Value stream mapping as a versatile tool for lean

Value stream mapping as a versatile tool for lean implementation: an Indian case study of a manufacturing firm Bhim Singh and S.K. Sharma

Bhim Singh is an Assistant Professor in the Department of Mechanical Engineering, Galgotia’s College of Engineering and Technology, Greater Noida, India. S.K. Sharma is a Professor in the Department of Mechanical Engineering, NIT Kurukshetra, Haryana, India.

Summary Purpose – The purpose of this paper is to explain how value stream mapping (VSM) is helpful in lean implementation and to develop the road map to tackle improvement areas to bridge the gap between the existing state and the proposed state of a manufacturing firm. Design/methodology/approach – Through this case study, the existing stage of manufacturing is mapped with the help of VSM process symbols and the biggest improvement areas like excessive WIP, lead time, cycle time, are identified. Some modifications in current state map are suggested and with these modifications future state map is prepared. Further TAKT time is calculated to set the pace of production processes. Findings – Current state and future state of manufacturing of a firm are compared and witnessed: 92.58 percent reduction in lead time, 2.17 percent reduction in processing time, 97.1 percent reduction in WIP and 26.08 percent reduction in manpower requirement. Research limitations/implications – The findings are limited due to the focused nature of the case study. VSM can also be applied to the process industry as well as to the service sector. Practical implications – This case study shows that VSM is a powerful tool for lean implementation and allows every industry to understand and continuously improve its understanding towards lean manufacturing. Originality/value – This paper is a real case study showing VSM applications for lean implementation. Keywords Lean production, Work in progress, Value analysis, Lead times Paper type Case study

1. Introduction The goal of lean manufacturing is to become highly responsive to customer demand while producing quality products in the most efficient and economical manner by reducing various waste in human effort, inventory, time to market and manufacturing space. This approach focuses around the elimination of all kind of waste. Waste takes many forms and can be found at any time and in any place. It may be found hidden in policies, procedures, process and product designs, and in operations. Waste consumes resources but does not add any value to the product. Russell and Taylor (1999) define waste as anything other than the minimum amount of equipment, effort, materials, parts, space and time that are essential to add value to the product. It has been established beyond doubt that the organizations that have mastered lean manufacturing methods have substantial cost and quality advantages over those which are still practicing traditional mass production (Fleischer and Liker, 1997). The original concepts and definitions given by Monden (1993) and Womack et al. (1990), about value stream mapping (VSM) demonstrated that it is necessary to map both inter-company and intra-company value-adding streams. Value stream refers to those specifics of the firm that add value to the product or service under consideration. VSM was initially developed in 1995 with an underlying rationale for the collection and use of the suite of tools as being ‘‘to help researchers or practitioners to identify waste in individual value

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streams and, hence, find an appropriate route to its removal’’. The process itself is very simple and straightforward. It usually starts with customer delivery and work its way back through the entire process documenting the process graphically and collecting data along the way. Finally it results in a single page map called ‘‘Value stream’’, these maps contains data such as cycle time, work-in-process (WIP) levels, quality levels, and equipment performance data. Depending on the complexity of the process and the number of components involved additional data required may be collected from other sources. A very important part of the VSM process is documenting the relationships between the manufacturing processes and the controls used to manage these processes, such as production scheduling and production information. Unlike most process mapping techniques that often only document the basic product flow, VSM also documents the flow of information within the system. Where the materials are stored (raw materials and WIP) and what triggers the movement of material from one process to the next are key pieces of information. VSM is about eliminating waste wherever it is. Various terminology used in VSM are discussed in Table I.

