01-03-01 Duggan Creating Mixed-Model Value Streams

Creating Mixed Model
Value Streams
Kevin Duggan
Founder
Institute for Operational Excellence
MWCC Mid-Atlantic Lean Conference

7-8 November, 2012
Rev 8.1
Creating Mixed Model

Value Streams
Kevin Duggan, Founder

Institute for Operational Excellence
www.instituteopex.org
© 2012 Institute for Operational Excellence. All Right Reserved.

Copyright Notice
© 2012 Institute for Operational Excellence.

All Rights Reserved.
Reproduction or distribution of this presentation

is strictly prohibited without written consent
from the Institute for Operational Excellence.

Kevin J. Duggan
Founder, Institute for Operational Excellence
• Renowned speaker, author, and educator in the principles of

Operational Excellence.
• Author of Design for Operational Excellence: A Breakthrough
Strategy for Business Growth, to be released September 16,
2011 by McGraw-Hill.
• Best selling author of Creating Mixed Model Value Streams.
• Executive mentor to many fortune 500 companies
• Co-author of The Office That Grows Your Business –
Achieving Operational Excellence in Your Business Process.
• Featured on “Inside Business” with host Fred Thompson,
featured on CNN and the Fox Business Network.

What is Operational Excellence?
“Each and every employee can see the flow of

value to the customer, and fix that flow before it
breaks down.” SM
Kevin J. Duggan

Eight Steps to Achieve
Operational Excellence
1. Design a lean flow using lean guidelines
2. Implement a lean flow
3. Make the lean flow visual
4. Create standard work for the lean flow
5. Make abnormal flow visual
6. Create standard work for the abnormal flow
7. Teach employees to maintain and improve the
flow to the customer
8. Free management to work on offense
Design a Lean Flow Using Lean Guidelines
1. 8 guidelines of end-to-end value stream design

2. 10 guidelines for the mixed model pacemaker
3. 6 guidelines for creating flow through shared resources
4. 9 guidelines to creating flow through the office
5. 8 guidelines to creating flow through the supply chain

The Mixed Model Pacemaker
Supplier Customer
XOXO
Weekly
Pacemaker Daily
Form Assembly Test Ship
FIFO FIFO
2 days 1 day 1 day 1 day 5 days

2 sec 20 min 10 min 15 min 45 min

Introduction to
Mixed Model

Today’s Factories Are Often Complex
• Lots of “tailoring” for customers

• Shared resources
• Many product variations
• Workfloor spaghetti
• Optimization of resources
• Uncertain demand from day to day
• No management time frame

How Do We Flow a Mix of Products
Through the Same Value Stream?
How will we run all these

products through the same value
stream when demand changes
each day?
Pistons: 45-80 units Collars: 30-55 units Lifters: 55-75 units

Brackets: 50-90 units Diverters: 35-60 units Levers: 60-95 units
Arms: 25-75 units Detectors: 20-40 units Cranks: 40-70 units
Stamp Paint Assemble Ship

FIFO
max 50

Which Type of Value Stream Is This?
Discrete Mfg. Make to Order Mfg.
2 3
Discrete Manufacturer Job Shop
High Mix Very High Mix
Number High Customization
of
Products
1 4
Discrete Manufacturer Low Mix
High Customization
Degree of Customization Required

Mixed Model Value Streams
Pistons: 45-80 units Collars: 30-55 units Lifters: 55-75 units

Brackets: 50-90 units Diverters: 35-60 units Levers: 60-95 units
Arms: 25-75 units Detectors: 20-40 units Cranks: 40-70 units
Stamp Paint Assemble Ship

FIFO
max 50
Mixed Model means to produce a variety or mix

of products or product variations through the
same value stream at the pull of the customer.
Ten Guidelines for Mixed Model
1. Do you have the right product families?
2. What is the takt time at the pacemaker?
3. Can the equipment support takt time?
4. What is the interval?
5. What are the balance charts for the products?
6. How will we balance flow for the mix?
7. How will we create standard work for the mix?
8. How will we create pitch at the pacemaker?
9. How do we schedule the mix at the pacemaker?
10. How do we deal with changes in customer demand?

