精益办公 lean office

7/28/2019 Lean office

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Change

Management

Associates

This workshop is one piece of a comprehensiveset of Lean tools and services designed to developa Complete Lean Enterprise.

Product Code CMA301

Training Material provided by Change Management Associates. All rights reserved.

Reproduction of this material expressly forbidden without written permission of CMA.

For more information on this or other training services please contact:Drew Locher, Change Management AssociatesPhone: (856) 235-8051Email: [email protected] Site: www.cma4results.com

The Complete Lean Enterprise

Incorporating the Office & Services in

Value Stream Management

Participant Workbook


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Table of Contents

Welcome The Complete Lean Enterprise 1Workshop Agenda 2Course Objectives 3Lean Thinking 4

Why Go Into Office & Services? 5 How Does Office & Service Differ? 6

Lean and Eliminating Waste 7 Office & Service Waste 8Class Exercise Identifying Office & Service Waste 9Lean Project Phases Project Phases Outline 10Scoping a Lean Project Project Preparation (Scoping) 13

Identifying Product/Service Families 14SIPOC 15Decision Panel Roles and Responsibilities 16

Class Exercise Scoping the Process 17Value Stream Mapping Value Streams 20

Value Stream Improvement vs. Process Improvement 21Purpose of Value Stream Mapping 22Mapping to Meet Business Objectives 23Value Stream Managers 24VSM Example 25Mapping Icons 26Levels of a Value Stream 27

Mapping the Current State Lean Project Phases Current State 29

VSM for Office & Service Processes 30 Select Data Attributes 31 Office & Service Process Data Attributes 32 Typical Steps for Current State Mapping 34Class Exercise Case Study 35 Cabbies Cable Service Data Set 38 Current State Reflections 39Creating the Future State Lean Project Phases Future State 41 Future State Questions 42Class Exercise Cabbies Cable Service Create Future State Map 58

Achieving Future State Lean Project Phases - Planning 60 Prioritizing Office & Service Kaizens 61 Completing the Implementation Plan 64 Documentation 67Recommended Readings Sources of Additional Information RR-1Glossary Terms & Definitions GL-1


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Participant Workbook1The Complete Lean Enterprise

Change Management Associates

Change Management Associates. All rights reserved. Change Management Associates. All rights reserved.

The Complete Lean EnterpriseIncorporating the Office & Services in

Value Stream Management

Drew Locher, Change Management Associates

Training material provided by Change Management Associates.. All rights reserved. Reproductions of this material expressly forbidden

without written permission of Change Management Associates.


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Workshop Agenda

1. Introduction

2. Scoping a Lean Project

3. Mapping the Current State

4. Creating the Future State

5. Achieving the Future State


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Introduce value stream mapping in a hands-onmanner.

Develop your ability to view work from a systemperspective.

Develop your ability to organize and facilitate leanprojects.

Develop your ability to create eyes for waste andeyes for flow.

Enhance your ability to create an operating strategyand an implementation plan to support yourbusiness strategy.

Course Objectives


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Lean Thinking

Fundamental Objective: To create the mostvalue in the most effective and efficient way.

Define value from the customers perspective.

Identify which process steps create value andwhich are only waste (muda).

Work to eliminate the root causes of the wasteand allow for one-piece, continuous flow.


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Why Go Into Office & Services?

Office & Service processes are often a majorpercentage of the total lead time in amanufacturer

Ultimate Goal: 400% improvement in productivityover 10 years

Untapped opportunities in business processes

How do we document, measure, communicate,

and, more importantly, realize theseopportunities?


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How Does Office & Service Differ?

In manufacturers, many functions are not onthe traditional shop floor value stream map

Many office & service functions support severalvalue streams without clear boundaries

Harder to identify customer, product or service,and customer value

What do we track/map?

Waste in office & service processes is muchharder to see - more entrenched and hidden


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Lean and Eliminating Waste

Value Added

Typically 95% of all lead time is non value-added

Overproduction

Wait

Transportation

Non-Value AddedProcessing

Excess Inventory

Correction

Excess Motion

Underutilized People

Non-Value Added


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Office & Service Waste

Overproduction Inventory

Waiting

NVA Processing

Correction

Excess Motion

Transportation

Underutilized People

Printing paperwork too soon Filled In-boxes

System downtime

Re-entering data

Order Entry errors

Walking to/from copier

Movement of paperwork

Limited functionalresponsibilities

Examples?!


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Class Exercise:Identifying Office & Service Waste

Break into groups of 4-6 people Select 3 of the wastes to discuss

Brainstorm examples and list on flip chart

Present results the class

Times:

Waste Development: 15 minutesPresentation: 15 minutes


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Preparation

Current State

Future State

Planning

Agreeing on what process/service to study,

how to map it, who will participate, andlogistics.

Agreeing on a well understood map of the

current situation.

Agreeing on a shared vision of a Lean

future state.

Agreeing on how to implement the future

state vision

Lean Project Phases

3 days


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Lean Project Phases

ImplementationKaizen

Progress Checks

Documentation

Achieving the future state vision.

Training the team on lean tools and

applying them to the value stream.

Reviewing efforts to keep the project on

track.

Updating the value stream map to reflect

new work and performance

Communication Sharing effort and new knowledge withinthe organization.

