Value Stream Mapping

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Value Stream Mapping
Day 1
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Jan Vlasak
Introductions
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Agenda
Current State Map
Future State Map
Value Stream Plan
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Agenda
Day 1:
Topic/Activity Time
Opening 	 8:00 AM	
Introduction 8:15 AM
Goals of Workshop			 8:30 AM
Review of Lean Principles		 8:35 AM
Break				 9:00 AM
Introduction to Value Stream		 9:20 AM
Current State Map			 10:05 AM
Exercise 1 – Customer Loop		 11:00 AM
Lunch				 12:00 AM
Report-outs				 12:45 PM
Exercise 2 – Internal Loop		 1:00 PM
Report-outs				 2:25 PM
Break				 2:40 PM
Exercise 3 – Supplier Loop	 	 2:55 PM
Current State Report-outs 		 3:45 PM
Opportunities In Future State		 4:05 PM
Example Future State Map 			 5:00 PM
Adjourn				 5:45 PM
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Agenda
Day 2:
Topic/Activity Time
Introduction Day 2 8:00 AM	
Exercise 4 – Customer Loop 8:15 AM
Break				 9:30 AM
Report-outs 		 9:45 AM
Exercise 5 – Internal Loop	 10:00 AM
Report-outs 		 11:45 AM
Lunch				 12:00 AM
Exercise 6 – Supplier Loop		 12:45 PM
Obstacles 		 1:30 PM
Value Stream Plan				 2:00 PM
Exercise 7 - VSP		 2:15 PM
Final Report-outs 	 	 3:00 PM
Break 		 3:45 PM
The Value Stream Team 		 4:00 PM
Closing Comments 			 4:15 PM
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Company Strategy
Growth
Competitive Position
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Cost Reductions
Customer Price
Labor Inflation
Increase Earnings
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Keys to Lean Production
Work Place Organization
JIT Production
Six Sigma Quality
Empowered Teams
Visual Management
Pursuit of Perfection
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Key Factors for Lean Success
Strategic Vision
Strong Line Management Leadership
Expert Training and Support
Aggressive Performance Targets and Tracking
Impatience
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“Becoming the Best”
The Answer;
Develop a Deep Understanding of Our Processes at their Broadest Levels and Not Just Continue to Improve Individual Work Units
Working Together to Add Value to our Company
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Our Needs
Tools to Support Linkages Between Processes
Emphasis on Processes and Systems
Horizontal Organization Based on Teamwork
Leadership and Followership
Commitment and Involvement 
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Performance
Operational Performance Determines Financial Results
Lean Enterprise Is the Key to Successful Operational Performance
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The AM of Tomorrow
Complete Understanding of Lean Principles
Commitment and Discipline to Live by these Principles
Sense of Urgency to Exceed the Targets and Deadlines
Commitment to Strive for Perfection
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Potential Benefits
Inventory Reduction
Quality Improvement
Productivity Improvement
12% Reduction in Overall Cost
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Why are we Here?
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Goals of the Workshop
L
E
A
D
E
R
earn to See
stablish a Plan
ct on Opportunities
rive Change
nable Teams
educe Lead Time
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Think Lean
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Waste
Waste is Only the Symptom of a Deeper Problem
Focus on the Source Rather than the Symptom
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Overproduction
Definition:
Producing More than Needed
Producing Faster than Needed
Parts
Parts
Parts
Parts
Parts
Parts
Parts
Parts
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Takt Time
Available Work Time
 Customer Demand				
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One Piece Flow
Make One, Move One!!!
Process
A
Process
 B
Process
C
Process
D
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Pull System
Supplying Process
Customer Process
Supermarket
Product
Product
“Withdrawal” KANBAN
“Production” KANBAN
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Selecting the Point of Pull
FLOW
P
O
P
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Why Small Lots?
Drive C/O Time Reduction
Flexibility
Reduce Inventory
Reduce Lead Time
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Leveling
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A Brief Introduction to 
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The Improvement Process
Employee Involvement
Training and Development
Model Work Unit
20 Keys Assessment
Traditional
Learning
Leading
World Class
Best in Class
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Factor			 	Improvement
PPM .…………………………….. 91.3 %
Scrap ……………………………. 57.6 %
Training hrs./Employee ………...182.2 %
Suggestions/employee ……..…. 347.5 %
Labor cost % of sales ……….… 36.4 %
WIP hours ………………………. 91.6 %
Changeover time …………….… 72.5 %
Lead time ……………………….. 87.0 % 
Results
Improvement on all work units since introduction of the AM Performance System 
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Operator 1
Operator 2
Entrance
R Cut
Draw
Draw
F/A
Spin
Spin
Exit
Production Space = 30%
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Opportunities = 70%
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Why???
Opportunities in Work Units
 Vs.
Opportunities between Work Units
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F
L
O
W
Stamping
C/T = 4 Sec.
Sub-Assembly
C/T = 60 Sec.
Final Assembly
C/T = 60 Sec.
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The Next Chapter in
 AM’s Success Story
Value Stream Mapping
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What is a Value Stream?
All the Actions Involved in Making a Part
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Establishing Flow
Production Flow
Information
Material
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Elimination of Waste
A Broadened Perspective
Identify and Target the Source of Waste in the Entire Value Stream, rather than Just the Work Unit
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Adding Value
Establishing the Vision
Reducing the Lead Time
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Big Picture Approach
Links Material/ Information Flow
Team Growth
Benefits of Value Stream Mapping
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Visionary Tool
Planning
Communication
Implementation
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The Current State Map
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Customer
Stamping
Sub-Assembly
Assembly
Finished Goods
Inventory
C/O Time
Down Time
Takt Time
Supplier
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The Future State Map
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Cycle Time
C/O Time
Stamping
Sub-Assembly
Final Assembly
A Lean Stream!!!
Finished Goods
Inventory
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Annual Value Stream Plan
This Plan Visually Displays:
Step-by-Step Implementation Plan
Measurable Goals
Clear Checkpoints with Listed Deadlines, Ownership, and Named Reviewers
The Value Stream Plan will Play a Fundamental Role in the Optimization of your Value Stream
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Management’s Role
See Overall Flow
Develop the Vision
Lead Implementation
Support EI Teams
Make Sure Everyone Understands!
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Management’s Commitment
Eliminate Overproduction
Support Lean Principles
Willingness to Take Risks
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“Whenever there is a product for a customer there is a value stream
The challenge lies in seeing it”
AM
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The Current State Map
Practice Makes Perfect
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It’s Time to Practice
At this Time Please Read through the Example Data Set for General Exhaust
We will Begin Drawing the Example Current State Map in Just a Few Minutes
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Data Set for General Exhaust
Customer
General Auto
Customer Information
20,000 pieces per month
Container size = 300 pieces
Customer operates on two shifts
Two deliveries to customer per week
General Auto
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Data Set for General Exhaust
(continued)
General Exhaust Production Control Department
Electronically receives General Auto’s 13 week forecast and enters into MRP
Electronically issues 13 week forecast to General Components
Receives daily firm order fax from General Auto
Secures components through daily fax to General Components
Generates daily departmental schedule based on MRP
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Data Set for General Exhaust
