theWhole

Seeing
the,:;tl.rtdi:civaluestream
mapping

by

DanJones
JimWomack

':'e.'.c'c bvJohnShook
{
t
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t
 theWhole
Seeing
Mapping the Extended Value Stream

By Darr Jon€s and Jim \lvomack

Foreword by John Shook

An LEI Breâkthrough Guid€

THE LEAN ENTERPRISE INSTITUTE

Brooklino, Massâchusetts, USA
r ru/\^r.lean.org

Version 1.1
Februâry 2OO3
 F

}.

B
l

E
I
Wirhgrarirude !o DanJones's
colleagues
arlhe LeanEnreryrise
Reseafch
Cenref,CardiffUniversir!, ô
in pârticulnNick Rich,DaveBrunt,DâvêS;monsandMâtrhiâsHolweg,whohelpedpioncerexændcd
valuestream mapprng, ô

Àndwith furthergmtitudoto oufrovi€wers, (whobeârno lesponsibiliry

edilo$ânddesigners for
theremaininsfaultdrJoseFerfo,BruceHenderson, DaveLaHote,Graham Loewy,D^!e Losozn,
BobMorgân, CuyPârsons, AthâSioshânsi,PeterTassi,
Jeffîimmef, HelenZak,MariaElenaStophcr,
ûndThomâsSkehan of OffpisteDesign.

grâri$de,asâlways,
Andwith special !o JohnShook.

O Copydght2002Tbe Leân Enterpise Institùte,Iûc.

P.O.Box 9. BrooklineNIÀ 02446USA

\ c 6 i o r l . l , F e b t u â r2
y003
rsB\ 0-96678.{3-5-9

\ll rish6 r. rhe .ext ànd illùstrationsreseNedbr The Lcan

:r

il
-

a
a

Whenever therc is a product for a customer, there is a value stream.

The challenge lies in seeing it.
r- - Mike Rother& John Shook,Leamingto See

When you have leamed to see value streams in individual facilities,

itb time to see and then to optimize entire value streams,
from raw matertals to customer

-
FOREWORD
\\-hen rhe first irenrin rhe Lean Tool Kit, leafling to See'w^s latrnchcdin Juneof 1998,
$'e et I-El begancohearfrom mânagersin mâny industriesthat "this is the tool we hâve
bccn lookingfor." Readersquickly rcalizedthat the greatpowerof l-eafiing to Seelics in
focusingattcntionon the valuestreamfor individualprod ct familieswithin plants Rarher
than corrcentracing on isolatedprocesses âlongthe valuc streamor âggre€(ated âctivltles
servingmanyvaluestreams,reâdersco ld suddenlyscehow rc optimizelhe flow ofcâch
productfrom receivingto shipping.'l'hisinsight wasbreathtakingfor manymanâgcrs
caughtup in narrowtechniquesor lookingaconly onc acriviryit x complexsystem

As morc and more peoplehe.td àbort Ledtning to Sec.Jrd begât lo practicevaluestream

mâppiûg,wc bogancohoârof âdditionalneeds."Ilow can wc introduccconcinuo!sflow at
the processlevel within facilidesl" And, "How canwc cxpandthc scopeof \'âlueslream
mappingbeyondindividuâlfacilitjes ro the extendcdvaluestrcâmftom rnwmâceti'lsto
thc end cùstùnerl" Many readerssuspectedthât if there wasvàstn,da wi$in thc wâlls
of e^chfacility !hc.e wÀse'len morcnxudabetweenfÂoilitiesand firms

Wo hâdbcenrhinkingâboutthisissuelongbeforcJuneof 1998.lndecd'rhe initiâloutline

of Lednlitlgto Saedevotedequnlâtlentionrc mâPpingthc extendcdvaluestrcâm l_lowcvor,
wc knelv thât cxtendedmappingis morechallcngingthan faciliryJevclmâPPingând wc soon
conchclcdrhatwe would tecd scver,llPublicalions. In addition,wc rcalizedlhâl Inândgcrs
would do wcll ro honethoir sldllsby "lcârtin6ito scc" within â limited Ârcâbcforevcnluring
fbfth ro "soe the wholo",

We tlrereloreincluded^ diâ;gr^nin LearninSro Se?illùstrâtingdifferenrlcvelsof mî0ping

Wc've recentlyaddressodlhe proccsslevel with Mike Rothcrand Rick Hùttis' Crcating
Contitl ous Flou),Iù Seeingthe Wholewc tacklethc higher,extcndedlevcls

I \.
 Why is an extendedmrp hrrderto drarv? It's no! becausethe fundamental conccptrs
diflercnt. At crcn lcrcl of mapping,rve are simply observingand writing down ever,vsrep
in informrrion processing ?nd physicaltransformation for individualproduccfamilies.We
observeûe flol ofcrrstoIrrefdcsircsmovingup thc vâluc strcâm,in the form ofordersor
schcdulcs..rndrhcn obscrvcthc progressofproductsmovingdownstreâmin responsero
this inf(rnârion. from raw materialscofinisheditems.

Dxtcndcdrrappingis hârdcrbccâusewe needto map acrossplaût,divisional,and compeny

bounclrrics.ln addicion,we must paycarefulactentionto lhe variabilicyin orderand mâteriâls
flou's.Iinallrt rvc nccclcr)think âboutuûcângling,simplifying,and "right sizing" complex
logistics:rnd information systems, largefacilicies,
andhigh-scale processing tecbnologies
scn,ingnrrnv valuostrcâmsand opcraredby many firms.

Conducting extendedmappingaequires the cooporation of rnanydoparlmenr$ ânddivi$ions

wirhin firms ând Lrotwccnfirms.:fhesc oûtitiesrârcly link aboutthe total flow ofindividual
p(xlucts ànd often hide informâtionfrom eâchocherwhile pushingin oppositedireccions.
ln îddirion, exrendedm,lppingrequiresthat line manâgeas devotehard-to-spâre tirnc ro
diroct obscrvacion ofcâoh prcductfamily'svâlLlcstroam.Failing chis,highorJcvollrrpping
easilybecomes (or a consulting
â stâffexercise project)yieldiûgonlyânodrerreporrrbât's
soontorgottcn.

ifhcse additionaldimensions ofcxtendcdmappingtrLrlyarcchallengcs.

Ilowcvcr,wc havchad
considerable successin overcomingthem,iûcludingreccûtinstârcesdur;ngchepreplrarion
of rlrisworkbook.We now ârecertâinthât chânge-âgent mânâgerscânmeet thescchallcnges
ândwe know rhattime âlreadydevotcdto leârningto seeat the proccssând the facilitylevcls
rvill provcinvaluablers you cxpdndyouf field ofview

Ls with Learning to See,we hope usersofSeeingthe \Vholewill tell us how to improve

chistool ând will be williûg ro shâretheir experiences
with the lem community.Numerous
usersuggest;ons, basedon hands-oncxpcricnccwich valuc streammappingacthc facilicy
level, hâvepermirtedts to improre Ledrning ro Seeseverâltimessinceits first publicâtior.
We look lorwardto an intenseand continuingdialoguewith the lean commun;tyon Se?itg
the Whole^s'rell. Pleâsesendyolrr commentsând sùggestions to stw@leâr.org.

JohnShook
SeniorAdvisor,Lean EnterpriseInstitute
Ann Arbor,N{I, USA
\ Iârch2002

<r
I
I
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I
I CONTENTS
I Foreword by John Shook
l
t Introduction: Changing Your Focal Plane

T Part l: Getting Started

I
I Part llr The Current State Map

ll
Part lll: What Makes an Extended Value Stream Lean?
I

a Part lV: Futurê State I

I
Part V: Future State 2
I

!l Part Vlr The ldeal State

I
Pârt Vll: Achieving Future States
ta
I Conclusion

t
About the Authors
ll

t Appendix A: Value Stream Mapping lcons

Appendix B: Facility-Level Gurrent State Maps
I
Appendix Cr Facility-Level Future State Maps
I
INTRODUCTION
Changing Your Focal Plane

l.or ycârsrlow wc haveloved co "takc a rvall<"alongdre cncircvaluc srroamlirr it

givcl producc,lookinglor vâluotnd wâstc.We'vc donc this flr dozonsof proclLrcts
in mâny indrstricsnnd lbllorvedstreamsacr'oss rhc rvorld.\\'e presentcdour first
cxtmplc  Lean Thinl<lt8 (1996)whcn wc clrervtlrc path of a burrl)lo colirciLn.
'l widr only throcprurs(bdncl,tqr, and "pop-!op")trrvclcd:ll9
his simplcproducc
dâysthroùghnino ftoiliticsorvnedby six conrpanics in firurcountticsto Drogross
lrorr orc in thc groundincothc handsof droousrorrcr. Yct dLrring rhislongmâfch
only rbfcclroùrsofvâluor:roaring rvcrcporli)nnod
acrivirics tlndtlrc gfc.t nrliorit)
of the stcps- scoring, picking,paclting,
shipping,urrprcl<ing, llinning,chcching,
rcworking, andcncllcss movomcnts olinformâtionm manlLgc thc systcm's complcxity
crcacoclno valuc lt rll.

Looliingàt thc wholchasalwaysscemednarurelo us anddoingso will Lr[vays

suggestwaysro slashcostsrvhiledramaticallyimprovingresPoûsivcrrcss antl clualitr'.
Yct mosrmânâgers we havccncountercdon our \'âluc stroalnrvâlkswrtt aostân(l
in oneplaceandlool<at onlyonc point rheirmachinc, rbcirdepârtncnt,thcil
plânt,thcir fifm. Olieû, the mÂchinc,thc dcpârtment,the pl.lnt, rnd thc firm are
perlbrmingrvell on rraclitionâlmeasures- high laborand machineutilization,low
dcfccN,on-tine shipments- and drc mânâgers arepleasedwich drcir âchievements.

Horvever', whcn wc get rnanagers to changcthcir focâlplânefrom rbcil assctsand

ûcir organization to look at thc productitselfandwharis acruallyhappening on irs
longjourney,cbeyimmcdiatelyrealizechatthc pcrfor'rnance oithe entirc valuc
streanris ab-vsrnallysub-optimal.Indccd, most u,onderhow thel' havcworkcd li)r
ïcârs ir trxditionâllycompartmcntâljzed operationsand somchorvfailed to no!icc
the rlasteeleryr.hcrc.Then theywonderwhatthcy cândo àboutdle mcss.
 And that is thc big ch:rllcnge.Nlanrgcrsfind it easvand lun ro drar\ e\rcndcd
cu.rcnt stir!! rrlrps.r\ncl rhis is n cr;r;clrlfirsr srcp becaùscir raisesconsciorrsncss.
But pro\ iclingâ n)anagcmcnr rool ùat pcrmirsthe wasre!o be rcmovedpernrncnrl\
bv achieling succcssive futurc smreshasbccn much hârder.ft $ras{rnlyrvhenrvc
tirst sal. \like Rothcr ând John ShooJrdrarvingfurure statevrlue streamnaps ar
ûe tlcilitv lcvcl and couplingdresemaps ro ân accionplar for inlplemertâtionrhâr
wc bcgiù tr) scc ho\y we mighc guide groups of rnanagcr.s
- 1br all cxrcndecj vajuc
strcans rrc slrareclâcrossmarv dcpartments lrnd fifits tou,ard siûrijar rcsulrs
for cntire strcams.

In this brcal<chlough guidc rve presenrour method.It ploposcsa progression

thft)Lrshrwo "lirturc states"to lrrr"ideâlsrarc"afrer rhe curfcnr stutc is joinrly
irlcntiliccland agreecl.'l'hcfirsr lururc sratctvill bc rclrrivelycasvand crcxtcsrhc
'l
sottinelof chosccond. ho sccondfilrurc statc is oonsidctublyhâ(lcr anclrcîchirrg
É{ rhc idcrl smtc lvill roquirc r nraior cornmitrncnr bv âll dtc firms touchiù!i rhc producr.

t{
Yct rve bcliovo rhat thc sxvingsin ciùrclLndetlorr and rhc irnprovcmcnrsin qu.rliq,
rrtovcry stcp will oncouragctornls to l{ocl)going oncc tlrcy lc.rm how to joinrly
|{ opci,rjzcthc shrfcd strctm.

{
l,)vcnnrtlly,widr sonrccreârivorhinl(ingîbour pfoccssal(l infbrrrariol tcchnologicr,,
r- wc bclicvc thrt mosr vllluo strcârrscân bc co|nprcssod xnd snroorhcdro r poirl
whcro I lrrgc fiacrionol thc oliginelstcpsand pr.rcriclll_v ell ol thc rh(rughpur rinrc
'ai 'l'his
ârc clilninllrocl. $,ill bc a n uc rcvollltionânclthc vâlùc srroarnrcrn gorring
thcrc first vill havc an ovcrwhclmingcompcritivcedvîntegc.N,lor.c iùrponrnt in
most câscs,thc tcnm gct.ing strr'!cdfirst xnd nral<ingrbc quicl<cstpr.ogrcss
irlong
{
tlre pxth will htve a continuing compcririve âdvânrage.
al 'l'hc
l<cy is ro summon your coutLgc! form yolrf closs-clcprr'tnronttrld cfoss,oon.\pllnv
tcirm,ând changcvourfocnlpl.nc t() focuson rhc frodùcr. l bcn lcarn to scc rhc
rlholc Ând ... gcr going to tâkc ou! lhe wâsco!\!b rvill bc urging yolr on and wâiting
ro hearrboutyourproblcmsand succcsscs,

D'.rn.Joncs ândlim W)mack

Itoss-on Wvc,IlcrefordshiLc,
UK
rrr\dIlftx)kline,
NIA,USA
ir \lrrch 2002

t
t
What is Extended Value Stream Mapping?
- bothvaiue,crcaring
An extendcdlaluc srrc!Dris simpl\all ofthc actions and
'lvâsteîul requircdro bring a producrfrom rarvmatcrialsinro rhe ermsof the
customcr.Thc relevan!actionsto bc napped consisrofovo flows:(â)ordersrraveiing
upstreâmf(nr rhc clrsromer(or from the sâlcsdcparcment
when forecastssubstitute
fof conilrmedordcrs)âncl(b) producrs
comingdownrhc vâluestrcamfromrarvmareriâls
to crrstoncr.lbgecher
theseconstitutc
a closedcircuitof rlcmandandresponse.

Vdhlcstrcanlmdppingis the simpleprccessof directly obsetltingthe flows of

infarnt.ttbll afid nate als as they now occur,suklmdrizingthem uisually,and
the e uisioningd future stateu./ithm ch betterpelformdnce,

Nhps of thc cxrcndodvâlLrcstrcamcanbe drâlvnfor productscurrenrlyin prodLrcti()l

or li)r fLrrrrcproductsbcingplanncd.'l-hc
only differcnocis ftat the "cuLrenr
state"
nrlp li)r l p()ductin production
showsconditions astheyexistt<xl^ywbilothc
"currcntstltc" nrlp for a Dowproductshowsd1c"lTusiness asusual"approach co
mrliingrhc producrcompârcd wirh îkcrnncive"fu!urescatcs" ârd "idcâlstarcs"
with losswilstcdndgrc{tcrfcsponsivcncss,

Selecting a Product Family

'1
hc \,holc pointoi vâlucsrrcarrmappingis ro disâggr'cgâtc opcrârional issucsco
thc lcvcl of spccificprodLrcrs,
wherethey câDbc morc casilyacteclon by nanagcrs.
'Ib
do thisyou nccdro stârrâcchcfurrhcstpointdorvnscrcarn (corvard drc customcr)
n) l)c Duppccland to definepfoductfâmilicsat rhârpoirc. 'I}pically
â producrfâmily
ivill inclu(lcr groupof prodrrct
variân$plssirg chrough similârproccssing sccpsand
usingconrrnon equipmenr juscpri(r ro shipmenrto rhc customcr. For example:

. In r powcrtoolsbusincss, a producrîanrilymightbe mediurn-sizcdclcctric

drillsut;lizinga commonchâssis andpassing throughâ commonasscmbly cell
as!hc l?rstmrnufâctlrring stcp,eventhoughthe fin;shcdproducthâsmâny
diffcfcnt fca!urcsand cusromerlâbels.Alcernatively
rhe mâppingtcam might
deline drc prtxlucrfamily as e mororgoinginro thc medium drills ând mâp
backupstrcamf.om thatpoinr.

. [n the eùroindusrr]!a prciuct lamilymighrbe â carplârform(e.g.,lord Expltxcr

ândN,lcfcur\\lounr.lineer)produccdin ân assembly plânt.Ahe.narivelv ir mighr
be a najor comfonentsuppliedro âutoâssemblers let'ssry an altcrnaror -
usinga conn'\ondcsignr.chirecrure
àndâssemblcdin a cell,but \\.ithvaning
poweroutputsandNith differenrarrachmenr
pointsfor diffcrcnrvehiclcs.

PAFT: GETTNG STABTEO

. In drc âerospece industry a productfamily migh! be cn cnrirc airframe
(e.g.,the Boeing737or AirbusA320).Alternaril'cl)lit migh! be e mâjorsub-
asscmbly, cail.The sub'assembhnlâ,vhavemany
for examplethe r.ercical
varianrslor differentbùyersofrhe completedaircrâft.l'or exemplelhe tail
structuremight incorporate differontâcriâlsand fairingsfor na|igationand
commùnication equ;pncnt.Aûd the productswithin drc f?mil,\chosenfor
mappingmight difler slightlyin dimensions.For exâmple,the bâs;ctâil
designmight be slightlylongerfor useon a stretchedairframe.IIowcvcr,
the vcrticaltàil clearlyconstitucesâ productfamily becalrscall v.rianrs
lollow the samcmanufacnuingpathand havcno commonalitywidr ta;ls
lof otheraircraft,even;fthey arcmadein otherareasof thc sâmefecilities
by the samefinn utilizingpanslrom the sanrcsupplicrs.

Note dracthe sameprcdùcrfâmily mây be suppliedto â nLrnberofdifferent

end customcrsând havecosmeticdifferenccsctusinglhe casualobscrvcrto
overlookproducrcommonaliLy Nevcrûelessfromthe scandpoinr of$c firm or
fâcility ar the dolvnsrrcamend of the mdp, ùe pfoductis cleàrlya fâmily.

Norc alsofrom chechart below thÂtfirms alongsimilarvalrrcstrear'nsoften

havccomplexrelârions lvirh cachocher.Dehasupplicssimilarcomponents to
both Sumrnaand Zenidl; Omegâîâbricârcssimilarpartsfor I)cka ancl
Azimuth;andIllinoisStcclsupplicsmatcrials to "fhccâândZctî aswcll às
Omega.Exccndedmappingcuts throughûis clutlcr to focùson just onc
s(eamin orderto rhinkofimprovcmonts tlratcanevcnnrallyapply
to allsneams

Zenith Dèlta
P l a t f o mA - . - . - . - , * . *

_______-__/ \,
a
3
z Product Families from Summa's Perspective
e
-

-a

rl

-a
t;;-l
ra t**'l
f.---* I

llccauscthc productfamilyis dclinodfiom cbcv.rntrgcpointof thc finâlstcpm{ppcd,thc

concepris cssontirlly cânclcfincproLlLrct
"fiâctÀI".'lhît is,,\,ou fâmilicsfrommlny stantng
poin$ înd màpbâokward up vâlucstrcams of varyinglcngths.Irot cxâmPlc,whà!âppeârs to
bc a productfamilv l'rrrrn rrmlturc manttfacturcr (lxrgearmûtufcsfbr àlternâtors)
is simply
oncof mânycomponcnt prrtsfb. an altornttorProduccr (whomightdefinea pioduclfâmily
âslârgealternanns).And the largcrkcrnâtoris just onc cornponentamongrnanyfrom thc
stândpointof rhe âutoâssemblcfwho defincsprodLlctfanriliesin tcrmsof vehicleplalforms.

As you selectyour startpoint and movc bâckopstre.lm,ir is b€stfbr your first mrp to l-ôllow
chepachof a singlefamity and x singlecomponert in the produc|.This is becausetbe first
obie.tiueof et tefided.mappingis to achieue4 breakthroughin sharedcotts.iousness ol
aaste and.to identib systetuati.opportunitiesfot elimindtinSthe uasle. It is highly likôly
thar ûe wastesident;ficrlby followingone comPonentbackuPstreâmwill occurin roughly
cqul meâsure;n evcrycomponentgoinginto the finishcdproduct.The altcrnâtiveâpproach
-l goinginto the productis time consuming
of mâppingthe vâluestreamof cverycomponent
- and costlyand we hÀvefound thât it overwhclmsmanagerswith t()omuch daca

-l In subsequentroundsof mapping- ifthe collaborators in the mâpPingproccsslind ways

-
to work togethcrand achieveuscflrlresults additionâlmâpscan be creâtedfbr mâny or
âll oîthc componentsand partsgoinginto a finishedproducr.B t to get stârted,keÉpit
- simpleand foc s first on âch;evingâ breakthroughin raisingyour team'sconsciousness!

STARTED
PAFTl: GETTING
 ManaseabreFierdor view
l:T-l,Tl"'"?
rnc rdexi,nirpwould"rrulv
sho$, ,1.h",
r'e whole.
nro u\esor (onsumes ir, i, ,oi .ru;,f,rhe end customef
rhe proLlucr, "uu,fa
fhc t"o world then follorv
up rhc valucsrrcamco."t"""* the prodLrctali thc u,ay

:ï:11..^
productl partsbâcl(upstreaD]
'" ,ii
.;
ï1*.,.";;;;;;;;;i:j:ii;:l:ii:j::l,JiJïjï:ii:;:,
is ovenvhc rrling to secro" fir rvrtlly,,sr
vrsronrnaybc fruirloss.w. uar.i"" 111nsn1
nou;".'lirA' that a lot
one or cwolàciriciesan. o; can bc lcarncclbv k,oking
- ,,;.;;;;;:::Ppers
"'-"'"''" whcrcvcryou start 'fltis is
scopcofcxtenclecl nrapp;n* "on1 rircmininrurr

Singf e Facility Field

of View _ Learningto
See

t**" I

fJ-=nii;-
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' I , Ô o r l r(ëti/':I
@/î\rùË

trt*=s
|:i;.+.='..rl
f --hn l
F-æ:a Ln

|-
 Even ar dris minimum scopc,note thât the scâleof mâpschângesdramâricallyber\\een
Leaffiing to See(facllitylevel mâps)and S?eingthe Vhole.The facility boxesrhat are the
primaryunitsofanalysisin this breakthroughguidearethe samesizeasthe indiv;dualprocess
boxes("stamping","welding","assembly")in Leatning to See.y^scexpânses of peoplcând
equipmentwithin facilitieshâvebeenshrunkinto cinyboxesso we cxn seethe big picture!

ln this guide,we will drawmaps\r!.iihan intermediatefield of vierv,scartingât the d;slribution

centerfor checompletedproductand proceedingLrpstreâm to râwmâtcrials(e.9.,rollsofsteel).
.-l lior thosewith more ambitionand with full cooperationfrom upstreamfâcilitiesand firms,
it is bothpossibleanddesirableto smrtncâ.the cnd cusromc.ârd rvorkfâr backupst.câm
towârdrâw materials.
-it

Muftipf e Facilities Field of View - Seeingthe Whole

,rt
F "1&tc
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i;;;i; rgill Ë
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Choosing a Leader and a Value Stream Team
\\Je hopc Lhatvou ârc experienced with facilityJevel mapping as dcscribe'.1inLearntng
to S?eand hâve lppointed value slrcam mânâgcrsfor âll of dle value streams\\,ithin
,volrrlàcilides. \Ve âre convinccd thal this is critical to gain the full benefir of rrapping
ât the fâcility level. What's morc, thc knowledge of lacilitvJ evel valuc strcarr managcrs
rvill be invaluablc îrx <luickly drâiving accurale mâps of rbe cxrcndcd vxlLrestreâm.