90 days


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Workshop Agenda

1. Introduction






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Project Preparation (Scoping)

Select and rationalize potential project with sponsoror Steering Committee

Scope effort with functions represented in theselected value stream

Confirm business objective

Identify measures of success

Identify Service Families

Identify Participants and Decision Panel

Develop SIPOC

Confirm scope with Decision Panel

Walk the flow!!!!


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Identify Product/Service Families

XXXXModel D

XXXXModel C

XXModel B

XXModel A

Shop

Packet

Order

Entry

Design/

Configure

Quote/

Estimate

Product

Determine product or service families based on similar processing steps

Process Steps


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SIPOC - Example

Objectives: Workshop Dates:

To Improve existing Product Development Process Project Name: New Product Development Process October 21 to October 23, 2006VS Owner: Joe Smith, Engineering ManagerSponsor: Diane Jones, VP of Research & Development

Goals: Leadership/Decision Panel: Jerry, VP of Operations, Diane, VP of R&D,

Reduce Product Development Lead Time by 50% Connie, VP of Finance, John, VP of Procurement Workshop Location:Reduce Warranty Costs by 75% Main Building, Conference Room AReduce Product Development Cost by 30%

Suppliers: Inputs: Outputs: Customers:

Tool Design Firms Lead Time Start: End: External:

Capabilities Design Release Quality Product New Customer Quality tooling Concept to Product. Quality Product Existing Customer

Material Suppliers Lead Time Internal:Capabilities Completed Design Production

Quality parts & materials Product Develop. Product. Completed Design PurchasingDevelop. Prototype Validation Estimated Cost Cost Accounting

Sales & Marketing Customer Requirements Product Features Sales & Marketing

- Price- Lead Time- Quality Expectations

- Competitive Information

Issues/Problems: Benefits: In Scope: Out of Scope: Technology: Participants: Data to Collect:

Losing potential new Estimated increase of $10MM Re-design of existing products New products using new ACAD Steve, Tool Engineer Lead Times from previousbusi ness due t o l ong i n add it iona l annua l s al es New P roduct usi ng exi st ing t echno logy & r equi ri ng r es ea rc h M RP B OM s B il l, Desi gn E ng inee r p ro ject s.product development revenue. technology Testing Software Eileen, Design Engineer Process Times fromtime. Pat, Supplier A previous projects.

Estimated decrease of $1MM John, Supplier B Information Quality issues.Losing repeat customers in annual warranty costs. Rick, Process Engineer Warranty information.due to design quality Jane, Test Engineer Cost information.issues. Bob, Engineering Services

[Insert Title] Value Stream Mapping Project


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Decision Panel Roles and Responsibilities

VSM Workshop decisions after review of thefuture state map and the implementation plan

Implementation reviews at regular intervals

Roadblock removal during implementation:

Resource constraints

Political issues

Technical barriers


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Class Exercise: Scoping the Process (Optional)

Break out into groups of 5 - 6 Use the case study as a basis for the exercise

Add your personal knowledge of the subject, as

appropriate

Develop a completed SIPOC for the case study

Timing:

30 minutes to develop

10 minutes for all report outs


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Cabbies Cable Service Case Study

Cabbie's Cable Service is in the business of installing cable service in residences.

They have struggled to remain competitive in recent years, mainly due to long leadtime for their services. The market has come to expect a 5-day or less lead time,

while Cabbie's Cable Service is currently at 1- 2 weeks. Customers have also often

complained about the accuracy of their bills.

In an attempt to become more competitive, Cabbie's Cable Service looked to lean with

its emphasis on lead time reduction and customer focus. There are several key

activities or processes that must be completed upon receiving a request for

installation: Set-up Customer; Schedule Service, Make Appointment with the

Customer, Dispatch the Service Technician, Install and Test, Review Completed

Service Order, Bill Customer.


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The Assignment

ScopingTo begin this case study, discuss the following points with your

team members:

Whats the business objective?

Whats the scope of the effort? What processes are in and out

of the scope? Where does the value stream begin and end?

Who, in your opinion, should be included in the value stream

redesign?

What data will be necessary? How will success be measured?


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Quoting

Order Processing

Purchasing Hiring

Shipping/Receiving

Whenever there is a product (or service) for a customer,

there is a value stream. The challenge lies in seeing it.

Physical Transformation - Manufacturing

Problem Solving - Engineering

Information Management including Support Processes

Accounts Receivable

Accounts Payable

Financial Reporting Service

Others?

Value Streams


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Initial

Customer

Contact

PROCESS

VALUE STREAM

Production

Scheduled

PROCESSPROCESS

Sales

Value-Stream Improvement vs.Process Improvement

Order Entry Process

PROCESS

Customer

ServiceEngineering Purchasing

Value Stream = ALL steps, both value-added and non value-added,

required to complete a product and/or a service from beginning to end.


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Purpose of Value Stream Mapping

Visualize work as a systemActivities, Pathways, Linkages (the DNA of Lean)

Point to problems (from a system perspective)

Focus direction (so the system benefits as a

whole)

Not to examine a specific function or

department, but the information process that

cuts across functions or departments


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Mapping to Meet Business Objectives

What is the market telling you in terms of the cost,service, and quality of your products/services?

