Value Stream:

The value stream is the linked processes of a business that describe the flow of information and / or product from inception to delivery to the customer. I have seen personally business managers try in vain to define the value stream for their organization. The reason for their failure to define the value stream is not that no one knew but that the individuals who had the data may have felt uncomfortable providing the data because of all the waste, muda, in the organization.

Yes, that is correct. Finding the value stream may be difficult because the ones who really know what the value stream is do not want to show their weakness in business management. To get around this problem the value stream must be continually re-evaluated.

Another problem in defining the value stream is that it changes from time to time and process to process. If the person who did know all the value stream properly communicated the current stream flow the information could be wrong tomorrow because of changes in the process. To get around this problem the value stream must be continually re-evaluated.

Last but not the least of the problems with evaluating the value stream is that the details of the real value stream do not become apparent until the process has been improved allowing a more complete view of the real value stream. As before to get around this problem the value stream must be continually re-evaluated.

What is not of value added is muda.

Here are some examples of muda:
Storage of product for sale.
Storage of parts for assembly.
Miss assembled unit.
Re-work of miss assembled unit.
Walking to pick up parts.
Re-typing a paper.
Sending the wrong product to the customer.
A meeting with a customer who was not interested in your service.

Examples of Value added:
Welding.
Writing a paper.
Assembly of a product.
Design of a product.
Filing out a tax return.
Discussion with a past customer to determine their future needs.

Because the world of manufacturing is easier to visualize I will provide examples of how the perception of muda and the value stream can change.  The problem described is more difficult to understand than most examples used to understand muda. The reason this process is used is that it shows more than just the everyday approach to change.

A large equipment company made some of the biggest gear boxes in the world for heavy equipment. Inside the gear box was at least one very large shaft with multiple gears milled into it. Each milled gear must be perfect or the shaft in the gear box would not be reliable. Each time a new gear was milled on the shaft the chance for a mistake to the final product increased greatly.

The first pass attempt to improve the quality of the shaft with the gears was to design a large machine that cut the gears by robot. This was a very expensive machine and difficult to maintain. The cost of the shaft with gears grew. The cost of the shaft with gears was now becoming to high to be profitable. An even bigger problem was the time taken to make a shaft with gears that would pass the quality inspection was becoming excessive to the point the gear box was not delivered to the customer on time.

A few concepts should be presented at this point. First quality can not be inspected into a product. It must be designed and build in. Secondly, the process must be standardized. Wast is not always just the loss of a part due to poor production processing but can also be the loss due to the way the process is designed.

So what did this manufacture do? They developed a new process. The value stream in the old process was milling each new gear on the shaft successfully. To succeed the entire set of gears on the shaft would need to be milled correctly. Each gear was a different size so the milling of the smaller gears would wast material. A defect in any one gear would wast the entire manufacturing process of the shaft gear set to the point of the miss processed gear. The process was rife with muda.

The correct solution was to machine each gear independently from the others. In this way any one gear could be miss processed yet the entire shaft assembly when complete would not be destroyed. Each gear could be made out of metal stock the correct size for the gear reducing waste, muda, of very expensive metal.

The problem that had to be resolved was how to put the shaft together. The gears could not be slipped on the shaft as that would weaken the assembly. The answer was to re-engineer the entire shaft building process to weld each gear to the assembly. But a conventional welding process would require may trained welders and lots of expensive tooling.

The company developed a new welding technique. They would spin the parts at very high speed then press the spinning parts together to form a friction weld along the axis of the shaft. The success of the friction weld was higher than that of conventional welding and the final product was better than if the gears had been machined directly on the shaft. The final assembly was less costly to produce, better built, easier to produce, faster to get to market and of higher quality.

Of great interest to the customer, the product was able to be manufactured with more variation in gearing due to reduced difficulty in the design phase and the improved adaptability of the machines making the gears.

This process was developed before lean manufacturing techniques had been introduced into the USA. I make this comment to stress that lean manufacturing is not the only way to gain improvement in a process.

The value stream for the new process was the manufacture of each gear followed by the friction welding of each gear. The value stream changed in an unanticipated way. This is not a typical way the value stream might change. I used this example because the process actually changed substantially.

In the books by Womack he shows changes in the value stream as reductions in inventory through the use of a pull technique where parts are sent on to the next process step only when required, just-in-time. Reducing the queue inventory for a process is a common way to implement lean thinking into the manufacturing process. The previous example took you beyond the mundane example to one where you had to think more about the value stream.

I recommend reading the book by Womack to gain more on the value stream concept.

Best regards,

Kendall Scott Wills