. For example, do certain products pass through the exact same machines? If so, we can actually group them together and create one set of value stream maps covering both products.
Combing the Tools
While each of these tools can work well on their own, it is my opinion they are at their best when working together.
In the picture above (click to enlarge it) we see that ABC took the prize for most units shipped, and XYZ made us the most money.
Then, when we looked at the routings we saw that ABC and QRS actually went through the same manufacturing steps. Further, product QRS was a close second place on sales $ and third place for units shipped.
So, in this example the team decided to map product ABC and QRS together.
That’s really all is there is to this tool. Obviously, real life examples will be far more complex than my simple scenario. But the process you use should be no different.
Lastly, this same process works in front office/transactional environments as well. Instead of looking at machines you may instead look at how a piece of paper flows through the office (e.g. which functional departments touch it).
If you are enjoying this series on value stream mapping please subscribe to LSS Academy via our RSS feed.
Read the next article in this series: Let’s Create a Current State Value Stream Map!