What objectives and goals have been established byyour company to address market needs?

What information processes immediately impact theperformance of these products and services?

What managers need to support this effort?

How can the business objectives be used to garnersupport? How will you position Value StreamManagement?


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Value Stream Managers

Each Value Stream needs a Value Stream Manager

For product and/or service ownership beyond functions

Assign responsibility for the future state mapping and

implementing lean value streams to managers with the

capability to make change happen across functional anddepartmental boundaries.

Value Stream Managers should make their progress

reports to top management.

Process 1 Process 2 Process 3

Customer

The Value

Stream Manager

Kaizen Don

Dont

star

twith

outone!

tstar

twith

outone!


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VSM Example Cross Functional (Door to Door)

Enter OrderFinalizeSchedule

Supplier

Order

Slit Finish Ship

Shipping Schedule

P/T=12 min

L/T=4 hrsP/T=12 min

L/T=10 hrs

P/T=5 min

L/T=4-6wks

MRP

Job Packet

P/T=8 hrs

Rew =5%

P/T=2 hrs

Rew = 5%

P/T=2 hrs

%C&A=95%

P.O.

Total P/T=12 hr

Total L/T=35.5d

I I

1 order X 2

IN

Customers

46 orders per day

IN

2 ordersMRP

1.25 days

12 min12 min

.5 days1 day

5 min

Total L/T=2.75 d

Total P/T=29 min

2 hrs 8 hrs 2 hrs

X 3 X 4 X 5

2 days 8.5 daysOverall L/T=38.25 days

Overall P/T=12.5 hrs

First Pass Yield=86%

FIN

MRP


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Mapping Icons

Electronic Information Flow

In Box(Queue)

INWait-Time

Information Flow

Data Box

P/T

L/T

%C&A

Supermarket

XOXOLoad

Leveling

Withdrawal (Pull)

F I F OFirst-In

First-Out

FlowStandard Work

Kaizen

Lightning

Burst

Iterations

Process Box

Technology Used

Receive Order

Fax

Outside Resource

(Customers, Suppliers)

Worker

Weekly

Schedule

Information


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Levels of a Value Stream

process level

multiple sites

across companies

Start Heresingle site

(door to door cross functional)


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Workshop Agenda

1. Introduction






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Preparation

Current State

Future State

Planning

Agreeing on what product/project to study,



current situation.


future state.

Agreeing on how to implement the future state

vision

Lean Project Phases

3 days


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VSM for Office & Service Processes

Identify process boxes where flow stops andbatch and queue occurs

Formatting examples:

Closed loop

Mono-flows, left to right

Inventory is information in queue (e.g. paperor electronic)

Information flow can be formal or informal: howis work prioritized?


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Select Data Attributes

What to measure? Should support a companys objectives for cost,

service, and quality

Should highlight waste

Be flexible

Revise as necessary as the process tasks are

defined

Select ones you may already be using

If there is time, seek out some baseline measures


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Office & Service Process Data Attributes

Process time

Available time

Set-up time

Lead time

Typical batch size or frequency

% Complete and Accurate information (% C&A)

Rework/revisions (e.g. design changes)

Number of people involved

Downtime (e.g. information systems)

Inventory queues of information (e.g. electronic, paper)

Demand

Information Technology Used


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Mapping Icons

Electronic Information Flow

In Box(Queue)

INWait-Time

Information Flow

Data Box

P/T

L/T

%C&A

Supermarket

XOXOLoad

Leveling

Withdrawal (Pull)

F I F OFirst-In

First-Out

FlowStandard Work

Kaizen

Lightning

Burst

Iterations

Process Box

Technology Used

Receive Order

Fax

Outside Resource

(Customers, Suppliers)

Worker

Weekly

Schedule

Information


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Typical Steps for Current State Mapping

Document customer information & need Identify main processes (in order)

Select data to collect

Perform value stream walk through and fill in data boxes,including inventory and resident technology

Establish how each process knows what to process next(how they prioritize)

Calculate lead-time (e.g. batch sizes) vs. process time,calculate First Pass Yield and/or other Value Streamsummary measures


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Cabbies Cable Service Case Study

Cabbie's Cable Service is in the business of installing cable service in residences. The

have struggled to remain competitive in recent years, mainly due to long lead time for theirservices. The market has come to expect a 5-day or less lead time, while Cabbie's Cable

Service is currently at 1- 2 weeks. Customers have also often complained about the

accuracy of their bills.

In an attempt to become more competitive, Cabbie's Cable Service looked to lean with its

emphasis on lead time reduction and customer focus. There are several key activities or

processes that must be completed upon receiving a request for installation: Set-up

Customer; Schedule Service, Make Appointment with the Customer, Dispatch the Service

the Technician, Install and Test, Review Completed Service Order, Bill Customer.

A Customer calls Cabbies Cable Service with a Request for Installation. Customer Service

takes all required information in order to Set-up the Customer. A Service Request form is

filled out and provided to the Dispatcher. The Dispatcher uses a spreadsheet tool toSchedule Service. The Dispatcher generally schedules all requests for the following week.