(continued)
Production Process:
Sub-Assembly 1 Sub-Assembly 2 Final Assembly
Work Time:
20 Days per months
2 shifts in all production departments
8 hours per shift
2 ten minute breaks per shift and unpaid lunch 
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Data Set for General Exhaust
(continued)
Final Assembly
3 operators
Takt Time = 55.2 seconds
Cycle Time = 55 seconds
Total Work Content = 146 seconds
Changeover Time = N/A
Uptime = 85%
Observed Inventory
.75 Days work in progress
3.5 Days finished goods
Shipped to truck from final assembly finished goods
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Data Set for General Exhaust
(continued)
Sub-Assembly 2
3 operators
Takt Time = 55.2 seconds
Cycle Time = 55 seconds
Total Work Content = 130 seconds
Changeover Time = N/A
Uptime = 90%
Observed Inventory
.5 Days work in progress
1 Day finished goods
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Data Set for General Exhaust
(continued)
Sub-Assembly 1
1 Operator
Takt Time = 27.6 seconds
Cycle Time = 24 seconds
Total Work Content = 24 seconds
Changeover Time = 30 minutes
Uptime = 97%
Observed Inventory
2 days raw material
.25 days work in progress
1 day finished goods
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Data Set for General Exhaust
(continued)
Supplier
General Components
Supplier Information
Stampings
Delivery to General Exhaust
(1) time per day
Container size = 300 pcs
Two shift operation
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Always Start With the Customer!!!
Work Upstream from There
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What to Look For...
Information Flow from the Customer
Forecasts
Firm Order
Instruction to Produce
Movement of Material
Inventory
Future Opportunities!
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Exercise 1: Customer Loop
Walk through the Entire Process (Upstream)
Sketch Value Streams for the Customer Loop
Gather Data for the Customer Loop Worksheet
Capture Information Flow
Return to Room
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Worksheet
Exercise 1: Customer Loop
1. Who are the customers and where are they located?
2. How many pieces does the customer require per month?
3. What is our delivery frequency?
4. What is the container size (pieces per container)?
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Worksheet
Exercise 1: Customer Loop
5. How many shifts does the customer run?
6. In detail, describe how customer orders are placed
 (Kanban, MRP, forecasts, firm orders, etc.)
7. Where is the point of pull?
8. How much finished goods inventory did you find (count it!)?
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Worksheet
Exercise 1: Customer Loop
9. Does any safety or buffer stock exist?
10. How is buffer and safety stock distinguished from
 finished goods inventory?
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11. Map the Material and Information Flow
Customer Loop
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Report Outs
Customer Loop
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What We’ve Accomplished
Understanding Customer Requirements
Established Current State of Information and Material Flow
Have Started to Think About Future Opportunities
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Internal Loop
Tie the Customer Loop to Internal Processes
Establish the Relationship between Internal Processes
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What to Look For...
Define Plant Level Processes 
Data Box Information
Takt Time, # of Operators, C/O Time, Work Unit Cycle Time, Total Work Content, Uptime %, # of Shifts, Available Operating Time
Capture All Inventory
What Initiates Production?
Future Opportunities!
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Exercise 2: Internal Loop
If Needed, Walk through the Entire Process (Upstream)
Sketch Value Streams for the Internal Loop
Gather Data for the Internal Loop Worksheet
Capture Information Flow
Return to room
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Worksheet
Exercise 2: Internal Loop
1. Define the processes involved in the production of the part
 from a plant level (bird’s eye) perspective.
 Ex. Stamping Work Unit Sub-Assembly Final Assembly
2. For each of the plant level processes find the Takt Time,
 # of Operators, Work Unit Cycle Time, Total Work Content,
 Changeover Time, Uptime %, Number of Shifts, Available
 Operating Time (in seconds).
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Worksheet
Exercise 2: Internal Loop
3. For each of the plant level processes count and calculate
 the finished goods, work in progress, and raw materials
 inventory.
4. How do the production work units know when and what to 
 produce? (Be very specific about this process)
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5. Map the Material and Information Flow
Internal Loop
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Report Outs
Internal Loop
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What We’ve Accomplished
Understand Relationship between Internal Processes
Current State of Information and Material Flow
Identified Future Improvement Opportunities
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Supplier Loop
Tie Internal Loop to Supplier
Understand Flow of Information and Material 
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What to Look For...
Capture All Inventory
Establish Current Information and Material Flow 
From Storage to the Work Unit
From Supplier to Storage
Understand Raw Material and Component Requirements
Future Opportunities!
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Exercise 3: Supplier Loop
If Needed, Walk through the Entire Process (Upstream)
Sketch Value Streams for the Supplier Loop
Gather Data for the Supplier Loop Worksheet
Capture Information Flow
Return to Room
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Exercise 3: Supplier Loop
Supplier Info?
Supplier
Part #
# of Shifts
Delivery Frequency
Amount of Supplier Inventory
Quantity per Container
Additional Comments:
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Worksheet
Exercise 3: Supplier Loop
2. Describe in detail how we decide we need more material
 and how we inform our supplier of our needs (MRP,
 Kanban, Forecasts, Firm Orders).
3. How do we decide how much raw material inventory we
 need?
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4. Map the Material and Information Flow
Supplier Loop
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Report-Outs
Current State Map
(Putting It All Together)
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The Future State Map
Practice Makes Perfect
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It’s Time to Practice
Please Review the Example Current State Map
We will Begin Drawing the Future State Map Shortly
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Opportunities in Containerization
Small Container Quantity
Increases Flexibility
Reduces Customer Fluctuation
Overall Benefit
Reduces Inventory Dollars
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Takt Time
Sets Pace of Production to Match Customer Demand
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Effects of Container Size
Current State Example
(takt time * container size) = min per container
	60 seconds	
(55.2” * 300 pieces) 276 minutes (4 hrs 36 m) 
 60 seconds 60 minutes
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Effects of Container Size
Future State Example
(takt time * container size) = min per container
60 seconds
(55.2” * 25 pieces) = 23 min 
60 seconds
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Container Size
Delivery Frequency
Small Containers = Improved Flexibility
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Fluctuation Caused by Container Size
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Fluctuation Caused by Container Size
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Opportunities in Delivery Pitch	
Even Delivery Pitch
Drives Constant Takt Time
Reduces Fluctuation
Overall Benefit
Reduction in Inventory
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Pick-Up (2,500 pcs/truck) 7:00 am Wednesday 7:00 am Friday
Truck 1 = 2,760’
 = 165,600”
Takt = 66.24”
Truck 2 = 1,840’
 = 110,400”
Takt = 44.16”
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Opportunities in Kanban
Pull System
Links Production to Customer Demand
Aids in Visual Control
Identifies Opportunities for Improvement
Overall Benefit
Improves Material Control
Prevents Overproduction
Reduces Inventory
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Pull System
Supplying Process
Customer Process
Supermarket
Product
Product
“Withdrawal” KANBAN
“Production” KANBAN
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Selecting the Point of Pull
FLOW
P
O
P
