Creating Mixed Model Value Streams

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1 Creating Mixed Model Value Streams Kevin J. Duggan, Founder

Renowned expert in applying advanced lean

Author of four books on the subject Kevin has

including FMC Technologies, Chromalloy, Aetna,

Airlines, Sikorsky, IDEX Corporation and Parker

Network Frequent keynote speaker, master of

2 Renowned expert in applying advanced lean techniques to achieve Operational Excellence Author of four books on the subject Kevin has guided many major corporations worldwide, including FMC Technologies, Chromalloy, Aetna, SpaceX, Caterpillar, Pratt & Whitney, Singapore Airlines, Sikorsky, IDEX Corporation and Parker Hannifin Featured on CNN and the Fox Business Network Frequent keynote speaker, master of ceremonies, and panelist at international conferences Kevin J. Duggan

3 Kevin J. Duggan Kevin has assisted many major corporations worldwide including FMC Technologies, Chromalloy, Aetna, SpaceX, Caterpillar, Pratt & Whitney, Singapore Airlines, Sikorsky, IDEX Corporation and Parker Hannifin Frequent keynote speaker, master of ceremonies, and panelist at international conferences, and has appeared on CNN and the Fox Business Network.

4 Continuous Improvement Companies have done continuous improvement activities for years

5 Continuous Improvement Pareto

6 Continuous Improvement Impact Effort

7 Continuous Improvement

8 Improving Operations

9 Improve Improve Improve Sustain The Lean Journey Sustain Sustain

10 Operational Excellence Mature lean company Time in Years Level of improvement

11 Operational Excellence Operational Excellence Time in Years Level of improvement

12 The Jump to Operational Excellence Level of improvement Time in Years

13 Operational Excellence When 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

14 The 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.

15 The 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.

16 Supplier Weekly 6 Week Forecast Eight Guidelines for End-to-End Production Control XOXO Form Assembly Test Ship FIFO Value Stream Design Weekly Orders FIFO Customer Daily 2 days 1 day 1 day 1 day 5 days 2 sec 20 min 10 min 15 min 45 min Eight VS Guidelines

17 Supplier Weekly 6 Week Forecast Pacemaker Production Control XOXO Ten Guidelines for the Mixed Model Pacemaker Form Assembly Test Ship FIFO Weekly Orders FIFO Customer Daily 2 days 1 day 1 day 1 day 5 days 2 sec 20 min 10 min 15 min 45 min Ten MM Guidelines

18 Six Guidelines for Shared Resources Flow Supplier Weekly Shared Resource Form 6 Week Forecast Production Control XOXO Assembly Shared Resource FIFO Test Weekly Orders FIFO Customer Daily Ship 2 days 1 day 1 day 1 day 5 days 2 sec 20 min 10 min 15 min 45 min Six S/R Guidelines

19 Customers Request Form P/T=15 min. 1 CSR Create File Nine Guidelines for Office Flow Sales Database FIFO Design Pkg. Max = 1.5 days days Log File 4 Hrs. Estimating Cell Takt = 60 min. P/T=170 min. PC/T=55 min. Op = 3 17 Min. 170 Min. Post Office Customers 4 Estimates per Day 1.5 Days min 187 min. L/T P/T Nine Office Guidelines

20 Beijing Walls China Seven Guidelines for Supply Chain Flow Practical Solutions (MO) Premier Rail Cars Axle Co. Unlimited (WV) FIFO Seven SC Guidelines

21 Production 6 Week Control Forecast Supplier Weekly XOXO Pacemaker The Mixed Model Pacemaker Weekly Orders Customer 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 Ten MM Guidelines

22 Pistons: units Brackets: units Arms: units Stamp Mix of Products Flow through the Same Value Stream How will we run all these products through the same value stream when demand changes each day? Collars: units Diverters: units Detectors: units Lifters: units Levers: units Cranks: units Paint Assemble Ship FIFO max 50

23 Number of Products Which Type of Value Stream is this? Discrete Mfg. 2 Discrete manufacturer High mix 1 Discrete manufacturer Degree of customization required Make to Order Mfg. 3 Job shop Very high mix High customization 4 Low mix High customization

24 Welcome to EMC Supply Co. In today s class we will visit the Electro-Motion Control (EMC) Supply Co. EMC Supply Co. builds a wide variety of products for the motion control and electronics industries. They supply distributors and end users. They also build custom products to order. The management at EMC Supply Co. have stated that want to achieve self-healing value stream flow in their high mix environment.