The Dispatcher will then contact the Customer to Make an Appointment. There may be

some delay here as the Customer is not always available to immediately answer the call to

confirm availability


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Cabbie's Cable Service Case Study

The Dispatcher fills out a Service Order form and places it in a file until the afternoon

before the appointment. The Dispatcher will then Dispatch the Technician oraccumulate all required materials and stage them for the Service Technician. The

next morning Service Technicians will pick up the Service Order along with the

materials and travel to the Customers residence. At the residence, the Service

Technician will Install and Test. Problems are encountered at times during this

process, sometimes requiring another service call to be scheduled.

Upon returning at the end of the day, the Service Technician drops off the Service

Order, completed by the technician and signed by the Customer. The Dispatcher

Reviews the Service Order for completeness, and then sends it to Customer Service

who in turn Bills the Customer.

Customers will contact Cabbies Cable Service with disputes regarding billing.Cabbies receives questions on approximately 20% of all bills.

Office personnel work approximately 460 minutes per day, not including lunch and

breaks.


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Cabbie's Cable Service Data Set

Set-up Customer: Customer Service (1)

P/T = 15 minutes%C&A = 100%

Technology used: BizSys

Schedule Service: Dispatch (1)

P/T = 15 minutes

%C&A = 90%

L/T= 2 days in in-box

Technology used: Spreadsheet

Make Appointment: Dispatch (1)

P/T = 10 minutes

L/T= 1 day

%C&A = 95%

Technology used: telephone

Dispatch Technician: Dispatch (1)

P/T = 30 minutes

%C&A = 100%

L/T = 1 5 days waiting for day before appointment

Install & Test: Service Technician (4)

P/T = 4 hours (including transit time)%C&A = 80%

L/T = 1 day

Review Service Order: Dispatch (1)

P/T = 15 minutes

L/T = 1 day in in-box

%C&A = 90%

Technology used: manual

Bill: Customer Service (1)

P/T= 15 minutes

L/T = 1 day in in-box

%C&A = 100%

Customer Related Data:

Demand= 8 calls per day

Lead Time


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Preparation

Current State

Future State

Planning




current situation.


future state.


vision

Lean Project Phases

3 days


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Future State Questions

What does the customer really need? How often will we check our performance to customer

needs?

Which steps create value and which are waste?

How can we flow work with fewer interruptions?

How do we control work between interruptions? Howwill work be prioritized?

How will we balance or level the work load and/or

different activities? What process improvements will be necessary?


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Who needs the output of the process?

What/how much do they need?

When/how often is it required?

Can we establish a pace or rhythm for

completing these requirements?

What Does the Customer Really Need?


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What Does the Customer Really Need?

What service level does the customerneed?

Desired response or turnaround time

Expected quality level of the output

What is the demand for the process?

Expected demand rate

Expected variation in the demand rate

Required resources to meet demandrate(s)


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Synchronizes pace of processing to match pace of customer need.

Need can be expressed in different ways.

Rate for completing work based on customer need.

Takt Time =

Effective Working Time per Shift

Customer Requirement per Shift

460 minutes

46 orders= 10 minutes/order

Takt Time = Demand Rate

What will be the desired cycle time or service level for each

activity?

What resources will be needed to meet demand?


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How Often Will We Check Performance?

At what frequency will the system be reviewed toverify it is satisfying customer needs and the desiredcycle time or service level? Example: Six Sales Orders an hour will be processed, with all

orders processed within 1 hour of receipt.

How will Takt Image be provided? Example: A visual means to determine the age of an order

will be provided.


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What Steps Create Value and Which are Waste?

Challenge every step ask the following: What is really needed by the customer?

Why are the current steps performed?

What can be done differently or not at all?

Is the order of steps creating waste? Whereshould decisions be made?

What assumptions underlie the current process?

Are existing controls and administrative guidelines

appropriate? What knowledge and skills are truly required to

perform the step(s)?


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How Can We Flow Work with Few Interruptions?How Can We Flow Work with Few Interruptions?

Batch & Queue Processing

Flow Processing

IN IN

Process A Process B Process C

Process A / B / C


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Office & Service Flow Processing

Customer Service (e.g. from Order to Invoice)

Technical Support

Order Processing (e.g. Design-to-Order)

Product Design (e.g. Concurrent Engineering)

Bidding and Proposal Teams

Warehouse and Distribution

Contract Administration


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Important:

Eliminate all reasons to batch!

Discipline to flexible processing!

No Good

Better: Every Type Every Day

Paperwork Processing

Monday 40 A

Tuesday 10 A, 30 B

Wednesday 20 B, 20 C

Thursday 40 C

Friday 20 C, 20 A

Monday: 14 A, 10 B, 16 C

Small Batches of Work

Even Better: Every Type Every Hour

8AM: 3A, 2B, 3C

9AM: 4A, 2B, 2C

Why such a routine?


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How Much Work Will You Trigger?

Monthly?

Weekly?

Daily?

Smaller batches are good!!


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How Will We Control Work Between Interruptions?

IN

Process A / B / C Process D / E / F


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Non-production examples:

Order Processing

Work Order and Picking processes

Job Packet Creation

Product Design

How Will We Control Work Between Interruptions?


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How Will Work Be Prioritized?

How can existing tribal knowledge bebrought out in the open for everyones use

and understanding?

