Non Value‐Added Activities | My Assignment Tutor

EG7322 Lean EngineeringSession 4: Process MappingMarina MarinelliMEng MSc PhD [email protected] Value‐Added Activities• Non‐value added activities are described by threeJapanese words: Muda (waste) Activity that consumes resourcewithout adding value• Type 1 – non‐value added activity that is deemednecessary – cannot be eliminated immediately• Type 2 ‐ non‐value added activity that is notnecessary – prime targets for eliminationWasted resources / time / effortMura (unevenness) waste caused by unbalancedworkloadMuri (overdoing) unnecessary overburdening ofor people, equipment or systemsWaste ActivitiesA firm needs to transport six tons of material to itscustomer using a truck rated 3 tons.Pile all six tons on the truck and make a single trip.Make two trips, one with fourtons and the other with two.Load two tons onthe truck and makethree trips.Load the truck with threetons and make two tripsABC DAnother way to look at waste…Failure DemandThe demand caused by a failure to do something or not do somethingright for the customerWork unnecessarilyloading the systemOverload Longer responsetimesMore failure FAILURE DEMANDIn 2007 a leading UK bank advertised a financial product with a very attractiveinterest rate. Investors were required to complete an application form and existingaccount holders were required to have the investment funds available in theiraccount. A large number of applications for investment followed. The officeprocessing the applications was overwhelmed. Many applicants were still outstandingone month after completing the application form.Many enquiries were made – failure demand. Enquirers were told that the investmentwould be backdated to the application date. After 6 weeks many potential investorshad taken their money out of their accounts. When these applications wereprocessed the transaction could not be completed – failure demand – because thefunds were not available.Letters were then sent out requesting re‐application with sufficient funds – morefailure demand. Many customers had already invested elsewhere.A failure to resource the office adequately or to monitor the flood of applications andadjust resources accordingly led to a huge amount of unnecessary work as well asloss of customers – some probably permanent.A case of Failure DemandIdentifyCustomers &Specify ValueIdentify & MaptheValue StreamOptimalResponse toCustomerdemandLean System1. Define VALUE from thecustomer’s perspective andprovide what they want2. Identify the VALUE STREAM orprocess for each product orservice and reduce or eliminatesteps that do not add value3. Align the value‐added steps sothey FLOW continuously4. Allow the level of customerdemand to PULL the process,i.e. produce only what isordered5. Pursue PERFECTION throughcontinuous improvementOur initial objective in creating a value stream “map” is to sort the actionsrequired to design, order, and make (provide) a specific product (service)into three categories:(1) those which actually create value as perceived by the customer (value‐added activities);(2) those which create no value but are currently required (Type Onemuda) and so can’t be eliminated just yet;(3) those actions which don’t create value as perceived by the customerand can be eliminated immediately (Type Two muda).Value stream mapMuda II(60%)Value Adding (5%)Muda I(35%)ServicesA process is a collection of interrelated activities, initiated in response to atriggering event, which achieves a specific, discrete result for the customer andother stakeholders of the process.Process MappingThe ways in which the activities operate andconnect to one another exhibit features thathelp or hinder “flow” and create value orwaste.Maps and flowcharts help make these featuresvisible. Broaden our perspective regarding how work works. Provide a common conceptual frame of reference about work. Clarify relationships, identify key elements, and consciously eliminateconfusion factors concerning work.Map Types and Level of performanceProcess MappingRelationship MapA relationship map visually depicts the “parts” of an organization, and the internal orexternal supplier–customer relationships among those parts.The relationship map helps you viewwork at the Organization level, thus itdoes not explicitly show workactivities.Why Use This Type of Map?1. Show what the organization “takes in” andwhat it produces3. Make selected internal and external supplier‐customer relationships visible.4. Highlight what each part contributes5. Provide context of workProcess Mapping2. Illustrate the organizational boundaries thatwork must pass through as value is createdOBSERVE directly Ask QUESTIONSGembaOscar: What starts the work related to an oil change? Phil: We use written service orders for all servicesNothing happens until there is a service order approved by the customer. Oscar: What part of the business isresponsible for obtaining the approved service order from the customer? Phil: Sales. They work directly withthe customer. They talk with the customer to figure out what they need, write the service order, and whenthe work is done they present the invoice to the customer and collect payment. Oscar: During an oil change,does Sales have any other forms to complete, besides service orders and invoices? Phil: Well, they generatematerial requests and send them to Administration. Administration uses the material request to generatepurchase orders for the various supplies we use. They don’t do this during each oil change though; they do itonce a week.Vehicle oil change at Phil’s GarageService orderVehicle oil change at Phil’s GarageOscar: So, in the case of an oil change, when the oil change service tech gets the job packet, whathappens? Phil: The Service tech reads the service order and begins to change the oil in the