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Value Analysis and Waste Identification Value Analysis and Waste Identification

Value Analysis and Waste Identification - PowerPoint Presentation

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Value Analysis and Waste Identification - PPT Presentation

Value Analysis and Waste Identification Welcome to the session Learn more about Value Analysis and Waste Identification at wwwfreeleansitecom 2 Lets take a minute for SAFETY ID: 764830

work waste customer added waste work added customer time product process analysis steps walk map times people business add

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Value Analysis and Waste Identification Welcome to the session! Learn more about Value Analysis and Waste Identification at: www.freeleansite.com

2 Let’s take a minute for SAFETY: Who has a safety concern/ contact or tip? Let’s band together for S afety, Q uality, S peed of Execution

Objectives Review the concepts of value-added and non value-added work Learn to recognize non value-added work and complete a Time Value Analysis (TVA) Chart Understand the 8 common types of process waste Learn the steps of a waste walk using memory jogger ‘DOWNTIME’ 3

What is Value? Definitions: “Relative worth, merit, or importance” “Estimated or assigned worth” “The worth of something in terms of the amount of other things for which it can be exchanged…” Definitions from Dictionary.reference.com 4

What is Value Add? Two types: Customer Value Add Physical transformation of product or service Customer is willing to pay for the transformation Done right the first timeBusiness Value AddAnything that the business benefits from:Required by law, regulation, agency policy Reduces risk, etc 5

Basic Definition of Work Activities Value Added Physical transformation of product or service Adds a form or feature, moves it closer to final form Customer willing to pay Source/ enabler of “competitive advantage” (better, faster, cheaper)Done right first time 6

Basic Definition of Work Activities Business Value Added Required by Federal, State, or Local Law or Regulation Reduces risk (product, operational, financial, safety, etc) Critical to avoiding process breakdown Required by agency policy or specific contract requirement7

Basic Definition of Work Activities Non-Value Added Everything else that is not customer value added or business value added Not done right first time Re-work, corrections, etc. Activity customer is not willing to pay for:Storage between operations, batching inventoriesUnnecessary process stepsMovement of inventory, paperwork, etc.Wait times, delay times, idle times 8

Evaluating Work Content “VALUE”: Customer knows it when they see it Adding a component to a product Testing a product Inspecting a part Pulling parts from a warehouse Sweeping a production area Welding Greeting a customer Taking an order Doing a credit check Filing a customer order Filling a customer order Vacuuming a reception area Watering plants Value Added or Non-Value Added? 9

Non-Value Added Unnecessary Continue Doing Challenge Assumptions Eliminate Immediately Work to Reduce Challenge Need Value Added Necessary Necessary or Unnecessary? 10

Our Goal and Focus Customer Value Added Improve the efficiency and effectiveness of the task Improve the flow of value to the customer Monitor to assure we are meeting customers’ evolving requirements Business Value AddedVerification that it is truly requiredReduction/ elimination of requirementsRedesign tasks to meet requirements more efficientlyNon-value AddedTotal and complete elimination, forever 11

Is the work to make this design Value Added?? In the Eyes of the Customer If you are sitting down in a resort locale for a casual cup of coffee? If you are four deep in a line waiting for a “cup of Joe” on your way to work? 12

Provide Wi-Fi Pour in cup Sell CD’s Take order Pre-heat vat (Set-Up equip) Grind coffee Write name on cup Brew coffee Add cream / sugar Are there NVA steps here? VA Work May Have NVA Waste likes to disguise itself as value-added work 13 Time Value Analysis Chart (TVA)

The Good News:If you can save it in the behind the scenes processes, you get to keep it! The Bad News: You don’t get credit for a good process A customer pays based on the finished product or service Customers Do Not Care About Your Process 14

Value Analysis Steps Using your process map, identify Lead times for process steps Work Time Wait Time Transportation Time Classify each step as Customer VA, Business VA (non value added, but necessary), or pure NVACalculate the VA to NVA RatioTotal Customer and Business Value Added StepsDivide by Total Time and Get % Value AddCommunicate using a Time Value Analysis (TVA) Chart 15

Priority After analyzing root causes, the next step is to consider improvement We will work to identify and remove waste and wasteful practices: Eliminate Non Value Add work contentReduce Business Value Add work contentImprove Customer Value Add (“TCE” = Total Customer Experience) 16

Waste - Defined Waste Elements of an activity that do not add value from the customer perspective Waste only adds cost and time Things to remember about waste Waste is really a symptom rather than a root cause of the problemWaste points to problems within the systemWe need to find and address root causes of waste17

