1

CHAPTER 2- LEARNING TO SEE

PART 3: THE CURRENT STATE MAP

Kudret Demirli
 Contents In Brief:
2

 Overproduction
 Characteristics of a lean value stream

 Takttime
 Continuous flow

 Supermarket pull system

 pacemaker process

 Paced withdrawal
 Reducing Lead Time (by eliminating waste)
3

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Current Situation
Percent of Lead Time
5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

VA NVA (Non Value Added)

Approach # 1: Reducing Value Added (VA) Time by 50%

VA NVA

Approach # 2: Reducing Non Value Added (VA) Time by 50%

VA NVA
 Q: What types of waste do you see in the CSM?

A: WIP & Finished Goods Inventories

7.6

5
4.5

2.7
2
1.8 K. Demirli
 Q: What’s causing inventories?

A: Main reason: Producing in batches (= overproduction),

K. Demirli
but there also are other reasons.
 Overproduction
6

 When you produce in batches, you overproduce -

producing more (sooner) than is required by the next
process.

 The most significant source of

waste is overproduction.
 Q: How do we stop overproduction &
also reduce other inventories?
7

A: (Eliminate) What’s causing them?

1. Setup/changeover times (batch)
2. Distant workstations (batch)
3. The way information is conveyed (batch)
4. Ordering/receiving less frequently (batch)
5. Unbalanced work load (inv)
6. Unreliable machines/processes (inv)
7. Quality problems (inv)
8. Some processes are batch in nature.

You cannot simply eliminate inventories to eliminate waste.

Instead, eliminate the causes to eliminate
inventories/overproduction.
 How do we stop overproduction & also
reduce other inventories?
8
 Overproduction:
Cause Remedy
Setup/changeover times Reduce by SMED, M/C selection
Distant workstations Create narrow U shaped cells
The way information is conveyed Provide instructions more frequently
Some processes are batch in nature Try to reduce batch size
 Other inventories:
Cause Remedy
Low ship frequency (shipping batch) Reduce ordering cost and ship frequently
Unbalanced work load Create continuous flow
Machine Instability - Unreliable M/Cs Improve machine stability - TPM
Material Instability - Quality Improve material stability – Quality at the
source, supplier selection, etc.
Demand instability Coordination with customers
Eliminate the causes to eliminate overproduction / inventories.
 Overproduction
9

 This is how traditional systems operate: We can see

the fundamental problems with mass (or “batch-
and-push”) production in the CSM: each process in
the value stream operates as an isolated island,
producing and pushing product forward according
to schedules it receives from production control
instead of the actual needs of the downstream
“customer” process.
 Overproduction
10

 Overproduction causes all kinds of waste, not just

excess inventory and money tied up in that
inventory.

 Since the material output is not yet needed

(overproduction), it must be handled, counted,
stored and so on. These increase cost and represent
pure muda.
 Overproduction
11

 Defects remain hidden in the inventory queues until

the downstream process finally uses the parts and
discovers the problem (which is by then extensive and
hard to trace).

 Overproduction lengthens the lead time (while the

value-added time for producing one product is very
short), and this impairs the flexibility to respond to
customer requirements.
 Overproduction
12

 To reduce that overly long lead time from raw

material to finished goods, you need to do more
than just try to eliminate obvious waste.
 The future state designs need to eliminate the
sources or “root causes” of waste in the value
stream.
 What are these root causes (of batch production
and Inventories)?
 High c/o times, transportation cost (distances),
unbalanced workload, etc. (see p6. above)
 Overproduction
13

STOP Overproduction!

Produce only what’s needed and

when needed.
 Characteristics of lean value stream
14

 All we are really trying to do in lean manufacturing is

to get one process to make only what the next
process needs when it needs it (in small batches). We
are trying to link all processes, from the final customer
to raw material, in a smooth flow (continuous flow) that
generates the shortest lead time, highest quality, and
lowest cost. This way we can produce what’s needed,
when needed in the most efficient way.

