Editor’s Note: This is the final article in a 3-part series on lean thinking and business process design. Part 1 ran on page 18 in the August 2010 issue. Part 2 ran on page 34 in the October 2010 issue.
Having covered the fundamental blocks of lean principles in the first two articles, this third and final piece will explain the upper level blocks of the lean thinking process. This approach culminates in Value Stream Mapping, the process that identifies areas of an operation that add value to products compared to those which simply add complexity or cost.
Quick changeover: The changeover time (e.g. the set-up time from a given state of the equipment to another one) of a piece of equipment or a process has a large influence on batch sizes. Thus, the quicker the changeover, the smaller the batch that can be run economically, the larger a line’s flexibility and the lower work-in-process inventory. For any machine setup activity, there are two types of activities:
• Internal activities: This type of activities that can only be performed after the machine has come to a complete stop, e.g., processing of products is no longer feasible. In a sawmill, for example, replacing bandsaw blades. Or in a pallet shop, changing over a pallet nailing machine to produce a different pallet size.
• External activities: External activities are activities that can be performed while the machine is in use, e.g., processing of products is still feasible. In the sawmill example, an external activity would be the preparation of the next cutting heads with new, different knives.
Quick changeover relies on recognizing which activities can be performed while a piece of equipment or a process is ongoing (e.g., the external activities) and executing these steps before the equipment or process is stopped. All external activities are conducted such that the amount of additional effort when the equipment or process is stopped (e.g., the internal time) is minimal. For example, the knives in a moulder head should be inserted into the heads such that no adjustments are needed when the change occurs.
Total productive maintenance (TPM): A process or a piece of equipment needs to be available when needed by the production schedule and run for as long as the order requires. In other words, the process or equipment has to be reliable. Total productive maintenance (TPM) seeks to assure process or equipment reliability to preventive maintenance achieved through a rigorous, static schedule of maintaining the equipment by operators, maintenance professionals, and external specialists if required.
TPM’s core function is to maintain optimum equipment conditions to prevent deterioration. This involves basic steps such as: cleaning (to maintain basic equipment conditions), lubrication, adjustments, regular inspections, visual controls, and following rules to sustain the TPM program.
In fact, total productivity maintenance is not only about machine availability but also deals with productivity and machine efficiency issues. In the long run, a good TPM program also helps to prevent accidents and to achieve and sustain zero defects production.
Pull system: Pull systems, combined with flow and takt time are the core elements of a Just-in-Time (JIT) production system. Flow refers to the smooth flow of parts through all process steps without build-up of inventories or waiting times. Takt time refers to the cycle of production, e.g., the rate at which products (unit/time) have to be produced to satisfy customer demand.
Pull systems also benefit from the implementation and use of kanbans, process adequacy, quick changeover, visual controls, and the 5S program. While quick changeover, visual control, and 5S has been explained above or in earlier articles, kanban and process adequacy are described below.
Kanban: A Kanban system relays replenishment instructions to external and internal suppliers. When producing a product, raw materials and supplies are consumed and whenever only a pre-determined quantity is left, an order is issued to replenish the material consumed.
The order is issued using a kanban card, typically a card containing all the pertinent information about the material to be replenished. Once released, the kanban card is given to the supplier of the material in question and a predetermined amount of the material is produced and supplied to replenish the depleted inventory. Kanban systems are simple visual systems that do not rely on computer systems or any other fancy technology to achieve a steady replenishment of the materials needed.
Process adequacy: Process adequacy describes the capabilities of a system to consistently produce at the same rate each day with the goal of minimizing workload fluctuations. Such stable systems allow for predictable outcomes with low variability.
Information and raw material flow in a Pull System. When a customer pulls a finished product from the finished goods warehouse, information flows to the previous process, Process C.
Process C now knows that it has to produce another unit, as one was pulled from finished goods warehouse by the customer. When Process C replenishes the unit missing in the warehouse, it uses materials from the previous, Process B. Thus kanban cards signal Process B to replenish what was used in Process C. Hence, a kanban-driven pull system maintains a level inventory throughout its process and stays idle when nothing needs to be replenished.
Lean relies on the premise that only activities that add value for a customer should be executed. Value Stream Mapping (VSM) is the lean tool that allows practitioners to analyze a company’s or a product’s value chain to visualize value added from non-value added activities.
A Value Stream Map graphically depicts not just process activities but the flow of products and information, the relationship of suppliers to the value chain and the requirements of customers. Other pieces of information that can be gained from a Value Stream Map include process and lead times, process availability, production scheduling methods, and the total time of value added activities compared to the total product lead time.
Figure 4 shows an example of a VSM applied to the value chain of an architectural molding company. This was a study performed by Quesada, Haviarova and Slaven (2009) that shows the power of a VSM. Figure 5 shows the summary of the value chain process. In this Figure there is a metric called takt time. Takt time represents the production rate at which products have to be manufactured. In our architectural woodworking molding company example, the takt time is 23.76 seconds per board feet (BF). Since customer demand is 25,000 BF of finished architectural molding products, the formula [Takt time = Available production time/Customer demand] applied to this specific example yields [Takt time = 22 days/ 25,000BF x 7.5 hours/1 day x 3,600 seconds/1 hour = 23.76 seconds/BF].
Our focus is on explaining some of the metrics found on the Value Stream Map. The bottom part of Figure 4 shows two time lines. The upper timeline indicates time for non-value added activities (NVA) while the lower one shows time of value added (VA) activities. The sum of NVA is 22.35 days while the sum of VA is 58 seconds. Thus, VA (58 seconds) represents only 0.01% of total process time (22.35 days). Hence, more than 99.9% of the total time that the parts spend in the system is wasted in the form of waiting times (mainly in raw material, work in process, or finished goods inventories).
Value Stream Maps are always first drawn for the current state, i.e., a Value Steam Map that depicts the current situation. Then, based on the current situation, an ideal state Value Stream Map is created. An ideal state Value Stream Map depicts the best possible way how a customer’s need can be satisfied.
Not all processes, technologies, or knowledge for realizing the ideal state exist. However, the ideal state creates the long-term vision that the company can aspire to realize. To start making incremental improvements, a future state Value Stream Map is then developed, incorporating the feasible parts of the ideal state. This future VSM includes all chances required to increase the share of VA time in respect to total process time.
Waste and inventories are eliminated as much as possible. While some activities are found to add value to the product (f.e., rough machining, machining, and finishing), other activities do not add value but are required to keep the system working (f.e., raw material reception, or finished goods shipping) and need to be kept, while other activities are found to create no value and not being necessary (f.e., inventories before machining and finishing) and can therefore be eliminated.
We hope that you found this lean thinking series to be interesting and with potential benefits for your manufacturing operations. A lean thinking journey is always challenging no matter your type of business, size, or market conditions. But as we continue to work with several wood products companies locally and at international locations, we have witnessed that lean thinking has helped wood products firms to dramatically increase customer satisfaction levels and to decrease manufacturing costs. Keep in mind that we offer lean training opportunities and will be happy to work with you to institute some of these principles.
Dr. Henry Quesada is an assistant professor at Virginia Tech specializing in the area of business management processes and modern manufacturing systems. He works primarily with the forest products industry. Dr. Urs. Buehlmann is an associate professor at Virginia Tech focusing on manufacturing systems, engineering, business competitiveness and globalization. For more information, contact Henry Quesada at Quesada@vt.edu.