25 Pistons: units Brackets: units Arms: units Stamp Mixed Model Value Streams Collars: units Diverters: units Detectors: units To produce a variety or mix of products or product variations through the same value stream AT THE PULL OF THE CUSTOMER. Lifters: units Levers: units Cranks: units Paint FIFO Assemble Ship max 50

26 EMC Product Family PRODUCT Mixed Model Value Streams Anticipated CUSTOMER ORDERS EACH DAY Demand MON TUE WED THU FRI A Sensor Activated Arm B Laser-Activated Arm C Manually-Activated Arm D Bar Code Diverter Piston E Bar Code Diverter Arm F Sensor Activated Piston G Laser-Activated Piston H Manually-Activated Piston I Custom Orders TOTAL

27 Key Questions and our Agenda 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?

28 Product Family Matrix

29 Product Family Matrix Injection Molding P/N Name XS2 Servo Motor X X X X X X X Sensor-Activated Arm X X X A X X X X X X X Photoelectric Detector X X X X Ionization Detector X X X X X Laser-Activated Arm X X X X X X X X X X Manual Servo Motor X X X X X X X Manual Servo Motor II X X X X X X X Manually-Activated Arm X X X A X X X X X X X Fiber Optic Visual Sensor X X X X X X XS3 Servo Motor X X X X X X X Radon Detecter X X X X Bar Code Divertor Piston X X X A X X X X X X X Bar Code Diverter Arm X X X A X X X X X X X Sensor-Activated Piston X X X A X X X X X X X Laser Diverter X X X X X X X X X X XS4 Servo Motor X X X X X X X Carbon Monoxide Detector X X X X X Auto Servo Motor X X X X X X X Laser-Activated Piston X X X X X X X X X X Manually-Activated Piston X X X A X X X X X X X Motion Detector X X X X Stamp Deburr Hand Deburr Paint Welding Mechanical Assy Electrical Assy Final Assy Configure & Test Ship

30 Three Potential Families P/N Name Sensor-Activated Arm A X X X X X X X A Laser-Activated Arm X X X X X X X X A Manually-Activated Arm A X X X X X X X A Bar Code Divertor Piston A X X X X X X X A Bar Code Divertor Arm A X X X X X X X A Sensor-Activated Piston A X X X X X X X A Laser Divertor X X X X X X X X A Laser-Activated Piston X X X X X X X X A Manually-Activated Piston A X X X X X X X A XS2 Servo Motor X X X X B Manual Servo Motor X X X X B Manual Servo Motor II X X X X B XS3 Servo Motor X X X X B XS4 Servo Motor X X X X B Auto Servo Motor X X X X B Photoelectric Detector X X X X C Ionization Detector X X X X X C Fiber Optic Visual Sensor X X X X X X C Radon Detector X X X X C Carbon Monoxide Detector X X X X X C Motion Detector X X X X C Hand Debur Paint Welding Mechanical Assy Electrical Assy Final Assy Configure & Test Ship FAMILY A B C

31 Name Refine by Work Content Hand Debur Paint Welding Mechanical Assy Electrical Assy Final Assy Configure & Test Ship TOTAL A Sensor-Activated Arm X 605 B Laser-Activated Arm X 530 C Manually-Activated Arm X 605 D Bar Code Diverter Piston X 645 E Bar Code Diverter Arm X 655 F Sensor-Activated Piston X 500 G Laser-Activated Piston X 745 H Manually-Activated Piston X 550 I Laser Diverter X 990 X Custom Orders X 615

32 Name Refine by Work Content Hand Debur Paint Welding Mechanical Assy Electrical Assy Final Assy Configure & Test Ship TOTAL A Sensor-Activated Arm X 605 B Laser-Activated Arm X 530 C Manually-Activated Arm X 605 D Bar Code Diverter Piston X 645 E Bar Code Diverter Arm X 655 F Sensor-Activated Piston X 500 G Laser-Activated Piston X 745 H Manually-Activated Piston X 550 I Laser Diverter X 990 X Custom Orders X 615

33 Current State Map

34 Key Questions and our Agenda 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?

35 Takt time = customer demand rate for the entire family. Need to select time period and understand limits of the mix Takt Time for the Mix

36 Name DEMAND Sensor-Activated Arm 65 Laser-Activated Arm 85 Manually-Activated Arm 35 Bar Code Diverter Piston 70 Bar Code Diverter Arm 50 Sensor-Activated Piston 55 Laser-Activated Piston 20 Manually-Activated Piston 25 Custom Orders 45 Total Demand 450 Takt Time Example Effective Time = 900 min. * * 2 shifts x (8 hrs. -.5 hrs.) TAKT = Effective Time Total Demand = 2 min.