 We will follow Toyota’s lead and use the guidelines

below to do this.
 Lean Value Stream
15

Guideline # 1: Produce to the Takt time

Guideline # 2: Develop continuous flow whenever possible
Guideline # 3: Use supermarkets to control production where
continuous flow does not extend upstream
Guideline # 4: Try to send the customer schedule to only one
production process
Guideline # 5: Level the production mix at pacemaker.
Guideline # 6: Level the production volume
Guideline # 7: Develop the ability to make “every part every
day” (then every shift, then every hour or pallet or pitch) in
fabrication processes upstream of the pacemaker process.
 Guideline # 1: Produce to the Takt time
16

How do we find the Takt time?

Your available working time (per shift)
Takt Time=
Customer demand (per shift)
27000 sec=(8 x 60 -20)x60
Takt time = = 60 seconds (/1 unit)
460 units =(18400/(20x2))

What does it mean? Takt describes customer demand!

It represents the customer demand rate.
No, it represents inter-arrival time for customer demand:
= Time / 1 unit
» Customer is buying one product every 60 seconds.
 1:Produce to the Takt time
17

Takt is a German word for pace..

Q: What is the relationship between Demand Rate and the

Takt time?
A: Demand Rate = 1/ Takt = 1 unit / 60 sec = 60 units / hour.
 1:Produce to the Takt time
18

How do we use Takt?

 Takt is a reference number! It tells us the C/T at

which we should set the process to produce:

 Set C/T ≤ Takt.
(Set Production rate ≥ Demand rate)

 Setting C/T (production rate) is equivalent to setting

the required capacity to meet the demand.
Setting C/T ≤ Takt identifies the levels of resources
(operators, machines, overime, etc.) needed to
accomplish this.
 1:Produce to the Takt time
19

 Producing to Takt sounds simple, but it requires

concentrated effort to improve stability and
discipline:
 Eliminate causes of unplanned downtime,
 Eliminate defects,
 Provide fast response to problems (defects,
maintenance, etc.),
 Eliminate changeover time in downstream, assembly-
type processes.
 1:Produce to the Takt time
20

Producing to Takt:

1. Helps us set a production rate to match demand

rate.
2. Requires us to do this in the most efficient way
by eliminating waste (downtime, defects, C/O
time, etc.)
 Lean Value Stream
21

Guideline # 1: Produce to the Takt time

Guideline # 2: Develop continuous flow whenever possible
Guideline# 3: Use supermarkets to control production where
continuous flow does not extend upstream
Guideline # 4: Try to send the customer schedule to only one
production process
Guideline # 5: Level the production mix at pacemaker.
Guideline # 6: Level the production volume
Guideline # 7: Develop the ability to make “every part every
day” (then every shift, then every hour or pallet or pitch) in
fabrication processes upstream of the pacemaker process.
 2: Develop continuous flow (more in Chapter 3)

22
whenever possible
 Continuous flow refers to one piece at a time, with each
item passed immediately from one process step to the
next without stagnation (and many other wastes) in
between.
 Continuous flow uses the least amount of resources to
produce, and you should use a lot of creativity in trying
to achieve it.
 The mapping icon we use to indicate continuous flow is
simply the process box.
 In the future-state drawing, each process box should
describe an area of continuous flow. There might be
many continuous flow cells along the value stream!
 2: Develop continuous flow
23
whenever possible, cont.
 2: Develop continuous flow whenever possible, cont.

24

Mtl. Inv.
Mtl. A+B+C FG
A B Inv. C FG

     
K. Demirli
 2: Develop continuous flow
25
whenever possible, cont.*

* http://leansixsigmadefinition.com/glossary/cellular-manufacturing/
 2: Develop continuous flow
26
whenever possible, cont.
 So with 1 & 2: We have continuous flow
processes producing to the Takt time.
 Lean Value Stream
27

Guideline # 1: Produce to the Takt time

Guideline # 2: Develop continuous flow whenever possible
Guideline# 3: Use supermarkets to control production where
continuous flow does not extend upstream
Guideline # 4: Try to send the customer schedule to only one
production process
Guideline # 5: Level the production mix at pacemaker.
Guideline # 6: Level the production volume
Guideline # 7: Develop the ability to make “every part every
day” (then every shift, then every hour or pallet or pitch) in
fabrication processes upstream of the pacemaker process.
 3: Use supermarkets to control production where
continuous flow does not extend upstream
28

 There are often spots in the value stream where continuous

flow is not possible and batching is necessary. There can be
several reasons for this including:

 Some processes operate at very fast or slow cycle times.

