Value Stream Mapping forAdministrative FunctionsPat JohnstonBrenda SchultzDavid PetersonNovember 29, 20121

Ariens VisionPassionate People AstoundedCustomers!2

Ariens Core ValuesBe HonestBe FairKeep Our CommitmentsRespect the IndividualEncourage Intellectual Curiosity3

15Principlesof 910

I. Culture15Principlesof the Principle 1 – Core ValuesARIENSManagementSystem Principle 2 – Long-Term Principle 3 – Leaders Principle 4 – Technology5TEC3910

II. People15Principlesof the Principle 5 – Development Principle 6 – Learn Principle 7 – Quality6ARIENSManagementSystemTEC3910

III. Process15Principles Principle 8 – Flow Principle 9 – Pullof theARIENSManagementSystem Principle 10 – Level Load Principle 11 – Standard Work7TEC3910

III. Process15Principles Principle 12 – Visual Principle 13 – Supply Chainof theARIENSManagementSystem Principle 14 – Just Get Dirty Principle 15 – Think8TEC3910

Why Map?David Peterson9

Five Principles of LeanValue Any activity that changes the physicalcharacteristics of material to meet customer demand.Value Stream The movement of material betweenvalue adding processes.Flow Reduces cost, decreases lead time, improvesquality.Pull Produce per customer demand.Perfection Strive for perfection to drive continuousimprovement.10

Manufacturing FocusProduction ControlPete’s1500 lbcoilsBetty’sMRPWeekly FAXHomeCenter3 mo.ForecastDaily Orders11,400 Flat3,500 phillips14,900 / mo.Box 20500 lbBoxWeekly ScheduleDaily Ship ScheduleSub Assy 1PressIMaterialStoresAreaCoils10 daysHandles6 daysI1.5 sec CT90 min c/o10,000 flat8,000 phillips140 sec CT5 min c/oSub Assy 2I3,200 flat1,100 phillips100% U/T2 shifts80% U/T2 shifts171 sec CT5 min c/oMarkI2,200 flat1,000 phillips100% U/T2 shifts154 sec CT10 min c/oAssemblyI1,200 flat4,000 phillips90% U/T2 shifts159 sec CT5 min c/oI4,400 flatSHIPPINGStaging800 phillips100% U/T2 shiftsProduction Lead Time10 days24.1 days1.5 sec5.8 days40 sec4.3 days71 sec7 days54 sec7 days59 sec58.2 daysValue Added Time225.5 sec.11

Effective Management Tool“Seeing” means knowing – Where you are today.“Seeing” means understanding – Why you got there.“Seeing” means visualizing – How to get where youneed to be.

Challenges for Admin:Intangible DeliverablesHomeCenterDecisionsAnalysesStrategies or TacticsVariable MethodsNot alignedVariableOverlapping11,400 Flat3,500 phillips14,900 / mo.Box 20Sub Assy 1PressIMaterialStoresAreaCoils10 daysHandles6 daysI11.5 sec CT40 sec CT90 min c/o5 min c/o80% U/T100% U/T2 shifts2 shiftsVariable MaterialsInconsistentUncontrolledRemoved from work area13

Three Types of MapsValue Stream MapHigh-level viewConnects suppliers to customersUseful for activity planningProcess MapDetailed look at one processCaptures methods and materialsFocuses on tasks, sequences, specific resourcesConsumption MapHigh-level viewShows how customers interact with processesFocuses on delivery14

Common TraitsSpecific Area FocusWhat is the problem or issue we need to solve?What is the scope of my project?What things can and cannot be changed?Customer FocusDefine the customersUnderstand value the customers get from the processUnderstand what the customer does not needCross-Functional TeamStakeholders in the processBalance people doing the work, customers, managersFamiliar with work and work space15

Consumption MapCustomer StepsProductResearch60 minsCompanyResearch30 minsPhoneCompany15 minsAskQuestions10 minsGiveAddressReceiveProductLiterature1 mins7200 minsTotal Customer Time: 7316minsWhat’s the value? At best, 101 minutes.1616