37 Key Questions and our Agenda 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?

38 Determining Equipment Needs Name A Sensor-Activated Arm B C D E F G H X Laser-Activated Arm Manually-Activated Arm Bar Code Diverter Piston Bar Code Diverter Arm Sensor-Activated Piston Laser-Activated Piston Manually-Activated Piston Custom Orders Configure & Test C/T DEMAND TIME NEEDED Effective Working Time Machines Required Configure & Test Total Time Sum

39 Key Questions and our Agenda 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?

40 Interval for the Mix In a mix environment we must define the Interval in which the pacemaker will run the mix of products. The concept of the interval must be clearly understood. You may have hear the term EPEI which stands for Every Product Every Interval.

41 PRODUCT The Interval WEEKLY DEMAND A Sensor-Activated Arm 325 B Laser-Activated Arm 425 C Manually-Activated Arm 175 D Bar Code Diverter Piston 350 E Bar Code Diverter Arm 250 F Sensor-Activated Piston 275 G Laser-Activated Piston 100 H Manually-Activated Piston 125 X Custom Orders 225 TOTAL

42 PRODUCT A B C D E F G H X The Interval Description Monday Tuesday Wednesday Thursday Friday Sensor-Activated Arm Laser-Activated Arm Manually-Activated Arm Bar Code Diverter Piston Bar Code Diverter Arm Sensor-Activated Piston 275 Laser-Activated Piston 100 Manually-Activated Piston 125 Custom Orders 225 Total Week

43 PRODUCT A B C D E F G H X The Interval Description Monday Tuesday Wednesday Thursday Friday Sensor-Activated Arm Laser-Activated Arm Manually-Activated Arm Bar Code Diverter Piston Bar Code Diverter Arm Sensor-Activated Piston Laser-Activated Piston Manually-Activated Piston Custom Orders Total Day

44 Is there Enough Time for Changeovers? We would compare the total time needed to the effective working time per interval. Any left over time can be used for changeovers. Time left for changeovers 100 min. 10 Products in the Family Max C/O time = 10 min. Time Machine station Effective working time per interval 900 min. Total time needed per interval 800 min.

45 Key Questions and our Agenda 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?

46 How will we Flow Work through the Pacemaker?

47 Takt = 120 sec. Current State Mech. 45 sec. Assembly Welding Operator Balance Chart - Part A (Sensor-Activated Arm) 140 sec. 90 sec. Elect. Assembly 130 sec. Final Assembly 110 sec. Config & Test Takt = 120 sec. Balance Charts Operator Balance Chart - Part A (Sensor-Activated Arm) 110 sec. 110 sec. 110 sec. 100 sec. Mech. Elect. Final Assembly Assembly Assembly Welding Future State Config. & Test Common Tools

48 Takt = 120 sec. Takt = 120 sec. Current State Operator Balance Chart - Part B (Laser-Activated Arm) 140 sec. 110 sec. 100 sec. Elect. Assembly Final 60 sec. Assembly Config & Test Mech. 30 sec. Assembly Welding Operator Balance Chart - Part A (Sensor-Activated Arm) Mech. 45 sec. Assembly Welding 140 sec. 90 sec. Elect. Assembly 130 sec. Final Assembly 110 sec. Config & Test Takt = 120 sec. Takt = 120 sec. Future State Operator Balance Chart - Part B (Laser-Activated Arm) 110 sec. 110 sec. 110 sec. Elect. Assembly Final Assembly 65 sec. Mech. Config. Assembly Elect. & Test Assembly Final Assembly Welding Operator Balance Chart - Part A (Sensor-Activated Arm) 110 sec. 110 sec. 110 sec. 100 sec. Mech. Elect. Final Assembly Assembly Assembly Eliminate Walking Welding Config. & Test Common Tools

49 Machine Cycle Times Products with a high cycle time at a station may exceed mix takt time. Bottleneck 200 sec. Testing Takt Time = 120 sec.

50 Balancing Machine Cycle Times Some products have a higher Test cycle time than takt time A small FIFO lane absorbs the mix difference in machine times FIFO Lane sized to the interval Pacemaker seconds FIFO Test seconds

51 Key Questions and our Agenda 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?

52 Balancing Flow for the Mix Since the labor content varies and not all products can be balanced to takt time, we must decide the best way to balance the products based on our business. Let s look at balancing options

53 Option # 1: Discrete Parts Low Demand Variation High Volume # Operators always constant Output varies based on work content Level mix, sequence orders based on work content and pull signals Pacemaker seconds Balancing Examples Level the schedule and keep labor constant, build products in order: A C B A C B A C B FIFO Test Seconds Ship

Option # 2: Discrete Parts Custom Parts High Demand Variation Short Lead Times Build to demand as much as possible Output constant, labor varies A C B C C B Pacemaker 110 seconds Balancing Examples