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Opportunities in Leveling
Leveling Post
Reduces Customer Demand Fluctuation
Reduces Delivery Pitch Fluctuation
Pulls Product Based on Takt Time
Overall Benefits
Eliminates Scheduling
Levels Customer Demand
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Week
1
2
3
4
Average
Part A
5300
4700
5200
4800
5000
Average
5000
5000
5000
5000
Difference
300
-300
200
-200
Forecast
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Customer Fluctuation
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Average
Avail. Sec
Takt Time
Container Size
# Containers
1000
55,200
55.2
25
40
Leveling Post
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Opportunities in Takt Time Production
Takt Time Post
Produce to Takt Time
Enables Visual Management
Prevent Overproduction
Overall Benefits
Identifies Labor Opportunities
Lowers Inventory 
Eliminates Scheduling
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Takt Time Post
1st Shift
6
0
6
6
1
2
6
1
8
6
2
4
6
3
0
6
3
6
6
4
2
6
4
8
6
5
4
7
3
0
7
2
4
7
0
6
7
0
0
7
1
8
7
1
2
6
0
0
Part A
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Opportunities in the Work Units
Uptime 
TPM
BOS Charting
Team Problem Solving
Overall Benefits
More Capable Processes
Employee Involvement
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Track Downtime and Improvement Activities on BOS Chart
Key Measurable
 Target
 Trend Line
Improvement
Activities
Data Analysis
 Pareto
Improvement
Tracking
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Opportunities in and between Work Units
Continuous Improvement Tools
Standardized Work
Work Balance
Bottleneck Improvements
Overall Benefits
Adding Value/ Removing Waste
Improving Flexibility
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Work Balance
Current State
Sub-Assembly 2
Final Assembly
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Work Balance
Future State
Final Assembly
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Opportunities in and between Work Units
Pull System
Withdraw Only What you Need
Replenish What is Taken
Overall Benefits
Flexibility in Production
Prevents Overproduction
Reduces Inventory
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Pull System
Assumptions:
Production Schedules Will Always Change
Production Will Never Go According to Schedule
It Is Human Nature to Overproduce
Preceding
Process
Store
Following 
Process
Production
Kanban
Withdrawal
Kanban
New Product
Needed Product
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Opportunities in and between Work Units
Changeover
Decrease Changeover Time
Increase # of Changeovers
Drive Small Lot Production
Overall Benefits
Flexibility in Production
Reduction in Inventory
Better Inventory Turns
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Game
Board
Tool
Storage
Paper
Storage
Die
Storage
Supply Table
1
1
2
2
3
3
4
4
5
5
6
6
Dance Chart Example
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Opportunities in the Supplier Loop
Supplier Development
Identify Key Suppliers
Reduce Container Size
Increase Delivery Frequency
Kanban!!!
Overall Benefit
Inventory Reduction
Cost Reduction
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The Future State Map
It is Time To Draw
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Value Stream Mapping
Day 2
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Exercise 4: Customer Loop
Step 1
Review Takt Time Calculation
Step 2
Opportunities with Containerization
Effect of Container Time
Fluctuation due to Container Quantity
Future State Proposal for Container Quantity
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Exercise 4: Continued
Step 3
Opportunities with Customer Pull Timing
Identify Delivery Pitch
Calculate Inventory Held Due to Pitch
Future State Delivery Frequency/Timing
Step 4
Opportunities with Leveling
Calculate Leveling Post
Develop Point of Pull
Future State Leveling System
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Exercise 4: Continued
Step 5
Opportunities in Takt Time Production
Determine Kanban Delivery Frequency to Cell
Future State Takt Time Post
Step 6
Map the Future State Customer Loop
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1.
Formula:
Pieces
Available Operating Time
Takt Time
=
2.
Takt Time Results:
Worksheet 1 Takt Time Calculation
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Worksheet 2
Opportunities with Containerization
1. Effect of container time:
2. Fluctuation due to containerquantity (Graph):
3. Future state proposal for container quantity
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Worksheet 3
Opportunities with Customer Pull Timing
1. Identify delivery pitch:
2. Calculate inventory held due to pitch:
3. Future state delivery frequency and timing:
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Worksheet 4
Opportunities with Leveling
1. Calculate leveling post:
2. Develop point of pull:
3. Future state leveling system:
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Worksheet 5
Opportunities in Takt Time Production
1. Determine kanban delivery frequency to the work unit:
2. Future state takt time post:
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Worksheet 6
Map the Future State Customer Loop
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Report-Outs
Future State Map
Customer Loop
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Exercise 5: Internal Loop
Step 1
Are BOS Charts Being Used?
Identify the Main Causes of Downtime
What Steps Can We Take to Achieve Best-in-Class Levels of Uptime (97%)?
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Exercise 5: Continued
Step 2
Identify Manual and Walk Time 
Identify any Bottlenecks
Calculate Labor Requirements
Does this Labor Requirement Reflect what You Witnessed on the Line?
Do Opportunities Exist to Combine Work Units in the Value Stream Based on Labor Requirements?
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Exercise 5: Continued
Step 3
Map the Future State Internal Loop
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Worksheet 1
Uptime %
1. Are BOS charts being used?
2. Identify the main causes of downtime:
3. What steps can we take to achieve Best-in-Class
 levels of uptime (97%)?
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Worksheet 2
Standardized Work
1. Identify manual and walk time:
2. Identify any bottlenecks:
3. Calculate the labor requirements:
4. Does this labor requirement reflect what you
 witnessed on the line?
5. Do opportunities exist to combine work units in the value
 stream based on labor requirements?
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Worksheet 3
Map the Future State Internal Loop
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Report-Outs
Future State Map
Internal Loop
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Exercise 6: Supplier Loop
Step 1
Opportunities with Kanban
Are Parts Ordered Based on Usage?
Are Supplier Kanbans Being Used to Order Parts?
Are Move Cards Used to Deliver Raw Materials to the Work Units?
Step 2
Opportunities with Delivery Frequency
Can Inventory be Reduced with an Increase in Delivery Frequency?
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Exercise 6: Continued
Step 3
Opportunities with Containerization
Do Component Container Sizes Match Finished Goods Container Size?
Step 4
Map the Future State Supplier Loop
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Worksheet 1
Kanban
1. Are parts ordered based on usage?
2. Are Supplier Kanbans being used to order parts?
3. Are move cards used to deliver raw materials to the
 work unit?
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Worksheet 2
Delivery Frequency and Containerization
1. Can inventory be reduced with an increase in delivery
 frequency?
2. Do component container sizes match finished goods
 container sizes.
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Worksheet 3
Map the Future State Supplier Loop
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Report-Outs
Future State Map
Supplier Loop
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Understanding the Future State
Drawing the Map
Put Pencil to Paper!!!
Remember:
Start with the Customer
Include Material and Information Flows
Data Boxes!!!
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Report-Outs
Future State Map
(Putting Opportunities Together)
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Implementation
Making the Future State a Reality
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Continuous Improvement Cycle
Plan
Developing the Improvement Plan
Do
Support the Implementation
Check
Analyze the Results
Act
Standardize the Process
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How Do We Implement?
Break Implementation Into Steps
Customer Loop
Internal Loop
Supplier Loop
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Value Stream Mapping 
 
