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Apples & Oranges: Value Stream Mapping in a Low-Volume/High-Mix Environment

by Aaron Hunt
October 27, 2015

Apples & Oranges: Value Stream Mapping in a Low-Volume/High-Mix Environment

by Aaron Hunt
October 27, 2015 | Comments (3)

Making improvements using lean principles in a low volume/high mix (LVHM) manufacturing environment can be difficult, especially when trying to determine where to start. However, some of the same tools that can be applied in traditional mass-production environments work equally well in a high-mix environment.

As the engineering manager for a LVHM organization in the medical device field, one of the keys to success for us was to identify groups of products by flow – especially during one project I worked on to fight long lead times and noncompetitive costs. In a sense, we stopped trying to compare apples to oranges and just looked at our products equally. We would first work to identify all the products in a facility, department, or office and then define the flows. This was probably the most time-consuming task for us as some facilities had as many as 4,000 products – some of which were only made once per year or less in as low a quantity as five (excluding custom orders and prototypes).

We would then align the products by flow. For example, in one manufacturing facility, instead of having products grouped by hips, knees and shoulders, we would instead group them by “Lathe-Vertical Mill-Vertical Mill” or “Lathe-Mill/Turn-Mill” or “laser etch-non sterile packaging – labeling” process flows. They might have been apples vs. oranges vs. pears in appearance, but if they all used the same flow, that was our starting point.

After grouping the product-by-product flows, we could then start identifying the volume, takt, and capacity required for each flow. Sometimes this meant products A, C and X would be grouped together, even though traditionally they were considered unrelated and ultimately look nothing alike. This created smaller individualized value streams within the overall organization – some with 300 products, others with 50, and still others with just one or two. Once we understood this, we then knew how many manufacturing "units" (e.g. machines, secondary processing, labor, etc.) we would need for each value stream. This fed our capacity planning. Ultimately our VSM ended up looking something the image in the header above.

This overall strategic-planning work allows you to determine where to start mapping, and what percentage of your business each flow represents. If you add current margins and variance reporting (if you have the data) of the combined value stream and detail by each smaller product family within the stream, you can start making some intelligent choices on which VSM will probably yield more significant wins for the organization.

For example, we focused on one combined value stream that represented several hundred products and reduced the average changeover time from 10 hours to just 30 minutes. Not quite single minute, but still a 95 percent reduction in wasted time between orders that meant the difference between losing money and making a decent profit on the entire range of products.

We started seeing significant growth once we had defined and improved 50 percent of our revenue using this strategy. We targeted one year for this initial part of the transformation after figuring out how many “events” we would need to get these changes done AND get a large percentage of our staff involved in the cultural change as well. And things only got better from there - once we hit 80 percent of our revenue, the sky was the limit.   

I challenge you to put aside some time to intentionally consider your organization’s value streams – or your product families if you don’t think in terms of value streams – and draw out your flows. You might find hidden opportunities within your current assumptions, or perhaps you’ll just find a starting point for transforming your LVHM business.

Have you already had success defining and improving value streams in an LVHM environment? Comment about your experience below to help others on their lean journey. 

The views expressed in this post do not necessarily represent the views or policies of The Lean Enterprise Institute.
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3 Comments | Post a Comment
Tim October 27, 2015
5 People AGREE with this comment

What you're describing is simply applying VSM after performing PFMA to determine product groupings by flows... This has been around since at least 1999, with one of the leading researchers being Dr. Shahrukh Irani.

In fact, he lays out how do conduct the preliminary analysis in an article that is hosted on the Lean.org website (http://www.lean.org/Search/Documents/217.doc).

Lean.org claims to be the leader in Lean thinking while rehashing nearly 20 year old ideas?  This isn't anything new or particularly interesting.  Between this, the rampant self-promotion of know-nothing and do-nothing consultants on the forums, and the joke of a coaching summit put on in Seattle, I am officially done with this website.

 

 



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Aaron October 28, 2015
16 People AGREE with this comment

Thanks for your comments, Tim.  I think there's something very beneficial for those with less than 20 years applying lean to consider:

You're absolutely correct. This is not new and earth-shattering.  The principles and foundations of Lean are much older than 20 years, and there's new people coming to see what Lean can mean to them every day.  Many LVHM organizations struggle with where to start - with applying the basics.  

Quite frankly, many organizations would be much better served by a relentless focus on using VSM to constantly iterate the Current state vs. Future State of their processes while attacking the 8 wastes, combined with daily Gemba walks by their leadership to drive strategy and build the people of the organization rather than to keep searching for the next "new thing" to pursue.  Think about it:  if you can’t master value stream mapping and waste identification and reduction, what good will things like hoshin kanri, heijunka, or kamishibai do for the organization?

Lean has been a philosophy of management for the duration of my career.  It is not a "program of the month" and it is not ever-changing.  So if you're reading this and relatively new to lean - have faith - learn the basics - pursue perfection.  They've worked for a long time, and will continue to work well into the future.   

       

  



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Shahrukh A Irani May 12, 2017

Hi to everyone.  Not trying to stir the pot but any HMLV (high-mix low-volume) manufacturer that wants to implement Lean (let's just say IMPROVE PERFORMANCE!) would be well advised to avoid using manual methods like Value Stream Mapping.  If you want to hear me out, please email me at ShahrukhIrani1023@yahoo.com and I will send you the relevant information.  Lean is good!  The Toyota Production System is good!  But that does not mean that we put on blinkers and intentionally think WITHIN the box.  Any Industrial Engineer who is conversant with Process Mapping, Facility Layout, Job Shop Scheduling, Gantt Charts, etc. will understand how I map a large collection of Value Streams that share resources!  Once again, while I respect what Lean has done to bring the power and simplicity and people-centric strengths of the Toyota Production System out to us common folks, let's please not for a moment think that HOW we deploy Lean in non-assembly environments HAS TO BE DONE using a highly limited and limiting and error-prone method like Value Stream Mapping.  To know the serious limitations of VSM, please compare an Assembly Line's operational characteristics with those of a Job Shop Cell.



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