2. Review of literature Lean manufacturing uses tools like one-piece flow, visual control, kaizen, cellular manufacturing, inventory management, Poka yoke, standardized work, workplace organization and scrap reduction to reduce manufacturing waste. VSM is an excellent tool for any enterprise that wants to become lean (Russell and Taylor, 1999). Rother and Shook (1999) defined VSM as a powerful tool that not only highlights process inefficiencies, transactional and communication mismatches but also guides about the improvement. According to Hines and Rich (1997) value stream is a collection of all actions value added as well as non-value added that are required to bring a product or a group of products that use the same resources through the main flows, from raw material to the hands of customers. Jones and Womack (2000) explain VSM as the process of visually mapping the flow of information and material as they are and preparing a future state map with better methods and performance. A value stream consists of everything including the non-value added activities and provides a pictorial view of what elements of the process the customer is willing to pay for (Tapping and Shuker, 2003). Jones and Womack define VSM as ‘‘the simple process of directly observing the flows of information and materials as they now occur, summarizing them visually, and then envisioning a future state with much better performance’’ (Voelkel and Chapman, 2003). Hines (1999) has designed a VSM and lean approach to supply chain improvement. Brunt (2000) has made an attempt to expand VSM across the whole supply chain. Current state and future state maps have been highlighted to illustrate the benefits of a lean system pictorially and a method of constructing an action plan has been discussed. The lean communication provider explains the contribution that service management can make towards reducing costs Table I Terminology used for VSM TAKT time

The rate at which a company must produce a product to satisfy its customer demand. It is calculated by dividing available working time per day (in minutes or seconds) to customer demand per day (in relevant units) TAKT time

Available working time per shift Customer demand per shift

Production lead-time

It is the total time a component takes in its way through the shop floor, beginning with arrival of raw material to shipment of finished/semi finished goods to customer

Value adding time

It is the time which is utilized in adding actual value to the product

Current state map

It describes the existing/ current position of shop floor of any manufacturing facility

Future state map

It describes the proposed/future position of shop floor of any manufacturing facility in order to bring some improvement

Kanban

Kanban is a Japanese word that means card and which is used to reduce inventory

Pull production

Producing exactly at pace of customers requirement

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and focusing on customer value (Adams and Willetts, 1996). Gallone and Taylor (2001) made the attempt to develop a lean logistics strategy from VSM. An application of VSM was also found in the distribution industry (Hines et al., 1998). Numerous researchers have contributed to the role of VSM to improve the supply chain process of the organization. Hines (1999), Lamming et al. (2000), Taylor and Brunt (2001), Seth and Gupta (2005) have made a successful attempt to use VSM as a technique to achieve productivity improvement at the supplier end for an automotive industry. They reported a drastic improvement in production output per person, reduction of work in process and finished goods inventory. Emiliani and Stec (2004) described the use of value stream maps for determining the beliefs, behaviors and competencies possessed by business leaders. As the complexity of manufacturing and business is growing, newer value stream tools are emerging. Today, there exists a plethora of different tools and techniques developed for different purposes and waste reduction or elimination. Although several researchers like Forza et al. (1993), Beesley (1994), Jessop and Jones (1995) have used VSM for different areas, yet much more needs to be done. That is why newer classification and application areas are emerging. Over the years, many lean manufacturing tools to support value stream have been developed and many more are being proposed (Schonberger, 1982; Dillon, 1985; Womack et al., 1990; Lamming, 1993; Barker, 1994; Liker et al., 1995; Cusumano and Nobeoka, 1998; Liker, 1998; Taylor and Brunt, 2001). Table II provides an overview of major contributions to the field of VSM.

3. Profile of manufacturing firm The firm under study ABC Ltd is located near Patiala, Punjab (India) and deals with manufacturing of sophisticated processed components to meet the maintenance need of diesel traction fleet of Indian railways. It was established in 1982 covering an area of 47,000 sq.m and annual turnover is approximately 450 crores. The company employs 1,500 personnel including workers, supervisors, engineers and top management.

4. Present work Present work deals with the mapping of existing state of manufacturing of crank shaft gear manufacturing line of ABC Ltd. This mapping is done with a pencil and paper using various process symbols of VSM to visualize the flow of material and information as a product takes its way in manufacturing line. Mapping is done keeping in view of the lean manufacturing principles which are the backbone of VSM (Seth and Gupta, 2005) These principles are: Table II Major contributions to the field of VSM Major contributors

Area of work

Monden (1993) Jessop and Jones (1995)

Defined value from customers’ viewpoint Developed tools to understand different value streams and their overlapping nature Suggested classification scheme about seven new mapping tools of VSM Identification and elimination of muda

