l03 va nva
TRANSCRIPT
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What is “ValueWhat is “Value--Added” Added” ??
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Lean and Eliminating Waste
Value Added
Typically 95% of all lead time is non value-added
Non-Value Added
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Lean focuses on the elimination of Waste
Typically, 90-95% of Total Lead Time is Non value Added activities and Waste
Does this look familiar?Typically, we tend to focus on and improve the Value Added
rather than attacking the Waste..the larger opportunity
Does this look familiar?Typically, we tend to focus on and improve the Value Added
rather than attacking the Waste..the larger opportunity
ValueAdded
Hand offs, Multiple reviews, waiting and more waiting,Rework, Checking Status, Multiple approvals, extra copies, searching for information, finding the “right person”
with the “right information”, expediting, getting dumped…..
Value vs. Waste• Three elements of Work:
– Value Added Activities:• An activity that transforms or shapes material or
information• And the customer wants it• And it’s done right the first time
– (Required) Non Value Added Activities:• Activities that cause no value but which cannot be
eliminated based on existing technology, equipment or thinking
• Regulatory, customer mandated, legal• Necessary because of risk tolerance, ‘buffer’
– Waste….Non Value Added Activities:• Activities that consume resources but create no value in
the eyes of the customer• If you can’t get rid of it, it turns to Required, Non Value
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Waste adds cost and time
Lean Thinking--- Defining Value
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Definition of WasteDefinition of Waste
Anything that does not add value to the Anything that does not add value to the product is product is wastewaste and must be reduced or and must be reduced or
eliminatedeliminated
Japanese Waste Definition: 3M
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What is MUDA?Muda means any wasteful activity or any obstruction to smooth flow of an activity
Activity = Work + MudaExpenditure = Cost + waste
That is, for each activity there is expenditure and every work there is a cost associated. Any expenditure on the Muda is a waste!
What is Mura?Mura = Inconsistencies in the system
• Happens sometimes? • Happens some places • Happens to some people • One side is ok; the other side is not ok
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What is Muri?Muri = Physical Strain
– Bend to work? – Push hard? – Lift weight? – Repeat tiring action? – Wasteful walk?
All this is Muri
Japanese Waste Definition: 3M
1 Ton X 12 = 12 Tons Truck Capacity = 4 Tons
How should I transport these materials?
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Japanese Waste Definition: 3M
The operator loads 6 tons and makes 2 trips to
The operator loads 2 tons and makes 6 trips
The operator loads 6 tons and makes 1 trips then loads 4 tons and make a trip then loads the balance 2 tons
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Japanese Inventory
Japanese Inventory
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Excess Motion
The brick weighs about 2.3 kg. How much is the worker actually raising and lowering every time he bends over for another brick?
Bricklaying, after Frank Gilbreth• Lesson: waste can, by long habit ("living with it," "working around
it") become built into a job.
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fabric folding operation
Henry Ford principle: "Pedestrianism is not a highly-paid line of work."
This shows the value of videotaping real operations(e.g. for kaizen blitz, SMED).
Office Waste
• NVA Processing• Overproduction• “Inventory”• Waiting• Defects• Excess Motion• Transportation• Underutilized People
• Too many approval levels• Premature quotes• Filled “In-boxes”• System downtime• Order Entry errors• Poor office layout• Movement of paperwork• Limited functional responsibilities
Examples?!
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7 Wastes in the OfficeWaste Definition To eliminate this
waste… Defects ANY rework of product or
information is waste. • Establish standard work procedures
and forms • Mistake proof
Inventory Excess stock of anything…extra copies, extra supplies, extra files etc.
• Produce only enough to satisfy the work requirement of the customer.
• Standardize work locations & quantities.
• Eliminate queues. Motion All motion should add value
to the product or service for the customer. Ineffective layouts or processes create more walking, reaching then necessary.
• Standardize folders, drawers, cabinets, locations etc. Color code as much as possible.
• Arrange files and information for easy reference.
• Arrange work areas and equipment into central areas.
Waiting Waiting for people, paper, machines or information…
• Review and standardize signatures • Cross train so that work can continue
to flow even if someone is out or busy• Balance the workload • Make sure equipment & supplies are
available.
7 Wastes in the OfficeWaste Definition To eliminate this waste… Motion Unnecessary work
movements…searching, walking, carrying, lifting, reaching, choosing, arranging…
• Standardize folders, drawers, cabinets
• Color code • Arrange files for easy reach and use. • Arrange work areas to support the
flow of your process. • Update forms and document layouts • Eliminate the “ings”…
Transportation Moving materials and information from place to place. Using temporary locations.
• Make the distance traveled as short as possible.
• Eliminate temporary locations. • Review the office layout…where
are you wearing down the carpet. • Duplicate equipment if an analysis
of savings supports it. Over-producing
Producing a product, service, or information before the customer needs it.
• Establish a work flow sequence geared toward the downstream customer
• Create standards/ metrics. • Create signal devices
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The Need: The 8 Wastes
Extra ProcessingMotionMaterial Movement
WaitingOver ProductionInventory
Unused Employee CreativityDefects
Lack of TrainingCurrent Roles & Responsibilities
Office Layout Performance MeasuresNo Standardized WorkSystem Limitation
Identifying Root Causes of Visible Waste
Operational InnovationAnything that does not add value to the product is waste and must be
eliminated
• Value Adding activities• Room readiness• Food on time• Registration open at customer specified times
• Non-value adding activities• Booking an event in computer system• Internal sharing of information• Accounting procedures
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Evaluate the processes, where is the waste?
