Professional Documents
Culture Documents
Process Improvement
Process improvement is successful only when you address the underlying problem. A useful way of improving processes successfully is to use a lean manufacturing technique called Value Stream Mapping (VSM). It originated at car manufacturer Toyota, where they called it 'material and information flow mapping.' VSM is now widely used in a variety of industries as a way of identifying improvement projects. The basic idea behind Value Stream Mapping is this: if the underlying process is right, the outcome will be reliable. To get the process right, you have to understand the sequence of activities that provide value to your customers.
Process Management is a management approach that focuses on improving business performance by improving process performance. It focuses on planning and administering the activities necessary to achieve a high level of performance in a process and identifying opportunities for improving quality, operational performance and ultimately customer satisfaction. It involves design, control and improvement of key business processes
Usable manner refers to the fact that many business processes are links in a chain of activities that have suppliers and customers. A business process, like a subsystem design, has many points of failure each of which can have different occurrence rates, and severity based on the effect of the failure on the business
I.E., process with failure probability of 10% with cost of $10 is not as serious as process with failure probability of 1% with cost of $1000. Probability of sustaining loss in unit currency should be used. Unit currency may be thousands or millions to get meaningful numbers Measuring reliability is necessary to assess effectiveness of improvement
Failure effects on subsequent processes are assessed
Business Process
Business Process a modified FMEA (Failure Modes Effects and Analysis) to address the possible failures of a Business Process and their effects. FMEA can be most effective tool for assessing business processes.
It is low in cost, Easy to understand by nonengineering personnel quickly identifies weaknesses in a process.
Business Process FMEA Team can be constituted uniquely for each process evaluated.
Process owner usually manager or delegate from same department Supplier to process is provider of inputs to the process Customer of process uses output of process as inputs to subsequent process. Suppliers and customers of a process can be numerous Facilitator is usually independent of process
Failure modes can vary from process to process as well as from business to business for the same process Failure Effects Typical failure effects translate as costs to the bottom line
failure to meet schedule failure to deliver proper quantity cost overrun
Detection related to likelihood that process will be able to detect failure mode before impact of failure effects are noticed Risk Priority Number RPN) a numerical value y ( ) that is the product of Occurrence, Severity and Detection developed in the FMEA to evaluate the relative importance of the various failures and prioritize corrective action.
Absolute Uncertainty Very Remote Remote Very Low Low Moderate Moderately High High Very High Almost Certain
CANNOT detect <5% chance >5 to 10 % chance >10 to 25% chance >25 to 50% chance >50 to 70% chance >70 to 80% chance >80 to 90% chance >90 to 99% chance >99% chance
10 9 8 7 6 5 4 3 2 1
Rating
10 9 8 7 6 5 4 3 2 1
Absolute Uncertainty Very Remote Remote Very Low Low Moderate Moderately High High Very High Almost Certain
CANNOT detect <5% chance >5 to 10 % chance >10 to 25% chance >25 to 50% chance >50 to 70% chance >70 to 80% chance >80 to 90% chance >90 to 99% chance >99% chance
10 9 8 7 6 5 4 3 2 1
Capacity utilization - the percentage of the process capacity that actually is being used. Throughput (also known as flow rate) - the average output of a production process (machine, workstation, line, plant) per unit time (e.g. parts per hour). The maximum throughput rate is the process capacity. Lead time (also known as throughput time or flow time) - the average time that a unit requires to flow through the process from the entry point to the exit point. Flow time includes both processing time and any time the unit spends between steps. Cycle time - The cycle time is measured as the average time from when a job is released at the beginning of the routing until it reaches an inventory point at the end of the routing.
Process time - the average time that a unit is worked on. Process time is flow time less idle time. Idle time - time when no activity is being performed, for example, when an activity is waiting for work to arrive from the previous activity. The term can be used to describe both machine idle time and worker idle time. Work In process (WIP) - the amount of inventory between the start and end points of a routing. Set-up time Setup time is the time a job spends waiting for the station to be set up..
Direct labor content - the amount of labor (in units of time) actually contained in the product. Excludes idle time when workers are not working directly on the product. Also excludes time spent maintaining machines, transporting materials, etc. Direct labor utilization - the fraction of labor capacity that actually is utilized as direct labor.
Identifying processes
Give them names that express their beginning and end states. For instance: Manufacturing: procurement to shipment Product development: concept to prototype Sales: prospect to order Order fulfillment: order to payment Service: inquiry to resolution
TYPICAL PROCESS
Customer Communication Market
Concept
Development
Customer Manufacturing
Order Fulfillme nt
The following are some of the things people can do to improve processes:
Use a structured methodology such as the Golden-Pryor Improvement Checklist. Eliminate activities that do not add value for the customer. Ask yourself: "Would the customer want to pay for this activity?" If the answer is no, ask yourself: "Why are we doing this? Is it a federal law? A state law?" If the answer is no, ask yourself: "What benefit do we gain by doing this?" At this point, you are coming close to eliminating the activity. Eliminate constraintsthings that frustrate employees and slow processes. Streamline/simplify processes. It is difficult to document and teach people complex processes.
