Value Stream Mapping (VSM)
VSM (Value Stream Mapping) and AP (Flow Analysis) are the most important optimization tools for collecting data on the process and preparing a plan of improvement (also a strategic and long-term version).
VSM is based on the analysis of the value stream in the organization. What is this stream? It is a set of all actions and operations necessary to make a product in accordance with the customer’s requirements from the moment the raw material arrives at the company to the moment of shipping the finished product. The purpose of VSM is to map this flow and create a map of the current state and a map of the future state, as a development proposal for the organization.
VSM is performed on a selected product sample. The main goal of the VSM is to put and focus on adding value and at the same time eliminating losses that limit or block it.
The results of the mapping are presented with a set of symbols and markings.
A characteristic feature of VSM is the definition of two flows – raw material flow and processing and management information flow and processing.
The finale is made by preparing a map of the future state, where after an in-depth analysis of the possibilities we decide to create a new flow.
The new map shows a better, more optimal flow and more effective methods of managing the information that controls this process. It allows us to create an action plan, what we want to change/improve where and how in our organization. The parameters typical for flow and stream maps are the so-called process efficiency. We calculate it by determining the ratio of time of adding value to the entire transition time, and then compare it between the current and future situation to see our impact on increasing value adding.
The VSM is an ideal tool for strategic insight and presentation of the entire process in a simplified but very legible form. If we want to do a very accurate and detailed mapping then Flow Analysis may work better here.
In the Flow Analysis, the execution principle is very similar to that of the VSM, except that the symbolic notation used is slightly different (4 symbols are used – a circle means adding value, other typical losses). Therefore, we perform an in-depth process analysis and create an accurate map of the flow and processing of the raw material already without information flow. In addition, we collect information on the evaluated flow, following the QDCI filter (Quality, Cost, Delivery on time, Involvment).
The analysis, depending on the needs, can be started in two ways – from the collection of base materials or from the finished product. The second option is more complex and requires experience in optimization activities, but allows for a more holistic view of the process and the visibility of both flow and quality issues. In addition, starting the analysis from the finished product allows to observe the relationship between the customer and the supplier and shows the problems related to inventory.
• strongly activates the working group,
• Due to its relative simplicity, it can be implemented again, independently by the project group, without the participation of consultants,
• is an analysis that can be done relatively quickly.
Both tools are a great proposal for companies that want to see what the efficiency of their processes is today and get a picture of the current situation (map of the current state) and prepare a proposal for the development of the company in the future (map of the future state) and an action plan how to achieve this.
from the analysis
• Reliable information on the duration of the process and its efficiency before and after the planned activities.
• Mapping of business processes together with a proposal of specific actions affecting process quality and efficiency.
• Educational function for people participating in the analysis – it can be treated as a practical training in “muda hunting”.
• Planning optimization activities in a systematic way, with consideration and selection of tools appropriate for a given organization.
Analysis of Technical Production Costs
TCM analysis is a tool that brings measurable benefits in the area of lowering production costs. It combines the logic of measuring and using TCM (Technical Cost of Manufacturing) and tools such as VSM (Value Stream Mapping).
Within the project, an analysis of processes included in the TCM structure is performed – with particular emphasis on the manufacturing part (VSM TCM).
The costs of materials and energy consumption, wage costs, direct costs related to production (e.g. machining, tools and instruments) and indirect production costs are taken into account.
Direct cost of CTVs [%]
For the production part, an analysis of the value stream in terms of costs is carried out – we pay attention to the actual duration of operations in relation to the assumed ones, the logistic and warehouse part of the process, processing and quality control operations, elements supporting and managing the production process (such as planning, accounting, etc.).
We are able to see the stream of value, but signed not only by the duration of the operation, the amount of material, but above all the amount of money that escapes us with every operation and action in the production area.
Going further – just like for VSM – we create a map of the current state of TCM and a map after introducing potential savings. The key parameter is our impact on the reduction of TCM and the calculated profit for the organisation.
The final element of the programme is the preparation of a plan of proposals for changes and improvements generating savings in TCM with recommendations and a proposal of the optimisation project.
The TCM analysis is a very good proposal for companies wishing to see their process here and now, not only looking at basic performance, timeliness or quality indicators, but above all cost. The strong point of the product is the TCM cost plan for the future and cost optimization with a calculation of how much money we gain for a given assortment and a ready-made proposal for an optimization project to be launched.
A simulation environment is often used in TCM analyses. After creating a model of a production line, the whole plant or even a single production cell, it is possible to measure all machines, operators, so that an analysis of the Technical Cost of Manufacturing can be carried out.