Types of Waste in Many Processes Non-Value Added Work Content (most common) Use this Memory jogger: ‘DOWNTIME’ D efects O ver-production W aiting N on-utilized resources T ransportation I nventory M otion E xcess processing 18

D efects Information, products, parts, or services that require rework, correction or are scrapped Correcting an error or repairing a defect in materials or parts adds unnecessary costs because of additional equipment and labor expenses 19

O verproduction Make more earlier or faster than the next operation needs it Doing this requires more raw product inventory than necessary, over uses machines and people and requires more storage area 20

W aiting Waiting for machines, materials, information, or people, sign-off’s etc. Idle time between operations or events 21

Non-utilized Resources Not utilizing people’s experience, skills, knowledge, creativity, or ideas Excess equipment or technology Unused contribution Underutilized ambition and drive 22

T ransportation Moving material, information, or equipment around Transportation is a required action that does not directly contribute value to the product It’s vital to avoid unless it is supplying items when and where they are needed (i.e. just-in-time delivery) 23

I nventory Any supply in excess of one-piece flow Excess inventory masks unacceptable change-over times, excessive downtime, operator inefficiency and a lack of organizational sense of urgency to produce 24

M otion Any movement of people that does not contribute added value to the product Excessive walking, twisting, bending, reaching, or motion to complete a task 25

E xcess Processing Effort that adds no value to the product or service from the customer standpoint Processing work that has no connection to advancing the line or improving the quality of the product or service 26

Causes of Waste Motion Waiting time Overproduction Excess Processing Defects Inspection Transportation Problems / Causes / Examples Incorrect layouts causing excessive walking Time chasing information and data Lacking ergonomic workspace design Lack of proximity of machines, off-line resources Equipment downtime Waiting workers, machines, materials, approvals Long set-ups and lead times Large batches, raw material stocks High WIP, finished goods stocks Making for the sake of it/ Ignoring customer Excessive paperwork trails, checklists Long cycle times- process, itself Unnecessary steps/ handoffs Re-entering data, making extra copies Missing or incomplete information Lost paperwork or documents Work not meeting standards Approvals of approvals High number of verification steps Reliance- Mass inspection techniques Unnecessary material movement Extra handling / Moving data between computer systems Types People Process Product 27 (NOTE: Non-utilized resources can touch each of these)

Examples of Waste in Many Processes Layout (distance) Insufficient maintenance Poor work methods Ineffective scheduling Incorrect final point of restCounting inventoryMultiple SignoffsNo back-up/cross-trainingExcessive Mobile EquipmentLack of workplace organizationToo many outside trucks in the yard The longer waste occurs, the more accepting you become !28

Waste in the Form of Rework Each defect must be detected, repaired, and placed back into the process (costs time and money) 29 Waste Causes A ‘Hidden Factory’ Increased Cost & Lost Capacity

Example of Transportation Waste Mobile Equipment makes a trip to the hook before receiving its first move instruction 30

The Challenge: Find and Eliminate Waste Objective Ask each team to take one of the typical wastes and find at least one example in their site and eliminate it Conduct Waste Walk A planned visit to where the work is being performed to observe what’s happening and to note the wasteInclude waste elimination execution in status reportsRequire waste elimination every month / every dayReinforce / reward for found and eliminated waste31

Waste Walk Steps 1) Huddle with your team members Describe the purpose Describe the various forms of wastes and examples Pass out copies of the Waste I.D. and Recording Form current-state map and identified problemsAssign areas to walk within your teamUsually better to have a pair of people for each assignment2) As a group, walk the whole flow (value stream) depicted on your map to confirm the areas of the individual/pair assignments 32

Steps (continued) 3) Explain to the people in the area of observation what you are doing 4) Share the map and waste examples and describe the objectives of the observation activity 5) Move to areas for individual assignments, and study the areas for 30 - 45 minutes 6) As you see work that appears to be waste, jot down the example you see on the form 7) Return to the team and discuss what you have seen33

8) As a team, match the wastes you see to problems previously identified in the current-state map 9) Put the results of the waste walk next to the current-state map being shared in the area and use the examples to continue to socialize the current state and the system-level problems that frustrate the people and process NOTE: If other significant problems are identified during the walk, place them on the map also 34 Steps (continued)

Review Explore definition of value added and non-value added work and Time Value Analysis (TVA) chart Recall the 8 common wastes within processes Understand the concept, step(s), and form for a Waste Walk Utilize the memory jogger: ‘DOWNTIME’ Watch the DVD - “An Introduction to Continuous Improvement & Lean Principles” by GBMP35

Value Analysis and Waste Identification Thank you for attending the session! Learn more about Value Analysis and Waste Identification at: www.freeleansite.com