Examples:

z Enhanced decision making tools (e.g. pull

systems)

z Define desired sequence (e.g. FIFO)

z Visual procedures


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How Will We Balance or Level the Work Load

and/or Activities?

Does the volume (e.g. demand variation)impact the system in any way?

Example: Month-end phenomena

Does the mix (e.g. order type) impact the

ability of the system to flow, or impact the

responsiveness of particular steps in any

way?

Example: Rush vs. Standard Orders


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Future State Questions

What does the customer really need? How often will we check our performance to customer

needs?

Which steps create value and which are waste?

How can we flow work with fewer interruptions?

How do we control work between interruptions? Howwill work be prioritized?

How will we balance or level the work load and/or

different activities? What process improvements will be necessary?


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Cabbie's Cable Service Case Study

Break into groups of 5 - 6 people

Review the Current State Map

Create a Future State Map for the case study

Use the future state questions to guide the

discussion

Begin by marking up the current state map


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Workshop Agenda

1. Introduction






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Preparation

Current State

Future State

Planning




current situation.


future state.


vision

Lean Project Phases

3 days


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Cross Train

Sales

Check-listOffice

Cell

EstablishFIFO Lanes

Standard

Work

Prioritize kaizens, develop

an action plan of What,

Who, and When.

Prioritizing Office & Service Kaizens


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Prioritizing Office & Service Kaizens

Eliminate NVA steps first that dont require new ITefforts

Address information quality issues first

Simplify steps that require minimal IT effort (e.g.minimize transactions entering and within the ValueStream)

Establish standard work to reduce variability

Implement flow (e.g. change office layouts)

Implement IT solutions (e.g. e-business)

Identify loops, as appropriate


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Total Lead Time < 10 minutes

Total Processing Time < 10 min.

First Pass Yield > 90%

Schedule

Productionvia FG Kanban

Financecross-train

Shippingcross-train

On-Line Order

Entry

Direct-schedule

shipping

Receive/Credit/

Reconcile/Confirm

MRP/FIN

P/T < 10 minutes

% accept = 90%

Batch = 1 order

Phone/Web

Shipping

ImplementKanban

Link FinanceAnd MRP

Customer

Orders (all)

MRP

Ship Schedule

Michigan Steel Order Entry Process

Future State - Sept. 2002

Order Processing Loop

Shipping Loop


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Completing the Implementation Plan

Establish the main objectives Kaizen bursts from the future state

Create the master plan

Create a detail plan for each kaizen

Can be done in break out groups

Establish project review dates

Within the team

With the Decision Panel

Present the plan to the Decision Panel


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Value Stream: Quoting and Order Entry

Value Stream Manager: John

Overall Timeframe: 90 days

Loop

(optional)Objective

Overall

Measurable

Goal(s)

Plan Details

Detail

Target or

Goal (opt.)

Team

Lead

Support

Team

Week

1

Quoting Create

standard

protocol

2 day

turnaround

Create std. input

form(s)

John Sue, Debi

Review forms with

sales

John Drew,

Chris

Dedicate phone

and fax numbers

Steve

Train sales and

quoting

Rick Drew

Pilot and measure John All

Roll out to all

quotes

John All

Use Engin. to

quote

twice as many

quotersCommunicate std.

protocol

Ted Jeff, Ann

Train pilot

engineers on

standards

Rick Archie

Develop

scheduling/pitch

board

John Archie,

Paul

Implementation Plan


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The End of Workshop Report Out

Use the documentation created for the reportout: Workshop objective, scope, participants, decision

panel members (SIPOC)

Current state map

Current state reflections

Future state map

Implementation Plan

Before / After Measures


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Value Stream Mapping Preparation Page 1

Company/Department:

Corporate business objectives and goals:

Division/Department business objectives and goals

Value Stream to be mapped:

Necessary management support:


Company/Department:

Corporate business objectives and goals:

Division/Department business objectives and goals

Value Stream to be mapped:

Necessary management support:


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Value Stream Manager:

Cross Functional Team Members:

What services will be consolidated into this specific service family?

What is the full scope/boundary of your initial value stream assessment?

Where does it begin and end?


Value Stream Manager:

Cross Functional Team Members:

What services will be consolidated into this specific service family?

What is the full scope/boundary of your initial value stream assessment?

Where does it begin and end?


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Value derived in this value stream from the customers perspective:

What we do know:

What were not sure of:

Overall objective & goal for the future value stream (3-6 month timeframe)

Selected initial value stream metrics:


Value derived in this value stream from the customers perspective:

What we do know:

What were not sure of:

Overall objective & goal for the future value stream (3-6 month timeframe)

Selected initial value stream metrics:


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APPENDICES

Recommended Readings

Glossary


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Recommended Readings RR-1

RECOMMENDED READINGS

The Complete Lean EnterpriseBy Beau Keyte and Drew LocherProductivity Press, 2004

Beau Keyte and Drew Locher's new book, The Complete Lean Enterprise: Value Stream

Mapping for Administrative and Office Processes, offers a step-by-step approach to applyinglean initiatives to the administrative and office environment. This book is a valuable tool inapplying value stream mapping (VSM) to non-production areas, identifying office wastes,establishing performance metrics, speeding up administrative workflow, and improving officeefficiency.