The program allows to take into account the costs of basic and auxiliary materials, necessary to produce a given product. Then it is possible to add operators’ salaries and conditional bonuses. In the next stage, the costs of particular media such as electricity, water or compressed air are taken into account.
To calculate the Technical Cost of Manufacturing, the program allows to add the costs of periodic TPM inspections, such as the costs of additional personnel, tooling costs or additional resources. The program also takes into account the costs related to breakdowns, production of shortages and changeover costs.
After performing the simulation, the program shows us the entire cost structure, taking into account different cost types from the input data, e.g. company-wide, departmental or depreciation costs. This way, we know what generates what cost and how it affects TCM.
It also allows us to check how the change of a given cost will affect TCM. It is possible, for example, to simulate TCM in relation to how TCM is affected by how many operators work on the line, how many machines are used, how many logistics or warehousemen work on a given shift, how many times we perform quality control, at what speed internal logistics operations take place, or in what production sequence we plan to produce.
Calculation of CTW TCM
We can also simulate additional costs related to production, e.g. the cost of stoppage and machine changeover and calculate how this affects the TCM of the product. The program gives us the possibility to test different scenarios and allows us to find the optimal one, where the cost of production is the lowest.
The audit is performed in the form of a site visit on a selected process and uses observation, intelligence and documentation analysis as the main forms of data collection. The data collection filter is based on 4 areas:
Q – Quality
The level and culture of quality in the organisation, the level of staff training and knowledge, internal and external quality indicators are examined. Existing problems and ways of dealing with them and the quality tools used are discussed.
D – Delivery
The degree of order fulfilment and existing problems in the supply chain, internal logistics and warehouse management are checked.
C – Cost
Observation concerns the tools, standards and system solutions used, supervision of performance and productivity, knowledge of their results and improvement plans.
I – Involvement
The competences of personnel, system solutions for supervising employee training, plans to improve versatility and polycompetence, systems for rationalizing ideas and communication within the organization are examined. Audit is a simple and compact tool, which may interest companies wishing to learn the conclusions of a consultant’s visit and recommendations for the future, without spending a lot of time on this issue.
Lean Champions League
It is a program based on continuous evaluation of the Customer’s organization in terms of requirements of the existing production system. This evaluation is based on the CPS LUQAM methodology and road maps of 20 basic CPS modules (CPS – Company Production System).
The program allows for evaluation of the current state, benchmarking and improvement of the production system implemented in the organization. Within the framework of the program, based on the road maps of the operating system (CPS LUQAM) – the Customer receives information about the next steps in improving system solutions in the operating division of the company.
Benefits for the Customer:
• Creation of a concept for building a long-term production system strategy.
• Road maps describing in detail how the development path of the organization’s system may look like.
• Comparison with others and development based on best practices and proven methodology.
• The possibility of free participation in LML trainings.
• Independent evaluation of the production system functioning in the company.
Areas of evaluation
The evaluation of the LML shall cover the following areas:
I. Work organisation
Good manufacturing practices, machine and instrumentation setup planning, work organisation and system supervision of the training and competence of production staff are assessed.
II. Standardisation of work
This module is about good practices for creating, verifying and applying work standards. It also covers the management of indicators, as well as the methodology of verification and normative creation and management in terms of quality and efficiency.
III. Visual management
A module in which existing visualization solutions related to information flow, internal communication in the organization and ways and methods of this communication as system solutions are evaluated.
Topics in this area are divided into the management of qualitative problems from an external (complaint) and internal point of view with an emphasis on rapid response and problem solving tools. In addition, the module deals with the aspects of reliability and error-proofing and methods supporting them.
A module containing verification of the state of systems for rationalization of ideas in accordance with the principles of Kaizen methodology with additional assessment of the ways of using the organization’s resources and system solutions in this area.
VI. Just in time
The most important tools used in the Just in Time pillar are evaluated. The ability and quality of the organization is verified in terms of the ability to map its processes and use the knowledge to work with reducing changeover times, building effective maintenance in cooperation with production employees, as well as the use of advanced methods to support the production process related to process optimization, improvement of flow and reduction of order completion times.
VII. Strategia i struktura
The module provides answers to the question of how, from the management’s point of view, the company’s plan related to continuous improvement looks like, whether it is sufficient and whether it allows for controlled and measured optimization management and whether the strategy affects the objectives and results of individual departments in the operational division of the organization.
A module in which, on the basis of data describing the technical cost of manufacturing a product and its use in the organization, the ability to manage and optimize costs is assessed.
The program allows to define a target level, and based on CPS Road Maps, to prepare a long-term action plan for the organization, whose effectiveness will be supervised by LML audits.
LML is a very good proposal for companies wishing to work on their standards and system solutions, which will ultimately strengthen and expand their internal and dedicated to their specificity, production system.