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Value Mapping for Competitiveness Part I

Because of the constant increase of international competition through globalization of markets and a dynamic environment, producing companies are forced to increase their productivity and this at lower costs while rising quality. To strengthen their competitiveness and to cope with global mega trends, modern production systems have to be lean and flexible. To put this into practice, the methods of lean manufacturing are most suitable.

value stream mapping

The main principles of lean manufacturing, which bases on the work of Ohno at Toyota, are the increase of production flow, the elimination of waste and variability as well as the involvement of employees. By eliminating waste and reducing lead time, the productivity of companies, work in progress levels and the flexibility regarding volume and variants can be systematically improved.

To meet the claim of a holistic improvement on production system level, the method of Value Stream Mapping (VSM) was developed as a tool for the implementation of lean thinking.

The focus of this method is not on optimizing single (production) processes, but rather entire process chains from receipt to delivery of goods. An optimization of material flow systems is of crucial importance for the performance of production systems. VSM is widely accepted in industry and already established as a standard approach especially in the automotive sector. Projects to improve production systems require a comprehensive analysis of the existing value stream. Information on shop floor level needs to be collected, analyzed and interpreted.

value stream mapping tools

Value Stream Design (VSD) is the second step of VSM. Based on the current state of the production system, one or multiple better future states have to be derived. Today's production systems attempt to align with the Toyota production system (TPS).

This production system is considered as being an ideal system for the total elimination of waste. The basic idea of the TPS is the same as for VSD: the elimination of all non-value adding activities. The advantage of VSM is the capability of detecting waste and its causes. The latter can be located precisely by using process analysis and the offered graphical representation. The main focus of VSD is on the observation and improvement of the entire production system. Waste identified at individual process steps can be resolved by single lean methods such as “single minute exchange of die” (SMED) or "poka yoke" (error avoidance strategies).

For improving production systems with the VSD approach eight design guidelines are available (see Table). By following these guidelines, one or multiple future state maps can be de-rived out of the current state map.

Without the holistic understanding that VSM provides, any improvements made to the life cycle typically benefit one segment, often at the expense of another. A simplified example would show that if we simply speed up the development process, it will probably increase the backlog for testing and result in more quality issues that can find their way to the production environment.

The purpose of the value stream map is to expose opportunities and help prioritize. One major goal is often to reduce the cash conversion cycle from payment outlay to payment receipt. The shorter this time frame, the more working capital is available for investment, reduce debt, and allow processes to react or change much quicker.

This could also be a differentiator from your competitors if it enables a quicker response to new business. We all know that forecasts get more and more unreliable the further out they go in time, so a quicker process reduces the dependence on longer range forecast which reduces the risk of overbuilding or the opposite.

To be Continued ...

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