vehicle.Oscar: In the oil change bay? Phil: Yes.Service orderVehicle oil change at Phil’s GarageOscar: So, in the case of an oil change, when the oil change service tech gets the job packet, whathappens? Phil: The Service tech reads the service order and begins to change the oil in the vehicle.Oscar: In the oil change bay? Phil: Yes. Oscar: How did the vehicle get to the oil change bay? Phil: AfterSales writes the service order, they get the ignition keys from the customer, and move the vehicle to theoil change bay. Then, they put the keys and the service order in the job packet and hand it to the Servicetech. Oscar: What happens to the vehicle after the oil is changed? Phil: The Service tech moves thevehicle to the pick‐up area, removes the keys, and puts the keys and the service order back in the jobpacket. Then, they return the job packet to the Sales person, like I told you earlier.Service orderVehicle oil change at Phil’s GarageOscar: Where does the replacement oil that you use during the oil change come from ?Phil: That’s why I told you about the material request. We order all our supplies from an auto partsdistributor. We send them a PO weekly, they deliver supplies weekly and leave us an invoice. We paythose once a month. Oscar: Which parts of the organization are involved with supplies and supplierinvoices? Phil: Supplies go to Service. Supplier invoices go to Administration. They also send out the POsand make the monthly payments.Service orderInterviewInputs and outputs (specific forms of resources associatedwith the work related to an oil change only)• Vehicle (before and after the oil change)• Oil change supplies• Customer invoice• Job packet• Payment (from oil change customer)Service orderInitial triggerProcess MappingCross-functional process map (Swimlane diagram)Whereas relationship maps focus more on the links between the structural “parts” thatmake up a business, cross‐functional process maps show what takes place withinthose parts.Oscar: Let’s take a closer look at the work associated with an oil change. Walk me through thework beginning with the arrival of a customer. Phil: Someone from Sales greets the customer,discusses the work to be done, writes a service order, and confirms with the customer the workto be done. Oscar: What happens next? Phil: Sales gives the service order to the next availableoil change Service tech, who reviews it and prepares to start the job. Oscar: What does theService technician do? Phil: He takes the keys out of the job packet, locates the customer’s car,and moves it to the oil change bay. Then, he prepares the vehicle for an oil change. Next, hechanges the oil. Then, he places a reminder sticker on the front windshield of the car, and does aquality check. Once he confirms that everything is okay, he moves the car to the pick‐up area,and notifies Sales that the job is complete. At this point, he returns the job packet to the Salesperson who wrote the service order. Oscar: Once the Service technician notifies Sales, theyprepare the bill for the customer and collect payment, right? Phil: Right.Process MappingFlowchartA flowchart is a graphic representation of the sequence of activities used tocreate, produce, or provide a specific, unique output.Why Use This Type of Map?1. Understand work at the mostgranular level.2. Quickly identify howcomplicated an activity reallyis and where waste in thework occurs.3. Make types of waste in thenon‐value‐creating activityvisible, such as delays, storage,batching, movement, inspection,approval, rework, etc.Process MappingThe work starts at the point wherevehicle information obtained from thecustomer is entered into the VehicleInformation entry screen.Flowchart for Activity 2Write Service OrderThe work ends by placing a job packetcontaining the written service order andvehicle key in the driver’s vehicle.Flowchart for Activity 2Write Service OrderFlowchart for Activity 2Write Service OrderThe Value Stream Map (VSM) is the flowcharting tool that provides acomplete, time‐based representation of the stream of activities – from beginningto end‐ required to deliver a product or service to the customer.Value Stream MapThe VSM… Has the customer’s perspective and focuses on his expectations,requirements and needs Shows how the information flows to trigger and support theactivities of the stream Shows how much of the time the activities are adding customervalue and how much is wastedValue Stream MapValue Stream Maptime measurement related to item flowInformation flows show how orders are placed and schedules communicated.Value-addedNon Value-addedValue Stream MapIdeally, the value stream delivers a defect‐free item, created right before it goesto the customer at the time they expect as a result of value‐added activitiesonly, i.e. the stream is not interrupted by waste.For an activity to be Value‐added it must:1. Be something that the customer is willing to pay for2. Transform the product/service in some way3. Be done correctly the first timeNon Value-addedValue-added1. Customer arrives and is seated by the hostess.2. Customer receives a menu.3. Customer receives water and their order is taken.4. Order is prepared.5. Order is delivered to customer and consumed.6. Customer pays bill.7. Customer departs.Benefits to mapping the current state• Gives an overall picture• Shows activities and decisions• Details how we are meeting customer requirements . . . Or not!• Highlights complexities• Spotlights errors and wastes• Provides a common language• Allows discussionThere is no one, right way to complete a current state map, but it should: Follow the process from end to end Capture as much information about the process as possible on one piece ofpaper so that we improvement decisions can be madeThank you STUDY ON LEAN


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