Hines and Rich (1997) Hines et al. (1998); Hines (1999); Grewal and Sareen (2006); Grewal and Singh (2006) Brunt (2000); Abdulmalek and Rajgopal (2007); Seth et al. (2008); McDonald et al. (2002) Mcmanus and Millard (2002) Emiliani and Stec (2004) Seth and Gupta (2005) Snyder et al. (2005) Seth et al. (2008) Faisal et al. (2006) Klotz et al. (2008) Lasa et al. (2008)

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Improved productivity of process industry Product development (PD) Leadership development Productivity improvement at supplier end Health care center Address various wastes in the supply chain of the edible cottonseed oil industry Mapped supply chains on these two dimensions risk and customers satisfaction Explained impact of process mapping on transparency in an employee training session VSM is a valuable tool for redesigning the productive systems

B

Define value from your customer’s perspective.

B

Identify the value stream.

B

Eliminate the seven deadly wastes.

B

Make the work flow.

B

Pull the work rather than push it.

B

Pursue to perfection level.

The major steps involved in mapping are as follows: 1. Various process symbols of VSM are drawn representing customer, supplier and production control, with sufficient space in between them. 2. All pertinent data related to existing stage of manufacturing such as lead time, process time, change over time and no. of shifts are shown by data boxes below the VSM symbols. 3. The monthly/daily requirements of product along with the number of containers and kanbans required are obtained. 4. Movement of product is shown with arrows including shipment and receiving data. 5. In between two workstations WIP is shown with proper inventory icons. 6. Major gap areas are identified from the current state map. 7. With the application of lean tools various gap areas are bridged in order to prepare proposed map. 8. Future state map is prepared and improvements achieved are highlighted.

5. Current state map All the data for current state map were collected according to the approach recommended by (Rother and Shook, 1999) with the consultation to workers, supervisors, engineers and managers. Figure 1 shows the current state map of the crank shaft gear manufacturing line. The demand per month of Crankshaft gear is 225, effective number of working days is 25 per month, number of shifts per day is 3 and working hours per shift are 7:

TAKT times ¼

Available working time per shift 7* 3* 60 ¼ ¼ 140 minutes Customer demand per shift ð225=25Þ

Demand comes from the customers (in present case it is railway department) to planning department of ABC Ltd. then planning department send its requirement to different suppliers by manually or by electronics media. In present case ABC Ltd. keeps raw material inventory of 15 days in their store, material moves from raw material store to finished items store through a number of processes/ machines like face grinding on R S grinder, drilling-tapping-D hole on R drill, step milling, turning on VTL, spot facing on drill, deburing-bolting, chamfering, hug hole drilling, bore grinding, identification marking and quality check up, hobbing and quality checkup, grinding and quality checkup, height maintained on R S grinder, key way cutting, benching, deburing, shot pinning and inspection. The production lead time and value-added time were noted on the current state map. It provides a snapshot in time. Inventory storage points in between the stages are shown in triangles. The timeline at the bottom of the current state map has two components. The first component is the production lead time and second component is value-added time or processing time. Value-added time is calculated by adding the processing time for each process in the value stream. The cycle time for each is the average cycle time, which is determined by using actual data from the company. This current state map provides a picture of existing positions and guide about the gap areas. It helps to visualize how things would work when some improvements/changes are incorporated. The gap area in the existing state results in a road map for improvement.

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Figure 1 Current state map

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6. Analysis of current state map For the analysis of existing status, a few assumptions are made. Regarding demand of crankshaft gear it is assumed that maximum demand may reach up to 225 per month. This is derived from past sales data at the industry under study. The current state map captures information at a particular instance, which may vary from shift to shift. For the sake of analysis the shift and operator-wise variation (which may be there) is not considered. Details regarding the current state of the manufacturing process of ABC Ltd. are obtained from the VSM of current or ‘‘as is’’ status as shown in Figure 1. Actual processing time or the real value-adding time for the existing process is 1,702 minutes (28 hours and 22 Minutes), whereas production lead-time is 53.31 days (53 days, 07 hours and 26 minutes) as shown. It has been observed that significant scope for improvement is there as a particular crank shaft gear waits for 53.31 days and real value addition time is only about 28 hours. On the other hand there is high work in process inventory of 345 crankshaft gears.