...How Do We Implement...
Develop Implementation Packet
Current State Map
Future State Map
Supporting Documentation (Standard Work Studies, etc.)
Value Stream Plan
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VSM001
Value Stream Mapping 
 
Value Stream Plan
The Plan Visually Displays:
Step-by-step Implementation plan
Measurable Goals
Clear Checkpoints with Listed Deadlines, Ownership, and Named Reviewers
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VSM001
Value Stream Mapping 
 
Key Points for Planning
Produce to Takt Time
Eliminate Overproduction
Pull Product Based on Customer Demand
Kanban
Point of Pull
Leveling
Establish Continuous Flow
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VSM001
Value Stream Mapping 
 
Outline the Plan
For Each Value Stream Loop
Establish the Objectives
Determine the Measurable Goal
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VSM001
Value Stream Mapping 
 
Plant Level Objective
	Goal				Measurable
Reduce lead-time	 	 9 Days to 4 Days
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VSM001
Value Stream Mapping 
 
Customer Loop
	Goal				 Measurable
Decrease Container Quantity		300 Pieces to 25 Pieces
Increase Delivery Frequency		2 per Week to 1 per Day
Finish Goods Pull System			1.75 Days of F/G Inventory
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VSM001
Value Stream Mapping 
 
Internal Loop
	Goal				 Measurable
Increase Uptime %			Best in Class - 97%
Establish Continuous Flow (0) Inventory Between Work Units 
 
Reduce Changeover Time		(30) to (15) Minutes
	
Internal Pull System			Production/Move Cards
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VSM001
Value Stream Mapping 
 
Supplier Loop
	Goal				 Measurable
Implement Kanban			 Supplier Cards
Increase Delivery Frequency		 4 times per Day
Decrease Container Quantity		 300 Pieces to 25 Pieces 
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VSM001
Value Stream Mapping 
 
 Date:
Yearly Value Stream Plan
Champion:
Plant-Level
Objective
Value Stream
Loop
Loop
Value Stream
Objective
Goal
(Measurable)
Specific Scheduling Deadlines
(
on Monthly Basis)
Owner
Reviewer and
Review Dates
1
Customer
2
Internal
3
Supplier
Product Family:
1 2 3 4 5 6 7 8 9 10 11 12
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VSM001
Value Stream Mapping 
 
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VSM001
Value Stream Mapping 
 
Exercise 7: Value Stream Plan
Step 1
Develop Value Stream Plan
Step 2
Discuss Roadblocks to Implementation
How Do We Eliminate Roadblocks
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VSM001
Value Stream Mapping 
 
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VSM001
Value Stream Mapping 
 
Report-Outs
The Value Stream Plan
(Putting Ideas Into Action)
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VSM001
Value Stream Mapping 
 
The Value Stream Team
Prepare the organization to see opportunities for improvement and turn those opportunities into reality
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VSM001
Value Stream Mapping 
 
Identify the Value Streams
End of the Chain
Completion of the final product
Next move is to the Customer
Move Upstream 
Identify the internal suppliers
Final step is supplied parts
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VSM001
Value Stream Mapping 
 
Choose the Model
Practice Makes Perfect!
Begin with the less complicated
Move to the more difficult
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VSM001
Value Stream Mapping 
 
Establishing the Team
Selecting the Team
Who are the people in the value stream
What type of resources are required
Function of the Team
Analyze Value Stream Together
Hold Frequent Meetings to Monitor Progress
Eliminate Obstacles Together
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VSM001
Value Stream Mapping 
 
Transfer the Knowledge
Start the Process
Current State Map
Future State Map
Developthe Plan
Check Understanding
Clear Up Confusion
Get Commitment
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VSM001
Value Stream Mapping 
 
Things to Remember
Benchmark the Current Condition
Dedicate the Resources
Monitor the Progress
Evaluate the Results
Celebrate Success
Continue the Pursuit of Perfection!!!
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VSM001
Value Stream Mapping 
 