Product Family Matrix
Injection Molding
Configure & Test

Mechanical Assy
Electrical Assy
Hand Deburr
Final Assy
Welding
Deburr
Stamp
Paint
Ship
P/N Name
12834 XS2 Servo Motor X X X X X X X
18392 Sensor-Activated Arm X X X A X X X X X X X
19283 Photoelectric Detector X X X X
19299 Ionization Detector X X X X X
21000 Laser-Activated Arm X X X X X X X X X X
21032 Manual Servo Motor X X X X X X X
21042 Manual Servo Motor II X X X X X X X
22020 Manually-Activated Arm X X X A X X X X X X X
23756 Fiber Optic Visual Sensor X X X X X X
25030 Radon Detecter X X X X
28121 Bar Code Divertor Piston X X X A X X X X X X X
30000 Bar Code Diverter Arm X X X A X X X X X X X
31000 Sensor-Activated Piston X X X A X X X X X X X
31666 Laser Diverter X X X X X X X X X X
34556 Carbon Monoxide Detector X X X X X
35599 Auto Servo Motor X X X X X X X
38200 Laser-Activated Piston X X X X X X X X X X
42005 Manually-Activated Piston X X X A X X X X X X X
45890 Motion Detector X X X X

Work Content
Configure & Test

Mechanical Assy
Electrical Assy
Hand Debur
Final Assy
Welding
TOTAL
Paint
Ship
Name
A Sensor-Activated Arm 30 60 45 90 140 130 110 X 605
B Laser-Activated Arm
C Manually-Activated Arm 45 60 40 120 150 90 100 X 605
D Bar Code Diverter Piston
E Bar Code Diverter Arm 60 60 45 100 180 105 105 X 655
F Sensor-Activated Piston
G Laser-Activated Piston 30 60 35 150 130 140 200 X 745
H Manually-Activated Piston
I Laser Diverter 30 60 40 240 300 240 80 X 990
X Custom Orders 30 60 30 120 160 105 110 X 615

Product Family
EMC Product Family CUSTOM ER ORDERS EACH DAY

Anticipated
PRODUCT Demand MON TUE WED THU FRI
A Sensor Activated Arm 65 54 48 36 60 70

B Laser-Activated Arm 85 84 78 48 84 75
C Manually-Activated Arm 35 24 30 24 25 35
D Bar Code Diverter Piston 70 84 72 60 75 70
E Bar Code Diverter Arm 50 60 84 72 55 65
F Sensor Activated Piston 55 36 48 48 55 30
G Laser-Activated Piston 20 18 27 39 25 25
H Manually-Activated Piston 25 36 54 54 20 20
I Custom Orders 45 30 36 30 45 45
TOTAL 450 426 477 411 450 435


Takt Time
 Takt = customer demand

rate
 It is used to synchronize
the pace of production
with the pace of sales
 Takt tells us how fast we
need to produce for each
product family
 Takt capability might be
needed if demand is low
or irregular

Machine Loading
Time Available Time
Uptime Factor Planned Load Threshold

(85% - 95% of available time)
Total Run Time Total Run Time w/ Uptime
Machine


Understanding Interval
We would compare the total time needed to the

effective working time per interval. Any leftover time
can be used for changeovers.
Time Effective Working Time

per Interval
Time left for

changeovers Total time needed
per Interval
Machine Station

Planned Cycle Time
A Planned Cycle Time that is less than takt can

help absorb variation in the mix.
Takt = 120s
Planned Cycle Time = 110s

(92-95%of takt)

Cell Balancing
Time Time
Takt Takt
P C/T P C/T
1 2 3 4 1 2 3 4
Operators Operators
1- Creating Continuous Flow v 1.0 –Mike Rother and Rick Harris, The Lean Enterprise Institute 2001, p.54.