Llowever, by their namfc, cxtcndcd mâps crosslàcilities and firms. Supposc mânagcrsârc
in placcfor rhc scgrrcntsof the streamwichiî exch fâcility Who hrs thc responsibiliry
tor direcdy rnanagingrhe rotal srrcam acrossfirms, to ccllrtect the maps ând lcâd tho
'I
irnprovcnrcntprnccss? hc rcrlity in mos! câsesrviil be "no onc". So lhcrc is â noed for
n ncw typc of mxnxgcr r4ro wc will call thc "Ploclucr Lirrc NlunrLgcl' (PLl\'l).

The Product Line Manager

'l'his
in thc nrostdownstrcamfifm ncodsto bc much rnorcdran a rcchnrcran
indiviclLrrl
concomcdwith onc lircility.Inclcccl,loro1>tirnrrlrosultsthc l)llxlLrctLinc NJânâgcr nocds
'l'his
to l)c â l)usirlcssman.go.. nrcrns "busincss"in clrcsonsoof ttking rosponsibility
for'rrrl<ingrroncy rncl growirlllm.rl<otsbâr{-, fiLrrilyin (lLrcstion.
!vith drc proclLrct AnLl
it rrcarrs"menegcr"in thc scnscol'looliingconcrctclyar drc prcciscrctiors thât ncocl
co l)c râkcn âll alongrhc vrluc strcàrrrto rcrllovcwâstc and costwhilc impfovingqLrâlity
anclrcsl)onslvcrlcss.

'I'hc
finns wc hrvc cncountcrcdusingrlrcsctochniqucshûvc l)f(xluct
mosr succcssfirl
Linc iVlanagcrswho think âbolrt produci marlieting and enginccring âs wcll âs production
and purchâsing.Wich âll tbe elementsof mârkccing, dcsign,production,ând sùpplychâin
Lrndcrhis or hcr oversight,$is individualis in â Lrriclucpositionto judgc thc porl'onr,rncc
of thc many funoions n)uchingùe prodùct.Indr:ed,as wc \vill soc in a momcnr,I
continuing âssessmentollunctional pcrfo|rnancc âlong *,ith precise prescriptions fof
improvcmentis one oi thc most importàtt benefitsol prodnctlinc mânâgcmcnt.

Ilowever, we do rot usuallyrccommcndwhât is sonednrescâlleda "product tcrm

strucnrre in which all of chc cngineering, operâtions,purchâsing,and ntarltcting
employeos supporting the product are put on a dedicarcd tcâm. I)oing ùis cûusesrr
\Iill
disruprionduring thc trnnsitionatd this srnrc!Lrrc
largcarnountof organizâtionâl
Llocsnot âcldressthe behâviof of upstrcâm ptrtner irms. Whet's nrore, it is rc.rlh not
necessaryin most cases;f thc PLNI tâkes an energetic eppfoâch ro thc job.
=l
=

iI
=
Pcrhapsrhc bcsrkno$'nexampleofwhât we are telhingabourin the
=
manulàcmringworld todayis the Chief Eûgineerlor a car placform
= et Tovota(a job positionalsocaUedthe shasa).This individùâlis
\r idel)' known by everyonein thc companyand takcsresponsibility
lbr the successof cheproductin rermsof return on invcstmentand
markecshare.Yetthe ChiefEngineer,Iikc our proposedPLM, actually
hasro direct âuthoricyovermarketinpl(which is done by a large
markecingdepârtment),overenginccring(which is done by the
vâriouspartsofthe lârgeengineeringdepâr|ment, overprodncrion
(which is done by the operâtion$deparcment), aûd over suppliers
(who âremanâgcdby chepurchasingdopartmenqand ùo production
controlârd lo€(isricsdepârtmerr.)Insteadrhe Chief Engineer,working
with â tiny groupof assistânrs, is the one personwho can"see chc
lvhole"ând thinl<âboutthe neccssâ.ycontriburionsfrom every
fùrctiorâl acciviryând everyupstreâmfirm |o creâreâûclclclivor
a succcsshrl productasjIdged by the end customcr,

T'he Pllvl in chemostdownscrcam firm will be evon mofc effeclive

if thcrc are similarindividualsin eaclrof rhc upstreamfinns so rhâl
for anyproducta quickevaluation canbe conducred by â srnâll
groupcomposcdofone PLNI pcr firm.

But this is not likely to be dro câsc.Indeed,in roday's$,orldvery

few firms havetnre PLMs. (One olour concemsin preparingthis
breakthroughguide hasbeeûthat the very mânâgersmoscable to
bcnefit from it don't currentlyexist ir ûany firms!)T'huscogct
starccd,someonefrom onc of the functionalareasin rhe most
downstreamfirm will probâblynecd to rakethe leâdand aim to
achicvea breakthroughin consciousness. This individualprobably
will hâvelittlc formalâùthodtyfor overseeingthe valuesrreâmând
will thereforeneedto leadby exâmpteand by raisinghopcsabour
possible joinr gàins.

We cant guarentee rhatanyoncanywherealonga valuestreamcan

succeedin ràisingcvcrvparticipant's consciousness
to transformrhe
entircsûeam.\\e cànguârântee lhat anyoneân)'wherecanrâiscrhc
= importântissuesand mâkcconsr.ucrive chângea possibilin rvhercit
waspreviously impossible... ifrhcv hâre!he courâgc ro acr.
 'll
bc successful,
the mappinglcaderncedsto be somconewho can gain the rcspect
of upstreamparrncr.sby conducring â rigo()Lrsând fâir proccss.Log;câl canclidâtesafe
lion1 purchasing,produclioû conrrol, logistics,operad(nrs,or â proccssimpro.r,cnlent
function like cluality or processcnginecr;ng. Anv ofthcse can rvork. I Iorvevcr,
âssignirg â buyer fiom purchasing ro be a rrapping Ieaclcrcan lead to prr)blems if
upstrcampâfticipantsbelicvc drât dtc real purposcoimapping u,ill be to Uncovcr
ryasrcât suppliers,firllowedby denands for immediarepricc reclucrions..I.h
sa
purchasinglurction wiil probablyneed co âssignmâppingleadcrshipto somconc
iiom its supplierdcvclopmcnrgroup ;f all prfticipantsîrc ro be convinccdrbâr rh,
processis fâir,bnlânced,and airrcd ac wirr-rvrn-wrn
ourcomcs.

The value strcam tearr needs ro incluLlc reprcscntarivcsofâll the firms anclfacilitics
th:rrsharcowncrshipind rnânlrgomcnr of the srrcam.ldcaliy,it rvouldrlso incluctc
lhc rclcvantdcl)ârtrlcnrs\rirhin otch fifrrl - salos,opcretions,prtxlucri()ltcontrol
dnd logisrics,pufchâsing,mtnufâcruringcnginccring,inlbrmationrnânit!(cmcnr, and
pfoduct cngioocring.lloi.evcl this can maho rhc rctrr too hrgc to rvrlli
rhc v.rlLrc
strcânltogcthct rvhich is ofton I crit;cllllcnming cxp{jricnco. I.hLrsw{j gcnorrlly
Lccollrmcnci â sntallrc{m widr N ntiniInrrm0f onc rcPrcsorrrarivr: conrl)rny,
'l l)cr
hc coar'n
can qucry thc firnorionssLrpportiogrhc vrhc strclrn ds ùcccss:tfy
t<)fill
in missinginlormation.

The Wrong Role for Consultants ahd Staffs

An understandable inclinationin anyfirm with busylinemanagers
- and this surelyincludesprâcticaily all firms_ is to deleqâte the
tàskof creàtirgvaluestreammapsto outsideconsuhanLs or to
internalstaffgroups,typicallyin operations pranntng or process
improvement departments, However, in our experience this is
masguided,lhe findingsof the consultant or staffexpertâre
rârelycredibleto the managers who needto takeactionandthe
consciousness raisingexperience of walkingthe valuestreâm
together* discovering the wasteândjointlyagreeingto a cross_
-
firm actionplan simplyneverhappens. A beautifulreportis
pfoducedby the consultaôt -
or staffteam ano In our expeflence
the beautyand precision of the mapsis generallyinverselv
proportionâl to theiruseflrlness-but the findinosarethenfiled
awayând soonforgotten,

Rêmember: Onlymanagers takingclearresponsibility

canfjx
the mess,So the samemanagersoughtto drawthe maps.
iI
z
z
z Taking a Walk

z Once dcsignâred,thc leâderand rhe rcâm reccl ro takc a \l,alk rogcrher

.rkmg dre valrresrreân, dralv thc current staremap, ancl drcn âsk, ,,Which
steps crcâre vâlue?,Which sreps ârc waste?,Wh,v is order f10rvso erraricl,
Wh! is qLlalitv so c|raric?,Why are dcliveries so erratic?,Irlow can vâllrc
bc cnhanccd for thc cnd-clrstome.l',
a Oûcc the map is d.awn so d)ât thc curreit srâreof ân existing value
scr'carnis knolvn prccisel)! it's time to creâre thc first of two .,1uturc
stâtc" mâpsthxc rcmovc wâsredstcpswhilc srabilizingproccsses
înd
sirrplifying information flolvs. Fururc Srale 1 ach;evcs rbe futurc stÂre
sho\\n in Lealning to Saervithin cach ilcilitv touching thc product.
!a! This mcnns introducing continuous flow (as d csctibcd ii Creati g
Continuous Flow) wllcrcvcr possiblc xnd instjtuting smoorh, lcvclc(l
lal pull bctwccn tho âroasof condnuoUs1low.

- liunrrc Stacc? thcn inrocluccssnrooth,lcvcloclpull wirh

il ticqucncrcplcnishmcrltlml)s borwconovcry firciliry
touohingtho pf(xlucr.In the proccss,most
warchousosâre climinatecl,or convcrtccl
ra |o crossdook opcr{tions,

Ao ldcrl StarcDl1yrhcn co-hoarc

lvt
{

I
âr onc sitc dll of the rcriviticsrcquircd
to pfoocodfionr râw rrltroriîlsto lirishcd
goods,in dle proocsscliminating practic.rllv
â11rrânsporrlinl$ ând needslor inlofnrârion
JN/
{

Yru rnayor rnavnot find ùis parricùlafscqucncc

appropriare lbr your own value strcams.ln pârriculâr, if
IJ\
vou ûre mâplrng 1incw vâluc strcamfor an entirclv new prodùca
,\'ou$ ill D.obrblywânr ro sl<ipdifccrly from checllnont (busincss_
as usurl) s!rrc to in iclcrl stare.Wc folloù rho rhree-srepseqÙcnce,
= bcgirning rridr l.'unrreStxtc I. in this breakthroughguide becausc
wc bclio c rhrr rhis is likely ft) bc rhe mosr typicâl.rppn)âch.

PAÊ'I CETT N' STAFTED

Two Final Benefits

A Diagnostic for Functions

Asteamsdrawrheircurrcntscate
valuestreammaps,theya.clikely!o makeâ surprising
discovery.
Moscproblems idencified
âlongrhevaluestreamwill !€ce directlyro the
peaformance - inlormation
ofvadousfunctions tochnology,
production control,logrsucs,
productengiûeering, purchasing.
operatioûs, What'smor.e,
rveaknesscs in funcrional
performâûccdiscoveredin thc samplevaluescfcamwill alnosr cefâinly be prcscnt
in evcry orhervaluestreamthe finns touch.In our expcdenc€,the lùncrionswant to
supporrtho vàluesrrcamfrrr eachproduct.But ùey havea hârd cimes€eingthc
connectionbet$icentheir acrivitiosând the necdsof the product.

Thus an importanrbencfit of the mappingproccss- in addirionto a brelkrhrough

in consciousncssâbourdle magnicude ofwâstcândlhe enormoùs oppornrnitics for
improvement - canbe to givcmùohcleârerguiclancc to eachfunoriondbourits rclc
in supporringvaluesrrcu\\s.A real bonuscdn be achieuedif the improuedfunctional
petfoflûancecan thefi be applied to all ualues*ealhs utithin the pafiicipatingfirms,

A Diagrrostic for Relations Between Firms

As teamsstartmapping,they arc likely comal(cyet ânochcrdiscovery. -lbday
wc âll usc
languagestressing partnership andcooperâtion hcrweenlirmssharingvâluestrcâms.
Howcver,mappingtcamsir mosccâseswill discovcran enorrnousgap bctlvccnthcsc
highJevelprinciplesofcollaborationand cheday-ro-dâyreâlitydown ar rhe Ievelof
eâchvaluc streâm.If the valuestreammap showswidcspreadconfusionand coùnær-
producciveaccionsbetweenfirms ar dre valuc streamlevel, it will be obviouschat
"partncrship"ât the rop isnrttmnslating
into compctitiveness âcchcbotcom.

lortunately, valucsrreammappingprovidesa clcarand consistcnclanguâgefof firms

to startan intelligentconvcrsarion with câchother âboutthe rootcâuscsof rheirshâred
cost,quality,reliabiliry responsiveness, and communications problems.(lndccd, \[,e
believea relentless,fine-grainedlocuson improvingeachvâluestrcam,ratherrhân
high-levelagreemcnc on principles,is what hasgivcn Toyoraits edgc in creatiûgùc
world'sleanesrsùpply base.)A real bonuscan be a.hieuedif the ptuctical lessonsof
sharedultluestteammanagerneht can thefi be applied by eacbfiïm to its rcldtions
taitb its otbel customersand suDDliers.
t
F
t
z
z
z
The Current State Map
With rhe basicprinciplesof extendcdmâppingin hand,it's time to accompanya value
strcxmteâmcreatinga map of the cuûent s|âtefo. a specificproductfâmily.This map
will chârâctcrize
the valuesrreamasic is todây.

We'vechosento focuson a high-volumcâutomorivecomponentoffcrcdwiLhâ smaltnumtrer

ofoptions- â windshieldwiper consistingof â blâdcholdingrhe acrualwiping edgeând rhc
ârm attachingthe blâdc to thc vehicle.This productis sirnilarin complexicyând vrriery ro
the stecringcolumnbracketLrsedto illllstrareLearhihgto See.

We'vedecidedcomap only ân intefmediareporrionof a toral valucstream,rvhichruns irs

enrirecyfiom the end ùscr (vou in your car)acchedownstreamcnclro .âw rîâterials(iron
orc in rho cârth)d! the upstreamcnd. 'l'hc poftion we will mâp srârtsat Alpha Morors,thc
linal asscmblcrof the finishedvehicle,towardrho cùsromeferd of rhe valuesrrcâm.Wc
then proceedbâckùp rhe strcamchroughchefaciliricsof DctaWipersând GâmmaSramping
to thc shippingdock ât MichigânSrccl,lt raw mÀteLiâls 'l'hc
serviccccntcr. fivc-mcmber
ream,f()m thc four firms shâringchisporlionof rho valucstream,will be led by thc hcadof
suppliefdevelopmenr in the purchasingdcpârtmentârAlphâMotorsanclincludcsd1eprodLrcr
line manâgerând the assemblyplânrmânagcrat BcrâWipcrs,dre vâlucsrreâmmanâgc.fo.
thisproductfarr,ilyar GâmmaSrlmpingrandthc salesmanager ar MichigdnStcol.

Vlrirrdshield Ulriper Value Strearn Tear|l

Gâmma Stampers

1.4 ProdudLi.e
It s"* r"-s*
r nn't"*n",
1 f

!ÂFT T I . E C J F N E N TS ' I A T EM A P '11

Ut indslr-eld Ultiper Assembly and Fabrication Path

\B

\c

E
E
stiffenerand wipingedge
E
E
E
Windshield Wiper Assembly and Fabrication Steps E
A. Rolledsteel stampedinto blade spine E
B. Four bracketsattachedto blade spine
C" Wiping edge attachedto blade spine and bracketsassembly E
D. Bladeassemblyattachedto arm Ê
E. Assembledwiper attachedto automobile
I
E
E
E
 Befor.:\À,estartmapping,leCslook ar ar explodedview ofthis producrsbo\r'ingrhc pa.rs
goinginto rhe wiper and its fi-point on drc end product.Note rhat we will onl] map rhc
c;rclcdareain this initial map.This is to keep the mâp simpleand ro concenrràre iniriâllt
on raisinecvcNone'sconsciousness ofthe extendedvaluestrcân.

5_-

--

arm components

\E

a
=

:l
a
=

t
:l
Our windshieldwipercomesin two spccifrcations hightrim andstandard
(HT and ST) - and in t\vo sizes- smalland large(S and L) - to fit
two differcntvchicles(A and B). The right-handand left-handwipers
areidenticalon the vehiclesin rhis examplc.Thc rrim levelsdiffer only
in the pa;n!- a mactc-blackfinish lor the standârdtrim veh;clesând â
glossy-black finish for the high trim models.Thc dcs;gnsfor the two
modelsdiffer only in the sizeolthc parts,not in their numberor basic
design.This mcarrschatthe wipersare interchangeable from â fital
âssemblystandpointbecausethey ùse the sâmcfit poin$ and require
rhe sameinstâllâtiontime. The wipcrsclearlyform a producrlamily
becauseali ol cheactionsoccurringupstream- componentâssembl);
painting,and stamping- âre in the sùmeprocesssequenccin thc
samefirms and use chesameprocessing cquipnrcntwith a few tool
and fixture changes.

Wiû tho productfâmily cleârlyidcntificd, rhc first steplor the tearnis to

"take a walk" alongclrccntirc lengthof rhe vâluestreaû to bc mâppcd,
recordingchcfaciliticsvisiued,the transporrlinks,cveryactionperformed
on thc product,âll inloûnntionmânâgcmcntâorions,and rhc time
required.We alwayssuggcstsmrtingar rhe oustomerend becauseùc
customcris the point- indecd,the only point- of thesematerialf'lows.
No productshouldbe aclvancing thât the customerdoesn'twan! and
nochingshoulclbe happeningthat the customerdoosnt considcfofvâlue!
B
For chewiper example,the liscof âctionson the productis shownin rhc
followinglist. Note that we havenumberedall of thc stops(73)in the
left-handmarginof chelist and comparedthesewith valuecreating
steps(8) in the first columnon cheright. We hâvealsorocordcdthe total E
clapsedtime (rotalproductcycle cime)which surnsthe time requiredto
conductall of the stepson a product(,[4.3dâys)ând comparedthis rimc F
rvith the acnralvaluecrcatingtime (54.7minutes),which is the sum of B
only the valuc creacingsteps.
E
E
E
E
E
t
Physical Actions Required to Create a Windshield Wiper
Totâl Steps Total Value
Creating Time Create
Steps
RâwMaterialsSupplier:
MichiganSteel,DearbornHeights,Ml
1.Loadcoilsfor twiceweeklydirectship 10m

TransportLink 1
2. Directship (truck),Tonawanda,
NY (500miles) th

Second'Tier Supplier:
GammaSlamping.Tonawanda, New York
3 . U n l o a dc o i l s 10m
4. Beceive& createticket 'l0m
5. Storecoils 14d
6. Conveycoilto StâmpingPress1 10m
7 Mounton coil rollerand feedpress 5m
L Stampinitial(flat)shape 1s
L AccumLrlate stâmpedpartsduringrun
10.Conveypartsbin to storâge 10m
11.Storepans 48h
12.Conveypârtsin bin to StampingPress#2 10m
13.Loadpartsin magazine, âutoteedto press 10m
14.Stampfinal (curved)shape 10s '10s
15.Accumulate partsduringrun 4h
16.Conveypartsto storagearea 10m
17 Store parts 48h
18.Conveypârtsto paintshop 10m
19.Rackpartson movingconveyor, clean, 130m 52m
dip,paint& bake
20.Removeparts,inspect,sort & accumulate in bin 2h
21.Conveypartsto storage 10m
22.Storepartspriorto shipment 48h
23.I oad pansfor lwiceweeklvdirecLship 'l0m

TransportLink 2
24.Directship(tfuck)toHarlingen,TX
(1500miles) 96h

First-Tier SupplierWarehouse:
BetâWipers,Harlingen,TX
2 5 .U n l o a d 10m
26.Formâllyreceive T0m
27 Store parts 48h
28.Betrieve and loêdtruckfor daiy directship 10m
Totâl Steps Value Total Value
Creating Tirne Create
Steps lme
TransportLink 3
29. Directship (truck)to Reynosa,l\,'lexico 6h
(100mileswith queueât bordercheckpoint)

FirstTierSupplierAssemblyPlant:
BetaWipers,Reynosa,Mexico
30. Formallyreceiveand moveto storâgearea 10m
31.Storein receiving storagearea 4Bh
32. Conveyfrom storageareato first assemblystep 10m
33.Storeat first assemblystep th
34.Insertfastenerclipand securewith p,n 10s 10s
35.Accumulate partsin first assemblystep 4h
36.Conveypartsto secondâssemblystep 10m
37 Storeat secondassemblystep 8h
38.Claspwiperbladeassembly to sub assemblies 10s 10s
39.Accumulate parts in secondassemblystep 4n
40. Conveypârtsto third assemblystep 10m
41.Storeat thirdassemblystep th
42. Insertwlpingedgein bladeassembly 10s 10s
43,Accumulate partsfrom thirdâssemblystep 4h
44.Conveypaflsto inspection, test& packsLep 10m
45. Store pârts ât inspection& test th
46. Conductinspection, test & packin protectivesleeve 20s
47 Accumulatepartsat pack 4h
48.Conveypartsto shippingdock 10m
49.Storeawaitingshipment 12h
50.Loadtruckfor dailydirectship 10m

TransportLink 4
51.Shipby truckto Harlingen,TX 6h
(100mileswith queueat bordercheckpoint)

Firsl-TierSupplierCross-Dock:
BetaWipers,Harlingen,TX
52.Unloadtruck 10m
53. Cross-Dock 10m
54.Storeawaitingtulltruck 12h
55.Reloadtruckfor dailyship 10m

TrânsportLink 5
route(truck)El Paso,TX
56.Shipvia multi-pick-up 96h
(600miles)
Totâl Steps Total
Creâting Ti rne Create
Steps lme
CarCompanyCross-Dock:
Alpha Motors,El Paso,TX
57 Unloadtruck 10m
10m
59.Storeawaitingfulltruck 12h
60.Beloadtruckfor dailydirectship 10m

TransportLink 6
61.DirectshiptoWestOrange,NJ by truck 96h
(2000miles)

Câr Company'sState StreeiAssemblyPlant:

Alpha Motors.WestOrange.NJ
62.Formâllyreceive 10m
63. Conveyto storagearea 10m
64.Storeawaitingneed 48h
65. Conveyto kitting area 'l0m
66,Transfer to assemblybins 10m
67 Storein âssemblybinsawaitingneed 2h
68.Assemble wiper bladein holderto arm 1m 1m
69. Attachwiper ârm with bladeto vehicle 1m 1m
70. Lineoff vehicleand test 10m
71.Storefinishedvehicles 12h
72. Loadtrâinfor dailydirectship 2h

TransportLink 7
73.Shipto Cleveland
Distribution
Centerby trâin 12h
(500miles)

sicâl Actions

Value
Total Creating

Steps 73 o

44.3 Days 54.7 Min.

Distahce 55OO Miles over7 l2nsport Links

Learning to Seê Value
As we wrirc down the actions,the âbility to distinguishvaluc-creâtingstepsfrom
but wasccfulstepsand r.alue-creating
currcrrly necessary time îrom cunently
necessary but wascedtime is criticallyimportânt.The etormousgap bctweentotâ
time ând value-creâtingtime end bet\r,ccntotal actioûsând valuc-crcâtitgactions
i s r h eo p p o f l | l n i r yh e\ a l u eù û c r mr c â mm u s t5 e i r e .