Value Stream Mapping for Lean DevelopmentA How -To Guide for Streaml in ing Time to Market

By Drew A. LocherProductivity Press, 2008

Savvy business people know that time to market can mean the difference between beingone more little fish or the big fish in the pond full of competitors. Crafted by Drew Locher,one of the world's most respected consultants on lean, this work presents a methodologythat is appropriate for any organization, whether it is service or product oriented. In his newbook, he provides an accessible, enjoyable, how-to guide to value stream mapping thathighlights its tremendous impact on development and accompanying processes.

Becoming Lean: Inside Stories of U.S. ManufacturersBy Jeffrey K. LikerProductivity Press, 1998

Becoming Lean uses first-hand accounts, performance records, and real numbers to showhow actual U.S. manufacturers have gone lean. Learn what they learned about thelogistical and people issues related to a Lean transformation and what the results of thattransformation meant to these businesses.

Lean ThinkingBy James P. Womack and Daniel T. JonesSimon & Schuster, 1998

In Lean Thinking, Womack and Jones show how the principles of Lean production,described in The Machine That Changed the World, have been successfully applied outsidethe automobile industry. They document the transformation of 25 U.S., Japanese, andGerman companies through the application of Lean thinking. (The description of the arrivalof the Japanese sensei at the Porsche plant in Germany alone is worth buying the book.)

The Machine That Changed the WorldBy James P. Womack, Daniel T. Jones, and Daniel RoosHarperCollins, 1991

The authors, who directed MIT's five-year study on the future of the automobile, explain thedevelopment and the principles of Lean production. The descriptions of the application ofthe process show not only howit works, but also whyLean manufacturing results in morecost efficient products and is transforming manufacturing around the world.


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Glossary GL-1

GLOSSARY

TERM DEFINITION

5S System A system designed to organize and standardize a

workplace and consisting of five component parts:Sort, Set in Order, Shine, Standardize, andSustain (see five component parts definitions).

8 Wastes Wastes addressed by Lean manufacturing thatinclude: overproduction, waiting, transportation,non-value added processing, excess inventory,defects, excess motion, and underutilized people

8D or 8Discipline The eight-step Ford methodology for problemsolving.

Batch-and-Queue Processing Producing more than one piece of an item andthen moving those items forward to the nextoperation before they are all actually neededthere. Thus these items need to wait in a queue.

Also called Batch-and-Push. Contrast withcontinuous flow.

Bottleneck A resource whose capacity is less than thedemand put on it.

Buffer inventory The strategically placed inventories which protect

the material flow and whose consumption set theschedules in a pull system.

Buffer Stock Finished goods available to meet Takt Time whenvariations in customer demand exist.

Capacity-Based Lot Sizing An approach to calculating batches on a setup-intensive resource which is based on the capacityof the resource, not on unit cost.

Catchball The handing back and forth of informationbetween workers and management and thesubsequent feedback.


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Glossary GL-2

Cell Operating a true continuous flow on machines andworkstations placed close together in the order ofprocessing, sometimes called a U shape. Celloperators may handle multiple processes, and thenumber of operators is changed when the customerdemand rate changes. The U shaped equipmentlayout is used to allow more alternatives fordistributing the work elements among operators, and

to permit the leadoff and final operations to beperformed by the same operator.

Cellular Manufacturing Linking of manual and machine operations into themost efficient combination to maximize value-addedcontent while minimizing waste.

Changeover When a piece of equipment has to stop producing inorder to be fitted for producing a different item; forexample, the installation of a different processing toolin a metal working machine, a different color paint in

a painting system, a new plastic resin & mold in aninjection molding machine, loading different software,and so on.

Charter A document that clearly defines the focused kaizenteam mission, scope of activities, risks, anddeliverables (if required by management to provideadditional details).

Continuous Flow Processing The process by which items are produced andmoved from one processing step to the next one

piece at a time. Each process makes only the onepiece that the next process needs, and the transferbatch size is one. Also called single-piece flow orone-piece flow. Contrast with batch-and-queueprocessing.

CONWIP Constant Work In Process. This is another way ofdefining FIFO (see FIFO).

Core Team The designated group of people primarily responsiblefor completing the details of the plan.

Cycle Time How frequently an item or product is actuallycompleted by a process, as timed by directobservation. Also, the time it takes an operator to gothrough all of his or her work elements beforerepeating them.

Defects Waste Inspection and repair of material in inventory.


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Glossary GL-3

Demand/Customer Demand Also commonly referred to as Takt Time (see TaktTime).

Direct Consumption Kanban A kanban approach which replenishes an inventorybuffer in the quantities withdrawn, thus allowing anyvariability in customer demand to propagate throughthe supply chain.

EPEI Refers to every-part-every-interval, which is a basis

for production batch size. For example, if a machineis able to change over and produce the requiredquantity of all the high-running part types dedicatedto it within three days, then the production batch sizefor each individual part type is about three day'sworth of parts. Thus this machine is making everypart every (EPE) three days.

Excess Inventory Waste Any supply in excess of a one-piece flow throughyour manufacturing process.

Extended Team Member An individual who provides expertise to the projectteam, but will not have the responsibility ofimplementation.