Consumption MapInternal Provider StepsAnswerPhoneAnswerQuestionsTakeAddress1 mins2 mins1 minsCollectMarketing Lit10 minsSend LitPackage10 minsReviewProductLiterature8 mins10 minsTotal Provider Time: 32minsAt best, value added: 12 minutes1717

Consumption Map60 minsProductResearch30 minsCompanyResearch15 mins10 mins1 mins7200 uctLiteratureAnswerPhoneAnswerQuestions1 tingLitSend LitPackage1 mins10 mins10 mins10 mins18

Operations MapAriens uencyCustomerScheduleData BoxData BoxRelevant DataRelevant DataProcess 1I1Process 2III1Data BoxProcess 4Process 311Data BoxData BoxData BoxLead TimeTimeTimeTimeTimeTimedaysValue Added TimeProcess Time (sec)Process Time (sec)Process Time (sec)Process Time (sec)sec.1919

Operations MapAriens CompanyMarketingUSPTOStatus, email3mos.MRPApplication, FeeScheduleData BoxSpecimen of UsePotential TrademarksDelivery MethodList of GoodsFrequencyFirst Use DateSearchDecisionIList ofnames1Data BoxMarkI1 dayII4AnalysisAvail.ProductApplicationApprovalData BoxMarkProductMarket1-2 days14Top twomarksData BoxMarkDesignProductsDesignData BoxMarkDesignProductsLead Time1-2 days2-3 days360072004800Process Time (sec)Process Time (sec)Process Time (sec)File Transfer1x each mark7 days3600Process Time (sec)12daysValue Added Timesec. 1920020

Municipal Cash Flow (Simplified)21

Municipal Cash Flow (Simplified)22

Municipal Cash Flow (Simplified)23

Municipal Cash Flow (Simplified)24

Municipal Cash Flow (Simplified)25

Municipal Cash Flow (Simplified)26

Kaizen ProcessDocument Current ConditionsWhat is the problem or issue we need to solve?What is the scope of my project?What things can and cannot be changed?Customer FocusDefine the customersUnderstand value the customers get from the processUnderstand what the customer does not needCross-Functional TeamStakeholders in the processBalance people doing the work, customers, managersFamiliar with work and work space27

Kaizen ProcessDocument Current Conditions – Change CaseWhy are doing this? How will it help?Who are my customers? What do they value?What are our risks? What mistakes cannot be made?How do we measure success? How do we collect it?What is the ideal condition?28

Kaizen ProcessDocument Current Conditions – Map the ProcessMap the process, starting at the customer.Collect data and record in data boxes for each process.Go to gemba; walk the process to verify process steps.Correct the map.29

Kaizen ProcessIdentify and Eliminate WasteAsk why five times.Define what is required to support the process.Identify barriers to flow.Identify sources of quality problems.Draw the future state map that eliminates the waste.30

Kaizen ProcessMake Big ChangesIdentify the changes required to achieve the futurestate.Prioritize the changes for effectiveness.Use 3P and Pugh Analyses to narrow solutions.Create a plan to implement the changes.Follow up on the plan.31

Kaizen ProcessVerify the ResultsVisually track the measures identified in the changecase.Adjust as necessary.32

Kaizen ProcessWhat does this look like?33

Kaizen ProcessWhat does this look like?34

Kaizen ProcessWhat does this look like?35

Purchase Order to PaymentPat Johnston36

Purchase Order to PaymentOnly Eight ProcessesQuote PartSet up PartSelect SupplierCreate Purchase OrderSet up Replenishment ForecastPart InspectionReceipt of Part into InventorySupplier Payment37

Purchase Order to Payment38

Purchase Order to PaymentReceiving Data:78,802 receipts against 3,944 P.O.s6,588 parts418 different vendors39

Purchase Order to PaymentAccounts Payable Data:220,897 lines vouchered105,676 vouchered manually in AP1,645 errors with 3-way match1,431 price errors55 quantity errors73 surcharge errors86 other errorsTakt time: 64 seconds.40