 Some fast processes need to changeover to serve different
product families (e.g. stamping or injection molding).
 Some processes, such as those requiring operations outside
or suppliers, are far away and shipping one at a time is not
realistic.
 Some processes have too much lead time (heat treatment)
or are too unreliable to couple directly to other processes in
a continuous flow.
 3: Use supermarkets to control production where
continuous flow does not extend upstream
29

 Always resist the temptation to schedule these processes via

an independent scheduling function, because a schedule is
only an estimate of what the next process will actually need.

 Instead control their production by linking them to their

downstream customers (processes), most often via
supermarket-based pull system, to control what, when and
how much the supplying (upstream) processes produce.

 Install a pull system where continuous flow is interrupted

(even when the upstream process must still operate in a
batch mode.)
 3: Use supermarkets to control production where
continuous flow does not extend upstream
30

MRP Push System

MRP
 3: Use supermarkets to control production where
continuous flow does not extend upstream
31

MRP Push System

MRP
 3: Use supermarkets to control production where
continuous flow does not extend upstream
32

 A “withdrawal” kanban instructs the material handler to get and

transfer parts and “production” Kanban triggers production of parts
(see the Figure below).
 3: Use supermarkets to control production where
continuous flow does not extend upstream
33

 Withdrawals by customer process trigger the movement of pre-

printed kanban (typically cards) from the supermarket to the
supplier process, where they are used as the only production
instruction for that process.

 The purpose of placing a pull system between two processes is to

have a means of giving accurate production instruction to the
upstream process, without trying to predict downstream demand
and scheduling the upstream process.

 Get rid of those elements of your MRP that try to schedule the
different areas of the plant. Let the withdrawals by the
downstream process out of a supermarket determine what the
upstream process produces when and in which quantity.
 3: Use supermarkets to control production where
continuous flow does not extend upstream
34

 The supermarket icon is open on the left side, facing the

supplying process. This is because this supermarket
belongs to the supplying process and is used to
schedule that process. On the factory floor,
supermarkets should ordinarily be located near the
supplying process to help that process maintain a visual
sense of customer usage and requirements.

 Pull systems are a nice way to control production

between processes that cannot be tied together in a
continuous flow.
 3: Use supermarkets to control production where
continuous flow does not extend upstream
35
 3: Use supermarkets to control production where
continuous flow does not extend upstream
36

FIFO lanes
 Sometimes it might be more appropriate to use
a FIFO (first-in, first-out) lane between
decoupled processes instead of a supermarket
to maintain a flow between them.
FIFO lane is like a chute that can hold only a certain
amount of inventory, with the supplying process at the
chute entrance and the customer process at the exit.
Parts leave the chute in the same order that they went
in (FIFO).
If the FIFO lane gets full, the supplying process must
stop producing until the customer has used up some of
the inventory.
 3: Use supermarkets to control production where
continuous flow does not extend upstream
37
 3: Use supermarkets to control production where
continuous flow does not extend upstream
38

 It may not be practical to keep an inventory of

all possible part variations in a supermarket -
custom parts, parts that have a short life cycle,
and costly parts that are used infrequently.
For such cases establish “sequenced pull” from
an upstream process with short lead time (See
the examples below for some usage of FIFO
lanes.)
Example 1:
 Company produces custom products where customization occurs
upstream. Orders are sent to the process where customization
occurs and the FIFO lanes are used from then on to send the
products to downstream processes and to the customers that
the order belongs to. See page 43 below,
 3: Use supermarkets to control production where
continuous flow does not extend upstream
39

Example 2:
 The upstream process is a slow process and operates
two-shifts, but the downstream process operates one
shift. Parts produced in the upstream process in the
overnight shift go into FIFO until the downstream
process comes on-line in the morning. FIFO lane holds ½
day of components (max). Both processes run during the
morning shift and the FIFO lane is gradually emptied.
By the end of the day all parts in the FIFO lane are
used.
Example 3:
 Upstream and downstream processes both operate 1
shift but downstream process requires 2-hours of
warmup.
 3: Use supermarkets to control production where
continuous flow does not extend upstream
40

