Wednesday, June 11, 2008

What To Do With the Current State Map.

My last post was about taking the first step on your Lean Journey -- creating a VSM (Value Stream Map). We discussed the current state and collecting data for it. Now let's take a look at the VSM you created and analyze it. There are two most significant numbers to study: processing time and delay, or inventory time. Are you shocked at how much more time is spent delaying vs. processing times? You should be, if you did it correctly.

Scrutinize all the numbers, making sure they pass a "sanity check." The numbers must be accurate and must include getting ready to start a process, such as the operator collecting information about the task, assembling all needed tools, cleaning the machine, and setting up the workpiece. If the VSM passed sanity, compare the non-value added (delay, transport and inspect) time with the process (value added) time. Typical results fall in the range of 10 to 1, up to 50 to 1 or even more. This indicates where to look for huge lead time improvement targets.

Reducing lead time has many benefits, among which are competitiveness against local shops and especially against foreign shops because of the distance and time involved in shipping by boat which can be 5 to 6 weeks or more. Internally, your shop, if you can reduce lead time by one-half you can do twice as much die work in the same calendar time. If your fixed overhead is normally covered by the current state work, your additional "earned lead time" work will generate a higher margin. Also, if you have the shortest lead time you can charge a premium if no one else can meet deliveries of emergency jobs.

Value added vs. non-value added time

The next step is to break down the value added and non-value added
activities (delay is one of them), which can be done with Pareto charts for each type of activity. This will result in two charts and will visually represent the activities that, when improved, will provide the most bang for the buck. Creating a Gantt chart from the VSM will illustrate the relationships of activities to time so you can see how long things really take, especially during non-scheduled times, that is, overnight, holidays and weekends. These charting tools are part of the Visual Factory, a Lean tool and die operation can use to show everyone involved what is happening at your plant. The visuals are much better than looking at tables of data.

Remember that value added time is activity for which the customer is willing to pay. If they don't require machining of non-functional surfaces, leave those surfaces unfinished if possible. Some non-value added activities are necessary, or enabling waste. For example, you have to move the material around the shop, from bench to machine and back, and you need to inspect the work in process to ensure you don't add labor to a piece which has become scrap due to errors in manufacturing it. However, these steps can and must be minimized so the total calendar and labor time can also be minimized.


No, that's not misspelled; it's a word I coined and have been using for fifteen years or more. There are many levels of manufracturing, but essentially it just means breaking activities down into ever-finer detail. The next step you'll take will be to break the activities in the current state VSM you created into individual maps for each activity that contains many labor and machine hours and/or long calendar times. An example target for this next level VSM could be the die design process or making cutting steels for a progressive or blanking die consisting of drilling, grinding, heat treatment, wire EDMing, and so on. The next level map could focus on the setup of the wire EDM machine, with programming and burning. You don't, however, want to go deeper than second level at this time. You'll have lots to attend to at level two when you get maps done for the most important first level tasks. Ultimately you'll look at feeds and speeds, cutter materials and geometries, and even chatter in more levels of VSMs.

The Future State VSM

In addition to manufracturing, the other step to begin working on is a future state VSM which will entail a lot of work by your teams. The idea here is to innovate all the steps in the first and second level maps, including both value added and non-value added activities. My next post will address application of this critical Lean tool to your shop and office operations. Stay tuned!