Be
Impatient!
*
* Welcome the group to the first day of training in Value Stream Mapping.
* This is an improved method for identifying the value added content in the
 total value stream.
* Likewise, it helps us identify areas that do not add value.
* The final result provides us with the opportunity to apply ArvinMeritor Performance System tools to the waste that exists in the value stream and improve the overall flow of the product through our facilities.
		 Copyright©2000
	 ArvinMeritorMeritor Inc. 
*
Introduction of participants.
Process:
1. Master Facilitator asks the participants to introduce themselves briefly (with above information).
2. Go around room (stand up so everyone can see & hear).
3. Thank the participants for taking time out of their busy schedules to attend the training program. 
*
This slide serves as a high level overview of the value stream mapping training program.
1. Development of a current state map. The purpose of this section is to grasp the current condition of the value stream being studied.
2. Focus on opportunities to improve the current condition. This is the improved condition or future state map.
3. Point out the direction or plan to turn the future state opportunities into reality.
*
This slide serves as a high level overview of the value stream mapping training program.
1. Development of a current state map. The purpose of this section is to grasp the current condition of the value stream being studied.
2. Focus on opportunities to improve the current condition. This is the improved condition or future state map.
3. Point out the direction or plan to turn the future state opportunities into reality.
*
This slide serves as a high level overview of the value stream mapping training program.
1. Development of a current state map. The purpose of this section is to grasp the current condition of the value stream being studied.
2. Focus on opportunities to improve the current condition. This is the improved condition or future state map.
3. Point out the direction or plan to turn the future state opportunities into reality.
*
In 2000 our company embarked on a challenging journey: To double both our sales and earnings within five years. In support of this strategy, we set challenging goals in order to achieve Best In Class levels of performance. Achieving this high level of operational excellence is an imperative to our growth strategy.
Growth is by definition risky. Growth takes us outside our comfort zone. Growth tests both our capabilities and our resolve. But, not growing is simply not an option. Growth challenges us and brings out the best in us. 
.Grow our core business through market share at existing and new customers.
.Grow through providing full systems, not just components.
.Grow through geographical expansion.
.Grow through product extensions and extension of our core products into new markets.
(Now while each of these four may involve some acquisition activity, it isn’t the preferred approach)
.But we will also grow through adding new products and capabilities through acquisitions
Keep this in mind. Our primary goal is to grow internally. It provides greater rewards and entails less risk.
*
Along with this growth, we must also continue to reduce costs. We must reduce costs at the rate of at least $380 Million annually. The $380M figure represents the amount based on our sales level necessary to offset customer price reductions of greater than five percent per year, our own labor inflation, and to continue to increase our earnings at a double digit rate. In order to achieve these goals, we must continue with our Lean Transformation. To sustain competitiveness, we must become a Lean Company. Not just a company with many independent, lean manufacturing work units. Achieving leanness in manufacturing alone is not enough to reach the $380M per year goal in cost reduction. We must create a lean enterprise by applying the lean principles we have instilled in our production operations to everything we do within the company. Lean manufacturing alone will not allow us to win the race. We must bring leanness to all processes – production, engineering, value chain management, customer satisfaction, and administration. 
*
To date we have found success in implementing what we might call “keys to lean production”. We have introduced Work Place Organization, Just In Time Production, Six Sigma Quality, Empowered Teams, and Visual Management. One key to lean production that we must continue to stress is that of the “Pursuit of Perfection”. We cannot afford to be satisfied, and we must continue to find opportunities for improvement.
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Although we have done a great deal to aid in lean production, we must do even more to become a “Lean Company”. 
.A Strategic vision of what the organization is moving toward.
.Strong line management leadership (without its full commitment, failure is certain).
.Expert training and support
.Aggressive performance targets and tracking
.A high level of Impatience!!! (A sense of urgency second to none)
Implementing these Lean Company fundamentals will be vital to the accomplishment of our corporate goal. We must institute Leanness throughout our company in order to facilitate our pursuit of perfection. Although we must move forward quickly, the indisputable fact from our certification records is that “we are slowing down” and not reaching the levels of quality, customer satisfaction, and manufacturing excellence that we should be achieving.
*
We are an enterprise that understands lean practices and has lean capabilities, but we are far from being a lean company.
We don’t use these capabilities on a day in, day out basis.
We are better than many, but we are far from the best.
What will it take to become a lean enterprise or lean company?
What will it take to become the best?
The Answer is: We must develop a deep understanding of our processes at their broadest levels and not just continue to improve individual work units.
None of our business processes: Production, Value Chain Management, Customer Satisfaction, Product Development and Launch, and Administration are independent—in fact in a lean enterprise they are all highly interdependent. Working together they all add value to our company. 
*
We need tools to support the improvement of and linkages between these processes.
We need much more emphasis on processes and systems rather than functional areas.
We need a horizontal organization based on cross-functional teams and teamwork.
We need leadership at all levels and followership at all levels.
We need a renewed and unwavering commitment to the improvement of our human resources and their true and full involvement in the improvement of our processes.
This will require us, as managers, to not only manage, but to lead, motivate, and educate. We must embrace the belief that people can change when properly led and motivated, and we must commit ourselves to leading our employees to new levels of commitment and performance rather than merely accepting the status quo. We must utilize what we are learning in White Shirt to aid in the company’s strategic initiatives.
*
Operational Performance will determine our financial results. However, our transformation into a Lean Company is the key to successful operational performance.
Leadership is essential to our achieving this transformation. Leadership cannot be conferred by promotion or appointment. 
Leadership, like anything, has to be developed through training, encouragement,and opportunity. Value Stream Mapping is one of those opportunities to demonstrate leadership. Value Stream Mapping enables us to see our processes more clearly and broadly and to attack the opportunities for improvement.
As we move forward and become better leaders we all must help realize the company’s vision of becoming the standard or leader among automotive parts producers. 
*
We must become the ArvinMeritor of tomorrow “today
	We must develop:
a complete understanding of Lean Principles
commitment and discipline to live by these principles
a sense of urgency to exceed targets and deadlines
and a commitment to strive for perfection (Value Stream Mapping gives us the shortest route to perfection.)
In closing, do all you can to see the opportunities that exist within our operations. If we act aggressively on these opportunities, we will achieve our goals.
Thank you for your continuing commitment in making ArvinMeritor the leader in our industry. 
*
If Value Stream Mapping and the improvements generated can get us to benchmark inventory levels, ArvinMeritor’s inventory level will drop by about 40%. If you believe inventory performance is linked to quality and productivity, then they too should improve by 40%. I will save you a lot of calculations to determine the financial benefits of this kind of improvement because I have already done them. This level of achievement would reduce ArvinMeritor’s total cost by 12%…and that’s pretty exciting.
If the benefits of moving to the next performance level are clear to you, then operations can again be the catalyst to lead us where we want to go. In the process of doing this we should strive to become the manufacturing benchmark in our industry. Most important we need elevate this level of performance to give ArvinMeritor a competitive edge in the marketplace. 
*
Ask audience why they believe they are here. “What would be the purpose of learning about something called Value Stream Mapping?”
The vision has been set and the expectation is clear. Our job is to meet the challenges set before us. We need a good tool to help us meet those challenges.
*
Value Stream Mapping will allow us to take a new form of leadership. With the advent of empowered teams, new opportunities await management with regard to corporate strategy. We must become a lean enterprise in order to reach our company goals. Value Stream Mapping will be an important addition to our Continuous Improvement inventory of tools. We will learn to see the bigger picture within our facilities and ultimately aid in the company’s attainment of its challenging goals.
As we begin to see the opportunities, we can begin to establish plans that will allow us to act on those opportunities. By driving this change throughout the organization and enabling teams to excel to their greatest potential, we can reduce our overall customer lead-time.
*
To get things started off right, let’s warm up by getting into a lean frame of mind. How about some basics?
We can’t reach our goal of becoming a lean company if we don’t develop a lean frame of mind. Our success will be determined by our ability to make lean thinking and implementation a part of our everyday lives.
*
Ask for audience participation in quick discussions on waste. Remember Value Streams will aid us in fighting the source rather than the symptom.
As we develop our thoughts towards becoming a truly lean company, eliminating waste will become our number one priority. We will learn to acknowledge the fact that waste is only a symptom of a deeper problem. All of our efforts will then focus on the sources of waste and not the symptom. The result will be a never-ending cycle of continuous improvement. No decisions will be made that allow us to work around a problem.
In this training program, we will concentrate our efforts on three of the seven types of waste that exist in our company today. These are wastes associated with inventory, material movement, and overproduction.
 