Which Type of Value Stream Is This?
Discrete Mfg. Make to Order Mfg.
2 3
Discrete Manufacturer Job Shop
High Mix Very High Mix
Number High Customization
of
Products
1 4
Discrete Manufacturer Low Mix
High Customization
Degree of Customization Required

Balancing Example
Option # 1:
• Discrete Parts
• Low Demand Variation Level the schedule and keep
• High Volume labor constant, build products
in order:
Level mix,
sequence orders
based on work
content and pull
signals
ACBACBACB
# Operators
always constant Pacemaker Test Ship
FIFO
Output varies 90 – 200
90 -150 seconds seconds
based on work
content

Balancing Example
Balance to the takt time and add labor
Option # 2: when a product exceeds the takt time.
• Discrete Parts Try to build products to demand.
• Custom Parts
• High Demand Variation
• Short Lead Times Prod Control
Build to demand as
Customer
much as possible
demand
ACBCCB…
Small overflow of main
products when mix is exceeded
Output Pacemaker Test Ship

constant,
labor varies
FIFO
110 seconds 90 – 200 s FIFO
AWCT=110s


Creating Standard Work
 By Standard Work we mean that

any operator following a
prescribed method, with a
proper workstation, and proper
tools, should be able to perform
the amount of work required in
the same amount of time,
without risk to health or safety.

What is the Best Method?
Hypotheses Test Analyze Implement Extend
Plan Do Check Act


Pitch
How much work do we schedule & take away at the

pacemaker?
This amount is our management timeframe – how often we
find out and can react to problems.
1 week
1 day
1 shift
1 hour
1 Pitch
1 takt © 2012 Institute for Operational Excellence. All Right Reserved.
Pitch
Pitch increments
Shift 1 6:00 6:24 6:48
Shift 2 3:30 3:54 4:18
G D A
G Pitch = 24 minutes
G A


Creating the Schedule Box
Min per Case

# Operators
Takt time
Pack Qty
Name Max = 24 minutes
Sensor-Activated Arm 4 6 2 min 12
Min = 6 minutes
Laser-Activated Arm 4 6 2 min 12
Manually-Activated Arm 4 6 2 min 12
Bar Code Diverter Piston 5 12 2 min 24 Pitch = 24 minutes

Bar Code Diverter Arm 4 12 2 min 24
4 slots needed
Sensor-Activated Piston 4 12 2 min 24
Laser-Activated Piston 5 3 2 min 6 per pitch increment
Manually-Activated Piston 4 3 2 min 6
Custom Orders 4-5 3 2 min 6

Setting Up the Schedule Box
Pitch increments or Buckets of capacity
Shift 1 6:00 6:24 6:48
Shift 2 3:30 3:54 4:18

Max = 24 minutes
G D A
Min = 6 minutes
Slot = 6 minutes
G Pitch = 24 minutes
Sensor-Activated Arm
4 slots needed
Laser-Activated Piston G A
per pitch increment
Bar Code Diverter G


Seeing Changes in Customer Demand
Inbox
Go To
Plan “B”

Adjustable Finished Goods Levels
We can establish preset levels of the supermarket

based on the flexibility and performance of the
value stream
LEVEL 2
LEVEL 1 LEVEL 3
CUSTOMER


Operational Excellence
“Each and every employee can see the flow of

value to the customer, and fix that flow before it
breaks down.” SM
Kevin J. Duggan

Connecting Upstream Processes to the
Pacemaker
• Create flow through shared resources
• Create guaranteed turnaround times (GTT) for

shared resources
• Offset sequencing
• Sequenced FIFO

Offset Sequencing
1,2,3,4… OXOX
Offset = 1 day
CNC Lathe 1 /
Manual Deburr Max = 12 pcs. Sub Assy
(1 day)
FIFO
C/T=30 min. EPEI = 1 day

P/T=55 min.
UP=93 %
EPEI=1 shift
=1
Sequenced FIFO
Family C/T
Cylinder 18
Small Impellers 8
Medium Impellers 25
Large Impellers 29
Machine Heat Treat

Deburr

Sequenced FIFO
Family C/T
Cylinder 18
Small Impellers 8
Medium Impellers 25
Large Impellers 29
Machine Heat Treat