Fabrication Process Segments of the value stream that respond torequirements from internal customers. Fabricationprocesses are often characterized by general-purpose equipment that changes over to make avariety of components for different downstreamprocesses. Compare to pacemaker process.

FIFOStands for first-in, first-out, which means thatmaterial produced by one process is used up in thesame order by the next process. A FIFO queue isfilled by the supplying process and emptied by thecustomer process. When a FIFO queue gets full, thesupplying process must stop producing until thecustomer process has used up some of theinventory. FIFO is sometimes called CONWIP, orConstant Work In Process.

Fixed Replenishment Interval A production cycle in which goods must be producedin a fixed sequence.

Flow A main objective of the entire Lean production effort,and one of the key concepts that passed directlyfrom Henry Ford to Taiichi Ohno (Toyotasproduction manager after WWII). Ford recognizedthat, ideally, production should flow continuously allthe way from raw material to the customer andenvisioned realizing that ideal through a productionsystem that acted as one long conveyor.


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Glossary GL-4

Heijunka The act of leveling the variety and/or volume of itemsproduced at a process over a period of time. Used toavoid excessive batching of product types and/orvolume fluctuations, especially at a pacemakerprocess.

Heijunka Box A physical device that visually displays the productfamily. Pitch and work orders for meeting dailydemand are represented by Kanbans.

Inventory All of the money invested by purchasing goodsintended for sale.

Inventory buffer A quantity of inventory located at a specific point inthe value stream to protect the flow of material and toprovide replenishment schedules.

Just-In-Time Producing or conveying only the items that areneeded by the next process when they are neededand in the quantity needed.

Kaizen Continuously improving in incremental steps.

Kanban A signaling device that gives instruction forproduction or conveyance of items in a pull system.Can also be used to perform Kaizen by reducing thenumber of Kanban in circulation, which highlights lineproblems.

Kanban Quantity The replenishment quantity of material authorized bya kanban.

Lead Time The time required for one piece to move all the waythrough a process or value stream, from start tofinish. Envision timing a marked item as it movesfrom beginning to end.

Lean A systematic approach to identifying and eliminatingwaste (non-value added activities) throughcontinuous improvement by flowing the product atthe pull of the customer in pursuit of perfection.

Lean EnterpriseThe organization that fully understands,communicates, implements, and sustains Leanconcepts seamlessly throughout all operational andfunctional areas.

Leveling The process or method used to distribute work withinthe value stream to maximize material andinformation flow efficiency.


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Glossary GL-5

Line Balancing A process in which work elements are evenlydistributed within the value stream to meet Takt.

Location Indicator A type of red tag that shows where an item belongs.These include lines, arrows, labels, and signboards.

Material Handlers Production-support persons who travel repeatedlyalong scheduled routes within a facility to transfermaterials, supplies, and parts in response to pull

signals, and to make paced withdrawal of finishedgoods at pacemaker processes.

Material Requirements

Planning (MRP)

A computerized system typically used to determinethe quantity and timing requirements for delivery andproduction of items. Using MRP specifically toschedule production at processes in a value streamresults in push production, because anypredetermined schedule is only an estimate of whatthe next process will actually need. ManufacturingResource Planning (often called MRPII) expands

MRP to include capacity planning, a finance interfaceto translate operations planning into financial terms,and a simulation tool to assess alternative productionplans.

Milk Run Routing a delivery vehicle in a way that allows it tomake pickups or drop-offs at multiple locations on asingle travel loop, as opposed to making separatetrips to each location.

Mixed-Model Scheduling An approach to scheduling final production

processes which smoothes out demand on thesupply chain by producing some of each item overthe shortest possible time horizon. (See Heijunka)

Motion Waste Any movement of people or machines that does notadd value to the product or service.

Muda See waste.

Non-bottleneck A resource whose capacity exceeds the demandsput on it.

Non-repetitive demand Independent demand which does not requireinventory buffers to meet customer servicerequirements.

Non-Value-Added Any activity that does not add market form orfunction or is not necessary. (These activities shouldbe eliminated, simplified, reduced, or integrated.)


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Glossary GL-6

Operating Expense The total amount of money spent to convertinventory into throughput.

Operator Balance Chart A seven-step process used to meet customerdemand or Takt through optimal human andequipment efficiencies.

Order Point The buffer inventory level at which a replenishmentorder must be placed.

Order Quantity The amount of a replenishment order.

Overproduction Making more than is required by the next process.Making earlier than is required by the next process,or making faster than is required by the next process.

Paced Withdrawal A timed sequence of withdrawal of finished productfrom the pacemaker process. Paced withdrawal is atool for pacing an assembly process and becomingaware of production problems within a pitch

increment.

Pacemaker Process A series of production steps, frequently at thedownstream (customer) end of the value stream in afacility, that is dedicated to a particular product familyand respond to orders from external customers. Thepacemaker is the most important process in a facilitybecause how you operate here determines how wellyou can serve the customer, and what the demandpattern is like for upstream fabrication processes.

Pack-Out Quantity The number of units/parts that can be movedthroughout the value stream to ensure flow efficiency.Pack-out quantity may or may not be customer driven.