Given the importanceof telling the d;ffcrcnccbetweenvalueand waste,it is no!

surprisingthât we often encounterreadersand audienccswho are anxiousâbout
their abili[y to categorizeactionscorectly.Actually,it is very simple.Pur yourself
in the po$itionof checonsumerand xsk ifyolr would pay lessfor rhe produc[of be
timc were left out.
rvith it iîâ givcn srepànd its necessary
lesssacis{ied

In checaseof artâchinglhe wipersto d1cvchicle in the Alpha assemblyplant,the

ânsweris clcâr.Consumersdo not oxpcctto receivedleir vehiclcswith ûe rvipers
"Somcâssemblyrequirccl"
by a polite nore scâlir1g,
in thc lront seat,accompaniccl
1'he final atcâchmentsrcpcleârlycreatesvâlùc for thc customet.So do lhc scvcn
âctionsof stâmpingtho me|alarms,pÂintingthcm,ândsub-4sscmbling drernpriot
to ârtâchmenton the vehiclc.

By contrast,look at chemânymovemenisof lho productwi$in cechPllnt betwccn

proccssstops,chelotg transporllinl$ bctweenplânts,thc warohousingand cross-
dookingactiviriesalongthc valuesrream,thc numoroustestil'\gând inspcclion
stcps,andthc repeâtcdpackingandunpacking ol chcproduct.Wouldyou,asa
consumer,be lesssatisfiedwith your vehicleif drcsccùrrentlyneccssaryâctivities
could somehowbe left out?Ofcoursc not. And would you bc happierif the car
compâry could get you thc modelyou wânt wilh rhc cfim level you wen! quickcl
becausethesestepswcre left ouc?Of courscyou would. Indeed,tho morc these
srepsc.ruscâ delâyin receivingcxactlythe prodùc!you wânt, the lessyou probably
arewilling to pay for it. Fâr from crearingvâlue,theseshipping,packirg, inspecting,
ând warehousingâctionsactuallydestroyitl

Drar /ing a Useful Map

The long list ofsteps,caregorized by wâsteend valuo,is highl),provocalivebccâuse
it helpsthe team realizethe enormousopporcunityfor savings.What'smore,the
ng time to total time (54.7minùtesout of63,792ot 0 087o)and
ratiosof value-creati
of vâluc-crcâtingstepsto total steps(8 oùt of73 or 11%)and the amountoftrânsPort
.l;stânce(5300miles)âre quite typicalfor discretemânufâcturedproductsin the
$orld toda-v.Our exampleis rhe norm,not the exception,and similârrâtiosare
likch ro emergefrom âny mâpsyou draw
 First View of the Current State Map
Shovving the Customer
--1-'-L4
I Alpha I
I Dlstributioi I
I c4t4r I

l r6o7w----1,
ta 640 A
426 91
| 214Hr )
I azob I
| 21291 |
l lo?tL)

However,for this informationto be usefulwe need to simpiify it and put it in a form

managerscanâct or. The besaway to do this is to groupand summarizechedatâby eâch
ofthe fâciliciesand trânsportlinks tho productencounters.Again,the placeto starris with
lbc cusÈomelât the most downstreâmend of rhe mâp,In this case,lhe cuscomeris the
Alpha Mo|ors DistribùtionCcnter,which interâctswith car deâlersto gec(rndconsumers
dre prodùctsthey want.We'll representchisorganization with a facility icon placedon the
right side oîthe map.flnderneaththis icon we'll drawâ dârabox recordingthe cusromer
requircmentfor sizeand lrequencyofshipmenc.

\o!e rhat this faciliry is a cross-dockingoperationwherevehiclesare sorredand senr

onNardas quicklyas poss;ble ro severâlregionalsrorage areasac.ossNorrh America.
l_romrhcfc rhey go to auto rerâilersand rhen into the handsofthe cusromcr.Thus our
;nlcrnrediâre-view mapsropsconsiderâbly sbo.tof rhe rorâlvâlueslreemmitprharrr ma!
bc usefulto drarvar some point in the future.

.AA' 'U:
C U Ê P E \ TS T A T EV A P 19
To get lrom raw materiâlsro the Alpha DistribntionCenter,rhe productflows throùgh
sovcnâssembly, fabricaaion,warchousing,and cross-dook faciliries.'Iheseare:
. Alpha Motors' StâteStreetAssemblyPlânt in WestOrange,Ncw Jersey
. AlphaNlotors'Cross-Dock, for manycornponenB from manysnppliers, in El Paso,Tcxts
. BetaWipers'Cross-l)ock,fbr partssentlrom sevcralplantsto manycustomers,
in Harlingen,Tèxas
. Betawipers' ComponentAssemblyPlânrin Reynosa,Nlexico E
. BetâWipers'Pârrs\Varchousein Harlingen,Tèxas
. GammaStamping'sStâmpitrgând PaintingPlxnt in Tonâwanda,Ncw York
. \{ichigân Steel'sServiccCcnter in DearbornHe;ghts,Michigan E
E
t
E
z

Current State Map Shovving All Facilities

| - l
Haîltn,en,lX

We havecreatcdrwo ncw facility iconsnot seeniû Learning to See.One ;s a cross-dock

icon for fâcilirieswhereprodùctsare no! storedbut instcadmovedimmediâtelyfrom an
incomingvehicleto an outboundshippinglâne.:fhe other is â warehouseicon for facilicics
whereincominggoodsarc sortedând storedbeforeshipmentto rheir nexr point of rse.
(Thc iconsuscdin rhisworkbookaredisplayed on rhe ins;dcbâckcoverândexplâined in
AppendixA.) \bu mal rlant or needto crcatoochericonsrofcôurse,in particularfor
activiriesoot encourtcrcdin our cxample.Iust mâkesurethat everyoneworkingon the
mapuscsthc sâmeicons.
exccnded
 r-v4
I aanna I
| qran?tnsI

t RMss6h-_l R M5 6 h ,
wtPltoh.

| lehtr""--]
Tj- EDa'--
De".t-1
a =2oooppn
| I

Youwill soondiscoverthat you can't succcssfullygatherand summarizethe informarion

neededfor improvingthe valuesrreamwithoùt drâwingdccailedcurrentstarein-facility
valuestreammâpsfor produccsâs they moverhroughmânufâcruringfâciiities.This is whv
tr
masteryof the materialÀ Learningto Seeis a prerequisitelor macro-mâpping. E
We'vedrawncurrentstatefaciliry-levelmapsfor the rhreemanufacluringfaciliriesalong E
rhisvalue stream- GammaStamping,BetaWipe.sAssembly,ând Alpha NlotorsAsscmbh
- in AppendixB of this workbook,and you'll want to appendyour lacilicyJevelmapsto
E
your clrrrcntstatemacromap asrvell.Note that thc dâtâbox under eachlacilirv conrarns E
daraon inventodes(RâwMâteriâls,Work-In-Progress, FinishedGoods),the amountof
producdvcrime(thenumberof shiîtsper dâyanddrc numberof workingda_vs per $ eekl-
r
!he liequencyof the producrioncvcle(shorvinghow often everyparr is madc.sucb.rs E
3
-

-.

rl

-
Current State Map Showing All Facilities
- and Datâ Boxes
-

!l

ra

r | - l

z
"EPE = 1 Day" mcaning "every parcevery dây"), ând rhe dcfccr level (in partsper million)
âs rcported lrv tbc custorncr ar the next downsrreâm facility (or by thc customer,sirrsPecror
rt ùc point oishipmenr jn rhe caseofrhe Alpha MotorsAsscmblyPlârt.)

\\:e havc noc drawn facilicyJevelmaps for the Alpha and Beta cross-docksâncl for rhe Berr
pârts wàrehousc.This is partly to keep thc size ofthis gujde mânâgcableanclalso bccausese
n ill cndeavor ro climinâre thcse fâciliries âltogerher âs 1[,cmove through progressivctir!Lrrc
sr.tcs.If vour vâluc screams
will rl-quirelergedistributionwafchonsesin ânl inrsin:rDtc
-
lirlure stâtc for exâmple1o.serviccparrs or cross-docks, vou shoulclalsorlr.rs m:p,
oithcsefàciliricsasaguideroimprovingthcirperformancc.Exâcrh$h;chf.rciliriù\mcnr
in iicilir\ mxpsând in what deail will âl.ivarsbe â mârlerofjudgmcnr. \o bc p.cp.tr(d!.
.latu\r\oLrrrpproâches \r)Ltrcxpeflencexcclrmujares and \oLrencounr.rdii'icr!nr riruriFn_

23
The Ouality Screen
i\s \r c l(x)k ar lhe dâra in thc laciliry boxes, rve norc â rrend \yorrhy of furdrer examtr.ratron.
At Alpha N{otoN Assenbly Lhc dcfccr mre lor wipcrs insrâiled or thc vch;clc - deîects
discoreredbv x rcpresenrative
fronrAlphâ\ llistribution Division in e final inspccrrorr
lusr
prior to shipment is 5 per million. (SinccAlpha is assernbling
2.50,000 r,ehiclespcr ycar
$,irh two wifers per vchiclc, th;s mlrâns that two to $ree wl)ers pcr.vcâr âfe fejecrcLlxr
fin.rl ir,spcction, usually lor screrchcsin the finish.) Ycr when we looli ar dcfccrs enrergrng
from Bcta Wipers Asscmbly (asjudged by AIphâ), we nore thxr thcfc âre 400 clciècrsfcl
million rnrl rvhcnwc look at delcctscmcrgingfrom (ianma Sranrping(.rsjudgcd br lletr)
wc rlotc thât thcrc ârc 2000defectivepartspcr nillion. finallv, whcn rvc look ât dcfccts
ârfivi|rgxr (iamma from tr4ichiganSrccl rhe 1lgùrcsoarsto 10,000pcr nillion.

lrr bricf, qunlity is worscât cvclv srep ùp tho vâlircslfel]m,â connr()nphcnorùonoùrn

pfxoticâllycvcrv indusrfy tlxllry. l his lrlclns dr.u to ochicvc 5 dclocts pcr nillion (upp(Ircnrng
the Six Signrr lcvcl of3.,1clcfoctspcr Inilliolr),rho productis llou,iûgrhr()ughr scrlcsol
quâlir_vscfecûsin cxch facility,crLohofr,hich rcsrrlrsinscrrpantl inspcctioncost. Ihc slopc
of chistlu.rlityglrclicntcrn surclv bc rctltrccrlin Tunrrcstltcs and it is inrpor.rlrnr
!o n{)rc
ctrcfLrllydrc r::rrrront
slopcto aicloLrrdrinliingon how ro do ùis. \!t ûcrciirrc rcconnrcnd
clrawinea Quàliry Scrccù(âsshown bclolv)on tho OurrcnrStdc rnrrp.In th;s crso wc hâvc
plâccdthc clilgrârnin r convcnionrsfor irr rhc lowor right-hînd comcr.

O.uality Screen
ppm

2000

't500

1000

500

MICHIGAN GAMMA BETA ALPHATO

TO GAMMA TO BETA TO ALPHA ALPHAPC
Mapping the Transport Links
The nexr step,oncethe lacilityJevelmapsare drawnâûd the datxhavcbccn summarizcrl
in fxcility boxes,is to add checranspor'c
links betweenrhe fâcilicies.To do dris,_vounur
need boat,train,ând airplaneicons,in âdditionto drc truck icon ltom Learningto See.

In this example,we wiil use rhe ailplaneicon with a dotted line lor shipmentsexpcdircd
'l
by air ând a rruch icon with rhc samescyleof doctedline for choseexpeditedby cruck. he
numbersin thc regùlarshippingicon (a cnrckof I trâin) sbowthe frequencyof sh;pments
(c.g.,"1 x da1"': one shipmentper day)while the numberin the expeditingicon shows
the nùmberof cosdyexpedjcedshipmentsin thc pâstycâf (c.g.,"2 x year" = rwiceI yea4.

With thesedatain hand,wc arc roadyto conrpletetbe physicalflow porrionof rhe map by
drarvingin the normalproductllows betweeûfacilitics,usingbroada.rows.Notc that tbese
xrc stripcd,"push" arrcwsbecâuseptoductsâremovingaheâdat the commancl ofa ccntrirlizcLl
inlormacionsystemand lot ncccssarilyin accordwith chcimrnediateneedsof drr:nexr
downscream facility.Undcr ear:hof thc transporrlink$ wc rccordtho discânceiù nliles,rhe
$hippingbârchsize,ând d)e percentâgeof defeclivcdclivcriosas roportodby tho customcr.

As cheseflowstre drawn,the tcamshouldnoteonc nddirionâl point- thc trcndin

dcfcctivcshipments:Iâte,e{rly, or ;ncorect (dre wrongpr<xiur:c or in drc wronganrounc).
As is alsotypicalin rnostindustrics toda$wc notorhâtthc furtherup !bc v{luestroâmâ
-fhis
faciliryis,rhc rrorc likcly it is comiko dcfccrivcshipmcnrs. siruati<>nis analogous to
fic quality gradicnt andequalll'worchyof improvcmcnt in firturcstatcsbccausc cvcry
defectiveshipmcût gcnctaocs oorrcctioncostsdo$'nstreân1
ând pcrturbs rlre schedùle.l.or
cconomyof spâcewe havesùmûnrizedth;sffcnd in tho sâmcboxâsrhc quâlirydâtâon
the CLrrrenr Stâtemxp,changing ùc lâbclto rhc "Qualicyand l)olivcryScrccn".

Q.uality and Deliverlz Screen

DEFECTS

2000 % DEFECTIVE
DELIVERIES

1500 10

1000

500

MICHIGAN GAMMA BETA ALPHATO

TO GAMMA TO BETA TO ALPHA ALPHAPC
 The "Bottom Line"
Finâlly,we cândrâw â cime-ând-steps line alongrhe bottom of lhe map.Note rhat
the first figure aboveeâchsegmentolthis linc is the tocaltime within eachfacility
ând âlor€(eâchtransportliûk, while the figure in pârcnthcscsio the righr is thc
valuc creatingtime. The first numberbelow eachsegmentof the line sholvsthe
toral acrions(sreps)tâkcn on the produccin eachfacility and rransporrlink, with
the valuecrearingacrionsshownto the right in parentheses. NocethacinlormatioL
necdcdfor eachlaciliry is containedin rhe "Steps"and "'Iime" sLrmmary boxesat
the endsof the time-and-sreps lines on thc individualfacility maps.

I 2r L- r-l- =
U'"kl.l
'U----d
loây I l'" l-
av4 3- =
| 32iiî" I na--=.r-> rrrrr'-+ l";f"#;l: l-r----) _
Reyhos,Md(o'.......
1
RM536h, RM56 h. "...=

o.3 d. 4.Oà. o.25à. O . a

20.6 à. (3131s.) 2.Od. 4.6 à.(3o e.)

2213) 21(3)
tr
t
tr
E
E
E
26 F
z

Current State Showing all Facilities, Transport Links,

Defects & Delivery, and Time-and-Steps Line

/.'v.'L4
I centt I

^ |s6otn; )
// 64A A

// ti::{
(=fl " .!,!u,
1\Oay 147Hr
| J
I - r "L F-L //
lj'Y l.l lto" ltl -/4221,./'t //,...... .,.....
=
rEd rrrrr-r>
+ l
rrrrr-'-r> l^x::,y:tr:V
ffii-
|
=1uhilân
ll TIME
|
El?a5o.ÎX
westoenqe.NJ eg!,tt"t":_l I
=I Dêfèctlvè 1% | |
N \_.....""'-
=77 I RM5Oh. | -l

2 i\sa. | 2OOO\. I
f--60o;-1 5htp6âNci
t ,lip r,*h I |
|
I
= 6 p â 1 t ê r sI
I,"l:pon = ts.s au,,
lD"t""Natu't\
=g';7;
4.Oà. 4.Oà. o.5â. "!Ai^,
o.5à. | 1 | O.5à. I | 2.6 à. (12o5.) | 1

11(2)
Mapping the Information Flow
Thc rcamhasnow completedmappingthe physicâlflow ofthe productbut the vâllrestream
map is only half done.This is for the simplc reasonthat if no customersignalsa demând
fbr producrsfrom upstream,then nothing\À.ill{low Or at leastnothing shouldflow! We
Lhefeforeneed ro go backto cheupperright cornerofour map and drawthe flow of ordcr
and productioninformationgoingbackfiom the customer.

I-Iowcvcr,aswe do this we need to warnyou that mâppingthe informât;onflow is thc

hardestparcof the task.The salcs,productioncontrol,and operationsgroupsrvithin most
compânies tcnd to communicârepoorlyand a manâgerwho fully understandsthc inf(xmation
managemen!methodsofâll rhreeg.onpsis a raritl'.Whol y61 xdclrhe complexityofgoing
actossseveralcompariesând throLlghsâles,productioncontrol,and operacions dopartmcnts
soemro havcuscflrl
within câchcompany,ils not surprisinglhat very few linr: manageas
knowledgeof how informationis mânâgedon a mâcro-scâle.

Given this rcality,you shouldsrârtwhoreordersenter the systenrdnd follow the orderflow

from departmentto departmentand ftom itfotmâtion mânagemcntsystcmto infornàûon
managemen!syscem,firsr chroughthc mos!downstrcamfirm and thcn upstre^mdrrough
tho suppliorfirms. lJo surero useâ pencil âsyou sketchinfoamation{lowsancll<copan
eraserhândy!Whât'smorej ilyou cân,rcqucsrficsc dâtaaheadof yoùr visit becausernâny
facilities
andIT departments do nochavcchemreadilyâchrnd.
'lo
actuallydrawthe informationportionof thc extendcdmapwo will nccd ân additionâl
icon lor productioncontrol,which we havedrawnin thc shâpoof â compùterlcrminâI.:fhc
firscof theseis for Alpha MotorsSalcsOrder Bank.Ac rhis point ordcrsareaggregated and
placedin invcDtory(shownby orderqùeueiconsâlongthe informâtionflows).Thcy arc
held ùntil rhe weekly sâlesplanningmccting that dcr:idosthc spccificârionof the orders
thar shouldbc rclcascdinto the systen, givenordersin hând from dealers.Thcsc orders
arethen releasedupstreâmto the followingfirms and doparcmcncs:

. Alphâ MotorsHeâdquârters
ProductionControl
. Alpha MotorsAssemblyPlant ProduccionControl
. Alpha MotorsAssemblyPlant MaterialsConcrol
. BetaWipersHeadquertersProductionControl
. BetâWipersAssemblyPlant ProductionControl
. GammaStampingHeadquarters ProductionControl
. GammaStampingPlâncProdùctionCottrol
. N,lichigan
SteelServiceProductionControl
f,

Fr
I
In almosrall manufacruring
sendù seriesof forecâsts,
companies, chesâlesard prodùctioncontroldepa(mentsâctualh
and productionfcleâsosbâckupsffeam.For exâmple.
schedules,
Fe
L
in the car indusrrya chree-monthforecâst!â one-monthrolling schedùle,e weekly tixed
schedule,ând â dâily shippingreleasemight be typical.For our purposes,!he important
L informâdonis the rveeklyfixed scheduleand the daily shippingreleasebccâuscthcsc
rcmally triggerproducrionin fac;liriesând shipmentsbctwecnlacilicics.'l'heseare the
informarionflorrs wc rv;ll câpturcon this map.

If we follow the weekly schedulcand write down thc informationmanagementstepsand

thc dmc involved,âswe did earlierwith physicalactionsperforoed on ùe producriwc
notethe followingirlong(hc lorrgc5r
plrh.