 
*
Waste of overproduction is producing more than is required or producing faster than needed.
Examples would be producing 500 when the customer needs 450 or running components at a much faster rate than the assembly, if the component line supports only that assembly line.
Once we develop a method to find waste in overproduction, we will see opportunities in inventory reduction, better manpower utilization, and overall equipment utilization.
Overproduction means that we are not replenishing only what the customer has taken. This indicates that we are not producing to takt time. 
Note: Interactivity is key, we want to make sure that the audience is “thinking lean”
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Producing to Takt time is fundamental to a lean company. Producing to Takt time means that we are producing to the demand of the customer. We will find numerous opportunities when we have the tools to develop systems in our facilities that allow us to produce to customer withdrawal, or Takt time. The closer we produce to Takt time, the easier it will be to implement one piece flow in our facilities.
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One Piece Flow is essential to lean production: Reducing inventory and increasing flexibility. ArvinMeritor introduced opportunities to the work units to establish one piece flow. In many cases we can move product through the work units one piece at a time; however, sometimes we create problems within our work units by not balancing work and giving the appearance to the operators that they have to run more pieces inside the line at various points in order to meet Takt time. In order to implement and sustain continuous flow within our work units, we must take time to visit our work units in order to facilitate improvements in standard work and manning. In order to become truly a lean company we must send a clear signal throughout our facilities: We must work together to establish one piece flow in order to produce to Takt time and eliminate overproduction. The bottom line is that we must implement a true pull system.
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Pull systems are an efficient way to prevent overproduction. When a true pull system is established there is no means of moving or producing parts without a kanban card. The mandatory use of cards for the movement and production of product, will identify opportunities in manning, inform us when we are behind schedule, and ensure our inventory remains at minimum levels. Any inventory in our plants signifies an opportunity for improvement, however we must determine what levels of buffer are required to run the system. Once we benchmark our current requirements, we should work to decrease buffer levels by taking advantage of the opportunities that the pull system will show us. Implementing a pull system will allow the movement and production of material to become part of an automatic process. This means that we do not intervene with written or instructed schedules at multiple points in the facility. The true pull system will allow production and movement of material to be pulled from the process most closely tied to the customer.
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The Point of Pull, or POP, must be tied to the customer. A point of pull closest to the customer is essential for the attainment of a Lean Value Stream. Once we establish a point of pull closest to the customer, this will allow us to produce parts based only on customer withdrawal. We can now identify opportunities further upstream that prevent us from attaining once piece flow. These opportunities for improvement might come in the form of downtime reduction, standard work improvement to meet Takt time, or changeover improvements to increase flexibility. Increases in flexibility, small lot production, are imperative in providing the customer with only what they want and when they want it. 
*
Small Lots drive C/O Time improvement, thereby increasing our flexibility, lowering inventory levels…the bottom line = reducing lead time. As we begin to eliminate internal roadblocks,like lengthy changeover times, that prevent us from achieving one piece flow; we can begin to develop systems that level customer fluctuation and allow us to further reduce our inventories.
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Proper leveling techniques will allow us to reduce the effects of customer fluctuation in our inventory. What misconceptions may exist about leveling today? Probably the greatest misconception is the thought that Leveling is nothing more than taking a customer forecast and producing it equally over a period of time. This fails because there is no regard to what the customer is actually pulling on a daily basis. Leveling in the true sense allows us to use buffer stock in times when daily customer demand exceeds the forecasted requirement and the replenishment of the buffer stock is made when daily demand is less than what was forecasted. Take a look at this example, the blue line signifies the forecast the customer provided, the red line represents what the customer is actually taking, and the green line represents our daily production as we begin to implement leveling techniques. Notice that as the red line, customer daily demand, exceeds the forecasted requirement, we can still produce at a fairly even level by pulling from buffer stock. As the customer’s daily demand falls below the forecasted quantity, we are able to replenish what was taken from the buffer stock during times of high demand. This allows us to pull product through our plant, including from our supplier, at a level rate. 
*
Now that we are in a lean frame of mind, we can begin to discuss this training programs main objective: Value Stream Mapping. Before we discuss it in detail, let’s look at our company’s improvement history.
*
The process of improvement at ArvinMeritor started with Employee Involvement. This was followed by the development of Training Programs that continue throughout our organization even today. A good example is CROMS. To support our employee involvement initiatives, CROMS was developed to help all of us strengthen our coaching skills and learn to utilize all of the resources within our company. We also learned to practice our new ArvinMeritor Performance System skills on Model work units that helped develop our implementation capabilities. This was followed by the development of Certification Systems that included:
.ArvinMeritor Performance System Level One Certification.
.World Class Certification.
.Best In Class Certification.
This process was designed to ensure that we continue to build on our strengths and make continuous improvement a part of our everyday lives, which in reality, is the true key to success.
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Just take a look at the results of our improvement since the introduction of ArvinMeritor Performance System:
.Our defect rate to the Customer has improved by 91.3%.
.Scrap has reduced by 57.6%.
.Training hours per employee increased by 182.2%.
.The ideas that our employees create jumped 347.5%.
.Labor as a percentage of sales dropped by 36.4%.
.Work in process reduced by 91.6%.
.Changeover times decreased by 72.5%.
.Overall lead-time improved by 87%.
All of these improvements are a result of applying ArvinMeritor Performance System principles to the production work units in our facilities.
*
With the improvements that we have made in our work units, our lead time to produce has greatly improved within our work units. In most cases, we are talking about seconds to produce a single part. However, production work units only take up about 30% of the space in our facilities. So we have made almost all of our improvements over the last few years by focusing on 30% of the overall opportunities. 
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That means that 70% of the opportunities for improvement are outside of the production work units. We think it is very important to recognize where we have done a good job, but it is more important to know what the opportunities are that we have missed. Applying ArvinMeritor Performance System principles have improved the work units, but we have not improved the inventory between the work units at the same pace. Take a minute and think about your own facility. I think you will agree that movement within the work unit is very fast and very close to a one piece flow. But, between the work units the movement of parts is still very slow. In most cases, we are talking in terms of several days. Some of this waste has not even been removed after we made improvements to the work units. How many times have you walked back to the area in the plant where you ship your final goods to the customer and then walked back to each work unit that supplied parts to the final assembly, counted the inventory, and asked yourself why you needed those parts.
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The reason we ask that question is because so often we get caught up with the problems that exist only on the work unit, we forget to think about the total flow of the product through our plant. We really don’t take the time to investigate the opportunities that exist between the work units. Let me give you an example. About 60% of our work units at ArvinMeritor are world class certified. That means we have less than (4) days of raw material, less than (4) hours of WIP and typically (1.5) days of finished goods. That is a total of (6) days of material. However, our books show a total of (17) days of material. So where are the other (11) days? You can bet money that it’s there somewhere, but we are just not seeing it. 
*
This is a visual example about flow. Think about taking a gallon of water and pouring out the water in a steady stream. Suppose this gallon of water represents raw material from our supplier. What we would like to see as the material enters and exits our facility is a continued steady stream. Let’s suppose the first process in the plant is a stamping line. We will use a funnel to represent the stamping area with a (4) second cycle time. But , because the stamping line has a long changeover time, we start to get a build up of finished goods. The next process is a sub-assembly line that has a cycle time of (60) seconds. However, since we have downtime on the line, we keep extra amounts of inventory and the flow begins to back up in this area. Finally, the material passes through the final assembly line with a (60) second cycle time before being shipped to the customer. Because we have trouble meeting our takt time requirement, we keep extra inventory in this area and the flow begins to back up again. Imagine that the very end of each funnel, the small tube area, is the actual cell in our plant. The rest of the funnel represents the area outside the cell. You may have poured oil into your car before and noticed that the oil backs up as the flow is restricted in the small tube at the end. This is the same thing that happens to us as the flow is restricted in the cell. But that is only part of the point that needs to be made. As we are pouring the oil, we really don’t know how much to pour to keep a steady flow. It might be because we can’t see well under the hood. We are probably not seeing what we need or why we need it. So what will help us to see the opportunities?
*
This is the Next Chapter in the ArvinMeritor Success Story. Our opportunities for success will be determined through Value Stream Mapping. This concept is an extension of the concepts of ArvinMeritor Performance System. It will help us to use the same tools that we have in our toolbox, but apply them to not only the cell, but outside of the cell or the whole value stream. Of course, a great deal of the opportunities will lead us back to the cell, but it will help us to learn to ask some important questions such as:
1. Do we understand the true takt time requirements for all of the work units in the value stream?
2. Do we really understand the changeover time and the effects it has on other work units in the value stream?
3. How should we handle work units that produce on one shift, yet supply partsto other work units that work on both shifts?
4. What impact does downtime on a cell have on other work units in the value stream?
5. Probably most important from a general viewpoint, what happens between the work units and how does it affect the entire value stream?