Deburr

Sequenced FIFO
Family C/T
Cylinder 18
Small Impellers 8
Medium Impellers 25
Large Impellers 29
Heat Treat
Machine
Deburr

Connecting Upstream Processes to the
Pacemaker
• Guaranteed turnaround times (GTT) for shared

resources
• Predictability, regularity, and consistency for

upstream processes
• Flow, not pull, through shared resources

Books available at our event
BOOTH!
Copies also available at

www.instituteopex.org

Thank You!
Complementary membership into the Institute

for Operational Excellence is available at
www.instituteopex.org. Benefits include:
• Advanced notice of open enrollment
courses
• Access to helpful resources including:
podcasts, videos, newsletters, and articles
• Discounts on mapping supplies

Question & Answer
Please fill out your session feedback and leave it

at the back of the room!
This Session Is: 01-03-01 Duggan
Are you a future presenter?

Contact Jeff Fuchs, jfuchs@choosemaryland.org
About presenting at next year’s
Mid-Atlantic Lean Conference.
MWCC Mid-Atlantic Lean Conference

7-8 November, 2012

01-03-01 Duggan Creating Mixed-Model Value Streams

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Creating Mixed Model

MWCC Mid-Atlantic Lean Conference

Creating Mixed Model

Kevin Duggan, Founder

© 2012 Institute for Operational Excellence. All Right Reserved.

© 2012 Institute for Operational Excellence.

Reproduction or distribution of this presentation

© 2012 Institute for Operational Excellence. All Right Reserved.

• Renowned speaker, author, and educator in the principles of

© 2011 Institute for Operational Excellence. All Right Reserved.

“Each and every employee can see the flow of

© 2012 Institute for Operational Excellence. All Right Reserved.

1. 8 guidelines of end-to-end value stream design

© 2012 Institute for Operational Excellence. All Right Reserved.

Form Assembly Test Ship

2 days 1 day 1 day 1 day 5 days

© 2012 Institute for Operational Excellence. All Right Reserved.

© 2012 Institute for Operational Excellence. All Right Reserved.

• Lots of “tailoring” for customers

© 2012 Institute for Operational Excellence. All Right Reserved.

How will we run all these

Pistons: 45-80 units Collars: 30-55 units Lifters: 55-75 units

Stamp Paint Assemble Ship

© 2012 Institute for Operational Excellence. All Right Reserved.

Discrete Mfg. Make to Order Mfg.

Degree of Customization Required

© 2012 Institute for Operational Excellence. All Right Reserved.

Pistons: 45-80 units Collars: 30-55 units Lifters: 55-75 units

Stamp Paint Assemble Ship

Mixed Model means to produce a variety or mix

1. Do you have the right product families?

2. What is the takt time at the pacemaker?

3. Can the equipment support takt time?

4. What is the interval?

5. What are the balance charts for the products?

6. How will we balance flow for the mix?

7. How will we create standard work for the mix?

8. How will we create pitch at the pacemaker?

9. How do we schedule the mix at the pacemaker?

10. How do we deal with changes in customer demand?

© 2012 Institute for Operational Excellence. All Right Reserved.

Configure & Test

© 2012 Institute for Operational Excellence. All Right Reserved.

Configure & Test

© 2012 Institute for Operational Excellence. All Right Reserved.

EMC Product Family CUSTOM ER ORDERS EACH DAY

A Sensor Activated Arm 65 54 48 36 60 70

© 2012 Institute for Operational Excellence. All Right Reserved.

1. Do you have the right product families?

2. What is the takt time at the pacemaker?

3. Can the equipment support takt time?

4. What is the interval?

5. What are the balance charts for the products?

6. How will we balance flow for the mix?

7. How will we create standard work for the mix?

8. How will we create pitch at the pacemaker?

9. How do we schedule the mix at the pacemaker?

10. How do we deal with changes in customer demand?

© 2012 Institute for Operational Excellence. All Right Reserved.

 Takt = customer demand

1. Do you have the right product families?

2. What is the takt time at the pacemaker?

3. Can the equipment support takt time?

4. What is the interval?