Information Actions Currently Required to

-3
Managê thê Value stream
4 Steps Delays*
ProductionaxAlPhâMotors
=
1. DealerOrdersqueuein the SalesOrderBank 10Dâys
1 2. Îânsmit lveeklyorderslrom Alphâ SalcsOrdcr lJank
1 r),,..,,,.^r Âr-haLlcadquarrers ProductioD
contlol 14days
-
4. lleleaseweeklyprodriction rcqui.cmcnt$
ro AlpbaPlânt
1 5. Queucat AlphaPlantProduccion Control 6dtys
: t',. Rclu:r.cL,ÎJ:ril1pr,,Jurrion.cquencc
Productionat BetaWipers
7. Tiansmitrveeklyorclerslrom Alpha I-10collecaI-IO
: 8. Ouuucar BcraI-lQProduction Control 6 days
'liànsmit
9. weeklyproduction requiremcnts ro lJeraPlânt
10. Qu,:ucrt BcraPlantProduction Control 6 dâys
l l . l ( e l e c soel w e e k l yp r o d U c r i o n . c h e d | | l c
12. Beta Plant issuesdâily ordcrsffom Bctâ Wârehouse
13. AlphaMaterialsControltransmitsdâily recluiremenrs !o BerâPlanc
- 14. LictalJlanL Production Controlissucsdailyshippilgrclease

: Productionat GammaStamping
15. Transmitweekly ordersfrom Bete IIQ coGammaI-IQ
16. Qucuoar GammaIIQ Production Control 14dxvs
'liansmir
= 17. $cckly produccion reqùiremenrs to GâmmaPlârr
18. Queuear Ganrnra PlanrProduction Conrrol 6 dars
19. Rclcescof n cckl-vproduction scheclule
= 20. Betâ\lareriâlsrransnritstwice-weekly requirements!o GammaPlant
(lonrrol
21. Ganm.rPl.rntI'jrtxlLrction issucsrnicc-weeld)'shippingrclcrsc
* A l t r a n s m i s s i o n sa r e e l e c ù o n i ca n d e s s e n t i ayl i n s l a n l â n e o u s .
 Deliverylrom MichigânSteel
22. liansmit weekll' orderslrom GammaHQ to MichiganSteel
23. Queueat NlichiganSteel 14dâys*
24. GammaMaterialsControltransmitstwice-weeklyrequiremenrs
to MichigânStcel
25. MichiganSteelissùest$'ice-weeklyshippingrelease

Totalnumber of steps 25 sleps

Elâpsedtime for ân orderfrom the lirst to the last step 58 days
(alongthelongest path)
information
Actual processingtime (âssumingeachIVIRP runsovernight) I nights
* Alltrânsmissions
areelectronic insiantaneous.
andessentially

Thê Value of lnformation

Nore rhzÙwc havornadcno efforr ro categorizeinformationmanagemen!stepsars"vâlue
creating"versus"wâsteful",dswe did fof the Iist oi physicâlstcps.This is bccÂuscfrom
lhe etd clrstomer'sstândpointnoneof the inlormationprocessing stepscreatesany value,
- - just
To tost lhis perhapsshocking asserrion, alskyourselfwhetheryou would bc lcss
sâtisfiedwith a productil ir could bc ordc.odand dclivcrodto yoll wi!h no management
of producdon ândlogisticsinformation. Obviouslyyou wouldtoc be losssâtisficd. Indccd,
you would be morosatisfiedif rhe coscsavingsfrom eliminatinginformationâcquisitionend
mânÂgement could be pâsscdalongro you.Yccin rhc moderncra of âu!o)na!cdinformrtio,r
mânagement, mostmanâgcrs havcimplicitlyâcceprcd !hc notiorthat irlbnnationis good,
morc informacionis bctror,and all possibloirformndoû is besc.[n fact,informarionfor
controlofopcracionsis ncccssâry wâsrc('IVpeOne Muda).Nlanagers oughtto be minimizing
the ûeed lor it râtherthan maximizingiCsavailability.In thc luture scares
and idcal srâcc
we will showhow

As rhe weekly orderinformationflows acrossthc top of thc mâp from heâdquarters ro

hcâdcluârters,
it is âlsoflorvingfrom eachheadquartersdo*.n to plant producrioncontrol
departmentsrvhereweekly schedulcslor cacbplant arc sct. For cxâmple,Alphâ Motors'
ÀssemblyPlantProductionConrroltakesrhc schedùles lrom AlphâHeâdqlrerrers Production
Control,runs chcmthroughits computerizedNlaterialsRequirementsPlanning(lvlRP)
sysrcm(âftcr â dclâyâveragingsix days),and createsâ rolling six-dayaheadschedulefor
the assemblyplânt.This scheduleis fully sequenced(e.g,a bluc Model A rvith high trim.
then â greenModel B with standafdtrim) ând râkesinto âccountline bâlâncingconstr.rin!s.
For cxample,thefe ârelimits on horvmany lvlodelAs or Model Bs can be run do\r'nthc
line in a row withour overload;ngsomc\rorkstationswhcrc work cortent vâriessignificânrl\
bctrvccnNloclclA and \Iodel B. I'heseschedulesarethen releesedto the Dlantlloor.

E
F
At thc sâmctime irlormarionis being releasednr drc l'loo.in eâchplant ir is alsobcrn,:
sent upstream.iiom plânt levcl rnâtcriâlsconrroldcparLmcnrs, in rhe lbrm of dâilv
shippjrg relexscs.Thcse ere the preciscamounrsof exch pârr number dre upsrrcam
.o ship ro irs dowrstreâmcusromeron rhc ncxr pickup. -f'hescdailv
plânt ;s aLrdrorizeLl
releâscâmoun!sare bâscdon known order lexd timcs Ând lhe stocksthorrghtro be on
hand at thc downsrreamplant.

I,'romdlis it is âppûrentthtt thcrc âfe rwo sepârâroinlofmrrior flows coming;n!o each

plânr- rhe wcckly schcdulelrom câch firm's ploducrionconrroldepirrrmcnrxnd thc
daily rclcascfrorn rhe cusn)mcf.Oftcn, drescllo\À,s
ârc nor prccisolysynchronizcd.So
a $ird infinnarion rran.lgeûrent l(np colncs inro plîy, \\ùich is dlrecr corrnunicarion
bctwcenthe mrtcrialshandlingdepffrmcntin the dotvnsrrcarr pl:rntanclthc shippirrg
cicp:lrtmcntin the upstrormpltlnr.

This clircctlink, usuallyll rclcphoncvoicc line, boconrosthc fenlp(xluction conrrcl

and shippingmcch:rnisnt whcnevcr rnxgcrs:Lrthe cnds of rhis link ovr:rridcthc
shippinijrolcrscsrnd, in cxtromc sitl|:Lrions, scho(lrrlcs.'lhcy Lrsrrîllvclothrs
l)r()LiLrction
buscdon droir'dir,:ctobscr\,rrions
ol:cntcr{ingshoftugcsrnd thciriLr(ignrcnr âboutwtrr
to do in rcsponse.\ryohxvo drrwn dlcso iniirtrlâtion llo\r,s l)ctlrcoû thc plxnrs wirh lt
dotted linc unclorrrinformâtionexpeditingicon - an old-feshionocl rolophonc.

A l /arning on Order Data

As youmoveupstream
don'tconfuse
thecustomer's
official
releasewith the amount each plânt actuallymade. Instead
gatheffrom eachfacilitydâta on what was actuallyproduced
daily over an extendedperiod and comparethis with customer
daily requestsin the form oJ shippingreleasesso you cân see
the relationof one to the other and the amount of vâriâtionin
both.We'realwaysamazedthat compâniesawash in information
about whât ought to happendo a poor job of recordingand
preservingwhat actLrally hâppened.So you may needto dig a bit
or even ass gn ên observerto câptureaccurate;nformêtionon
plant-levelproductionand shipping performânce.What you find
will be invaluablefor achievingyour future states.
Current State Map Showing Inform;tio; Flow

f,Nl

OH
--_l_
--E-
I
V
:
flNl

.'7 t J_
Z-9æ-
' -.7t
r;h BE
t4
= ,Tft
l.r+
ùh t'j,'^ -i.iL
,.rrr.-f l"i:::Tiï Iæ
L-:-.J
RM536 h,
1 1 RM56 h.
"".......

o,3à. 4.Oà. o.25à. O24 6

20.6 à. (5131e.) 2.Oà. 4.6 à. (3o s.)
22(3)
21(3)
t
t
t
t
I
r ffi;;l
l?ftiducr.ion
I
I contrat I
I vRP I I'Nl
rr ?ltmoùth,Ml 14 àâY3
Eirminqhan,
Ml
w*kryl
t----i-----
-
{ ----r---T-

l v4\
II
14
I t'l
t4 t-
t t ,
t ","
: l/ *E T-
v t-i|",..- I
t wk ..-L.zL4
I Atptâ |
lPlstributirnI
I cent r I
<1 ctevetand.aH
I i /,/
//'l-
960 | Day
,// 640 A
I // 426sr

\_\ ( , ,iJou"
ir----------æ---.---r Drily I
--\
'-1 + | 2.tt9l
. .1rory | 1o7Hj I

1 1 "L rÉLr-
+LIJ +'!
rrrrr-f> rrrrr-r>
14 TIME

l Hartiheen,rx

f. | 6oon. I
I ahtPôar.h I
U. | =6,panere
I Ita!5po.r
I Detaartw=5 1 = B jdaÉ
t.
32b1e
- 4.o à. 4.Oà. o.5à.
7, o.sa. I r I o.sa. I r I z.oa.ç2o".1
| t
l. 11(2)

t
t
t'
I
I
 Demand Amplification
For the pastyear,Alpha MotorsSalesOrder Bank hassenrvery stablewcekly
orderscallingfor 960vehiclesper day,five working daysper wceh to Alpha's
Headquarters ProduccionControl.And HQ ProductionCoûtrolhasreleasedlevel
weekly bucketsoforders to Alphâ'sAssemblyPlanrProductionConcrolatd to
Beta Headquârters ProdùctionControl.

lfhe accualbuild still vaies from the schedule- due to pulling vehiclcsout of
sequenceto coffectdefecrsor becauseofproblemsin rhc paint boothor due !o â
lack ofparts. However,by adjuscingthe scheduleand workingoverlrm€ar d1ecnd
of eachshift as necessâry, the output ofAlpha MotorsÂssemblyvâriesby only
about5/, from the 960urits plannedfor eâchday and all vehiclesbuilt areshipped
on the dailv crainto thc Aloha DistributionCenccr.

Dernand Arnplification for Alpha lu|otors

2800

2600
30r/.
2400
20y.
2200
107r
2000
1920
1400 -1010

1600 .20%

1400 -30%

1200

'1000

10 15 30

- ALPHAPBODUCTION - ALPHAORDERSTOBETA
I
I
f
t
t
rhe mix ol modcls(A vcrsusB) variesby only about5% daily as doesthe
Similarl-v,
rl 'liim
mix of lvipers(Standârd with flar paint versusHigh Tiim with glossypâirt.)
t On average, Model A accountsfor two thirds ofproduction and Model B one third
rvhileStandardTiim wipetsaccountfor two thirdsof demandand High Tiim che
al
rctuainder.:fhus prolluctionârd shipmentsârc fâirly stâblcat thc customcr(righc)
- end of our map.

:r Yet,aswe plot the productionand order/release databack upstream,we note tl'rât

t the,rmplitudeofchângesin both produdion ând releasesincreâses markedlyfrom
in productionâr Alpha lvlotors^ssemblybecome
facility cofacility.Nlinor variaLions
il much lârgerby the rime we reâchlletâ Wipcr'sassemblyplanc,ns shownbelow.
-l

-t

al
Dernarrd Arnplification inclu.ling Beta Ultipers
rl

2800

2600
30%
2400
207o
4
2200
10%
2000
,,},u
1920

1800

1600 Y -20%

1400 ,' -30%

1200

1000
10 15

ALPHAPRODUCTION ALPHAORDERS10 BETA

BETAPRODUCTION BETAORDERS
TO GAMMA
 B,vthe time *'e reachGâmmaSrâmping,chcvaria[iorsâ.e verv large.
Indced,Gâmma
Stamping'srelcasesto N,lichiganSteelvariedby nearly40% in the monrh prior ro the arr;val
ol thc meppingtcam.This information f.,rGammaSrxmping comtlete,rhg p.m.r6
AmplificationScrecnfor our clrrrentstale,âsshownbclow.

Tb makethis veryconmon phenomcnoncleercr,rve,r,csummarizcdthe nraximum

pcrccntage
changcin dailyproductionanll dâily releascsovcr the pâsrmonchfof
eachfacilityanclaligncd
thcm in a simplifiedDemandAmpliticationchârrasshownacrighr.\\rc,veplaced
this chaif in
a box in the upperlefi cornerof ourCurrenrSrarrmirlr,irssh,,un un rh"
n.:*rpog.,p,."u.

Derrrand Arnplificâtiorr Screen in Current State

2800

2600

307,
2400

2200

2000
1920
/A-
1800

1ô00
vl -20%
1400

1000
t0 15

ALPHAPRODUCTION ALPHAORDEBSTO BEÎA

BETAPRODUCTION BETAOADERS
TO GAMMA
GAMMA PRODUCTION GAMMA ORDERSTO MICHIGANSTEEL

Ti) deâiw;rh thc erradcorderflol\,,Bcra,Gâmma,and MichiganSreclmustcithermarnrarn

excraproductioncapâciryor cârryIârgesrocksof finishcdgoocisin invcnroryor tlisappuinr
tlownstrcam cusrorncrs a significânrfractionof the time.Bccause failirg ro shipon rimeto
ùccr cus|omer ncedsrsân unâccepteblc alternarive for supplicrs
in rhc auroindLrstryand
bccruscextraroolingcenbc vefl cxpersivc,mosrfirmsin !hisindusrr\rinclucling llere,
Sirnplified Dernand Arnplification Screen

% variation Demand Amplification

35
30
25
20

10
5

-fhe
Gûmmr,xnd i\lichiganSteel,carfyexlm inventories!o protcctthr: customer' cost
of dcmandamplification
implicarions arethereforcâpparent in thc amountof exlra
in !he vàlucstream.
invenrorics

Wh-\,docsrbisgrowingvarialionexist?For dre simplereasons rhntproductionproblemsoccur

in cvcry plant(evcnthe leanestl),transportproblemsoccuron everylink, fccdbnckon curron[
conditionsanclamountsolproduct on handis ncvcrcomplccelyaccuratc, and largemtntmum
Dmducrion andshipmen!quantities câusoverysmâllchanges in thc amoùntsneodcd
downsûcâmm Dtoducemuchlargerchangcsin lhe âmountsrequesledand producedups|reâm.

example,if one wiper is discoveredro be defectivoat the assembly

To takc the wors!-ctrsc
plantand thc rc-orderamountis just on dre edgeof onc new pallet(containing320 wipersin
oùr cxample)rhe ro-orderwill jump to 2 pallets- or â total of 640wipers- eventhough
only one additionalwiper is needed.And this phenomcnoncân br: repeatedsevcralmore
timesas the orderflows backupstream,creatinga wave Thc reasonthjs wâvegrowslarger
aswe moveupstreamis becauseof the nurnberofschedulingpoints(8) ând rhe lcngth of
the delays(cotaling58 days)beforeinformationis actcdupon Eachsystemrocalcitlâtes irs
schedulebesedon irs own (not very accurate)forccastsand on inlormalionfiom customers
rhâris âlreadyup to â week old. This is the familiârand dreaded"ForrestcrElïect"
documentedby JâyForresccfât MIT in the 1960s

Thc irregularitiesin chesystemarcfurtherexaggerâted by the misâlignmenrofwhat the

olficialschcdulingand releâsingsystem(in the centralizedcompucers) aresayingand t'hat
rhe individuâlsin shippingand reccivingjobsareseeingand doing.'lhen' asmisalignmenrs
grow,confidencein the formâlsystemdeclinesârrdmoreând moreofthe âclualschcdulinÉ1
and relcasingmay be donemanuallydespitethe largeinvestmentsin informationLechnolog):

PARI l:THË C{IRRE\-i S iÀ;: r.rÂ'

f

t
Demând A]nplificâtion
-

|!l
: fiËl<-
F-Jl

ra

-
1
rætffi-t i rl
lMichiaanSteell -a--- :
I ee;iêe co. |
14daYo riÊl rl
t"-l
tl
l- rrac"lt"-f
'.-\---l. <-
: \ \
i' T-;L'\ \.
.. lweor'l {
!-lt
\8
\ '.1 2 44l r7
' .- - e -\ -
\)Jlii
':lr,L4 Fi!
l----., i
,l 32nffi"ffir--r> |
NS-
-V
lonawahàa,N\- '6^
.., Hâtttt,eilx .,.
RM536h. -1

o.3à. 4.Oà. o,25 d. o.2sà. -

20.6 à. (3t313) 4.6 à, (5Oe,)
22(3) 21(3) tr

tr
tr
tr
F
3a
t
 Final Current State Map Showing Demand Amplification

:
-\ fi Nl
E i .:-:-
-----Lj:lJ- r--.*G---f r=
=- frffiî -4dâ,ê Aiminohah,tll
l--w""rÇ-l
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tiÊl --t P'tV
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I AtPha I
ilïil l D l s t r i b u t i o hI
cenret
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z4"ct*;;ào;
,/,,,1 _
i // | e6otaar
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r--l{_--l 32oo I
I-l . .ltorr
21391
oz tt I

F"-l- r-r--L.-\
f1! U4
rrrrr-+ rnT--r)
TIME
r-otâl = 44,6 da\s

Î"\ffn = rtzawu

^vatue = 32'1eeô.
L@rng 547 din.
4.Oà. 4.O â. o.5à.
o.5à. | 1 | O.5à. | | 2.6 à. (12o5.) | 1

4
-
 The Limits of Our Map
^s the tcam finishcs recording these product and informarion florvs, it seems scnsioreto
concludethc Cùrrent Scâtemap âr this scopeof mapping.'lhc rnap cloesnor go all rhe wav
dorvnstreamto rhe customer trking delivery of a caLat rhe dcalcr.shipantl it does nor go al
the wây upsrrcâm ro thc steel mill, much less to ore in rhe groulld. N,lâppingthese âddirional
stepswould doubtlessprovideadditionalinsights,but to do so woultl reqLrirclargearnounrs
of time and cxpense ro examinc organizâci(mswhosc behâvior the reâm hâs lirde prospect of
chxnging right now Yct cven within this scopc, rhe rnâp covers a consjdcrxblc portior of â
Icngthy ând compicx 1'aluesrrcâmând uncoverssomc very provocâtivc pcfformancc ieaturcs.

What We See When VVe See the Whole

W;th regârdto physicâlflotvsrvc norethat 4:1.3dxys{nd 73 actions()n thc proLjucrâfe
nccdedto achicve3,281scconLls (54.7minurcs)of vrlrrccrcutioninvolvingonlycight
'f
â,rtions. his mcânsrhtt 9().t)9<)2o/ô
of tllc cl\rscd cimcrn<l89%of thc trrtalacrions,
\Àôilcclrfr'cntly
ùnâvoidablo,arcoi no varucro Lnccus(rtlcf.

Wc canoxprcss
rhcsofindingsin tor.rrsoi lord cirlcsrnd invontor.y
tLrr.ns:
LEADTTME (in days)
Grmma + llota + Alph.r= In-ltrnr*
Curent State 20.6 ,+.6 2.8 31.0
'lirnspon =
+ lirtal
13.3 44.3days
INVËNTORYTURNS
{annually)**
t1 19
*lncludesthreedaysspentin wârehouses andcross-docks.
x*Notethatfacilities
with simple,frequenractivities
(e.g.,assembtyoperations)wilt hâvehigher
turnsthanfacilities
with manybatchoperations, and individuat
fâcitities
wiI havehigherturns
thanthe entirevaluestream.

Wirh rcgard to quality aûd dclivcry reliabilitv. we noro that cncl-oi thc-valuc srreânrincjicâr(n.s
of both ncasures ârc vcry good (5 ppm âncl I7r rlefccrivc shipmonts ro rhc cusromcDbur rhis
is âchieved chrough â soriesof scrocus$,irb signilicanr costs and dela1,s.

With regârd to information eboùr cusromer demand! wc nore thxt orcler infbrmârion is âcrcd
upon up to 17 rimcs and stor.ccl
lor up to 5ll clâ),sin queues.Whar is rnorc,six ilclividualsin
rcccivingand shippir,g.lirecrlyinrcNene in mcdiatingorder florvsrvirhinan cxpensivc,
technicâllysophisticaredinformarion managemenrsvsremthâr on its iàcc is rorâjlvxuromârcd.
Evcn with this intervenrion- end in somecâsesprobablybecauscof it dcmand
rmplifioârion,vith compensâring inven|ofi(-sto pforecrcusromers,increases
srcaclrtv
to
r lcrv high lcvel âs onc looksback up ùc vâlue strcâm.
-

Èl Current State Srrrnrnary

at
Current
g State

E 44.7
Total LeadTime
ll days

VâluePercentageo{Time
a!
( v a l u ec r e a l i n tgi m e o.oa%
t to lotaltime)

Ë ValuePercentageof Steps
(vêluecreatingsteps 11%
to totâlsteps)
È

È InventoryTurns 5
Ë
OualityScreen
tE (detectsâtthe downstreamend 400
ovêrdefectsat the upslreamend)
*
DeliveryScreen
È
(7odefectiveshipmenlsat the a
downsùeamover% defedive
shipmentsat upsveamend)
Ë
DemândAmplificationIndex
t (% châfge in demandal downstreâm 7
ênd over% chânsein demand€t
upstr€ameno,
t
t ProductTravelDistance
(miles)
5300
t
E
E Finalll', we must notc a suddenly obvious point âboùt the performancc of the many

â deparrmcnrs and firms rouching rho physical product on its 44-day jolrrney and ordcr
inlormation on irs 58 dav journcy: IJowever effective thc var'iorrsfuncrions - opcr,Lti,,n',
d'
production control, logisrics,menufacturing enginecring, quality, and purchasing- rnay be
in âchieving rheir o\['n olicctives, they are nor at âll cffective in supporting this prodrtct on
its paù to rhc cusromerWhar'smorc. bôcâusethe processes involvcd alrecommonto âll
productspâssingdrroughthcsc depàrtmentsand firms, it is highlv unlikel-r'$at thcl_rre
doing a berrcrjob of supporlingorhcf productIàmilies.The funcrionaldiagnosticaspcct
of our extendedmâppingprocess which rve bclicvc is icsmosr importantcontribution
to firms in rhc long run functionsàll ùe $'r-v
rhereforcrcvcâlssôverelymal_perfonning
up and down the vâlue stream.

PABT I THECUNRENTSTATEIV4AP 4 1
 =

tr

If this is an accurateportrayalofthe currentstate- and,becausethe valuestreamteamhas

D
direcclyobservedit, chereis goodreâson!o think that it is - there âre surelyopportunrties
to spccdthc accuraredr:li1.ory of productsto checustomerrvhile eliminaringlargeamounts F
'Ib
ofcost. beginto do this wc needto specifyin ùc ncxt scctionLhcfcat r'csof a lcan
F
extendedvaluestreamthat can deliverrhesebenefirs.
E

The Porrver of Simplicity

"What do yorrconsiderthe /argcst[scnle]mrrpdrât woukl bc rcllly uscfirll"
"About 6 inchesto dre mile." F
"Orrlysrr rzclresl...\Vc
acruallyrr:rdca mrp on thc scalcofa,'rzilcIo the nilel"
Ê
you uscclit much?,I cnquircd."
"l_Iave
Ê
"lc hasncvcrbcensprexdour...rho firrmcrsobicctodltherlir $,ouldcovorthc wholc
country,ânLlshutoùt thc sunlighrlSo now we usethe countryitsclf,rLsits own rnrp,
arldI âssurc
vou thrt it docsvcrywcll."
t=
- LorvisCarroll,Syft.,ia
and Bruno Conclucled,Obtptcr 11
aâ

As you experimentwith drâwingoxrondcdmapssuitablcfor your productfzrmilics,you

mÀywonderjùst how much dotail to includo.Wc oftcn find th^r noviooroa,ns- lil(c
I-ewis Carroll'srnyopicmaprnaker- want to recordeveLyconccivrblcdctâ;lâboucrho
currcnt statc,âswell as mappingrhe flow oievery pârt in d1cfirishcd product.'fo mâlic
roomlor all this detâil they even crearewall-sizedmâpsin corporâtewâr .ooms.

Buccoomuch detail in ân extendedmap interfereswith cleârthirking âbouthow to

improvc tho valuc slrcam.Wc thcrcforeufgo tcams!o l(cepextcndcdmapsassimplc as
possible.The objectivemùst be ro truly "see the whole" by slrmmârizingthe vâllrcsûcâm
on a singlcshcccofpaper(11" x 17" is a goodsize,A3 in Eùrope)and ro rrsethisbig
pictureto râiseconsciousress imong âll thc valucstroampafticipanrs.Only choncanyou
identily waysto quickly improveperformanceâll âlongrhc vâlucstrcdmând motivalcthc
firms involvedto optimizerl,e whole.