Get the Waste out--- Understanding and Eliminating Waste
� The Secret:Be Systematic� Work with a versatile team� Measure, evaluate� Find the 5 Whys� Follow up� Standardize, make uniform� Simplify� Combine� Prevent� Make waste ugly
Elimination of Wastes and Continuous Improvement
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Improving Performance
People Process Results
Rs
Time More
Better
Faster
Cheaper
Improving Performance
People Process
Rs
Time More
Better
Faster
Cheaper
Results
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Improving Performance
People Process Results
Rs
Time More
Better
Faster
The same...
… or less
IMPROVE
IMPROVE
Cheaper
Delivery lead timeThis is life!
If not, it’s torture…
When the delivery lead-time is bigger than the manufacturing lead time:
Manufacturing lead time
Delivery lead time
Manufacturing lead time
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Solution…
What is the solution?
Generate and support stocks
Delivery lead time
Manufacturing lead time
Delivery lead time
Manufacturing lead time
False appearance of a solution
Identify and eliminate all wastes in our operation processesExample: manufacture a
Total operations: 6 hoursMfg. lead-time: 40 days = 320 hoursDifference: 314 hours
How to reduce the manufacturing lead time?
Delivery lead time
Manufacturing lead time
?
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Example: manufacture a Total operations: 6 hoursMfg. lead-time: 40 days = 320 hoursDifference: 314 hours
What are processes made of ?
Delivery lead time
Manufacturing lead time
Storage,
Transport,
Waiting time98%
Kaizen ExampleShrinking Lead Times
Order Lead Times Manufacturing Lead Times Delivery Lead Times
Manufacturing Lead TimesOrder Lead Times Delivery Lead Times
Reducing the overall time from receiving the order to delivering the product makes your company more responsive to the customer. This can become the deciding factor when the customer makes their selection.
As can be seen, manufacturing is only one part of the entire process. Inputting, processing, and issuing orders is an area for improvement, as well as, assembly, loading and delivery to the customer`
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Kaizen ExampleWhere’s the Time in Lead Time
This timeline represents an overall lead-time, with very little time spent on adding value to the product.
Non-Value Added Time (NVA)99% of Total Lead time
Value Added Time (VA)1%
Improvement EffortsConcentrated on reducing VA time, with no attention given to NVA.
Non-Value Added Time (NVA)99% of Total Lead time
VA1/2 %
Results of Common Improvement efforts, did not improve response time. VA time is reduced, but, the costs for those improvements in lead time was substantial.
Common
Kaizen ExampleWhere’s the Time in Lead Time
NVA Time95% of Total Lead time
VA5%
When we look at attacking the NVA Activities in the Timeline and compare that to the original timeline:
Non-Value Added Time (NVA)99% of Total Lead time
Value Added Time (VA)1%
This shows a 5X improvement in lead timeGreat Job!!
Greatest Opportunities are actually here!
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Focus on Blockages to Flow & NVA
Eliminating Non Value Add has a major impact on
Quality, Cost and Service Delivery
•Value-Add activity
Non-Value-Add activityTime
Right First Time Every Time
• Everything must be of acceptable quality– Sub-standard items or information will cause delays
�Make no defects�Pass no defects
�Accept no defects
• Find the root cause of defects fast– Ask the “5 whys” and 1 “how”
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Flexible Staff
• Focus on giving the next in line what they want when they want it
• Be prepared to– do what needs to be done to keep the work flowing
smoothly– learn new skills and new ways of operating
Standardisation
• Standardisation• Current best way to do the task
– Least waste way
• Everyone must adhere to the procedure– Until it is changed for all
• Procedures must be continuously upgraded– Continuous search for improvement
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Perf
orm
ance
Time
Why Standardise?
Businessas usual
StandardOperatingProcedures
Kaizen orcontinuous
improvement
Pull Process
• “Typical” Business: Push Process
Imagine each Paperclip represents an individual process within the Value Chain
PushBottlenecks
Space
Waiting
WIP
Finished Goods
Inventory
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Pull Process
Customer Pull
Reduced bottlenecksReduced work in progressReduced operating space
Improved quality
Do MORE with LESS
Waste Productivity
Staffing Productivity
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Typical Problems Observed in Organization
Value: From the perspective of the customerUnderstanding Customer Requirements – Example: Not meeting timing needs
Flow: No Waiting – No Rework – Information AvailableMany handoffs, Interrupts, Waiting for decisions and approvals
Work: Standardized Built in QualitySignificant Rework, Standards not being followed (workarounds) or no standard
Manage, Improving and Learning: Milestones and Checkpoints, Learning EmbeddedOver processing, no management corrective action, limited feedback
InitialCustomerContact
PROCESS
VALUE STREAM
AgentDelivery to
PROCESSPROCESSDistribution
ValueValue--Stream Improvement vs. Stream Improvement vs. Process ImprovementProcess Improvement
Insurance Policy Writing Process
PROCESSUnder-writing
Rating PolicyWriting
Value Stream = ALL steps, both value-added and NVA, required to complete a service from beginning to end.
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Making the Work Flow
Step 1 Value Stream Chunks or Loops
Step 2 Apply basic Lean concepts� Reduce handoffs by combining steps
� Eliminate waiting for decisions with a “proceed unless halted” agreement
� Maximize flow by managing interrupts
Step 3 Apply Lean tools � Standard/balanced work – reduce variation in work
� Visual workplace – identify problems (defects, backlog)
� Built-in-quality – eliminate rework
� Pull systems – a method to control process flow by replacing only what is consumed
• Reduce handling, storage and paperwork
• Production based on consumption
A Shift in Mindset
Waste
Waste is not defined or easily visible.
Reacting to ‘big issues’.Reactive improvement.
Waste is visible.Identify small opportunities that
together create large overall change.Continuous improvement.
Transport
Defects
Over Processing
MotionWaiting
Over Producing
WasteInventory
LEAN
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