Once processes are streamlined, computerize them if feasible. Provide leadership in a positive direction. Function as a strategist. Envision and invent the future with streamlined processes and relationships. Act empowered; be accountable. As individuals and members of teams, function as process owners and consider process management and improvement an integral part of daily work. Don't say, "They won't let us " Make decisions, not excuses. Document and publicize improvements. Success breeds success. Continue to monitor and evaluate processes to identify additional opportunities for improvement. Ask (and teach others to ask) what, where, why, who, when, and how questions about each step in a process (or job).
PROCESS QUESTIONS.
What:
is there to do? is being done? should be done? can be done? constraints keep us from doing it?
does this job? should do this job? knows how to do it? should know how to do it?
Who:
Where:
is this job done? should it be done? can it be done?
When:
is this job done? should it be done? can it be done?
Example
To illustrate the steps of creating a Value Stream Map, we'll use a simple example: the process of transforming an Internet order into a shipped product.
Step Two Draw the Current Value Stream Map To help you draw the map, gather a team of people representing the stakeholders in the process. Include people who both manage and support the various parts of the value stream. It is vitally important here to include people who actually do the work, and not just the managers of team leaders - otherwise you risk creating a VSM that shows what should happen, rather than what actually happens. You can then observe and gather data to complete the map:
Brainstorm who is involved, both internally and externally; what is needed to deliver the product or fulfill the customer need; and the tasks or activities that go into producing the products. Put these tasks in order, as much as possible, and include costs and actual working time for each task, in order to build up a picture of average performance for each task (and ultimately for the entire, end-to-end process). Look at the delays in between stages of the process for example, the length of time a task sits in someone's in-tray and add that.
Example
Here are the tasks involved in order processing and delivery for our example:
Order entry and processing. Supplier liaison. Inventory management. Order picking. Packaging. Shipping.
Depending on your operations, any of these tasks could be the subject of its own Value Stream Map that's why defining scope is so important.
Step Three Assess the Current Value Stream In this step, you analyze whether each activity in the process is adding value. This is where you can look for lean improvement opportunities: What is 'value add'? Value-add activities change an item, and make it worth more to the customer. Car assembly is a perfect example: as the car body moves along the production line, more and more pieces or assemblies are added, making it more complete. Eventually, it becomes a fully operational vehicle that people will buy. Each step adds value (although clearly the most value is added when the final component is installed!) At each point in the map, ask yourself, Does this activity add value? Identify your value-add points. Identify your no-value-add points (for example, places where material is stored, redundant or excessive paperwork, and places where there are long lead times). Determine which no-value-add points are still necessary (for example, for meeting regulatory requirements, addressing other compliance issues, and ensuring worker safety).
Step Four Create a 'Future State' Value Stream Map Map how you want your improved process to look in the future. How will the process work after you've eliminated the waste you identified in the previous step? Follow these tips:
Assume that anything is possible. Ask yourself what your leanest competitor would do. Consider how you would structure the process if you were starting the business today with unlimited capital. Look for similar activities, and see if there's a way to group them. Identify bottlenecks and critical events. Look for ways to simplify activities that are complex. Confirm that customers actually value each transformation activity. Look for common forms of waste, such as these: Moving product/materials inefficiently. Using equipment and people unnecessarily. Keeping too much or too little inventory. Performing inefficient quality checks. Stockpiling finished goods. Adding features or conducting processing that the customer does not value.
Example
Here are some of the opportunities for improvement in our example: Eliminate redundant approvals or move them earlier in the process to prevent unnecessary work.
Improve the flow of information (paper or electronic). Restructure the warehouse operations for efficiency. Update the inventory control system.
Step Five Create a Plan to Implement the Desired State When you have identified your objectives, you can develop a plan for change. At this point, many organizations also begin other lean processes like Kaizen, Kanban, and Just In Time. Remember, though, that the time you invest in VSM will pay off only if you follow through with the implementation plan. These guidelines will help you do that:
Use the VSM to communicate your goals and objectives. In your VSM team, include people who will work with the new activities. This helps increase buy-in. Talk frequently about lean and efficient operations so that it becomes part of your corporate culture. Look for ways to reward efficient work and efficiency suggestions.
Step Six Implement the Plan Various techniques can be used, but one of the most popular used with VSM is a series of 'Kaizen Blitzes,' each lasting approximately one week. These gradually move you from the current state to the future state. Step Seven Review the Results, and Repeat