=
42
 Principles of a Lean Extended Value Stream
t ifty vearsegoTiriichi Ohno at Toyotaenumeraced seventypesof wastein valuestrernrs.
\bu nrayhavethemrremolizedby norvbur rbevbearrepeating because the lypesof\rrstc
arc thc slme 3t the process,thc làcilir),,rnd the extendcllvalucstrcamlcvcls of anal,vsrs:

Oveproduction- Nlâltingitcmsupsrrcambclorcanyoncrvantsor nccdsthcm clol,nstrcam.

Defects- Drrorsin producrs,pâperworlisupportingproduc$,or Llclivcrypcrfor'rrancc.
ctl Unnecessaryinventory- Productsiû excessof the amountncerlcdto insurcmeering
cUstomer
needs.
Èl
Unnecessaryprocessing- ^ctivitiosnot âddingvalle thatcouldbc climinarctl,
suchrs
t scpxrxtoinspcorion
stcproplxccdL)yâ sclf-nronit{)ring
machincrvithâuro-stop, or flash-
romovdxfrermoldjngolin,imLtcd
rith highornToldtulorinccsxnd l)otrcrûroldnlrintonxûcc.
rt
Unnecessarytransporlationbetweenwork sites- NlovingProdrrcrs bctrvccnfacilitics
ù $at ooulclcrsilybr::consoliclrtod.

-
Waiting- [JsLullyl)roduccionîssocidteswlLitingfor mtchinoscocyclc.
Unnecessary motionin the workplace- ^ssocidrcsnrovingout of thcir worlispâcc
f,
ro find mâtcriâls,
tools,workinsrructions,
âod holp.
È
Wbcnmappingat rhc lacilitylcvclàndât thc process lcvclwithinTùcilirics, wc rrc rlw.lys
fl concernccleboùt overproductionduc to poorinfornràrionllows r/irrlfi 1àciliticsrnd thc
f, dcsircof nranagcrs to rnoveprochrcts
âhcaclto rncctperforrnance mctricsfor cquipmcnt
rutilizttion.(Ohnoâhvâyss csscdrhât ovcrprocluction is thc worst\r,rstc.)Wc arc rlso
tl lool<ing proccssing,
carcflllyfor unncccssary dcfct:ts,
rvaiting,end motion.
È
When rve more our anâlysisof productend inlormarionflons ro rhe exteûclccl, mrcro
.{ lcvcl,ovcrproductionis srillrtcr;tic.rl
concornbul nowclucro crraticinfomarionflorvs
bcrwccnlirms ând làcilitics.Ancl\r,cârc now spcciallvintcrcsrcclin ùc nvo iinal lornrsof
lvâste:unnecessaryinventories(clueto erraticinfbrmâtion1lowsâswcll îs incâpâl)lcxnd
.* batch-orientedùpsùeâmprocesses) àûd unnecessarytransportation(crusecltrr loc.rti,,n
decisionsrhatseekto optimizeperformance ât individùâlpointsalongthe !,âluesre.nl
raûcr thantho rvholcvahrcstfeam). Rcducingcheseûree formsofrvaste- /argclr'ûr'
.d bettel mdtlagihgin[omlatioh flaas and logistzs - rvill bc ccntralconccrnsfur our
exrended'nrapping ol'liture stirtes.
-4
What shouida leanextendedvaluesrreamlook likel

First,everyonein the entirevâlueslream should be awareof the rate ol customer

consumptionol the product at the end of the stream.
Youarc probâblyfâmiliarrvith takr cime,which is cheamountof producrdcmandc.l
pcr unit time adjuscedfor the amountof productiontim,: âvâilablc.This is a
\r.ondcrfullyuscful conceptwithin everyfacility becauseic tells everyone$e
necessary râteofproductionfromminu[oto minuceto mcctthc nccdsofthc next
downscream cuslomer.I-Iowevclnorc thât râkt rimc will vary from facility cofacility
alonga valuc strcamif thc amountofavailableproducliontime differsfrom facility
ro facility and if downscrean, stepsincorporâtemore drânone unit of an upsrrcam
'fhus (to
colllpon(-n!. tak! rime acthe Alpha MotorsAsscmblyPlâtt is 60 sccoDds
build960vehiclesduringthc sixtccnholrrsof prodLrction timc rvâilnbleeachday)
but is 30 seconds at Beca's
wiperassembly plantrunningchesameshift pâtccrn
(becauseeachvehicleneedstwo wipors)ânLlwould fall n) 1.5socondsif thc wiper
xsscmblyplantswitchcdto only a singlecighthourshifccachday.Ihus, in most
cases, dret€is no singletâkt timc for drc cntircvalucstrcarr,

flowcvcr, cvcry facility âlongon !hc suoâmnocdsto be iwrLc of thc cnd ràtc of
consu,npcion to calcularc fâcility-spccific
tâkcrimc.Production ar cvcryupstrcâm
stagcshouldtur on àvcrageàt thc sâmcrâtc,âsadiustcdfor rlrc âvailablcamounl
of prodùcrion time ât cechstcpânddrc noodto makcmultiplccop;csof somc
productsto incorporâtcin produccs downstroam.Any timc wc scc â chronicpàttcrn
of imbalanccdproductionratcsin diffcrent facilitieswe know wc dont havcâ
leân vâlùestreâm.

However,pleaseunderstand thatevcryfâcilicyupsrrcam shouldnot conductits

âcriviricsin locl( stopwith rhc currentmte of rhe end fàcility in the streem.This
seemsto be the implicâtiontodayof mâny nalveclaimsfor c-commcrccând thc
web: "llyoù know rhe râteof end consumptionright now you cânschedule
yoursellaccordingly." In facc,what cnchfacility shouldprodùceeâchmorninÉl
is a levcledmix ofwhat thc ncxt downstreâmfacility requestsfor deliverythis
rftcrnoonor tomorro\r,. Knowingchangesin actualconsumptiona! the end of thc
streâm (particularly the âmplitudeof thc changcs)is cxcrcmclyimportanrfor
capacityplanningbut is not sufficientfor controllingproductionrodey.
a
-

- 'lVhat
we canlearnfrom comparingproductionratesupstreamwith actuâlconsumption
-
downsrream is how faithfully the productioûcontrolsysremis serding true customer
dcmand(rvhichwe call "signal")upstreamversusdistorteddemand(whichwe call
I "noise").If rhereis significântnoise,prodlrcing"demândamplificacion" unrelâtcdco
ù
cruecustomerdesires(aswe seein our CùrrentScatemap),stepsneed cobe raker
ro eliminatethcsegyracions in futurc stâtc..
-
A secondleatureoI a truly lean extendedvaluestreâmwill be veiy liftle inventory.
t 'fhis
inventorywill consisrof rhc minimum arnountof (1) rawmacerjals, (2) tvork-in-
I process, and (3) finishedgoodsrequiredto supportthc nocdsofthc ncxr downstrcam
customergiven (a) the variabilityof downstreamdemand,(b) the capabilityof
!l
Lrpsue?rm processes, and (c) the inventoryrequiredbetweenprocessing scepsdue co
-l bacchsizesand shippingquântitics.Toyotacallsthc minimurnârnountsolinvertor)
neededto sr.rpporc checustomersin a valuestreamat àny given time the standard
Il| 'fhe
inventorp srândârdis câlculnrcdfor oâchcâtcgoryof invenrorydepending
ù upon its funccionin rhe vâluestroâm.'l-oyotâ continuallysccl$ ro rcducerhis
âmountby dccrcâsing bâtchsizcs,increâsing shipmentfiequencies, leveling
t dernand,and improvingcapabilicy.
tt

t||
Lovv Inventories \rvith High Demand Variability and
tI = Chaos
Lo\ r Process Capability
I We sometimes encounterleanimplementers who seekto reduceinventories
alonga valuestreâmwithoutbotheringto calculate the standardinventory
I neededfor the currentlevelsof vâriabilityand capability.
An immediate
"loweringof the waterlevel"may indeed"exposethe rocks"and put
ct
pressureon everyoneto go fasterto reducevâriability and improve
Ira capability.
However, a morelikelyconsequence is chaosand outraged
customers whenthe newly"lean"valuestreamfâilsto deliverthe right
l{ amountswith the rightqualityat the righttime.

A betterstrategyis to calculatethe standardinventoryat everystorage

pointalongthe valuestreamin the currentstateand immediately eliminate
!a inventories greaterthanthe stândârd.Then lowerthe standardand reduce
inventoriesto the new standardin a futurestateaftervariabilitv
and
{
caoabilitvissuesare addressed,
1

EI

1 PARTll:ïHE EXTENDEO
VALUESTREAIVI
The Many Forms and Uses of Inventory: Greating a Strategy
We'vede{inedthe threetraditionalcategories of inventoryand compâredthesewith
severaladditionalcategoriesin commonuse (âs shownin the nextpage).Notethatthese
categoriesoverlâp."Finishedgoods"can be "safetystocksl"bufferstockslor "shipping
stocks'lWhattmore,the sâmeitem- a palleto{ windshieldwipersin Betat finished
goodsarea,for example- can be includedin severalcategories - a "safetystock"ând
a "bufferstock"in the caseoTour wiper- dependingon the practiceof the firm and the
The keypointwith regardto definitions
facility. is for the membersof the valuestream
teamto agreeon a consistent useof this sometimes confusingterminology

The key point with regardto the inventoriesthemselvesis for the team to makea strategic
planfor everypan in a futurestâte,describing the reâsons for keepingspecific amountsof
materialsand goodsin specificplacesas standardinventory. As they do this,manyvalue
streamteamsdecideto actuallyincrease the amountof inventoryin a downstream finished
goodsareanearthe scheduling point,bothas a bufferstockand as a sâJetystockThis
guardsagainstdemandamplification trâvelingupstreamandfâcilitates the reductionot
work-in-process anclraw materiâls to a very low levelin upstreamfacilitiesBy increasing
inventoryat one point- seeminglya stepbackward- it may be possibleto reduce
inventoriesat everyotherpointalongthe valuestreamandfor the vâluestreamas a whole

Tlre Many Fofrns of lrrrtentory

E:E
rfrll
l.,"irbll
EEE
#Él
lr-ie ll.,'ir-l|æçl
t-

I
a

3
a
t
TRADITIONAL CATEGORIES
ta
Definedby their positionin the valuestream
t
Raw Materials
ta Goodsenteringa facilitythat havenot yet beenprocessed.

I lrvork-ln.Proce6s
Itemsbetlveenprocessingstepswithin a facility.
l|

I Finished Goods
Itemsa facilityhascompletedthatawaitshipment,
I

I
ADDITIONAL CATEGOFIES
I oy Inetr purposeIn Ine vatueslream
LreTtneo

I Sâfêty Stocks
Goodsheldat any point {in RawMaterials,
WIB or Finished
I Goods)to preventdownstreamcustomersfrom beingstarved
by upstreamprocesscapabilityissues.
I

I Buffer Stocks
Goodsheld.usuallyat the downstreamend of a facilityor
I process,to protectthe downstreamcustomerfrom starvationin
the eventof an abruptincreasein point demandby a customer
I - a demandspikethat exceedspoinl productioncâpacity.

Shipping Stocks
Goodsin shippinglanesat the downstream end of a facilitythat
are beingbuilt up for the nextshipment.(Theseare generally
propoÉionalto shippingbatchsizesand frequencies).
a

P A Ê TI I : T H EE X T E N D EVD
A L U ES T Ê E A M
A third fealure of an extendedleanvalue streamis as lew trunsportlinks
âs possiblebetweensteps in the productionprocess.
As we haveûotcd earlier,no customerattachesvaiueto rnovingcheproduct
âround.Indeed,customcrswill ofcenbe willing to pay more for a producrif ir
caû be suppliedin the exaccspecificacion they rvantvcry quickly.Thus we
ncod to askaboùtcvcry ùansporrlink: Is rhis roaliynecessarylSubsticur;ng
modes,notablyâir for truck, is ccrtainlyan alternacivcway to reduce
throughput time,but cypically at an unaccepcablecosrprcmium.In general
we want to eliminârctransportratherd1ânspeedit up,

A fourth teâtureot a lean valueslream is as little intormâtionprocessingas

possible,with puresignâlând no noisein lhe inlormationflows that remain.
'lihis
moanspulling informationmanâgement downlrom higherlevelsoi rhc
orgâtization,ir romotcinfor'mationmanagcmcntdopârcments, to thc shop
floor wlrcrc cachprocessingsccpand cachfacilicycansignalrhc prcvioussrcp
ândlâcili!ydircctlyâboutits immodiarcnccds.Wo shouldscbcclulc rhc c,rrirc
valuost.câmfromonlyonc point,in driscâscrhc âsscmbly Iincof AIpha,ând
pull mâtcriâls bachup chcvâlucsrrcâmfromrbispoint.

A fifth featureof leanvalue streamwill be the shortestpossibleleadtime.

Indeed,chismaybe the mostimportantof àll.'làiichiOhnoofrcnrcmarkcd
the wholcpoincof the TbyotâProducrion Systemwassi,nplyto redùcclcrcl
times fiom râw rnatcriâlsro thc cùstomcr.The shorterdrc lcad time, rhe more
likcly ir bccomesthât the cntiro valuescreâmcân rcspondto reâlordcrsrathcr
châninaccurâteforccasrs. ^nd the more likcly ir becomesdracdcfccrs,p.ocess
vâriâtions,and everyorhcr pfoblcm will be detcctcclbeforcsignificdntwasrc
is created,

A final principleot â leânvaluestreamat the macro level is that changes

inlroducedto smooth flow, eliminateinvenlories.ând eliminateexcess
transportand leadtime, should involvethe least possibleor evenzero cos1.
What'smore,capitalcosts,when they arencccssaryshouldtre dcfcrrcduntil
eâsierând quicker âctionshâveâlrcadybeen tâken.
The Plan for the Remainder of this
Breakthrough Guide
Thc lasrprinciplesug€iests
thât rve addrcssin-plant productflows firsr using
ùe methodsdcscfibcd;n Learhihgto Seear\dCreatingCofititluousFlotu.
Theseentailpracticaily
no câpitalcostsandwill createryhatwe wiilcall our
FutureState1, asdescribedin ParrIV of this Guirle.

Once florv and pull havebeen inûoduccdwithin eachfacility,eliminaring

mânywâscefulstepsin the process, it will bc rimc to exarrinethe informarion
ând trânsportlinks bctweenfâcili!ies.Ofreû it will bc possiblcto smoodr
lhe valuestrcamânLlrcduccthc nced for buffersby incroclucing rlircct
fccdbachloopswirh levelingmechanisms for infor,nâtionflowing from câch
downstrcam"cùscor1of"cothe precedingupslrcam"produccr",Wc w;ll do
dlis ;n FutureStâte 2, as dosoribcdin PârtV of rbis Guicle,noringlbât â
smoodrprrll of ordcrscrn ofcenbc tcsteclon rn oxpcrimcntâlbâsisfor onc
producrfamily rvithourcffcoringinformâtionflows for odrcr p()duolsgoing
throughdrc s,lmefâcilities.

With infonnation flowssmoorhed ând ûoiscrcduccd,ir will bc rimc rc

rcduccshipmonc sizcswhilc incrcasing
shipmenrlicqucncios l)ccwocn cach
laciliryandit's upsùeâmcuscomor. Wo rvillalsodo drisin FururcStltc 2.

Ffcqucnrdelivcryin smalllorswill requircthc inrroduorion ofsomerypcof

"milk run" logisticsbetwccnfaciliticsand for dre first time will râisethc issùc
of relâcions bctwecnmultiple producrlamilies.This is bccauscorgânizingâ
milk run for the pârtsnccclcdfor only a singleproductfânily xt chencxt
downscrcam facility will often be impractical.Insccad,majorporrionsof a
làcility or ân entirc fâcility may needto make the leâpfrom dcdicâtcd
shipmenrsârrivinginficqucntly to sharedshipmentsârrivingofren.

Irinally,after Future Srate1 ând l-ucureStâtc2 arc achieved,ir may make

senseto begin rc-s;zingand relocatingactivitiesin orderb "comprcss"rhc
valuesrream.Doing this may make it possible!o removelargeremaining
blocksof timc ând costand movechevaluestreammuch clrxcr to pcrfccrion
in an ldealState.
Becausevâluestroamcompression will often requiresignificantinvestments
by a firm at Point A that lower costsfor â firm downstreamât Point B, some
methodwill be neededcojustily theseinvestmentsand to determinehow che
firms can sharethe costsand benefits.We'llprovide somesimpleguidelines
in PartVI of rhis Guide,describingthe Ideal Stâre.

A truly ideal stacewill be chehâppycircum$tance in which all accionscreate

valuewith zerodefectsand consumerrcsponseis instantaneous. No one is
Iikely ro reachrhis pcrfectrealmsoon,but it is highly provocâtiveto âsk
whât typesof producrdesigns,producriontcchnologics,and locationallogic
cancloseâs much of rhis gap as possible.WhaCsmore,the processof
developingan Ideal Statecan provideân invalrrableNorchStarfor steering
eachvaluestreamthroughsuccccdingprcductgcnerâdonschâtcomecloser
and closefto perfecrion.
E
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ç

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tF
,ç

rE
tr
'E
rE
E
tr
-

.F
F
,,jF
,F
*i*

lç
ET

E
Future State I
t5 Once the tcâm completesthc Currenl Statelnâpând evcryoneâgreesùâr
it is accurace, the kcy questionbecomes,"What shouldbe donc in what
5
sequcnceto crcatea bctler ftlture stale?"In our cxperlencc,the eâslest
EI placeto snrt is to crcatefuiure stateswithin thc wallsofcach of the fàcilirics
gl rhe productvisitscl'I rouccto dre cuslomer.l]y drawingand thon achicving
â lururc sate of the tyPc describcdi\ LearnirS ,o S?3wirhin cachmx.jor
5 t'rcility it rvill bc possibloto achicveâ subsknrialimprovemcttin tho
performanccof the enrirevaluostreamâûd to do dlis w;tlrin à shorltime
'fhis
crearosconfidonoein lhc proccssând givc tcâmsâ sensethât mlrch
g
morcis possiblc.

lleginrirg rvirhrhisstepnlsohasthc criticxlâdvanrâgc of imPosing â

tjl "priccofadmission" on âll ollllo vtluc strcâmpârticiPants l)rawingthc

currcn[s!âtomâpis flln but ontrlilsno roiLlcommilmen|. [Cswbcnyottgot
l)t
|o tho, "Whâtâfcwc goingto clo(xhy rbollt rhc wâslc?"qucstionthàttho
harclissucsarisc.Insis[ingthrt c.ch p{rticipÀtingllcili!y ùndfinn quicl(ly
implemcDr âcnlalimprovcrrcnts asthc priocofcontinuiDg with the cxorcisc
âlsotcnds ro gain bu-\'-inlirr tlro process.Yct thc hurdle is not too onofolts
bccâusc littlc caPiralinvcstmont is rlcodcdto âohicvca firturcstatcwithin
the irdividuil fâcilitics.

Level Puf l and Flovv Within All Facilities

In AppendixB, we showthe Futùre StarcMaps for the Alpht Nlotorslrinal
AsscmblyPlânt,the BccâWiPcrsComPonentAsscmblyPlânt,ând dle Gammâ
Stâmpinglrârt FabricâtionPlânl A! the urgingoithe cxrcndedvâluestreâm
teâm,thcsewere implemcntedand stâbilizcdover a chree-monch periodby
newly appointedvâluescrcâmmanâgersin eâchplant. (As notcd earlicr,no
changeshevcbeet attenpted ât the Alphâ and Bctx crossdocksand in tbc
Betâwerehouse.This is boù to kecp the exorcisemanâgeable ând becalrse
we will seekto climinatc thesefâcilitiesin È'uturoStâte2 )

rcsulto1lheseâccions
The cumùlâtive at thc plantlevclis shorvnin thc
summârvboxcsoû thc Future Stxte 1 mâp.

t:a- ,, :---". srÀ-. I

 Dêmand Amolification

{.-t I

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1 Wiper Value Stream Future State 1
il
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w e 4 \ \ u l M R P | t r N l
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a---.-. - . - - -/Ë\" - . - . - - _ . _ ) 32aa l
t -vl |
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I lJ'v lrl tP+
iEÔ rrrrrrr->
_ | -t t____-:J .a NME
r......'t
j'!?ï.î...
I
#1.1........."'
-r*
f-- *;;---f a ,ooo^ tnffinr= osaas
- | eht"B"th-1 Yêât I shtPbârchI
1 | "è"no | = 6 P â r ê rI.
lDêrè'rt"e=3%l = tccûye
1 W4 1 ê

c"yo^"='#)ffi
4.O à. 4.O à. o.5à.
o.5à. o.5à. 1 1.3à. (12o5.) 1
4 7 (2)