54 Option # 2: Discrete Parts Custom Parts High Demand Variation Short Lead Times Build to demand as much as possible Output constant, labor varies A C B C C B Pacemaker 110 seconds Balancing Examples Balance to the takt time and add labor when a product exceeds the takt time. Try to build products to demand. FIFO Prod Control Test s AWCT=110s FIFO Ship Customer demand Small overflow of main products when mix is exceeded

55 Number of Products Which Type of Value Stream is this? Discrete Mfg. 2 Discrete manufacturer High mix 1 Discrete manufacturer Degree of customization required Make to Order Mfg. 3 Job shop Very high mix High customization 4 Low mix High customization

56 Takt = 120 sec. 35 sec. Welding Takt = 120 sec. 35 sec. Welding Operator Balance Chart - Part D (Bar Code Diverter Piston) 180 sec. Elect. 90 sec. Assembly 140 sec. Re-Balance for Building to Demand 110 sec. Final Mech. Assembly Config Assembly & Test Operator Balance Chart - Part G (Laser Activated Piston) 150 sec. Mech. Assembly 130 sec. Elect. Assembly 140 sec. Final Assembly 200 sec. Config & Test Takt = 120 sec. Operator Balance Chart - Part D (Bar Code Diverter Piston) 110 sec. 110 sec. 110 sec. 110 sec. Final Mech. Elect. Assembly 75 sec. Config. Assembly Assembly & Test Welding Takt = 120 sec. Elect. Assembly Final Assembly Operator Balance Chart - Part G (Laser Activated Piston) 110 sec. 110 sec. 110 sec. Mech. Assembly Welding Elect. Assembly Mech. Assembly Final Assembly Elect. Assembly 105 sec. Final Assembly 200 sec. Config. & Test

57 Key Questions and our Agenda 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?

58 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. Creating Standard Work

59 Key Questions and our Agenda 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?

60 Pitch is targeted to be: Takt time x something (ex. Pack size) Establishing Pitch How can we create pitch when the pack size is different for each product?

61 Name Sensor-Activated Arm min 12 Laser-Activated Arm min 12 Manually-Activated Arm min 12 Bar Code Diverter Piston min 24 Bar Code Diverter Arm min 24 Sensor-Activated Piston min 24 Laser-Activated Piston min 6 Manually-Activated Piston min 6 Custom Orders min 6 Creating the Schedule Box # Operators Pack Qty Takt time Min per Case Max = 24 minutes Min = 6 minutes Pitch = 24 minutes 4 slots needed per pitch increment

62 Pitch = paced withdrawal at the pacemaker. Pitch = visual timeframe. I withdraw parts from the pacemaker every twenty four minutes What is Pitch?

63 Slot = 6 minutes Setting Up the Schedule Box Pitch increments or Buckets of capacity Sensor-Activated Arm Shift 1 6:00 Shift 2 3:30 Laser-Activated Piston Bar Code Diverter G G G G 6:24 6:48 3:54 4:18 D Max = 24 minutes Min = 6 minutes Pitch = 24 minutes 4 slots needed per pitch increment A A

64 Key Questions and our Agenda 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?

65 Scheduling Products with Various Work Contents Mix Analysis Product Pacemaker Takt Time Testing Cycle Anticipated Mix Time A sec 65 B sec 85 C sec 35 D sec 70 E sec 50 F sec 55 G sec 20 H sec 25 X sec 45

66 Logic Chart

67 Loading the Schedule Box Shift 1 6:00 6:24 6:48 7:12 7:36 8:00 8:39 9:03 9:27 9:51 10:15 10:39 11:33 11:57 12:21 12:45 1:24 1:48 2:12 6:24 6:48 7:12 7:36 8:00 8:24 9:03 9:27 9:51 10:15 10:39 11:03 11:57 12:21 12:45 1:09 1:48 2:12 2:30 G D D D D H H X E E E F C A A A B B B G H H X G H X X C A A B B B B G H X X 4 operators 3 operators

68 Future State Map

69 Key Questions and our Agenda 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?

70 Finished Goods Level We can establish preset levels of the supermarket based on the flexibility and performance of the value stream LEVEL 1 LEVEL 2 LEVEL 3 CUSTOMER

71 Supermarket limits Flexible Supermarkets Total demand for the product family Lead time intervals

72 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? Summary

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73 Live Training Events Each year the Institute for Operational Excellence producing training events throughout the U.S. and Europe. London, England May 8-10, 2017 Denver, CO June 12-14, 2017 Anaheim, CA October 16-18, 2017 London, England May 11, 2017 Denver, CO June 15, 2017 Anaheim, CA October 19, 2017 For more information please visit

Creating Flow through Shared Resources

Creating Flow through Shared Resources Kevin J. Duggan, Founder kduggan@instituteopex.org Renowned expert in applying advanced lean techniques to achieve Operational Excellence Author of four books on