7. Proposed changes for future state map Acting on the gap areas identified by the value stream mapping of the existing state, some changes were proposed as indicated in Figure 2. Store persons were asked to fulfill hourly demand instead of supplying shift-wise. It is requiring a high degree of information flow and coordination to fulfill hourly demand. To track hourly demand a kanban system is proposed. As it helped to foster proper information flow regarding demand. It is suggested that withdrawal kanban should flow from planning department to dispatch. Similarly, the production kanban is suggested flowing from dispatch to raw material store. The kanban system brought the necessary schedule and delivery discipline. This is necessary to ensure the functioning of raw material store and dispatch like a supermarket. It is also observed that inventory was high in the production line. ABC was holding 15 days’ inventory in the store because of poor communication and a play-safe tendency. Electronic information flow is proposed for the suppliers of ABC. It helped in reducing order quantity and inventory at raw material stores. Implementation of milk-run discipline introduced between ABC and its suppliers reduced transportation costs. These changes reduced inventory levels in raw material store. This also helped in making the whole supply chain lean and flexible. To synchronize station cycle time with TAKT time at step milling station, present cutter of milling machine should be changed with nitrided cutter or nitriding of the present cutter should be done. With nitrided cutter it will Figure 2 Future state map

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Figure 3 Comparison of TAKT time with processing time for current and future state map

be possible to increase milling speed and station cycle time of 150 minutes can be reduced to TAKT time (i.e. 140 minutes). At vertical turret lathe for chamfering operation, a cemented carbide tool is suggested in place of the HSS tool which will not only synchronize the station cycle time with a TAKT time but also improve the quality and at bore grinding with Arbor grinding wheel, presently grinding allowances are 22 to 26 percent, they can be reduced to 10 to 15 percent to meet the requirements of TAKT time. The future state is presented in Figure 3.

8. Analysis of future state map The calculations from Figure 3 which are shown in Table III indicate that work in process inventory is reduced from 345 to 10, production lead-time is reduced from 53.31 days (53 days, 07 hours and 28 minutes) to 4.11 days (04 days, 07 hours and 38 minutes) and processing time is also reduced from 1702 minutes (28 hours and 22 minutes) to 1,665 minutes (27 hours and 45 Minutes), see Figures 4 and 5. High demand at ABC is easily achievable with reduction in both WIP and finished goods inventory in the supply chain. All these proposed changes will lead to a significant cost reduction at ABC, and hence it will also help in reducing overall costs in the supply chain. Now the ABC will be in a position to deliver at an hourly rate, and high quality crankshaft gear at lower cost, which is also the requirement of a lean and responsive environment. After applying the proposed changes station cycle time will synchronize with TAKT time as shown in Figure 2.

9. Conclusions It is proven beyond doubt that VSM is a powerful tool for lean manufacturing and allows firms to understand and continuously improve its understanding towards lean. It links people, tools, processes and even reporting requirements to achieve lean goals. It provides clear and concise communication between management and shop floor teams about lean expectations, along with actual material and information flow. This paper compared the current state and future state of a manufacturing firm and witnessed 92.58 percent reduction in lead time, 2.17 percent reduction in processing time, 97.1 percent reduction in WIP and 26.08 percent reduction in manpower requirement. Table III Comparison of lead time, processing time, inventory and man power requirement in current and future state of crank shaft manufacturing line

Machines/processes

Lead time (days) Current Future state state

Processing time (minutes) Current Future state state

Inventory (component) Current Future state state

Manpower requirement (No.) Current Future state state

Store R S Grinder R. Drill Milling m/s V T Lathe R Drill Torquing and benching V T Lathe R Drill Grinder Id marking and Q checkup Hobbing and Q checkup Grinding and Q Checkup R S Grinder Broach R Drill (Balancing) Benching HTS and Q checkup Finished goods store

15.00 1.10 2.00 2.11 1.66 1.89 2.33 2.77 2.00 2.56 1.11 5.33 2.44 2.11 2.00 1.78 2.00 3.11 2.00