What we really want to accomplish is to understand the impact of everything that takes place in the value stream.
*
Now that we understand value stream, or all the actions involved in producing a part, let’s take some time to focus on the concepts of value stream mapping. Value stream mapping is made up of (3) essential components.
*
The first component of value stream mapping is Establishing Flow. We often associate establishing flow with the movement of material throughout the value stream, and of course, this is one component of flow. If we walk out in the plant, it is usually easier for us to follow the flow of material. Inside the work unit it is very easy to follow the material flow. As we walk out side of the work unit it becomes a lot more difficult to follow the flow of material, especially when the material travels out of our sight. In addition to the material flow, there is another key ingredient in the value stream flow. This key ingredient is the flow of information, which we often have a tendency to overlook. If we took time to walk through our plants today and try to identify the information flow, we would have a very hard time. In most cases, schedules are driving our information and we can’t see how the information from one work unit travels to the next work unit or finally to our supplier. The flow of information should be clear and as visible to us as the flow of material. Information Flow and Material Flow are critical for us to understand if we are going to effectively run our business. It is extremely important for us to establish both of these as we see the value stream.
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The second component of value stream mapping is the Elimination of Waste. Elimination of waste is not something new to anyone here today. The practice of waste elimination is a key strength of this entire audience, which is evident with the results that we saw earlier in this presentation. But it is impossible to eliminate waste that we can’t see. We talked about the difference between what we report as inventory and what actually exists. This would be a good indicator that we are not seeing all of the opportunities. There is more waste in the entire value stream and our main objective is to identify this waste in the entire value stream and target the actual source.
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The final component of value stream mapping is adding value, the real reason for our existence! Once we are able to establish the true flow of material and information and identify the true sources of waste, we can begin to establish the vision or direction of our efforts. This will provide us with the flexibility to meet the demands of our customer. The final result will provide us with a reduction in our lead-times. 
*
Value stream mapping provides the benefit of helping us see the whole value stream through the big picture approach. Remember that we are interested in seeing the overall flow and not just the flow within the work unit. The mapping approach will develop our skills to fully understand the material and information flow throughout the value stream, and this will allow us to make more informed decisions about the way we utilize our resources to make improvements. It will provide us with the tools necessary to make reductions in our lead time by reducing inventory. Value stream mapping will also provide us with a method to expand the growth of our teams and enable our employees to work together on opportunities that exist outside their own production work unit. After continued practice and use of the mapping process, we will become stronger at managing our operations and the improvement process.
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Value stream mapping will help us achieve this goal because we will be better able to see the vision. And after the vision is clear, the mapping tool will provide a method for us to plan our improvements, communicate those plans throughout the organization, and provide us with a system for implementing our plans.
*
In order for us to identify these opportunities in the value stream, we have to first understand our current or actual status of manufacturing. That is why value stream mapping begins with the development of a Current State Map. The purpose of this activity is to make clear the current production situation by drawing the material and information flow. There is only one method that allows us to accomplish this task. We have to gather information from the plant floor. It is a great deal easier to just run reports that may provide us with this type of information; however, most of the time it does not accurately reflect the current situation. Besides, if we can’t see the actual condition first hand as it actually exists, we do not stand a chance of seeing the direction of improvement. Therefore, value stream mapping always begins with the current state map.
*
Let’s take a minute to discuss what we may find as we begin to map the current state. But, let’s look at it from another approach. Suppose we have a river that represents the value stream in our facility. In this example we will start with the supplier. Just before the supplier we have a dam holding back the river representing large amounts of inventory. This may be the result of poor delivery performance, large container quantities, or variations in the orders we send to our suppliers. As the water releases through the dam the material enters a stamping cell shown here as the narrow, fast moving part of the river. The material moves quickly through this area similar to the speed at which we stamp parts on the press. We may also find that because changeover times are high, the material moves very slow once it leaves the press line. The inventory increases due to changeover and becomes stagnant. This would be similar to the wide bend in the river where the water moves slowly. But once the material reaches the next process, or the sub-assembly cell, the movement of material speeds up again to a rapid pace. However, downtime in this area might be increasing the inventory to make us feel safe and another large pool is created in the river. As the material reaches the assembly work unit, the movement increases again to a very fast pace. But look at the pool of water before the dam which represents the customer. Large inventories are held to prevent miss shipping to the customer. However, we don’t really know if the inventory we keep is due to internal problems not allowing us to achieve takt time or fluctuations existing in customer demand. These are the type of things we want to see as we map out the current state.
*
Once we begin to see the value stream through the creation of the current state map it is easier to recognize areas of overproduction. However, a current state map and the effort required to create it are pure waste unless we use the map to quickly create and implement a future state map that eliminates sources of waste and increases value for the customer. The goal is to build a chain of production where the individual processes are linked to their customer either by continuous flow or pull, and each process gets as close as possible to producing only what the customer needs when they need it.
*
In the same type of example that we used earlier to depict our current state map, our future state might take this form. Notice the improvement points that we have made to make the flow of product more smooth. As we identified opportunities in leveling of production and the ability to meet takt time through improved cycle time, downtime and changeover time, these items that once prevented us from achieving a continuous flow are now minimized and the total lead-time to travel the river is much shorter.Wide bends in the river where product might become stagnant have become less of an issue. As you may recall from lessons in geography, the smaller rivers are known for the winding way they travel. The larger, more powerful rivers have less bends as they have continued to wear away the land that prevents their straight path and continuous flow. As a strong company, we have the same power to to eliminate those items that impede our ability to achieve continuous flow. However, we can only accomplish this task as we develop the ability to see the whole river. 
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All of the information completed to this point, the current state map and the future state map will lead to the development of the value stream plan. This plan shows:
exactly what you plan to do and by when, a step-by-step approach
measurable goals
clear checkpoints with real deadlines and named reviewer(s)
When executed correctly, the value stream plan will play a tremendous role in the overall optimization of the entire value stream. You might say it is our map of the river that prevents us from running ashore. Therefore, time well spent in developing the implementation plan will increase the probability of success.
Think about another example. Let’s say we want to take a trip from Columbus, Indiana to Detroit, Michigan. There are several routes that we can take, but we want to arrive at the customer before our competition. To make sure we get there quickly we drive on the interstate because we can move at a more rapid pace. The same pace that we move product through our work units. But at different points along the way, we have to get off the interstate and onto two lane roads because of construction. The traffic begins to back up and our pace slows way down. This would be similar to product moving outside of the cell. By executing the value stream plan, we can eliminate the construction, maintain our speed, and beat the competition. 
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Making the value stream mapping process work requires strong management support. Therefore, we as a group of management must be able to see the overall flow. It is imperative that we dedicate the time to really learn the process of value stream mapping to the point that we can actually teach it and use it in our daily interactions. In reality, management has the perspective to see the total flow as it cuts across departmental and functional boundaries, and therefore, we have to pull our resources to develop the vision of an improved, lean flow for the future and support the implementation. This will provide us with the opportunity to pull employees from different teams to interact and understand how their areas affect the flow in the entire value stream. As a coach, our role is to make sure that everyone understands.
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Understanding the management role of value stream mapping brings about the commitment to support the process. Constant efforts must be made to eliminate overproduction by producing to takt time, which means that we have to manage our operations around takt time requirements. We must have a firm conviction to adapt the ArvinMeritor Performance System principles throughout the entire value stream. And finally, we must understand that there is always a learning process of trial and error. In other words, we have to be able to accept the fact that we will go through the process of trying, sometimes failing, but most important learning. The final outcome will lead us to victory.
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The race against the competition continues for all of us at ArvinMeritor. If we are going to keep ahead of the pack, we need to find an easier way to see the opportunities. In closing, I would like to make a challenge to all of you here today. First of all, when you return to your plant, pick a product in your operations and walk through the entire value stream. Think about the things that we talked about today and see if you can identify the flow of material and information throughout the value stream. Take the time to ask yourself why the things you see exist. 
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The first few times you practice mapping in your facilities, you may find it difficult; however, with practice you will find it a very simple and effective tool to use. 
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In the packet you have been provided you will find a data set for a fictional company called General Exhaust. Please take a few minutes to review this material, and then we will begin to develop a current state map.
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When going through the mapping process, in order to fully gain an understanding of the value stream, we need to start with the customer. 
