Value Stream Analysis (VSA) – A first step in Change Management by Lean Transformation

Lean Transformation, otherwise known as Lean Six Sigma, seeks to streamline and add customer value to the manufacturing process by:

i. Eliminating resource wastage
ii. Developing a system that generates a consistently near perfect final product
iii. Optimization of the system for continuous flow and removal of non-essential links

Lean Transformation makes use of a number of specific tools, such as Value Stream Analysis (VSA) to manage the change process. In Value Stream Analysis crafting of current and future state maps that are subsequently used for tactical implementation planning takes place.

The value steam map (VSM) is a pictorial representation of all the steps involved in bringing the product from the original material suppliers, right through, to the customer. The crafting of the value stream map requires extensive data collection. Standard resources and procedures are depicted on the map by symbols and the map is usually condensed to one page. Value stream mapping varies from process mapping since the former considers the entire system whereas the latter analyzes one process in isolation.

Likely to be represented on a value stream map are:

i. Logistics (transport of raw materials from suppliers to the manufacturing plant and of final product to the customer)
ii. Every process in the manufacturing procedure
iii. The flow of information and material between the supplier and production control in the manufacturing plant
iv. The flow of information and material between production control in the manufacturing plant and the operator(s) of each individual process
v. The link between the customer, the ordering system and production control

Most importantly, timings for every link are recorded prominently on a value stream map. The data for a value stream map is often collected by an operator that shadows team members through each system process documenting data relevant to material and information flow.

In the development of a current state value stream map, firstly customer requirements are clarified since one of the final aims is to develop a work schedule which satisfies these. These requirements are then documented as the first recorded piece of information on a single piece of paper. Then, the process steps involved are expressed diagrammatically on the map and data related to cycle times, changeover times, uptimes and production figures are documented for each process. Multiple processes in parallel are depicted so they are easily identifiable. For each work station number of operators, cycle times, changeover times, percentage reliability, and a finished goods inventory is documented. Then inventory and timings between processes is recorded and push and pull material information flows are listed using 1 month to 3 month forecasts.

Once the current state value stream map is complete, a future state map is developed, based on customer requirement. The approach in crafting this map is to start from the premise of cutting all resources to a minimum, with subsequent incremental resource increases till a high value product is attained within the leanest workable resource framework. In other words, the system is experimented with till an optimal state is reached. Timings for material flows from suppliers are then drawn onto the map.

The aims of the value stream analysis exercise are to:

i. Improve the value stream to eliminate waste
ii. Eliminate overproduction (The aim is to take note of what is known as Takt time i.e. matching the pace of production to customer demand.)
iii. Limit inventory
iv. Eliminate operator movements not essential to the process
v. Eliminate waiting times
vi. Minimize transportation times
vii. Cut duplicate transportation steps and
viii. Eliminate over-processing and the need for reworks

One of the key premises of the lean system is the practice of what is known as Kan Ban or otherwise a pull instead of push system. Here batch production, is replaced by single piece continuous flow manufacture which tends to lower lead times significantly. In this system when a customer purchases a product a signal is sent through the system for immediate replacement of that single product. Thus there is no overproduction and wastage in the system. Through the use of value stream analysis, accurate predictions of rates of customer purchasing can be made and the system can be set to operate at a level to satisfy this. These predictions ensure that while flow is maintained, overproduction is not used as an expensive safety net.

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