Pitch When Takt Time is too short for a reasonable pacedwithdrawal, it can be adjusted upward to a consistentincrement of work called pitch, which becomes thebasic unit of your production schedule for a productfamily. Pitch represents the frequency at which youwithdraw finished goods from a pacemaker process aswell as the corresponding amount of schedule you

release to that process. Pitch is often calculatedbased on the customers ship container quantity.

Point of Use Storage (POUS) Raw material stored at the workstation where it isused.

Process Cycle Time The amount of time taken to produce one good partbefore it continues to the next process in the valuestream.


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Glossary GL-8

Safety Stock Extra buffer inventory to cover fluctuations in customerdemand within the replenishment lead-time.

Set in Order (for 5S) Step 2 of the 5S System. To identify the best locationfor remaining items, relocate out of place items, setinventory limits, and install temporary locationindicators.

Shine (for 5S) Step 3 of the 5S System. To clean everything, inside

and out and to continue to inspect items by cleaningthem and to prevent dirt, grime, and contaminationfrom occurring.

Signal Kanban A printed card indicating the number of parts that needto be produced at a batch operation to replenish whathas been consumed from the supermarket.

Sort (for 5S) Step 1 of the 5S System. To perform Sort throughand Sort out, by placing a red tag on all unneededitems and moving them to a temporary holding area.

Within a predetermined time the red tag items aredisposed of, sold, moved or given away. When indoubt, throw it out!

Standardize (for 5S) Step 4 of the 5S System. To create the rules formaintaining and controlling the first 3 Ss and to usevisual controls.

Standardized Work Operations safely carried out with all tasks organizedin the best-known sequence and using the mosteffective combination of resources (people, materials,methods, machines).

Storyboard A visual representation of all the main activities of aLean project from start to finish.

Supermarket A controlled inventory of items that is used to scheduleproduction at an upstream process.

Sustain (for 5S) Step 5 of the 5S System. To ensure adherence to the5S standards through communication, training, andself-discipline.

System Kaizen Improvement aimed at an entire value system.

Takt Image The time frame or window that prevails throughout thevalue stream acknowledging, identifying, andcommunicating a certain quantity of parts that shouldhave been produced.


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Glossary GL-9

Takt Time The rate of customer demand: how often thecustomer requires one finished item. Takt Time isused to design assembly and pacemaker processes,to assess production conditions, to calculate pitch, todevelop material handling containerization and routes,to determine problem-response requirements, and soon. Takt is the heartbeat of a Lean system. Takt Timeis calculated by dividing production time by the

quantity the customer requires in that time.

Theory of Constraints A management approach that is based on identifyingsystem constraints, exploiting the constraints,subordinating everything else to the constraints,improving on the constraints, and then repeating theprocess.

Throughput The rate at which money is generated through sales.

Total Product Cycle Time The total individual processing time of a particularprocess or for the product throughout the valuestream. Total product cycle time would ideally beequal to total value-added time.

Total Productive Maintenance

(TPM)

A systematic approach to the elimination of equipmentdowntime as a waste factor

Transportation Waste The waste of unnecessarily transporting parts andmaterials around the plant.

Underutilized People Waste The waste of not using peoples mental, creative, andphysical skills and abilities.

U-Shaped Cells U-shaped, product-oriented cell layouts that allow anoperator(s) to produce and transfer parts one piece, orone small lot, at a time.

Value A product or services capability provided to acustomer at the right time, at an appropriate price, asdefined in each case by the customer.

Value Added Any activity that increases the market form or functionof the product or service. (These are things thecustomer is willing to pay for.)

Value-Added Time Time for those work elements that transform theproduct in a way the customer is willing to pay for.


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Glossary GL-10

Value Stream All activities, both value added and non-value added,required to bring a product from raw material into thehands of the customer, a customer requirement fromorder to delivery, and a design from concept to launch.Value stream improvement usually begins at the door-to-door level within a facility, and then expandsoutward to eventually encompass the full valuestream.

Value Stream Loops Segments of a value stream whose boundaries aretypically marked by supermarkets. Breaking a valuestream into loops is a way to divide future stateimplementation into manageable pieces.

Value Stream Manager The person responsible for creating a future state mapand leading door-to-door implementation of the futurestate for a particular product family. This personmakes change happen across departmental andfunctional boundaries.

Value Stream Mapping A pencil-and-paper tool used in the following twostages: 1. To follow a products production path frombeginning to end and draw a visual representation ofevery process in the material and information flows. 2.To then draw a future state map of how value shouldflow. The most important map is the future state map.

Value Stream Methodology A sequential process used to implement Leanconcepts and tools derived from the ToyotaProduction System for the purpose of attaining awaste-less flow of product throughout the value

stream.

Visual Controls Simple signals that provide an immediateunderstanding of a situation or condition. They areefficient, self-regulating, and worker managed.

Waiting Waste Idle time created when waiting for anything in amanufacturing process.

Waste Any activity that consumes resources but creates novalue for the customer.

WIP Stands for work in process. Any inventory betweenraw material and finished goods.

Withdrawal Kanban A printed card indicating the number of parts that willbe removed from the supermarket.

Work Place Organization A safe, clean, neat, arrangement of the workplace thatprovides a specific location for everything, andeliminates anything not required.


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