3.00 1.10 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

00 112 140 150 135 112 90 165 64 155 52 138 120 37 38 112 30 52 00

00 112 140 140 135 112 90 140 64 140 52 138 120 37 38 112 30 52 00

180 10 18 19 15 17 21 25 18 23 10 48 22 19 18 16 18 28 18

27 09 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 09

3 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 3

1 1 1 1 1 1 1 1 1 1 1 1 1 1 0 1 1 0 1

Total (in revelant units)

55.31 days

4.10 days

1702 Minutes

1665 Minutes

345 Nos

10 Nos

23 Persons

17 Persons

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Figure 4 Comparison of production leads time of current and future state map

Figure 5 Comparison of inventory of current and future state map

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Rother, M. and Shook, J. (1999), Learning to See: Value Stream Mapping to Create Value and Eliminate Muda, Lean Enterprise Institute, Cambridge, MA. Russell, R.S. and Taylor, B.W. (1999), Operations Management, 2nd ed., Prentice-Hall, Upper Saddle River, NJ. Schonberger, R.J. (1982), Japanese Manufacturing Techniques: Nine Hidden Lessons in Simplicity, Free Press, New York, NY. Seth, D. and Gupta, V. (2005), ‘‘Application of value stream mapping for lean operations and cycle time reduction: an Indian case study’’, Production Planning and Control, Vol. 16 No. 1, pp. 44-59. Seth, D., Seth, N. and Goel, D. (2008), ‘‘Application of value stream mapping (VSM) for minimization of wastes in the processing side of supply chain of cottonseed oil industry in Indian context’’, Journal of Manufacturing Technology Management, Vol. 19 No. 4, pp. 529-50. Snyder, K.D., Paulson, P. and McGrath, P. (2005), ‘‘Improving processes in a small health-care network. A value-mapping case study’’, Business Process Management Journal, Vol. 11 No. 1, pp. 87-99. Tapping, D. and Shuker, T. (2003), Value Stream Management for the Lean Office, Productivity Press, New York, NY. Taylor, D. and Brunt, D. (2001), Manufacturing Operations and Supply Chain Managemen: The Lean Approach, Thomson Learning, London. Voelkel, J.G. and Chapman, C. (2003), ‘‘Value stream mapping’’, Quality Progress, Vol. 25 No. 5, pp. 65-8. Womack, J., Jones, D.T. and Roos, D. (1990), The Machine that Changed the World, Macmillan, New York, NY.

Further reading Hines, P., Rich, N. and Esain, A. (1999), ‘‘Value stream mapping: a distribution industry application’’, Benchmarking: An International Journal, Vol. 6 No. 1, pp. 60-77. Pavnaskar, S.J., Gershenson, J.K. and Jambekar, A.B. (2003), ‘‘Classification scheme for lean manufacturing tools’’, International Journal of Production Research, Vol. 41, pp. 3075-90. Womack, J. and Jones, D.T. (1994), ‘‘From lean production to lean enterprise’’, Harvard Business Review, pp. 93-103.

About the authors Bhim Singh is presently associated with Galgotia’s College of Engineering and Technology, Greater Noida, UP, India, as an Assistant Professor in Mechanical Engineering Department. He holds a BTech degree from REC Kurukshetra, and MTech degree from GNDEC, Ludhiana. He is presently pursuing a PhD from NIT Kurukshetra on Lean Manufacturing. He has more than ten years of teaching experience in Undergraduate and Post graduate classes. He has published and presented papers in several national and international conferences. He has guided many projects to undergraduate students.His areas of interest include: statistical quality control, operations research, supply chain management, value engineering and lean manufacturing. Bhim Singh is the corresponding author and can be contacted at: [email protected] S.K. Sharma, eminent scholar and leader in the field of industrial engineering and entrepreneurship development, is currently a Professor in the Department of Mechanical Engineering at National Institute of Technology, Kurukshetra, Haryana, India. He did extensive research in the field of Industrial engineering and has guided 16 candidates in their dissertation for a MTech degree. He is guiding ten students for their PhD Degree in the field of production and industrial engineering. He has published many papers in national and international journals of repute.

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