Purchase Order to PaymentProblem Solving 28% of AP time41

Purchase Order to PaymentWhat to do?Reduce the errors AP was dealing with.42

Accounts PayableBrenda Schultz43

Accounts PayableChange Case : Why do you want to do this and how will it help?1) Streamline process2) Reduce overtime/temp. employee3) Automate future processValue Statement : Who is the customer and what is the value the customer expects?1) Vendors/Employees (Exp. reports) - accurate and timely payment based on agreed upon terms2) A/P - quality information on a timely basisKey Requirements : What is the risk and what are the mistakes that cannot be made?1) Interrupted material flow2) Lost documents3) Payment errorsMetrics : What are the measurements for success and failure and how are they collected?1) First pass yield2) Number of manually handled invoices3) Number of days to process invoicesWhat is the ideal condition?1) Pay vendor after collecting from customer2) Electronic receipt and payment of invoices44

Purchase Order to PaymentProblem Solving 28% of AP time45

Accounts PayableHow many steps does it take to pay aninvoice?57 StepsTakt time: 64 seconds.46

Accounts PayableEight Classes of Waste1 Waste of inventory: Packing sheetsChecks and envelopesPostage2 Waste of transportation: Walking to receiving, mailroom, and computer roomTravel to Post Office and Plant 3Temp. employee walking to A/P3 Waste of processing: Multiple checks and balancesPrinting, stuffing and mailing checksFiling, scanning, alphabetizingManual 3 way matchVoid checks, deleted and changed checks4 Waste of waiting: Scanner speedWaiting for packing sheets, invoices, checks, etc Waiting for mail and Plant 3 documentsWaiting for return phone calls and reports5 Waste of motion: Unnecessary keystrokesWalking to get information (Receiving, mailroom, computer room)6 Waste of over-production: Print checks, then void and wireFeeder checks at beginninbg of check run7 Waste of a defect: Voided checks, deleted checks and changesMissing invoices and packing sheetsKeying errorsNegative checks8 Waste of a person: Temporary employee and overtime47

Accounts PayableInventory ItemsDescriptionProcess StepsMCTTCT (60 days) V.A. %Current State57 steps3,677 sec. 5,184,000 sec.0.07%Future State (03/11)37 steps1,877 sec. 5,184,000 sec.0.04%Improvement20 steps1,800 sec.0 sec.% Decrease35%49%0%48

Accounts PayableDescriptionCurrent StateFuture State (07/01)Process StepsMCTTCT (60 days) V.A. %57 steps3,677 sec. 5,184,000 sec.0.13%8 steps412 sec. 5,184,000 sec.0.01%Improvement49 steps3,265 sec.0 sec.% Decrease86%89%0%49

Accounts PayablePolicy Changes :1) One line item/receipt per P.O. (No multiple deliveries)2) P.O. number is the key for all deliveries/tracking3) Terms reflect Receipt Date vs. Invoice Date4) A/P vendor to expand and obsolete Purchasing vendor #50

Lessons LearnedBrenda, Pat, David51

Lessons Learned Pugh Analysis and Pareto Charts are invaluablesupporting tools Plan-Do-Check-Adjust problem solving supports themapping process Keep the team focused on the action plan52

Lessons Learned Do the whole process (trigger to done), don’t squish thewater balloon Don’t worry about what to do first, don’t worry abouttraining everybody, don’t worry about fancy forms, don’tlet inertia get in the way get started Don’t cut corners because sitting in a conference room istedious53

Lessons Learned Best is the evil enemy of better Be hard on the process, soft on the people Four keys to successful kaizen events: preparation,knowledge, communication, commitment54

Thank You !What Questions Do YouHave?55Ariens History Presentation Version 07 18 08

Value Any activity that changes the physical characteristics of material to meet customer demand. Value Stream The movement of material between value adding processes. Flow Reduces cost, decreases lead time, improves Five Principles of Lean 10 quality. Pull Produce per customer deman