Example 4:
 We ship to an outside plating process one time per
day. The plater can only handle 50 pieces per day,
so you set up a FIFO lane, sized to hold at most 50
pieces of plating work. In this manner, the FIFO lane
prevents the supplying process from overproducing,
even though the supplying process is not linked to
the plater via continuous flow or supermarket.
When a FIFO lane is full, no additional kanbans are
released to the upstream process.
 3: Use supermarkets to control production where
continuous flow does not extend upstream
41

 Supermarket :  FIFO Lane : Controlled

Controlled inventory (just inventory (required –
in case (waste)) - immediately needed)
downstream process which is temporarily
pulls what it needs and
upstream process kept and sent to
produces what’s downstream process in a
consumed. specific order.

 FIFO is preferred to supermarket.

 If conditions are right, use FIFO lanes.
 3: Use supermarkets to control production where
continuous flow does not extend upstream.
42

 So with 1 & 2 & 3: We have continuous flow

processes producing to the Takt time, and they
are connected to each other in such a way that
each process (supplier/upstream) makes what its
customer (downstream) process needs.

 What is next?
 Lean Value Stream
43

Guideline # 1: Produce to the Takt time

Guideline # 2: Develop continuous flow whenever possible
Guideline# 3: Use supermarkets to control production where
continuous flow does not extend upstream
Guideline # 4: Try to send the customer schedule to only one
production process
Guideline # 5: Level the production mix at pacemaker.
Guideline # 6: Level the production volume
Guideline # 7: Develop the ability to make “every part every
day” (then every shift, then every hour or pallet or pitch) in
fabrication processes upstream of the pacemaker process.
 4: Try to send the customer schedule
44
to only one production process
 So far, we have combined processes (continuous flow),
produce to Takt and connected them to each other with
supermarkets (pull). Next, we need to put someone in-charge
to produce the daily schedule.
 We typically need to send the schedule to only one point in our
door-to-door value stream. This point is called the pacemaker
process, because how you control production at this process sets
the pace for all upstream processes.
 Because of this, the pacemaker process for mainstream products is
frequently the most downstream continuous flow process
(before shipping) in the door-to-door value stream.
 On the future state map, the pacemaker is the production process
that is controlled by the outside customer’s orders.
 4: Try to send the customer schedule to
only one production process
45

Also see pp 60.

 4: Try to send the customer schedule to
only one production process
46

In the case of custom products, the scheduling point often needs to be

further upstream (at the point customization begins).

Note: In case of custom products, material transfers from the

pacemaker process downstream to customer need to occur as a
flow. In case of custom products (or, when you produce to order in
general), no supermarkets downstream of the pacemaker process.
 Lean Value Stream
47

Guideline # 1: Produce to the Takt time

Guideline # 2: Develop continuous flow whenever possible
Guideline# 3: Use supermarkets to control production where
continuous flow does not extend upstream
Guideline # 4: Try to send the customer schedule to only one
production process
Guideline # 5: Level the production mix at pacemaker.
Guideline # 6: Level the production volume
Guideline # 7: Develop the ability to make “every part every
day” (then every shift, then every hour or pallet or pitch) in
fabrication processes upstream of the pacemaker process.
 5: Level the production mix at pacemaker
48

 Most assembly departments probably find it easier to

schedule long runs of one product type and avoid
changeovers, but this creates large FG inventories and
also creates serious problems for the rest of the value
stream.
 Leveling the product mix means alternating repeatedly
between smaller batches of different products.
 For example, instead of assembling all the “Type A”
products in the first 2 ½ days and all the “Type B” in the
remaining 2 ½ days, leveling the mix means alternating
between smaller batches of “A” and “B” on a daily basis .
 5: Level the production mix at pacemaker
49

 Grouping the same products and producing them all at

once makes it difficult to serve customers who want
something different from the batch being processed.
This requires you to have more finished goods inventory
in the hope that you will have on hand what a customer
wants, or some lead time to fulfill an order.