@ \
'@
io]iilr/e iir,::Li!!ii! ,.;Ji i{l
ill:r.g. rLr1,r rl;-':rl.i[{:!]:
li! rt r,t:,,n r i(:!: !rr,-liJ:l
i1,rili,,7l\'/,J r7- r("I
-ilE t!i.rii Stili t'r \rv.Llliii,r
,irrf/ inirlt ,/ Ii'r'r', t,11
irirrË,V Lrrir,'itrdJl ilil"l,1t t{o
i]!r!t! [!1, Gù{!lil!I-:.'ti
ii i,r!,,i\',r,rtl;rlriii tlEl-iiirlltutll
\!r/[ill.]ilir'rr1tt'-fliU
\l^ri.!:tl:j('.1::rO*i 'iliO
slrrt.t 11iiir'tiin-_rùl:ll["r;
t i ,lji Lr,iIJ i [tit41dù
irrrLldl Ll[Ëû()ilfl[ii{,
ItId iriill fa.tll|j tjt ' (,
o (,rilelii (i 0i, rtj
'ili,ûdrlllLl
ùLldL
Or,tti i!ii;'r.J-= t€
, {.-!^!a".l:t
iI) fjl-{ôitr) rtj
t('! iug-€ aiiI,- lt;6t{:}ll
It.|!rirlrdllltJ[€ taia,-r
iitt,ctlIrr:):".- I
.J;{ù!lli l-àDttte}t\fl.}El
ùt rj,oliirldir lutiliÊr
li !l! r,tl.lLj1"{:r(,-!liiLli}l
si firfÏt ir1{ie !1€lo
,!r'/rllirj \rrli! ilril |IaGil
lïitr'll'i1"/1rù+I.]lnl.ûaolllv
,:Jir"riç) .fi ir i:tr!1il!li(llfiiil
11ùù I i ir! [:] Gr',oil€(-ni! iIi)
L)j.il.ritù.J.i,irr:l
l!È sriij:itÈ:)t'rl
r(:iriir Êi irf f{-Jrfftl
' !it,r/:'
!i,;io ll.ri'!
Future State 'l Chânges
,\t Ahhx NIot{)r'si\sscmbl_.-it rvNspossil)lctrl clirlinxrc r liiriin{
opcfâtion.rn.ldelirer px|ts dirccrlyfronr rcccjvineto lifesjrlc. \t thc
\rDc.iIrrc, r sinrplcprrll svstomwus irtlodrrccri1)crwccnlinrl .r\scnrbl!
rnrl tt ipct sLrLrasscnrbl!
n) rut rhc .rnrountol irvcntor! il irLlf $.lrilc
snroothingrhc norr
^r llcm Wit)crsihc icunr rxrli athrntucc ol rlrc u;rprouchLlcscribcrln
Ctu'tltit1!(:otitnluats /rlorr.,rorclocutcJ lilnrcrlr srrrll rrlolc rusls irrto
o n c c c l l \ \ ' h i l cr o ( l u c i n r- h c , r L , , , i l )oc l, l , r o r l u c r i o n , r s s o c i r, cr rccrsl c t l
l i o r r rf i v c t o r l r r c c l.r r l r Ls l r r r r1ci r r c ,r l r cr c l r r c r c u r c (l lc i c l c r lp r L l Il r r p s
l i o r r t l r c s r r l c r r r r u r l iicnt r h c s l r i t ) t ) i r g , r ctr. )r l r cx s s l r l ) l \ f c l l x r i l l r t ) n l
r l r cr s s c r r r l ) tl :\ c l lt o t l r cs L r ; r c r r r r u rilni cr tc c c i \i r r q r. o r c r l r rcr i r i c r r t o r i c s
l r i r r l l l r l. t ( j r r r r r f rS
u t l | | ù p i n rr.l r c l ) l r c hn l û L r c( ) l r l r cr ( l r t r i q l n ( l
; r , L i r r t io
r r;gr c t t L t i o r vr sr sr c c c p t c ( l i ) rr l r c n i o r i r ( : nIri.r L r h cr r| ] l L r r ri n r ir 0
i n t r o t l r r ri:rcr r t i n r r o r rl lsn l r y c c l l L r l : L r i zti hn cqs c , ) t ) c r r r i o nr h s .c t c u r l
locrisco
( ln r n r o ( l u c i n rl d ( i l c ( l t ) r l l l r r , p sb c t r r c c l r h c r h r c co l { i r , L r i r ) r s
r u r r r cl r l r r c i r sr gc t r r l rt i I l r c s( j i ( , r l or n c l r o L rt o r l r r c cr ) r i l l r I c s , ) r lrr cr $ ' 1 )
s r r L n r t J i1r )i !r c s s cr nr ( l l r ( ! r . 1 0r r i r ) L r r cr (s,1 i \| r r r i r L r r tisr rr h c p r L i r r r
b ( x , r h ) . ' l h i st x r l r i t l c ( lr ) l r r l rs l ) l l l c r b r r r c l r cr o
s l r c r r : r r l cu. ' i r l ii l c ( l L r c l r
r c p l c r r i s h n r conl tt h c i L r w r s r r c r r sr r r p c r r l u r l t t isl s r ) r r lrl n r i L r n r s .
N o t c r ] t l r l h c c x t c r ( l c r rl r r l Pi t s c l ls c c n r sh r n l l ! l o h u y cr h r n s c ( 1r.\ l l
r* thc flcilit,,-l)(,\csxn(l llo$ rhc)-rrcrc. )tr (hc srnur,Lf\ =
l i g n r c si n t l i c l u c i l i t rd u t l l x r r c sr r c n o w c o n s i r L . r r r lrrl ll ri l c r c r rur r r rrl h c
r l x t xi n r l r cs | | n r n r v b o \ r r r h c l o \ ï o rr i r l r rc o r n c ri s t l i i l c r c n r r sr c l l .
Spccificullv.
thc totrrlnLrnrbcrol sfot)shîs bccn cut llonr 7l r()5I r|(l
()kl thrcughIur rirrc lrrs bccn rcrlrrccLl
lionr.l-+ù,2+ (ll\s. ,\il r)l rlic
i n ( l i c N l o or sl v r r l u cs h c r n rI ) c r l i ) n n r n ci cn l i r r t r r r S
o t u t cI , L r r r r r p u r c L l
$,ith thc (lu cnt Slrlc, lrc sho$'non rhc ncxr p1rgc.
[.ucn tnorc itnporlanl, eûch finl Darticifdttll!1 t11lhis sht1rcdt,ûl]!t,!!it,ir)l
hds qui&l)'tahen d) tl(t. st?psh eLilti]1atenast( onl ijltl)1)t t
pcrforlnancein ils oun olcratit)ils.'l l:'i\ is uoi r clLrnplc.l\ \ r \r.
rll tm olien, oidoù,ùsuerlrlfirms rnll îâciliricslccrLrringLrpsrrcrL:f '. .
a n d i x c i l i r i c os n i n r p r o | i n er l r e i LI c L i i r r I n , L n\c\ h
c i l c r l o i , r gn , , r i , , , r - . , i '
rircir own t)crfi)rmxncc.
a
a
L
Ffrture State I Srrrnrnary
I
,
Current Future
3 state stâte I

44.3 23.9
TotalLeadTime àays
day6

ValuePercentageof Time o.o8% o.16%

!a (valuecreatingtime
to tota time)
lt
ValuePercentageof Sleps 11% 15%
! (valuecreaungsteps
to tolal sleps,
t!
q
!! InventoryTurns 5

tt
O!ality Screen
al thedownstream
{defects ênd 400 200
:
overdefects
ât theupsùeam end)
I Delivery screen
(7"defective atthe
shipm€nls o a
:a downsùeêm over% deleclive
shipmentsat upstream
end)
! Demând Amplification Index
(%chânge
ln demandatdownstreêm 7 7
t in demandat
endover70chânge
upstreamefdJ
a
ProductTravel Distance
I (miles) 5300 5300

)l

{ At thc lcvel of the stamping plànt, rbe componeût âssembly plant, ànd the final rssemblv
plant these changesarc often tnrly imprcssive. In the most srriking instancc - rhe Betir
1 Wiperscomponcnt$sembly plant in Revnosa- !he nLrmberof slepsat hâsbeen cu! b!
-l 60% and rhc rhroughputtimc hâs been slashedby 75% However,in rcrms o1lhc cnrir,,
value streem,as expcricnced b1' the cuscomeret the end, chc chânge in pcrformancc is ntorc
modest:a 2-5%r'cductionin rhc nlrmberof stepsând 46% redLrction in toralthroLrghnultimc,
'l
wbich is still much longcr rhrn the end cusrtnneris lvilling to $âit hus dtc wholc \âlrre
stream is srill producing to a forecast rrther than !o confirmccl orcler.\\'hat s more, ùe
performanceimprovementsonl-vassumerhesemagnitudes$'hen e|en facilitr touching
the product âchievesits flcurc state.

PAÊTV: FUTURESTATE1
This realizationprovidesa usefulinsightto thc valuesrreamceamaboutthe limits
of isolaccd,individualaction:Ilyou wânt to achievea breâkthrough- x "gânc
chânger" that âltcrsyour positionin you| industryor producesprofirslar âbove
industrvaverages, vou'll need to opdmizethe entifc vâlLrcstrcammthcr ftan
stoppingâftcr improvingrhe flo1valongsmallcoursesof the srreamwithin your
own laciliry xs rnânynxnxgcrsând firms clotoda_v.

Any film unwilling or unableto implementthe liLrtùreSmrcI in its fâciliticsis

ur,likclyto bc willingor'ableto tal<edre nextstepsto achieveI.'uturcStatc2.
Therefore,if it becon,cs âppxrcnrxr rhis point tbât someparr;ciprrnts
rvon'rnrakc
thiscommitment, vâluostrcamnrcmbcrs
it willbc criticalto find allernativo bcforu
othcrparticipânts wxstctimc in futilc offorts.An obviousadditional qucstionfor
the fiûnsdownscre^m to âskis, "Do wc wântto kocpthc do-nothing upstrcânr
firmsin oùr supplybdscl"

The Distance Still to Go

While tlrc first fivc iremsin rhc summarybox shorva suLrstantirl
inrprovcmcrrt
bocwocnthc Currcnt S*rte and FurlrreStltc 1, thc l$t drrcc itcms - lho dclivo.y
scrccn,thc donl1tndampl;ficârionscrccn,,rnd trxvcl distâncc- show no chângc.
TlTis is becarrsetlresc indicâtofs îfc dfivcn by rc!^rions bctween Î^cilitics t.tthcf
than activitics solcly ,r,ltliz fecilities. The next châllengc lbr rhc tcam rhcrcforc
is co tâcklerelâcionsbetrrecnthe ftcilicics.'fhis ncccssarilyrcqrrircsrackling
operarionâlrelationsbetweenfirms.

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Future State 2
^s rhc value st.eâm team âchicvcs l-uturc State l wirhin cach facility ancl begins t
scrse !ha! collcctive managcmentof chc value screamis possible,it's time to tâkc the
-Ihis
next leâp. is to draw and quickly achieve â Future Srate 2, intro(lucing a smootlr
ând lcveled pull âlotg with frcqùeût sbipmcnts betwecn câch of ûe fâcilities

lnstaf ting Leveled Prrll Betvveen Facilities

In conccpt,chisis vcry simple.Whât we want to ckris to link cachpoint of usc of the
!l pfodùcrin a downsrrcâmfacilir-r, rvith chcprcviouspoint of producrionor shipmenr
in the ncxt upstream facility.In thisrvay,constrmPtiotxr d)e poinFof-usc is (luicl(ly
andexâcdyreplenishcd by !hc icxt upsl.câmProcess

lârgcrthrn minimumprodûction
In pncricc,shippingqutntitieswill bo oonsidcrtlbly
- cvcll in e vorylctn valucsrrcâmlior cx{mPIc,thc minimumshiPPing
qlurntities,
qùÂnrityof wiporsm rhc finaltsscrrblyplantin thisc?rsc is onc Dâllctwich20 tr1t)
olwipcr ârrrswirh eàchtraycontaining1(;wipcrànrs,for.r tot.rlo1320rviporslt is
simplyroocxpcnsivcto shipirrdir'iclLral mtrchlcssindividutlrvipcrs
rr.rys,

Thc minimumproduclion qu{ndly,by conrrasq woùldbc onc trâyof l(t wipcrs.

'l'hisis bccausc
sct-up!imcsândcos!!o âlærnâtcbocwccn'IyPc A rnd'lyPc ll
wipersin rhc two trim lcvclsârenowzcroât thc Bcrt WipcrPlant,rltcr
implcmenting FùrureStarc1. llur it wouldstill bc roocxpcnsivefor matcrials
handlersro rvrapand movc individualwipers

Thcrefore,ro lcvcl producrionto rhe mexirntrmextcnt fclsible asordcrsrrùvclbâ(*

upstreâm,wc will wanr m sendProdLrctioû signalsto ùe work ccll lt lJetaby trays
ratherthânby pallctsândto IevcltheseordcrsFor examplc,if 20 trays(oncpaller)
areorderedby Alpha NlotorsAssembly$'ichthe orderconsistingol:

5 trays ofTypeA, HighTrim (which we will call Part#1)

5 trays otTypeB, HighTrim{PaÉ#2)
5 trays ofTypeA, LowTrim{Part#3),ând
5Trayso{TypeB. LowTrim{Part#4)

PAFTV:FUTUFESTATE2
 \\t rvill rvrnt to scnd rhese orders to thc Betâ assemblyccll ;n dre sequcncc:

1 / 2 t 3| 4 t 1 / 2 / 3 t 4 t 1 t 2 t 3 t 4 t 1 t 2 / 3 / 4 t 1 t 2 t 3 t 4

tuthcr than in the sequcncc:

1 t 1 t 1 / 1 t 1 t 2 t 2 t 2 / 2 t 2 / 3/ 3 t 3 t 3 t 3 t 4 / 4 t 4 / 4 t 4

B)-rcpcâtingthis producLionlcvelingproccssar cvery link upsrcâm we wilt continualll'

smooth prodlction râthcr than crcating lvavcs duc ro batching.

In pracrice,thcrc alc rnanytvâysrr)acbicvcthis result.Somc firms instrll pull systcnrsor

â strictlvmânlrÂlbasisby collcccinghunbencrrds from travsand phoningot firxingthcsc
orclersl)xcl(to the ncxr upstrcâmf:1cility.'l'hcro,
kînbân sig|xl cxrdsârc w.irrcn up rûd
scnt to dre finishod-goods
supcûr:ukot co âsscù1blo
dtc ncxr shiprtcùL (Whcn phnrs xrc
vcrv closctogethcrrnd shipmcntstiorn thc ncxt rrpsÛcrmiLciliryoccurnrllnyrintosx dây
- not thc cxscir1our exâmplc- tbc cârclsc o bo sonr b:Lcliwiô rho .fucl( bringingrho
nc\l/ prrts dnd roturningthc cmpry ptllcts. li)f nrnnyvcârs,dris r';rsrhc pr'inrurvmcrhotl
'1byot"r
of inforrnâtionrfânsforin Cicy.)

^ small srcp ùD iù xutomationwould involvc thc Lrscof rrnclcoronic r'crdcrto scitndrc

lierrbrncalclsÎrcrn cr'npticdcllys rnd scnd rbis infi)r'rrlltionchr.orrgh.rn
l,)lcctrorric
I)atu
lntcrchângc(lll)I) ncrlvorl(ro thc ncxr rrpsrreamiiLcility.l hcr'c,nc$, lianbrn carrlscould
bc printod and rclc{scd m thc finishcdgooclssupc.rnâ (ct to inscrt in trrys rrnclplacc in
pàllctstbr rhc ncxr shipmcnt.(\\rhcn rhcscrfaysaro rcccivcd in pallotsat thc do!\,nsrro{nt
facility,thc crrclscan be scxnncdâgâinro confirn rccciprand ùiggcf supplicf pâvrùcnt.
'l
hcy worrldbe scanncdooc lâsrtime - ând disoardedto complctc the cvcle- rvhon!hcv
âre removcclfrom tbe empty rraysas the pâûs âl.cconsumcdin dro downstrcârnprcccss.)
The cârdsrcmovcdfrom ûtys in rhc upsûcirmsupcrnrafhcr3s procluctis shifpc(l woutd
thcn lre placed in somc r_vpeofloâdlcvcling (heijunha) tlcvicc beîore râDsmiss;o
ûpstrcam co the previous processingstep
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E
^ firrther sccp ;n âutomâcionthâc h^s bcconle ârtrâct;l'c receûtlr-is t1)sLrbsrirutex simplc
rvcb-basedinfbrmâtion lransfer svstcm fof rhe EDI linh. Th(r bar codc scânning âûd dte B
print;ng of ne$' cârdsâr thc upslreâm làciliry rcnrain the semc bul now the dârâ rrc scnr o\'cr
the web. ('fhis configruàtionofinformârionmânâgcmcnris sho!ïn in $c d;agrâmDcto$:)
Ë
Still a lurrhcr step is to clim;nâtethe cardsaltogerheraûd send clecûonicsignalsclirccrl\
l;on) the downsrream processto the supermârkct in the next upsrrcam process\ hcrc
tr
shilping instnrcrionscan be displâvcclon screensor hând-helddeviccs_I Itx|cver.r c E
xlNx\'sstâri ro gcr rnxious rvheninfornation disappcar.s
inro complexclcctronic\\.srcnr-
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2 Electronic kanban rrsirrg a bar Goale reaaler

Heijunkadevtce i -.r-.r
' l l c a " d l
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| ?rintet I
'---1-r-
i

v _-l
Clean,Taiit&tale
-t A99EN'BLYCELL

--1
I
GammaStam?inq 6eta Wipere

N o t e t h a t t h e r o w s i n t h e h e i j u n k ab o x a r e f o r t h e f o u r t y p e s o f p a r i s i n t h i s p r o d u c t
f a m i l y w h i e t h a c o l u m n s( a c r o s st h e t o p ) a r e f o r t h e p i t c h{ r a t e )o f w i t h d r a w a lo f t h e
c a r d sf o r c o n v e y â n c et o t h e u p s t r e a mp a i n t p r o c e s s .

\'r'boscinncr worliings âr'copaqÙc to lino rranagcrs ancl pxxluccion rssocirtcs, \À/càclvlsc

rusingthc sirrplcst possiblcsystomrbacclLngcr drc jot) donc, rcl(no\vlcclgirgthât son)o
than orhcrs.
busincsscsinhcrcnclyrcquirc lnore complcxity in inlornrationnrenagcnrcnt

ifhc key poinr ro noto about cach of thcsc arrâtgencntsis ahâtthere is no ncod m scn(l
clay-ro-clayplocluction insûuctions dowû from N,lRPsin thc plalt officc or ar corrlpxnv
hcrdqLrârters. Nor is thcre a need for cusromersto scnd daily rolcascsgcncntcd by thcir
schedùlingcomputers.Rîther rhân foquiringclâborârccrloulttionsin r centrâlizec
s1'stemon what shoulclbc procluccdin eâohplânt .nd ât eâch mechinc git cn
processing
cxpcctcdopcratingconditionsrnd pre-estâblished leâd times - thr: new s_vs!cm
sinrpl\.
|cflcxivcll rcrrdcrs from dle next upstream point rvhar has just bccn consunccl br thc
next dowûstreâmpoin!,

expeditingloop,rvhichrvasoftcn thc rc.rlschctlLrling

\(rrc rhlL|thc tclephone-based *.tc:::
in dre Current Stareand in Funrrc Srâtc 1, is now gonc. lf smallrmoLrnsof p:rn. .rrc
rc orrlercd
a n < s1h i p p c c l a u t o n a r i c a l l v , r c c u r a t e l y , a n d f i e q u e n r l \ i n t c s p o n ' c : , , : L : L - . . . -
rhc nccd for cxpcditingis clininatecl.\\e r,e clrâ\1nthis nc$ infirrrlrti,,n rr.i:r.:1.:rr :
sr srcm in oLrrl ururc Srrtc 2 mâp.
 Demand Amplification

20

<______

RM16

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a.oà.(3131
s.) 1.2à.(5os.)
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20 13) I (3)
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 Wiper Value Stream Future State 2
Shouring Level Pull Betrrveen Facilities
ffi;;l
IoÀ*Ê"ùl

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/-L.-1--l
| ^tphâ |
I Dldinbutloi I
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Clêveland,
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Woxl--'%

TIME

tnffinr= o.sawa
l--1aoo;-
t ohF6;h_-l
= Y.cdây.
nÀe
I o"t".at";=1x,1,
value 32b1sèê.
Cwring = 54,7 frin
4.5à, o.5à,
1 1.3à. (12O6.\ 1

7 (2)
ouâtrryândD.nv€rys.'4n
The Need for Controlled Experaments
"But," you will say,"how canyou do this for informationflow for only â single
valuestreamco-mingledwith manyotherslThe samecomputersendingsignâls
to controlthis streamis alsoschedulingotherstreams.Surelythe wholesyscem
must be chângedin orderto chângeanl'thingandthis,r€alistically, is a mâssive
and cosdyundertaking."

Actuallymâssivechângeis not necessâry. Juscaswe havedisconnecledout

sampleproduccfamily from the MRPSwithin severâlplântsin Future Stâte1,
and installedsimplepull loopsbetweenactivitieswichincâchplant, we cân
disconnectindividuâlvâlue s[reâmscurrentlyrnnningbetweenfâcilitiesunder
cenrrâlconrrolând insrallsimplepull loops.

The hey point is for the valuestreamleam to tahe this opportunityto try the
experimentand judge the results.We confidentlypredicrthat the performance
of lhe valuestreamasmappedin FucureState2 will arguefor convertingmore
ând moreprodùctfamiliesto simple pull systcmsso thacthe overlycomplex
productioncontrolsystemscommonlyin placetodayare graduallyconverled I
to ân âctivirywhere rhey âreactlrâllyuseful.This is capaciryplanningon a
lotal svstembasis. E
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Lean Lab f
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'.- C
/a
TLUN SlLul

Installing Frequent Transport Loops

'l'hc
logic.rl.urdncccssrlvconrplcmcntto pLrllsystomsbcnvccnflLcilitics
is
inclcrscdshippingfic<lucncicsbcnvccn fiLcilirios.l'hisc.rûbo echici,cclby
convefciùgintrc(lucnrlirll-tnrckdircct shipmentsbcNvcoûNfo litc;litios
to ffc(lucnt rlrill(fLrnsinvolvingscvcr'rlfircilitics.

'l
his hasan âdditionâlrnd substrntiîl bcnolir.'l hc iùtlodrrctionof nrilli
rùns rnd morc lrcqucot dclivcriosmxlics ir possiblctu clim;nârcdro st()p
ât thc RcteWipcrs lvrrcbolrscin lllL|lingcnan(l rhc loùg cxcLrrsion
m drc
'l
Alpha l\4o<xscrossdock in IJI P.rso. his srvoscight stopsand six dnysof
throughpurdmc ând rLùousand rrilcs of rr:rûsporL(Plus.i1 rhc parrsfor
othcr \'âluc streâl]]susing thcsù ftcilirios arc rrcâtcd similârl)', the 1àcilitics
thcnrsolvcsc:rnbc clirr,inetedwith najor cosrsâvings.)

We've drx\i,n thcsc chângcs in thc lurure Strte 2 mxp

by substinrtingour icon fbr milk run replenishmentloops
fof tho stfipcd push ârrowsused in dre Curcnt Srarc m i J kr u n
ând l.'uturc Smtc l. replenishment

Introclucingpull loopsând milk runs on xn expcrirrcntalbasisrvill require

a modestinvestmerc,b c bo nclingthe experimert càn kccp rhc rmoirnr\
smâ11
until resultsare in ând e decisionis mâcicon \yhetherwhole pftxlucrir)n
svstcmsshouldundergocorversioû.And oftcn thcse da_vs.
orhersupplicrs
anclcusromcrsl ithin an industryâre âlreâd) usinglrrilk nrns.Pcrh,rp,ir oLrr
I)roouct cân râg arong.
Demand Arnplificâtion

<-

4.O à. (3131s.\ 1.2à.(3o..)

20 (3) b (3)

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 Vviper Value Stream Future State 2
Sho\rving Frequent Transport Loops

E \

A-
4À
/ / @ A l
ll ) 32oo I
r-'l

TIME
Iriff! = s oa"".
J
l--1ao;;:-f
| ^tpe.'t-l
= e.3dây6
=1%1 rth;e
|D"i""tk

=
o.5à. "!!#^"V).;,i
1 1.5à. (12O6.)

