Value Stream Mapping
In an article by Magnier, he says that the goal of a value stream map is to depict material and information flows across and throughout all value-adding processes required to produce and ship the product to the customer. Two specific points were addressed for determining how a value stream map can be beneficial to a company in the article. First, during the team creation of a value stream mapping, businesses and manufacturing waste that occur in the processes can be easily identified (Magnier, 2003).
Second, once the current state value stream mapping is created, it becomes the baseline for improvement and for the creation of a future state value stream mapping. The FSVSM can then be used as a world class manufacturing implementation road map (Magnier, 2003). Next the topic of waste in companies is addressed, as it relates to individual value streams. In a research article by Hines and Rich the most common waste a company incurs were discussed in great detail. These types of waste include overproduction, waiting, transport, inappropriate processing, unnecessary inventory, unnecessary motion, and defects.
Overproduction is regarded as the most serious waste as it discourages a smooth flow of goods or services and is likely to inhibit quality and productivity. Such overproduction also tends to lead to excessive lead and storage times. As a result defects may not be detected early, products may deteriorate and artificial pressures on work rate may be generated. In addition, overproduction leads to excessive work-in-progress stocks which result in the physical dislocation of operations with consequent poorer communication.
This state of affairs is often encouraged by bonus systems that encourage the push of unwanted goods (Hines & Rich, 1997). When time is being used ineffectively, then the waste of waiting occurs. In a factory setting, this waste occurs whenever goods are not moving or being worked on. This waste affects both goods and workers, each spending time waiting. The ideal state should be no waiting time with a consequent faster flow of goods. Waiting time for workers may be used for training, maintenance or kaizen activities and should not result in overproduction (Hines & Rich, 1997).
The third waste, transport, involves goods being moved about. Taken to an extreme, any movement in the factory could be viewed as waste and so transport minimization rather than total removal is usually sought. In addition, double handling and excessive movements are likely to cause damage and deterioration with the distance of communication between processes proportional to the time it takes to feedback reports of poor quality and to take corrective action (Hines & Rich, 1997).
Inappropriate processing occurs in situations where overly complex solutions are found to simple procedures such as using a large inflexible machine instead of several small flexible ones. The over-complexity generally discourages ownership and encourages the employees to overproduce to recover the large investment in the complex machines. Such an approach encourages poor layout, leading to excessive transport and poor communication. The ideal, therefore, is to have the smallest possible machine, capable of producing the required quality, located next to preceding and subsequent operations.
Inappropriate processing occurs also when machines are used without sufficient safeguards, so that poor quality goods are able to be made (Hines & Rich, 1997). Unnecessary inventory tends to increase lead time, preventing rapid identification of problems and increasing space, thereby discouraging communication. Thus, problems are hidden by inventory. To correct these problems, they first have to be found. This can be achieved only by reducing inventory. In addition, unnecessary inventories create significant storage costs and, hence, lower the competitiveness of the organization or value stream wherein they exist (Hines & Rich, 1997).
Unnecessary movements involve the ergonomics of production where operators have to stretch, bend and pick up when these actions could be avoided. Such waste is tiring for the employees and is likely to lead to poor productivity and, often, to quality problems. The bottom-line waste is that of defects as these are direct costs. Defects should be regarded as opportunities to improve rather than something to be traded off against what is ultimately poor management. Thus defects are seized on for immediate kaizen activity (Hines & Rich, 1997).
Value stream mapping also has numerous benefits, including the ability to “see the flow” of your value stream. This allows manager to realize the wastes in the production process and ultimately eliminate those non-value added processes. Value stream mapping also opens up the opportunity for a company to further employ lean manufacturing processes. Perhaps the biggest benefit of VSM is that it provides a detailed picture of where the company is right now, and where the company wants to be in the future. (Van Oss, 2006) Next, the different types of cycle times that take place in a process will be discussed.
In a research article by the Institute for Innovation and Improvement (NHS), cycle time was defined as the amount of time that elapses between one process finishing and the next process up. They went into detail to differentiate between each of the different cycle times. Value added time (VA) they defined as the time that actually adds value to the patient journey. Changeover time (C/O) they defined as the time taken to switch from one type of a process to another. Number of people (NP) is defined as the amount of people required to work on a particular process.
Lead time (LT) is the time it takes to move all the way through a process or value stream (Improvement, 2008). All these times together make up the cycle time for a process which is a key point in creating a value stream map. Below is Figure 1 Current State Value Stream Map, which is a combination of all the practices discussed above and applied to our process of Barnes and Noble. As you can see, the Value Stream Map starts with the warehouse front office sending out the weekly production orders to our publishers. From there the books are shipped from multiple publishers to our receiving department of the warehouse.
Normal shipments are a total of 2,000 books. The cycle time for receiving is 30 minutes before the books are moved to the sorting area which has a cycle time of 10 minutes. Once the books have been sorted to their respective categories (fiction, history, self-interest, etc. …), they are pushed to the inspection process with a cycle time of 20 minutes. After the books have passed inspection they are pushed to packaging where they are wrapped and ready for storage with a cycle time of 10 minutes. The last process in the warehouse is storage with a cycle time of 30 minutes.
The total inventory on hand is 5,000 books. Every week the warehouse receives orders from the front office which are then handed down to the production control center with instructions for daily operations. From the warehouse, the books are distributed to local Barnes and Noble stores where the customer either buys them in-store or orders them online. The final step in this process is the physical stores sending weekly sales figures and inventory numbers to the warehouse front office to start the cycle over. Barnes and noble have an enormous range of customers seeing as how so many people love to read.
With locations scattered all across the United States they seem to be doing a good job at meeting customer demand. With that being said it is hard point out areas with room for improvement when they are doing such an adequate job at keeping their customers satisfied. One area in particular that I think can be reduced is the amount of time that is spent on the inspection of books. Don’t get me wrong, inspection is a very important step and is a key attribute to ensuring customer satisfaction, however if inspection time can be cut by a couple of minutes it would make room for the production of many more books.
One way to cut back on inspection time would be to add a worker or two to the inspection line. Taken together, the results indicate that the value stream map plays an important role to the companies that have them in use. Specifically pointing out value-adding and non-value-adding processes (Hines & Rich. , 1997; Improvement. , 2008; Magnier. , 2003; Van Oss. , 2006). Companies that have an active value stream map in place tend to be more aware of their financial status. They know where their money is being used effectively, and can easily point out the areas that need improvement due to waste.