 The more you level the product mix at the pacemaker

process, the more able you will be to respond to actual
customer requirements with a short lead time while
holding little finished goods inventory.
 5: Level the production mix at pacemaker
50

 This also allows your upstream supermarkets to be

smaller.

 However, be warned that leveling the mix requires

taking some pains in assembly such as more
changeovers and trying to keep all component
variations at the line at all times (to eliminate
changeover time).

 The reward is the elimination of large amounts of

waste in the value stream.
 5: Level the production mix at pacemaker
51

Example: Mix leveling

Demand Average Weekly (Daily) Demand
A 120 (24)
B 70 (14)
C 140 (28)

◼ Daily Avg =66.

 Production Strategy 1 (with 1 week of stock+SS+BS)
EPEweek: Produce 120A, 70B and 140C.
 Production Strategy 2 (with 1 day of stock+SS+BS)
EPEday: Prepare to Produce 24A, 14B and 28C daily
Mix is more level in Strategy 2.
 5: Level the production mix at pacemaker
52

Example: Given the following demand

Demand Mon Tue We Th Fr Weekly TOTAL
A 20 28 22 24 26 120
B 12 14 16 14 14 70
C 34 26 28 24 28 140
◼ Daily Avg =66.
 Production Strategy 1 (with 1 week of stock+SS+BS)
Produce 120A, 70B and 140C
Ship: 20A, 12B and 34C on Monday
Ship: 28A, 14B and 26C on Tuesday, etc.
 Production Strategy 2 (with 1 day of stock+SS+BS)
Ship 20A, 12B and 34C on Monday
Produce 20A, 12B and 34C (total=66) on Monday
Ship 28A, 14B and 26C on Tuesday
Produce 28A, 14B and 24C (total=66) on Tuesday, etc.
 5: Level the production mix at pacemaker
53

 The icon for production leveling is this symbol, which

is inserted into an information flow arrow.
 Lean Value Stream
54

Guideline # 1: Produce to the Takt time

Guideline # 2: Develop continuous flow whenever possible
Guideline# 3: Use supermarkets to control production where
continuous flow does not extend upstream
Guideline # 4: Try to send the customer schedule to only one
production process
Guideline # 5: Level the production mix at pacemaker.
Guideline # 6: Level the production volume
Guideline # 7: Develop the ability to make “every part every
day” (then every shift, then every hour or pallet or pitch) in
fabrication processes upstream of the pacemaker process.
 6: Level the production volume
55

 Too many companies release large amounts (batches) of work to their shop floor
processes, which causes several problems, such as:
 There is no sense of takt time (no “takt image”) and no “pull” to which the value
stream can respond.

 The volume of work performed typically occurs unevenly over time, with peaks
and valleys that cause extra burden on machines, people and supermarkets.

 The situation becomes more difficult to monitor: Are we behind or ahead?

 Gives the opportunity to each process to shuffle orders and create big batches.
This increases lead time and the need to expedite.

 Responding to changes in customer requirements becomes very complicated,

which can often be seen in very complex information flows in current-state
drawings.
 6: Level the production volume
56

 How often are the production orders delivered to the pacemaker?

 Regularly release only small, consistent amount of work (usually
between 5-60 minutes worth) at the pacemaker process, and
simultaneously take away an equal amount of finished goods.

 We call this practice a “paced withdrawal”.

 Consistently releasing small amounts of work establishes a level

production pace and creates a predictable production flow.

 We call the consistent increment of work “pitch”.

 For convenience, we often calculate the pitch interval based on
packout/container quantity (the number of parts one finished-
goods container holds) or a multiple of that quantity.
 In fact, Pitch interval can be set to anything! (more later).
 6: Level the production volume
57

Assume that you adopted Production Strategy 2 (with following

mix leveling):
Example: Avg Daily Demand = 66 units and Daily available time
= 430 minutes. So, Takt time is ~6.5 minutes.
EPEday: Produce 20A, 12B and 34C on Monday.

Now the question is, how are you going to manage the
production? How are you going to convey this production order?