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In this exercise it is important for us to understand the information flow from the customer. This would include the forecast as well as firm orders. What we are interested in is how this information flows from the customer to the assembly line. In other words, what tells us to produce and move material to the customer. How do we understand what our inventory levels should be? 
Don’t forget to look for future opportunities.
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In order to fully understand the value stream, it is important to start at the shipment of material and walk back to the receipt of supplied parts. The objective is to be able to sketch out the value stream, which would include all of the data required to complete the customer loop. 
Don’t forget to capture the information flow.
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Hopefully this exercise provided us with an understanding of the current state of information and material flow. Completing this exercise allows us to see what really takes place from the time the customer orders a part until the time that we ship the part. This also helps us to see opportunities. 
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Our next step is to tie our customer loop to our internal processes. We want to be able to develop and understand the relationship among the internal processes.
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As we enter this exercise there are key items of information that we need to identify. This would include a complete understanding of all of the plant level processes in the value stream. In each of these plant level processes, or work units, we need to fully understand the takt time requirements, current level of manning, changeover time, work unit cycle time, total work content, uptime %, # of shifts, and available operating time.
We must also capture all the inventory. And just as important, we need to understand what information initiates production. Don’t forget to think about future opportunities. 
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If needed, it is okay to walk through the entire process again to refresh our memories. Remember the purpose of this session is to grasp information that allows us to sketch the value stream for the internal loop. The data gathered during this step will also be applied to the current state map. Think about the flow of material, but don’t forget about the flow of information.
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At this point, we have gained an understanding of the relationship between our internal processes. We have mapped out the information and material flows associated with these processes, and most importantly, we have identified opportunities for improvement.
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We will now work to tie our internal loop to our supply base. To do this, we must capture the flow of information and material.
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In this step we want to begin by capturing all of the inventory. To accomplish this, we have to understand the flow of information and material from our storage area to our work unit and from the supplier to storage. Most importantly we have to gain an understanding of what the raw material and component requirements are in order to meet demand. If we have considered the opportunities that might exist in the customer loop and internal loop, we will be able to identify many opportunities that exist in the supply loop. 
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As always, feel free to walk through the entire value stream. This always seems to make it easier to sketch out the value stream for the supplier loop. There is a great deal of information togather in this exercise in order to complete the supplier loop worksheet. Be sure to capture the information flow. 
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After the report outs, we will focus our attention on opportunities that exist for us in the future. The real benefits from the mapping process begin by looking at our actual condition and seeking out opportunities for improvement. In the pursuit of perfection, the only thing that is really necessary is an open mind and the determination to be better than we are today.
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Mapping the future state takes practice. We have to think about all the tools that we have learned from ArvinMeritor Performance System and apply them throughout the entire value stream. None of these tools are intended to work alone. They all have their place in the overall improvement process. The key to success is knowing how they interact to achieve the end result. 
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Let’s take a few minutes and review the example current state map we prepared yesterday. After you have had a chance to refresh your memory, we will begin drawing the future state map.
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Packaging is often an area that we have a tendency to overlook as an improvement opportunity. In fact, container size can actually cause us problems in manufacturing without us even knowing. In reality, bigger is not always better. Small container quantities actually provide us with increased flexibility and can reduce the fluctuations that we see in Customer orders. The end result is a reduction in inventory and the cost associated with carrying additional inventory. How can small container quantity provide us with such a benefit?
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The answer is in the time it takes the Customer to consume all the pieces in a container and the time that is required for us to replenish what has been withdrawn from our processes. This brings us back to the most fundamental component of manufacturing which is takt time production. The reason is very simple. Takt time sets the pace in our production processes to match the demand of the Customer. This is true not only for the time it take us to make one single piece based on the usage of the Customer. It is also true for the time it takes for the Customer to use a full container and for us to replace it. In the example current state, our takt time was 55.2 seconds. After we calculate takt time, we can study the affects that container size has on our ability to be flexible and the problems it can cause in the fluctuations of Customer orders.
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Let’s start with our own ability to be flexible. We can start by determining how long it takes us to produce a single container. If we take our takt time and multiple it by the quantity in one container, it will give us the total seconds required to produce a single container. If we divide it by the equivalent of one minute, or sixty seconds, it will tell us how many minutes are required to produce a single container. In our example, the time to produce a single container is (4) hours and (36) minutes. Let’s suppose that we produce (3) different parts on a single line and we have the capability to changeover in a single cycle or 55.2 seconds. If a truck picks up parts from our facility every two hours, can we produce every part number for every truck. Of course the answer is no, since it takes us over (4) hours just to produce a single container of one part number. In this example, our strength in changeover did not provide us with the ability to reduce our inventory, since our container quantity was so large. The smaller the quantity per container, the more flexible our operations become.
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If we were to reduce our quantity per container to (30) pieces, we could produce a container every (27) minutes and (36) seconds. This would allow us to produce at least one container of every part for each truck. We have just become more flexible in our ability to supply the Customer on a just-in-time basis.
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It should always be our goal to reduce the number of parts per container. After all, we are searching for continuous flow. As the delivery frequency increases from our Customer, the reduction in container quantity becomes more of an issue if we are to become flexible.
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What effect does container quantity have on the fluctuations in the orders that we receive from our Customer? This graph does a good job of illustrating the problem. Keeping our current state example, the Customer builds 1000 vehicles a day. Since our container quantity is 300 pieces, this does not allow the Customer to pull only the quantity they need to produce each day. To produce the required 1000 pieces on the first day, the Customer will have to order (4) containers or 1200 pieces. At the end of the day, the Customer has 200 pieces remaining. To complete the production on the second day, the Customer only needs to order (3) containers or 900 pieces, since the balance of 200 plus the order of 900 equals 1100 pieces. As the same pattern continues, we can see the fluctuation in the Customers orders. It’s really not the Customer’s fault. The Customer just doesn’t have the flexibility to order in smaller lots. 
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Now look at the reduction in fluctuation if the container quantity is only 30 pieces. The Customer now has the flexibility to order closer to the number of parts that will be built in one day. Check this example more in detail by doing the math.
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How does even delivery pitch provide us with a benefit? Even delivery time supports takt time production and helps us to reduce the amount of fluctuations in Customer demand based on our abilities to produce. The more frequent the Customer pulls our parts, combined with an even withdrawal or pick-up of those parts, a benefit of inventory reduction can be realized. It should be a common practice for us to encourage the Customer to have frequent deliveries at even intervals. 
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This slide helps to clarify the benefits of even delivery pitch. This example provides us with the delivery frequency, the times for pick-up, and the forecast quantity for each truck. Remember that the takt time based on demand is 55.2 seconds. However, the Customer is picking up our parts only 2 times per week and the time to replace those parts for each truck is different. If truck 1 arrives at 7:00am Wednesday, the time to produce or replace the parts previously taken by truck 2 would be from 7:00am on Friday until 7:00am on Wednesday. The time available would be 165,600 seconds. If the trucks take equal quantities, the takt time to produce for truck 1 would be 66.24 seconds. However, if we perform the same calculations for truck 2, we find that the takt time is much less at 44.16 seconds. Therefore, we have to hold additional inventory in order to ship the required parts for truck 2. Our best option would be to equal the time available to produce for each truck.
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One of the opportunities we identified in the current state was to develop a pull system of production. Production instruction was being accomplished through a push system based on production schedules. In order to establish a pull system of production we have to link the customer’s actual usage with our production processes. Meaning, we will replenish only what the customer takes. This provides us with the opportunity not only to produce exactly what the customer wants, but it provides visual control of the movement and production of material. More importantly, it points out opportunities. The overall benefits comes in the form of improved material control, the prevention of overproduction, and the reduction of inventory. 
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This example visually enforces what we have just discussed. Withdrawal of product from the customer is signaled through the use of Withdrawal Kanban. After the customer withdraws product, its replenishment is signaled with Production Kanban.
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Remember, in order to fully implement a pull system, our production instruction must originate from the point closest to the customer. In our current state example we were