7 (2)
 Future Stâte 2 Sfrmlr|ary
Current Future Future
State State 1 State 2

44.3 23.9 15.O

Total LeadTime
days days aays

ValuePercentâgeof Time o.oa% o.16% o.6%

{valuecrealingtime
lo totâllime)

ValuePercenlageof Sleps
(vâiuecreatingsteps 11% 15% 21%
to total slepsl

InventoryTurns 5 Y 14

OuâlityScreen
{defectsat the downstreamend 400 200 50
overdetecisal the upstreamend)

DeliveryScreen
(o/.dêfectiveshipmentsat the a a 3
downstreamovêr7odefective
shipmenlsât upstreamend) z
Index
DemândAmpli{ication
(% changein demand€t dowrstreêm 7 7 5
end ovêr% changein denand ât
upslreamenoJ

ProductTravelDislance 5300 5300 4300

{mires)

Totaling the Results

E
Tho conseqùence of smoothpull signalsand lrequent rcplcnishnent lbr our eight E
indicatorsofvalue screamperlormanceis shorvnin thc surnrnaryboxeson chc
Future Scatc2 map and in the cban abovc.The rnoststrikingchangcfrom !'ulure
E
Scatc1 coFutùre State2 is thc drarnaticreductionin demândâmplilication,clualit. E
problems,and late shipmentsâs the ordersmovebâck upsùeâm.The amountof
variationexpericncedat MichiganSreelis nos. much closerto the vcry low le\ el ol
3
variationacAlpha Motors^ssembly In adrlitionthe dramaticrcductionit shipPing a
and lag time betwccnthe creationof a defectend its discol'er!at thc
cornplexit,v
ncxt dolvnstreâm proccss hascauseddefecrsandshippingcrrorsat the Lrppcr cnd ol
I
the ïalue streamrc converge oI1the low levelsat rhc lorverend ol thc \llue srrcrnr I
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Compressing the value Stream

So 1ârwe have lcft every value crcating activitf in its original placc, changing
only infornation flows and shipment lrequcncics while elininaring unneedcd
warehouscsar,d cross-docl<s,Although thc valLrestreâm rcam hâs cut thc
nurrbcr ofsteps from 73 to 39, reduccd throughput tirnc by 64%, and grcttly
drmped demandamplification,rnuch wasceând l(Dg time lagsfcmâin

llecauscit âppearsth.rrmost of thc rcnaininelwastcînd time rre cluclo the

ncerl to rnovc thc procluccbctwccn mân-l facilitics âûLlover long distânces,
Ë â logicâlncxt stcp is "valuc srrcamcorrprcssion"!o fcloc.rtcâûd co-locrtc.
v,.lluc-{ironringncrivitics so thcy cxn l)c pcrlorncd ftrstcr vvith lcss cflbn.

What is the logic of relocation?

'l'hc stcl)sin chc procluct
first principlcis sirr,plyrbat all mnntrlacturirlii
shouldbc movod ns olosc()gothorns possiblo.Iclcall,vdris worrlclr:venbc
ln cltc sàr'uoroom.

scqrrcncoof ûclivitics
^ scconclprinciplc is rhât drc oloscrùis comPrcsscd
is to thc crscomcf- Alpha NlotorsÂsscnrblyin otrr cxrmplc - thc bcttcr'
Thc ol)jcctivcof lcân thinliirrg,aftcl all, is to rcclucocostsânclimPmvc
quality while gcrtingcustomcrscxactlywhxt lhoy w.rnt \rllcn thoy wânl il
Remote m,rnufâctlrring âlwâys works egainsr dris gorl becausc ic increases
rcsponsctine oncc tho customers'dcsircs.tre known. Thc unâvoidablo
consc(lucncefor rcnrorcly locâtcd manufircturcrswho arc clctealnincclro
irnrnediately scrvc dreir cuscorrcrsis ro creatc invcnrories of fin;shed ùnits
produocciro (usuâllt inacclrrâte)forecasls.In the current global security
onvironment,whcrc shipmentsacfossborderserc suliccl to disrLlPtions,
rhis is ev(-n morc the casc.

"l)o it âll in oûe plâcc" and "locatcthat placenext to the customcr"â.e

useiirlprinciplcsto get slaftcd.However,a criticxithird rulc is necessâr\':
That if pLoximiryshouldcnrail excramanufàctùringcosts(llllhoughthc
rcvcrsc$ ill be morc commoû)ithcsccostsmust bc wcighed ûgainstrhe
vxlue of rhe tiûrc sxvings.

PARTV THE DEALSTATE

'l
heseprinciplesin combinâtionsuggestâ ver,vsimplc locât;onâlgorith:n
for rrost producrs:

l. If checustomer is in a highleborcostcountry(c.g.,drc tI.S.,Japan,(;crmâny)

and nccclsimmccliarc rcsponseto orders,andil the producthasrelativelylittle
laborcoûteniconductâll of thc mînufacruL;ng srcps;n closcpfoxiorirvând
closeto the costomerin the high-wllgccountry.

2. Ifthc customcris in a high labor-costcounrry;slvillingro waitlor some

shippingintcrvrl,âûd the pr(xluctis priccscnsitivc,manufacnrrc thc cntirc
produc!,liom râw mâleriâlscofirished goods,in closcprcximiry in r Io$,cost
localo,shippingonlythc finalgoods. In oul experience drecorrectlocalionis
almostalwrysat â low-\\^f:ccour\u,rtuilhin thc rcgionof salc.l.or cxamplc,
Mcxicofot thc tl.S.,Chinafot Jap.rn, Polandfor Gcrmany. Shipmcotoi drc
finishcdproductby trùck,or I sho.tlorryrido,andacross onlyonc bordcr
cÀnstill permirrcsponse to lhe ctlsconrer
withinâ folvdâys,whiloshipmcnt
by scafrorr anothcrcontincnrrcqlr;rcs wccks.
I
3. ll'drc cusconrcr r:ouncry
in a high hbor-cosc ncodsimnlcdixtcrcsponso bur
chcDroducthA$high [Lborcontcnt,cloa carcfulcos[ingoxcrciso ro dclcrn]iro
rl)ocorrcctbcâri(nol ùrxnufàcturc. l hc l)cstloc.rtion
mighrvrry frnn r vcry
low-wagc sitc in anoûorlcgionof drc worlcl,with thc p(xluct cvondolivcrcd
by âir,to â ncw tccbnology rcmovirghigh-cost mrnuiicnrringhbor in rbc
high-cost corrntryoi salcand pcnnitcing thc conductof ell mânufâcnrring
stcpscbsc to clrccllstomcr.

,1.If thc oustomeris in a low lâbor-costcountryând scàlerequirementspennit,

mrnufâcturc lhc cntircprocluct - from rawmarorial to finishcdgoods- in
gcogrephicproximity in thxccounû)i.

As the rvipcrvaluc strcâmtcrms lmkccl acrhc simâriorrând ponderedtheserules

it becameapparentthât the bestlocàtionlor ân iderl stâtcin rhis crsc \r,olrldbc
immcdiatcly adjacent to the vchicleassemblyplantin the highcosrcoùntry(the
U.S.)l his \r,âsbccâuse chcâmountofdircctlaborconrcncin ûc productwas
âcluallyvery small,indeedonly thirty secondsât the *,iper âssemblyplânt xnd â
vânishingly slighrâmountât rhc scnmping plant.(The numberofwiper assemblr-
operatorsrequiredhâd âlreâdybeen reduccdfrom fivc in thc Currcnt Srarcto û.cc T
in FurureState2.) The teamfound thât â smâllincreâsein direcclâborcostsfrom
I
rckrcarion of thisassembly stepfromN,lexicoto the fJ.S. evenwher trâdirionàl
oorporrtcovcrhcâds\r'c|c adclcdto dirccr wagecosts- $,ouldbe mofe !hân olÀe!
br-a big reducrion in shippin!:, ândgcncralconncctilitlcosts.
invenror-v,
!

!t

il ldeal State Changes

I The valuesrrearntcam rherelorecreatedcheldeal Scatemap shownon thc
ncxr pâgc.Notc thât wiper assembly(includingthc blâde-to-armassemblystep
I
conductedin Alpha'sâsscmblyplant),paiûtin€!,and stampinghavc
previousl-v
ù now beencomprcsscdinto one room in a "supplierpark" on ûc s;tc of the Alphâ
Mororsâssemblyplânc.A cheaper,low-speedstâmpingprcsshasbeen iûcroduced,
È
which we calla "right-sized"tool becauscits câpâcityis proportionâl!o the
'I'his press
I requirementsof chisvaluc strcarn. is âlsoâbleto makebochthc primar)
ând sccondarystampingslor all of thlr other paûsnccdcd for thc wiper âssembly
i|
(seerhe schematicdrawingon pagcs12ând 13showineirhese pâr!s)and in very
rill smallbâtches|o minimizeinvencories andleadcimes.A mini paintboorh a
-
sccord right'sizedtool hasalsobeen dcsigncdâtd is bcâtcd betweenthe
stamping srepandwipcrâsscmbly.

Bccauscchenew wiper mûnufâcRningmodùlc gotsal olcorroniosiginalon whât

to buildnexcasedchvchiclelcâvcsd1cpâintboothin the vehicleassembly platt
(a 3-hou.lcâdtimc) ândbccause the timc ncedodfiom thc stârtof wipcrâsscmbl)
unril dcliveryro thc finalassembly line is lessthândrc âvâilablc loâdrimc,wiPers
with highândlow trim for vehiclcmodolsA anclll crn now be âssernbled to linc
scqucncc.'l'hcy ârcrhcnplacodin linc-soqucnced tr{ysof40 wipcrsândconvcycd
to thc fit pointon chcfinâlâsscmbly linc evcrytwcntyminurcsby a "wttcr spidcr"
(a sm{ll càrrpulled by a convcrco<lf<rrkJift).'lhc wlter spiclcrloopconncctsscvcrxl
similarcompononr plancs to dreAlphl finalasscmbly
{aljâccnt planr,bringingl){cl(
ompcytrays^nd nocdcdpàrrsro thc wipcrâssembly arcaon c^chcircuit.

.,tl:.|.',

P A F T V : T I ED Ê A LS T A T E
 È

Demând Amplification
35
30

20
15
10
5

Wiper Value Stream ldeal State EasrOnnge,NJ

E
o.4à
E
H lg:J
I o,a* |
H Oea.bon , Ml

Con+"rol oH
Clevelanà,
Control (l
,/ /r
% //

.it t------
tE- \ t shrpç;_l
I o"t*i,*1%-l
I CELL I i CELL I
f------------1^ r---loe'a Al?haMotorg I
I o,nna f( 4l I
wt9{6
leranptrq l- | |

'a TIME
PARK
9UPPLIER
a ÎP^t = z.oa^uu

'! -l
!]-a__l I RMt
\tll?12 | wIP2 |
I 1 6 2 l t F a $ l
t
EPe-|Aa\ | F P E = | D J VI
I oelê.!o= | DeIeea.= |
I oep. 2?pn I = zzo,*,.
!l o.5à. "!!)f."
"i;;" 547 nin

! à.(3161
1.1 e.) | t I o.oa.Po s.1 1 t
5 20 (6) 7 (2)

!|

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I
 l.leal State Surnrnary

Current Futur€ Future ldeal

State State 1 State 2 State

TotalLeadTime
44.3 23.9 E.A 2.4
days aays aayg days
ValuePercentageof Time o.oa% o.16% o.6%
(valuecreatingtime 1.5%
to totâltime)

ValuePercentageof Steps
{valuecreâtingsteps 11% 15% 21% 27%
to totalsteps)

InventoryTurns I 14 79

Ë
Ouâlily Scaeen
(d6fectsat the downstreamend 400 200 50 2.5
overdefectsal the upstreamend)

DeliveryScreen
(% defectiveshipmenlsâ1th€
a o 'l
downstreamovero/odef6ctive
3
shipmentsat Lrpslrêêm€nd)
DemandAmplilicationIndex
( %c h a n g e
i n d ê m a n da t d o w n s ù e a m
e n do v e r% c h a n g e j n d e m a n da t 7 7 5 1
ùpslrearnend)

ProductTrâvelDistance
(miles) 5300 5300 4300 525

E
E
Dramatic Changes
Throughputrime from raw macerials to cusromerhasnow bccn rcduccdby 9,1%to 2.8davs, E
and prâcticâllyall of the transportlinks, invcntories,and handofls- chckcy driversof E
connectivitycosts- havebeen eliminated,from the final assemblerbâcli rhroughrhe
wipcr makerto the stamperand raw materialssupplier ln addicion,ir is hardto telt whcfc E
one compânyleavesoff and the next picks up the valuestreâmbccauseactiviriesformerh 3
conductedby Alphâ,Beta,and Gammaat locâcions thousandsof milesapartarc nos being
conducredin continuousflo$'in one roomlocatedacrossthe roadfrom the customcr. 3
I
-

E
I
I
t
I
il
l /inners Need to Compensate Losers
I
r ,\s lumre state and ideâl stêle maps are clrawn up, it rvill quickly bccomc
apparcncthat posirivc change is most likely if the team can lind a rvay fbr
r winnersto compensâteloscls. l his is bccâuscit will commonlvbe !he
câse chât a downstreâm participant can gct bcctcr valuc at lowcr cost ifan
I upsrream pârcicipantleâi,esoùt wâsteclsteps, irnplcmcnts lcvclcd pull
e systcms with irs supplicrs, incroduccsmore câpâbleprocesstechûologies,

a ând relocacesâctivities, Llowcvcr, evcn *,hcn cvcryonc cxn scc thar

thc incrcmcntâlsavingsexcecdthc increrncnr!lcosrs',i rlr(\c
2f
,r\\ ç
e
E
d
initiacives,little is lihcly ro happcn unlcs. up\r(rm pîrriciprnr\
.rrrr Lrrnl'crr'rtcdby dortn.trc:rmLrncllc uncr lor r rrirnAt, ^rt'
.r'u, n' rh"r '1'rirni,,Lrl* ulrr,L.
r., Ê
R

ll
t
t
()
Yll
,/"\9 (

J\
d
fl
lfiru,r c : . : i l 1p o . . i L r lrco c o r n r r . rrror :r : rIl' r ^ ( l r ( r , , ^ rl ) c l ; , r c qf(ï/
/
\j/ --
! . , n r l : r l l { r r l rl.r r r . . r , r r c i r r r t , r , r r r r c r r r . . i o r n t \ r . . r l iI,n' ri Ë l , r l ' c
nn cirsicf;ssuc.
Ilowcvcr,tr'rditionlll)urchrsing.urcl
accorrnting
sysrcnrs
virlucsocanrpîfticipxntsrnd in xny clrsc
rrc oltcn incompat;blcl>ccwocn
ârc Doorlysùitcd lor càlculâtingprocluctcosrsflr crrchprrxluctf.rmil1i
'l'hoso
systcmstvpic:rllyr'crlrrir'c
cnor'nrous
arnountsof Llrr.rtt) rllocrrrc
4
ovcrhcâdsl)y pr{xluctund ûcy usLrally
fril t()ciloLrlxtcoostsiû il wâv
= thar âll farricipânrswill acccptas valid.

1t \Vc proposckccping it simplc t)y ignorirlgrfrdirionalsvstcmsrurl instcrd

1
dcterminingdrc incrcncnt.l cost (in somc commoncrffoncy rnid rncl rhc
incrcmcncalboncfir (in the semccurrencyùnit) of crch proposcdcbrngc in
4 lbe vâlùe sLreâmin fucurcand iclcelsraccs.
This is surprisinglycesyi| nrrny

I
câsesând càn chargc the lbcùsof thc vâluc srfcâmrcanrltmnrrcdrcssing
(rr dcfcnding)thc mistakesând inequitiesol dre pâstnr ,:liscovcring
1 win-win-ivin alcernâtivôs1or dle futurc,

"1 'I
he problemof cfoss-firmcompcnsarionrvill nor bc such ân issùeif the
4 product being mâppe(l is nerv ancl the collrsc of thc valuo srrcarnis nor
consrrâinedby existing facility iocatiors or even existing supplicls.
1
However, ir \r,ill still bc impolrant to calculare connectivir_vcosts1br !,arious
conllguradonsof the vâluestreân to scc vrhichonc rvill acmallvproducc
rhc bcst combinationof lorvcost and rapid customerrcsponsc.
Timing the Leap to the ldeal State
Lower-speedpresseswill be cheaperand more capableif usedon ncw parr
designs,and a changein the raw matedalproviderwill be tequircdaswcll.
(Notc rhârNew JerseySteelis to be sùbsritutedfor MichigânSteel in rhe
Ideal Stace,to rccluceshippingdistancefor sceelcoils from 500 milesand
eight hoursto 25 milesand one hour.)Therefore,rhe besrrime to leîp ro thc
IdealStatcwill be with lhe next productgencration,nhen new process
eqùipûent will be necdediù any case.

The excrciscofcreatingâû idealstateto contrastwith a business-as-usual

stâteshouldbe conductcdlor cvery new productgcncrarion.:lhis can leâd
to â very cfeâtivejoint mappingof rhc idealstatefrom the very starcof rhc
ncxcdesignrwhen the bafiiersto doing cvcrythingrighcâre greâtlyreducecl.

A Final Risk to Avoid

.lV/ole
In dcvclopingtlre cxarnplcslor Seeingthe we havelearncdof E
ânorherrisk for the valuc streamtcam to avoid.This is to turn tho mâpping
exerciseinto a oonventionalcoststudy for â productfamily by rrying to mâp
E
rhe flow ofevery pârt goinginto rhc product.When rearnsdo this we'vc E
lound that rhey loscsightof the l<cypoint. :fhis is thrt thc lypcs of wasre
oxposedând the demândamplificaciondiscoveredarealsoprescntin cvcry
E
prodrrctfamily passingthroughâll oi rhe pd(ioipanrfirms.The firsr purpose E
of rhe exerciseis to raiseconsciousnessaboutsyscernic problcmsand to
spurthe developmentof systemicsolutionsrequiringbetterperlormancc
E
by the functions,not to shavea bit ofcost out ofonc specificproductand E
chendeclârevictory
E
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t.r' ''' E
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F
F
 Achieving Future States
\ilue streammapsât the mâcro-levelarevery usefuifor raising
consciousncss aboutwasteand the lack of customerresponsiveness in
today'stypicalcurrentstate,a situationoften invisiblc covnluc sùcam
partnerslookingonly at thcif owt opcrâtions.However,ifconsciousness
is raiscdbut no luturescateis achieveddrewholernapping cxcrcisc just
createsmofe corpoaate wallpapcr- pLrrcmuda,

FLrwcan you accuallyachievefuture staleswhcn mân)'dcpxrtmcnrs

ândfinnsmustcooperate and no onc porsoror lirm is Icgally"in chuge"?
We havealrcadysuggcsrcd rhâtp()grossis bostmadcin a seriesofstcps
bcginnirgwichdrocasicsr. lla l,'unrreSrare1 canbe achieved thâtrcdLrcos
time rnd ciforrwirhineachpar[icipâtingfirm,thiswill givcxll rJfthc vrluc
strcaorp{ftroLsthc coufâgoxnd inccntivc m go lirfthcr,
'lhon,
!r if FururcStato2 cm be ùcbieved Àswell- âddrcssinia p()duorion
conlrolprol)lcms dcmand,rcmovonoisc,cut costs,rnd cnhâncc
to stâl)ilizc
rcsponsivcncss to tho oùsmmcr- thc mo,nentum fbLinlpLovcmcnt will bo
'l
a muchsc|()ngcr.hc prospccts fbr sÙcccsslirl of thc TdcrlSmtc,
introcluction
rvithits r'cquir'cmcnrs for invcstmon! ânciroloc^cion then
ofâct;virics,
a bccomemucl)brightor.
a Runningthc proccss in drc opposite direction, with a big lcapto
beginning
a m ideâlsrrte,ma_vbe possiblcin somccâscs- parcicLrlafly fof cntirel),new

a proclùcts ândwe ccrtainlydort wântro disconngcvâlucsûeâmteamsin

a posirioncomal<cthis lcâp.Flowever,iû the greâtbull<of insranccs, smâll
a stepswill be essentialar the stâftm lây thc groundworkfor big leapslater.

a
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T
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 IF

t-

ln our experience,Future State1 can be achievedin aboutthree months

after completionofthe CurrentStatemap. Future State2 can be in place
in six monthsafcerrhe achicvcmcntof Future Stace1. Llowr:ver,conditions
will vary and ic may be more practicalfor the vxlùe streamteâm ro begin F

implementingFuture Scate2 even if Future State1 is noccompletelyin È

placeand stabilized.This is becausemany of the activiciesinvolvedare
quircscpararc rn.l canprocccdin parallc..

The timing foarhe Ideâl Stâtemây rângelrom "soon" (parriculârlyfor

new products)to "much later".'l'he team in our exampleconcludedthar
the new supplierpârk configurâtioncân be in placein four years,a! the
point thacrhe nexr gencrâtionof vehiclc ModclsA and B wirh rcdesigncd
wiper systcmsis inrroduced.Tiying to move fasterwould meanthat lleta
and Gâmmâwould need to continuetheir remoteoperâtionsfor d)eir other
cùslomerc ûndwouldincùrsubsrÂntiÂl coscs lor duplicatetoolingând
rrndcrurilizarion
of rhcirexi.ringfrcilrtrc..

Even ilthe preciseriming of the later staresis hârdto derorminenow,

rhe simpleact ofwriting down all of the necessâry stcpsand agreoingon
specifictargetdacesfor achievingspecificstepshaschehighly uscful clfect
ofconvertingvâgueintentionsand "no ycar" pro.jcctsinto concrctc,
ûacl(abletasl$.

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tir

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ttl

TlT e Value Strearn Plan

We suggestthat the valuestreamteamdevelopa valuestreamplan lor their
productfamily accheend oftheir initial walk, when the CurrentStatemap is
II
drawn.lfhis exerciseshouldonly tâke â few days,Ilit dragson the oddsare
I very high that nothing will ever be implemented.Just asin the caseofiean
production,v€locityis criticallyimporcantin leanimprovementactivities.
t-l

tl
A valùestreâmplân shows:
. exâctlywhat your teamplans[o âccomplish,step by step
3 . measurâblegoâlsfor teâm members
:| . clearcheckpointswith real deadlinesand responsibleindividuals
. the lormula for sharingcostsand benefitsamongpârticipâtingfirms
I
3 This planningprocesswill be fâmiliarto you ifyou hâvehâd experiencewirh
policy deploymentor ifyou havealreadydevelopedlaciliry-levelvâluesrream
I
plânsof the type showîinPafiy of Learftittgto See(andPaftyl of Creating
I ContinuousFlow).However,ir will be a bir morecomplicatedbecausethis plân
buildson the "YearlyValueStreamPlan" for eachfacility being developcdât
il
the sametime, Âsillusv^ted i^ Learnihg to See,
T
The wiper valuestreamteam developeda simplevaluc streamplan,asshown
I or the nexl page,
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I PARTVI ACH EVING FUIR: S-A--S '''
 January2OO2

Bârb Stnith. Alpha

?a!1Ooe,Aerai Joe Vaker,Aannaj
YEARLY
TEAM MANAGERS: gatty )one., 9reet 9upptier

Product-Fâmily Velue Stream GOAL OUARTE RLY

Business Objective Obiective (measurable)

lmproveproliLability r i 2 l Leaàtime=23.9 days

onwipercfor Alpha, whercpoaoiblein lnventorylufi' = 9
Bela,Gafima,+ âll facilitieg Quâlitysareen= 2OO
eTeeleupplien *levelpullwithin
âll
lacili'f,ies

Miahiïah9teel

*level bet' een Leaàtime = 15,8àayâ

?ull
alllaailltiee
lnvenlorylurna = 14
"fîequenL Qualityeareen= 5O
F92 rcplenishtnent
loop6betweerl screen= 5
Delivery
alliaêililiee Demanà afiplification
qarcen- 5

t
"valuestîeam leaàtitke = 2,Odayâ
comPress@n oy lnvenloryLu?na= 79
colocalinî all B
st'e?eaàiacent Quâlitysarcen= 2.5
ao cu9tottel Deliverysareen= 1
Demanà
amplifraâlion

E
E
E
O Stan ^ Completion E
F
Ê
 SIGNATU RES

\'ALUE STREAM PLAN

SCH EDU LE

Ope.ation
?urchasing
?c&L
ManufacNurir,g
Smllh EnlineerinO o
rF Quality
o
6aker ^
î,rmfiaciliry)
Joheg A
ft
iiSl

ii5

i,i:I

t{l

lll

|{:

i:

rl

Ëll

rI

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-

T
T O On target À Behindtarget PRODUCT FAMILY: WipeÉlor AlphaMoâelsA+g

I
t P A Ê T V l lA C S I E V | N G
F U I U R ES - T A I E S 79
 CONCLUSION
At rhc cnd of rh;sbr;efbreakrhrough guidefor achieving lutureând idealsrares \\'emusr
sharea secrer:You'll nevcr actuallyâchieveyour idcal statelIt rurnsout that chereis alrva_rs
morewas!eto removeard ùât valuelbr the customercânalwaysbc further cnhanced.