 Are you going to send the production order in the morning and
collect it at the end of the shift? Or,
 Are you going to break it into smaller portions of work?
 6: Level the production volume
58

Example: Volume Leveling

 Option1: Bring production orders all at once.

◼ Produce 20A first (~2.6 hrs), 12B next (~1.5 hrs) and 34C
(~3 hrs).
◼ How often do you monitor the process?
◼ You monitor the process once a day!

 Option 2: Bring production orders 2 units at a time.

◼ Produce 2A,2A,2A,…,2B,2B,2B,…,2C,2C,2C,....
◼ How often do you monitor the process?
◼ You monitor the process once every 13 minutes!
 6: Level the production volume
59

 With pack size = 2 pieces:

 One option for pitch interval = 2 x 6.5 = 13 minutes. In
other words, every 13 minutes:
 a) Give the pacemaker process instruction to produce one
pack quantity.
 b) Take away one finished pitch quantity.

 In this case, pitch interval means multiplying your Takt

time upward to a finished-goods transfer quantity at
the pacemaker process. This then becomes the basic unit
of your production schedule at the pacemaker for a
product family.

 What if takt is in days? Inverse pitch.

 6: Level the production volume
60

 One way to think of pitch interval is as your “management time frame”.

 How often do you know your performance to customer demand?

 If you release a week of work to the floor at one time, then the answer is
probably “once a week”. It is impossible to produce to takt time in this
situation - simply, there is no “takt image”.

 However, if you are scheduling and checking production every pitch, then
you can rapidly respond to problems and maintain takt time. Just as we
don’t want to transfer material in large batches, we don’t want to transfer
production instruction (information) in big batches either.

 There are many ways to practice paced withdrawal of small, consistent

quantities of work. A tool used at some companies to help both the mix and
volume of production is a load-leveling (or Heijunka) box.
 6: Level the production volume
61

 A load leveling box has a column of kanban slots for

each pitch interval, and a row of kanban slots for each
product type. In this system, kanban indicate not only the
quantity to be produced but also how long it takes to
produce that quantity (based on takt time).

 Kanbans are placed (loaded) into the leveling box in the

desired mix sequence by product type (see the leveling
box illustration). The material handler then withdraws
those kanban and brings them to the pacemaker process,
one at a time, at the pitch increment.
 6: Level the production volume
62

Option 2: Pitch interval: 13 minutes

8:00 8:13 8:26

A 7 more

B 3 more

C 14 more

Production Kanban

 Volume is more level in Option 2.

This is called the Heijunka (Load Leveling – both, mix

and volume leveling) box.
 6: Level the production volume
63
 5: Level the production mix at pacemaker
64

The principle behind pitch is early identification of

problems and timely reaction to solve them.

Pitch should also be matched to the organization’s

capability to react to problems. If pitch is too short, it
won’t work and will cause frustration.

If pitch is too long, then problems won’t be identified on-

time

Implement the shortest pitch you can sustain and

continuously strive to reduce it.
 Lean Value Stream
65

Guideline # 1: Produce to the Takt time

Guideline # 2: Develop continuous flow whenever possible
Guideline# 3: Use supermarkets to control production where
continuous flow does not extend upstream
Guideline # 4: Try to send the customer schedule to only one
production process
Guideline # 5: Level the production mix at pacemaker.
Guideline # 6: Level the production volume
Guideline # 7: Develop the ability to make “every part every
day” (then every shift, then every hour or every pitch, etc.) in
fabrication processes upstream of the pacemaker process.
 7: Develop the ability to make “Every Part Every day” (then
every shift, then every hour or pitch, etc.) in fabrication
processes upstream of the pacemaker process.
66

 EPEi describes how frequently a process changes over to

produce all product variations.
 In general, we note either the batch sizes or “EPEi” in the data
boxes. EPEi stands for ‘Every Part Every interval” – where
interval is replaced with a time such as week, day, shift, hour or
pitch, etc.
 Shorter the interval, smaller the batch size!
 By shortening changeover times and running smaller batches in
your upstream fabrication processes, those processes will have
even less WIP inventory held in their supermarkets.
 An initial goal at many plants is to make at least “Every Part
Every day” for high-running part numbers (in upstream of the
pacemaker processes.)