For oxarrplc,wipersm;ghrsomeday be moldedasa singlepiecein malchirg body colors,

eliminatingthe need for the stâmping,painting,ând final assemblyof considerable numbers
of parcs.If cycletimes for theseactivitieswere at or belowtâkt timcs for wiperson the final
àssemblylire and ifchâûgcoversfrom onc wiper colorand specificationto chenexrwere also
essentiâllyinstantâneous (or at leastwithin takt time), it would bc possibleto mold wipersro
line scqucncclvith corâlthroughputtime ând valuecreatingtime borh shrinkiûgro seconds.
At rhat point, the "ldeal State"portrayedin this worhbookwill ^ppeatto be î\tl! of thudal

llowevcr, chcre'sa compâniorpoint thacalsoseemsto be a secret!o manymanagers. :fhis is

thât succcssive -
futurc stâtcsgcctingmuchcloserto the ideâlstâtecanbe achieved by real
mânâgers in realfirms buildingcurreûtproductdosigns- in only a shon pedodof ttme even
whcn rhereis no "valuescreamdictâcor"givingorders.And evcnmorccân bc âccomplished
wirh the next gencrationoîproducts,beforcnachinesand fâcilitiesârolockedin placc.

The crickis to take a walk togelherso everyonecânseethe wholo.'l'hen esrimatcdrc "prizc"

'l-hen
avâilâbleto the groupif the wholevaluestrcamcan bc optimized. deviscI mùtu^lly
acceptâble wây to split the loot if the cufien! stace"Bânl<of Muda" cânbc robbcd.ft wonl
happenall aconceandyou'll probablyneverreachthat happyhnd ofcomplccolyfrictionlcss
tir coopemtionbut the challengeis to got starrcd,gainsomcinitial successesr ând rot lool( back.

5 As flrms ând depârrmencs leârnto sec togcthcrit shouldâlsobe possiblero mâkeyour mâps
ovor more inclusive,eventuâllyreâchingâll the wây ftom rhc cuscomcr's Lrscof chcproducr
-
throughthe lifc cyclebackupstrcamto inohoatematterbeloreany processing. And wc llelievc
-l ir will be âttractiveto mâp wider ând wider rângeof goodsnnd scrv;cesincludingoffice
processcs, âsmâny readershavealreadystarcedto do with the mjcro-m ps it Learninqto
See.(For example,we at LEI hâveâlreâdyheardfrom rcadcrsaboutmappinggold mining,
fish srick mânufacturc,poscalsortingoperations,insuranceclâimsprocessjng, the writing of
technicalmanùâlsfor complexâerospâce products,and visi!sto rhe docror.)Becâusethere is
alwaysa valueslreamwherever there is â product(lvhethcrit\ a good,a scwice,or some
I combination), r,e areconfiden!lhat consciousness willcontinueto spreâdabourûc porcnrial
of valùestreâtrmâpping.
=

e We wishvou dre bestin yourendeâvors

ândhopeto heârâboutyourproblemsandvoursuccesscs.

T
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About the Authors
t
DanJones
l)an is co-authorof Tre MachineTbat Changedthe World andLean Thinking.
t
He is a SeniorAdvisorto the Leân EnterpriseInstiturc (LEI), ând Chairmanand t
Founderof LEI's affiliateorgânization,cheLean EnterpriseAcademyin rhe UK
(www.lean.uk.org). He haslong had an interestin mappingencirevaluestreamsand
I
rook ûe leadin developingthe exâmplespresentedin Châpter2 of Lean Thinhing !
These beganwith the humble cânof colârhât requires319 daysto pâssthroughsix
differen!compâniesand nine facilitiesacrossthe world, firms ând fâcilitiesrhat
B
colleccivelyconductonly throe hoursof vâlue-creâtingactiviticsbeforedre colâ E
linally reâchesthe customcr
E
Jim Womack tr
Jim is co-authorof TDeMachiûe Thdt Chdngedthe Wo d ar'd Lean Thixhixg and tr
Presidentand Founderof the Leân BncerpriseInsticute.He finds it hard nor co
rhink aboùcextendedvaluestreamsincludingchoscinvolvingheâlthcâre, mobility, E
food,communicacion, constuction,defcnse,and logistics, |l
It
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B
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il
z
- APPENDIX A - Extended Value Stream Mapping lcons
The iconsand symbolsfor curren!and future sratemappingfall incothree câlegores:
fl
MâteriâlFlow.InformarionFlow,and GenerâlIcons.
-
Material lcons Represents Notes
15

fl ManuTacturing
Process Oneprocessbox equâlsan âreâ
of flow.AII processes
shouldbe
lâbeled.Also usedfor departments,
suchas Production Control.

OutsideSources Usedto showcustomers, suppliers,

and outsidemanufacturingprocesses.

ClO= 3O mln. DâtaBox Usedto recordinformationconcerning

a manufacturingprocess,depaftment/
customer,etc.

| - > l
uross-t_rocK
| ----<'-
+ l |
|

ln I
N\_ PlaneShipment NoteTrequency
of shipments.
L,'-
: q=f= TrainShipment Notefrequencyof shipments.

:
TruckShipment Notefrequencyof shipments.

Inventory Count and time should be noted.

1Oây
 Mâterial lcons Represents Notes

lMovementof production Materialthatis producedand

materialby P!!S! movedforward beforethe next
processneedsit; usuallybased
on a schedule.
l\4ovementof finished
goodsto the customer

IMilk Run

1 Expedited
Transport

Supermarket A controlled inventoryof parts

that is usedto scheduleproduction
aI an upslreamprocess,

Withdrawâl usuallyfrom
PulloTmaterials,
a supermarket,
E
Transferof controlled a deviceto limitquantity
Indicates
quantities of materiâl ând ensureFIFOflow of material E
-FIFO* betweenprocessesin betweenprocesses.N4aximum
a "First-ln-First-Out" quântityshouldbe noted. E
sequence,
E
t
lnformation lcons Represents Notes E
E
IVIanual
lnJormation
flow Forexample:productionschedule
or shippingschedule. E
E
<-=-s- Electronic
lnformationflow Forexampleviâ electronic
Inrercnange.
data
E
lnformation an information
Describes flow. E
É

e4
F
I
I
I lnformation lcons Represents Notes
:r
t-;\ Production Kanban The"one-peFcontainer" kanban.
t r-- I ."
t -
l--- (dottedIineindicates Cardor devicethattellsa process
:r T kanbanpath) how manyof whatcan be produced
and givespermissionto do so,
:r
I
,--%---
I
WithdrawalKanban Cardor devicethat instructsthe
materialhandlerto get and trânsfer

lr t parts(i.e.Jroma supermarket
consumingprocess),
to the

ir
il
t-
I
-V SignôlKanban The"one-per-bâtch"kanban.
Signalswhen a reorderpointis

!r t reachedand anotherbatchneedsto
be produced.Usedwheresupplying
processmustproducein batches
I becausechangeovers are required,
I
KanbânPost Placewherekanbanarecollected
:r and heldfor conveyance,

:r
T +1 \ )J-- KanbanArriving
in Batches
:r
ir f,^...* ,^v i
lu^\JAl LoadLeveling Toolto interceptbatchesof kanban
ir ând levelthe volumeand mix of
them overa periodof time.
I r-_-l
iI
t l ControlCenter

ir
ir
/
-,8.- - \
Phone

I
-.
il Orders
f I ;.tl
il
il Genêral lcons Bepresents Notes

ll Operator Representsa personviewed

rOr
I
I
I
Appendix B: Alpha Motors Assembly Plant, West Orange, NJ
Current State - February 2OO2

Alpha
Crosè-Dock

El ?aso,TX

1200A
440 a
$- Daily 7r oà uaT'ioh 5 equence
l;i"h
20
T\-
t7,
Rcceiving Kilting
ruft\$ --rfp Sub.aeeenbly ----li
2560 A 160A
E
1200É bog
E
E
E
E
E
20m. 40 h. 20m. 2h.

E
E
t
E
É

E
 AlphaHQ
?roàuclion
Control Alpha5ale5
Oràer gank

Dearbofi,Ml

AlphaOiot.
----
Center

AlphaTlant
TroAuc on 960 WipetêlDây
Contrcl 640 A
220 6

FACILITY9UMMARY
il Rt\.1
50 h,
tr wt?2h.
FA14h.
E 2 'hiftg
FinalAeeembly

3=:A-+ &1e91t æ7\=.=+ 5 Day6

E?E= l Day

320 A
tr Cll = 60 seô.
160I
Carg

5 CIO=O,
2 5hift6
ù

t ""i:ff''n=t o'..

I
1(1)
il
I
I
I
I APPENDIX B
 Appendix B: Beta l/Vipers Asse]nbly Plant, Reynosa, Mexico
Current State - February 2002

lonawanàa,NY

Harlinqen,
TX
| ,ï^-p4"",r"1
zootaox
| I
l,oooJPattetI
--E-
I
| 12?atte@ |

I l" l--
l " Yl l
T\T-u
v
Receiving
-êwÀ+ Aseeffbly 1

ïêP
Aesernbly
2
rr-rlT.w,
/ > \

25,6004 4324 ()1 4324 q9r +32A

t-
12,AOOB 2246 2246 2z4b
?arA6 ?a.tê Wieerg
' l -

CIO= 5 n/.in. ClO= 5nin. F

Uprime= 95% U\ime = 95%
26hiftê l-
E?E=1Day EPÉ.= l Day
b
o.zh, 48,Oh.8,2h. a.oh. 8.O h.
4.2h.(o o.) 4.3h.(1Os.)
E
3(1) 3 (1)
E
E
F
aa t
e
f
I
z
e 6ela Ha
z Proàuatiotl
Cont?ol Alpha
I MotorS
MRP
e Harlinqen,
TX
? Det'rcit,Ml

e
e-------> ?lant Harlinqen.TX
ù- ?rcàuaaion 1920 WiperclDay
Conbrcl 12AOA
---"
640 b

\Neekly?îoàuation Saheàule
2Palle|,sb

e TACILIry9UMMARY
RM56 h.
I wt?41h.
FA12h.
I 25hi1io

ryâ\ùQ . 1 z '-7âP
Assembly3 lnsbect &lesl
F 5 Days
E?E= l Day
=
çQ2r 432 A 640 A
224 b 320 0
-

a ClO= 5 nin.
Uprime = 95%
CIO= 5 'r'in.
Upriî,e= 1OO% = 109.4 hre.
25hifte
E?É= l Day

4.2h.(1os.)
3 (1)
4

r.a

APPÉNOIX B
Appendix B: Gamma Stamping Assembly Plant, Tonavvanda, NY
Current State - Éeltruary 2OO2

DearbornHeiqhte,Ml

2xWeek

Receiving
'-AEÔ
Stam?inq1
,-fN+ Sramping2
w
336 coils 25,600 A
12,bOOb
pârte
CIT=1Oç.
CIO= th. ClO= th.
Uptime= 8O% E
E
10m. 14d. 20 E
4.4h.(1e.) 4 . 6 h . ( 1 Os . ) E
3 (1) 2(1) F
E
E
E
 GamfiaHa
?roàuaLion bet'a Wipers
Conlrcl HQ
Proàualion
Contrcl
OH
Clevelanà,

beta Wipe.e
Warchouoe

gTAMPEPPARTg
2OOlb^

2xWeekly
Tonâwânàâ,
NY ShipScheàule

FACILIry9UMMARY
Weekly?roduct ion 5 cheàule R[,1556h.

ra40h.
3 ghlfi'
5 Oây,

Clean,?a1,nt.
&bake Shippin6

"l-'4.)
25,600 A 25,600 A
12,800 ù 12,bOO E
PArOs pârt6
CIl = 52 tt1iti.
CIO= 30 min. Proàucrion-_ 20.6
Leaàlime àdyo
Uotime= B5%

H ?roaes.inq_ 3,131

{
40h. 4Bh. 10m.
4.5 h.(3120s.)
- 3 (1)

APPENDIX B
 !

Appendix C: Alpha Motors Assembly Plant, West Orange, NJ

Future State - lv|ay 2OO2
-

6eta -
Wiperc
!

Alpha
Crosa-Dock

El ?aeo,IX
F

_ - t

l!

F
(.,,,/.2-----i i - - - - - - - - - - -L _ J " - - ' - - - - - - - -
i Y
tr
I
Wiper
5ub-Aèsembly
tr

F
F

E
F

F
E
s
E
È
 Alpha
Alpha 9ale.
HQ Oràer
ftoàuction tank
Conlrol

Dearbofi,Ml

Alpha
Dist, Center

AlphaTlant
?roàuallon
-..."7 Conlrcl
960/àây
640 A
? ^
- L 620I
//

// FACILITY
9UMIVARY

r=t= RM15h.
wtP2h.
1x Day
FG14h.
i--z 25hl1r.
5 Daye
itr.l FinalAssembly 5hi?pin0
EPE= l Day
-
il &Test

: .""">
'l>

ProaeÊeikO 1ZO
line
2h.
ou 5.

2(1)

APPËNDIX C
 È

E
Appendix C: Beta Wipers Assembly Plant, Reynosa, Mexico E
Future State - rMay 2OO2 E
E
E
E

lonawanàâ,NY

Tx
Harlingen, ,.--È
n3----"-
2OO/tox
1,600l?alleï
12Pallets
rNr',--""
1T
-'\,1:.2 F

"-----------------Èr

/ Arthe Cell
-,\ T F
I assrva-'CELL
I- A9SEM9LY
- li ll

ll l rl o E ----{É

!!a
Stanpeà
Pârlg !t
C I O= 5 m i n .
Uolitne = 1OO% !a
2 ehifto
la

Ê
1 6h .
O.1h.(3Os.)
!i

C.earing= 3
 Aeta HQ
fuoàuction
ConTrol Alpha
Motorg
Harlingen,lX
Oeûoit, Ml

----|

beta ?lant Harlinqen,

TX
fuoàuôlion - Prê^ 1920WiperslDay
3-='7 Control
I o,irvI W49Z6xoxl >A 12AOA
640 t

32O Wlpercl?aller

2 ?allelsb

RM16 h.
ShippinO
FG12h.

?toàu.tion _ c^.1À"

- = cu 5ec,
Tifrè

APPENDIX C
Appendix C: Gamma Stamping Assembly Plant
Tonawanda, NY Future State - May 2OO2

&1
I Miahiaangteel |
---{wJ-
\ âÉ*-rr
OH
Clevelanà,

I F
leervtéecenter
Dearbofi Heights, Ml

Steel Coils
I
t-T
Gaftma?laîr
Proàuêlion
Cohtrol F

F
Tonawanàa,
NY
N ,,' I

\N/'
,-----------t
,.-f
i abthe i,"
i ?rcee .,i -"-
i--------v
r--7

i { Slampinql
V
Stampinï2
E

E
Cll =1sec, Clf = 10 aec,
CIO=3 rr'in. C I O= 3 m i n .
E
Uptine= 95% = 95%
Upaiftie E
Shifxs=2 5hiftç = 2
E
E?E= 4xehift E?E = 4x çhilt
E
2.5à.
2h.(1s.) 2 h . ( 1 Os . )
I
2(1) 2(1) T
I
a
a
I
I
t
I
betaWipers
H8
?roàucl.ion
Conlrol

r
tet â Wipers
I
I=_-___-1
t--7-1-1
Dairy v@>^ _V2à
l_.q.D)-_1oxaT
'""4i - -
"2'22
I

r
I
I
li
---Jt
91 M?EO?4R15
2OOIB^

| 2x l/
f t
.'i'I
% I w*r,f-l FACILIry9UMMARY

7r-
R[44A h.
I I------' D"i-'-'
"3 ' i i
i

i V
l wt?62h.
FG 12 h,

3 i - ' t Clean,
?aint&bake
i +-1
I ti _l J Shippinq
69hifte
5Dây5

3_. pl..l. J
= - l J
t r l-tI
: l ClO=5 min.
. l - J

Uprime= 95% ?roàucalon

-_ 5,1
Shit'La= 2 Leaàline àayo
EPE= shift

13Om.(3120s.)
3(1)

|!

APPENDIX C
 F

-ç

F
tâo^.
!
We'veffied ro mâke this worl<bookeasyro use,with detailedinstructions,
simple illusrrations,and clcarcxamples.However,we know from ycarsof ts
expcriencerhatapplyingevenchesimplestconocptirr a complexorganization
is difficuh, So we needyour help.After you haverried implementingthc
techniquesdcscribedin this workbook,pleâsemail,fax,or cmailcon,mentsto:

Institurc.llO, lJoxq. Btookl;nc.

Lc.rnlinrerpri<c l\lA 0244f)I-sA
Fax: (617)713-2999. F,mail:stw@lcan.org r Reachus at: wwrvlern.org

E
E
E
E
E
E
E
E
E
E
E
E
E
È
MATERIAL FLOW ICONS

IMânufâcturing Outside DâtaBox Cross'dock

Process Sources

-FIFO*
Truck Plâne Train First-ln-First-Out Supermarket Inventory
Shipment Shipment Shipment Sequence Flow

t GENERAL ICON

PUSH Finished
Goods It4ilkRun Expedited
to CLrstomer Transport

+t )J_)--/
INFORMATION FLOW ICONS
KanbanArriving
;n Batches

#
IManual E ectronic Schedule
InformationFlow Load Leveling S i g n ê lK a n b a n
nformationFlow

,--%
t -
,--D---
I
I l r.'J I
t witna,u*ur
Kanban
T Production
Kar]ban ControlCenter KanbanPost Orders
 Wiper Value Stream ldeal State

aI
,/ /r
% Daily //
ÉD

f-ÉLL--] f-- cELL--l

rtr"I
la.:rn;lcl
AlphaMotore

TIME
PARK
SUPPLIER

tn{.ffil = z.+a'ys
I RM12 I RM4 |
I wrPl2 I wtP2 |
l----19-2 ) FO14 |

O.te.t3=
Z PPfr

o.5à.

1.1à.\3161s.) o.b à. (12o5.)

20 (6) 7 (21
Demând AmDlification

Eâsr0tan4e,NJ

o.+à.
 Vviper Value Strearn Current State

I"e#\
. . . . . . . . . . . . . . . . : -
.-___]T1 !--_l IMvri_.::_.;
?Vnouth M1 14aal.
w"tttl
t---r--T-
I A I
,1 L 4
i flN l l_l-
o " v l
I 6 d.re
v r---;;;:-l
/-L.-1-4
ëiEft c^rct
I I

t ^ I s6a1;;---1
// 640 A

// r,::i
3206
FfJ |
I-\ | 213e1 |

r-î---L
ll,Dov
al

TIIVE

'nl,fl' = a.oa^y.
=
:il
4
4.Oà. +.oà. o.5à.
o.sd. I r I o.5à. | 1 | 2.oà.ltzo
e.)l I
4 4 11(2)

";-.
Demand Amplificâtion

@ .
r;;t

iiË t

<_
I

7/â\ t - J -
I T " r " / - .-8 - r '7O\ -.r
-r- Dâ lv
wæryI Lr---:--r

\ 1,4|4+lr
| 't
17":h = \
ræt l-J
lff ; ; i " t Lr 1r t 1 " . !
-_l

| >A-\-
| 32ni,î, | ôerawipeÉ |
|
^$enbty
I
ronâwânlâ,NY.3

l * -

o.3à. 4.Oà. o.25à.

20.6 d. (3151 2.Oà. 4.6à.(3oê.)
22 (5) 21(3)
 l /ipèr Value Strèâm Future State 1

lë:vàg.l
l c"n-
|

"v;;;;i' n;:"
--
--rri-T-
l l A
I ' \
1.4 a
/ t,<-t
I a a"-aq.
T r--;;-l

_.----8- td"l'
r r*T
i--_t
l
| \>t L_:__:l TlrvlE
_a
.......;...............,1>.-..........'
H r r t i i a a nt.X E th e ô . , ,

*2.
1 6ao n | l--/999-!' )
I fîF6,."h-l \ea' I ehPoatah
= a e n t a " l l = 6 ? a t t è ù l
- )h
D"1", i"=."a | | uerc.\!è = t""on"n
24o*
I

4.Oà. 4.Oà. o.5à.

o.5à. I I I a.5ê | I | 1.3à.l12oe.) I I
7 (2)
 Oemand Amolificâtion

Ë- .-

----t-
-l
''
/..L..4 æl
-
lMtcltdâAgtêêll :.
14dâr6
| 5ê;reco | fN.

ueièa, '.
lRernoea,

- =]-
'
- ::t"

o,3à, o.25à.
5.1à. (313ts.) 1.2à.(3o ..)
20 (3)
 Vviper Value Stream Future State 2

+
\
--r
I D,lv I

}/v-L4
Arpha
I I
I oi.rtiblr an I
I c-È. I
oH
Clevelanà,
A- s.oDà'
4l
/l - n:
ll
F=
6xaf, %

æ TIME

-ç!,5

I lbao; --l ) I aGk

-r,rp 6,'.h

@r*.r"-;;*l

4.5 à. o.5à.
't.3à.(t2o 5
)

712)

ô \
Dêmand Amolification

,tVV, "..._ fc-*-]

lvi.niqân9teetl Dàly l- lâoduda I
J
{ \s Gn*.
lseturcec4r?,| I I <-
Oêatborrlleign& Ml

r i
tF
s-
i v

I *F-" I

o.3à. 4.Oà.

4.o à. (3131s.) 1.2à. (3o 3.)

20 (3)
gruE
I S B N : 0 - 9 6 6 7 854I3
90000

lillili[ili
ililIi