United Technologies Lean Transformation

Lean / Value Stream

Mapping Overview
...1

Agenda

Lean Principles
United Technologies Vision
What is Value Stream Mapping
Seven Steps to Lean
Building Lean Organization

...2

Roots of Lean Thinking

Ford: Highland Park: 1913

GM: Mixed Model - Batch Process: 1930-1940
Ohno: American Supermarkets: 1950s
Toyota Production System: 1945-1970-now
Lean

...3

Womack and Jones

Lean Thinking 5 principles:
1- Specify value
2- Map the flow of value
3- Make value flow
4- Pull from the customer
5- Seek perfection
Jim Womack and Dan Jones,
Lean Enterprise Institute, USA & England

...4

United Technologies
Continuous Improvement Flight Path
Lean Transformation
2003
First Cell Achieves Gold
2002
First Cells Achieve Silver
Supply Chain Excellence
2000
ACE Launch
1998-1999
Q+
1986-1990

KAIZEN
1993-1996
...5

Vision
Current Supply Chain
(weeks)
Order
Cycle

Procurement
Cycle

Assembly Delivery
Cycle
Cycle
FAB

Customer
Order

Raw Material

Manufacturing

FINL
A

Assembly
& Test

Shipping

Supply Chain Vision

(days)
...6

The Transformation

Its all about

Connecting
the Dots

...7

Adding a tool to the ACE Toolbox

Value Stream
Management

5S
Passport
Market FeSetanda
dbackrd Work
ly
s
Root Cau Ana
M
se Corrisetciaske Proofng
ive Action
Process Manatg
ement
Process Cer
tifcation

...8

What is a Value Stream?

All activities both value added and nonvalue added required to bring product
from raw material to the customer
Value Stream
CUSTOMER
Producer
A

Raw
Material

Producer
B

Producer
C

Warehouse

Assembly &
Text

Customer

Finished
Product
...9

What is Value Stream

Mapping?
Implementation
Plan
Future State
Map

Current State
Map

Product Family
Defnition

...10

Example of a Current State Map

6 Week
Forecast
Weekly Fax

Raw Material
Supplier

90/60/30
day forecasts

Production
Control

Weekly Schedule

300 parts

C/T = 5 hr.
C/O = 10 min.
Uptime = 80%

5 hours

Assembly

350 parts

C/T = 10 hr.
C/O = 10 min.
Uptime = 80%

30 days

200 days

Daily
Schedule

Producer B

Producer A

Customer

Daily
Order

50 parts

C/T = 20 hr.
C/O = 10 min.
Uptime = 80%

5 days

35 days
10 hours

Shipping

20 hours

Leadtime
= 270 days
Processing
time = 35 hrs.

...11

What defines a Process on a Value Stream Map?

Where inventory stops an accumulates

Mill

Turn

Grind

Assy

How many processes are there? 4

Mill

Turn

Grind

How many processes are there now?

Assy
1
...12

Example of a Future State Map

6 Week
Forecast
Weekly Fax

Raw Material
Supplier

90/60/30
day forecasts

Production
Control

Daily
Schedule

Batch

Part
Producer

Total Work
<30 hrs

20 days
10 hrs

Shipping

Assy &
Test

Set-up

25 days

Customer

Daily
Order

2 days
15 hrs

Lead-time
= 47 days
Processing
time = 25 hrs.

...13

Value Stream Mapping Advantages

Measures value from a customers perspective

Focus is on lead time
Shows a system view
Links the material and information flows
Enables the organization to identify waste
Provides a roadmap for continuous
improvement & change

...14

The Future State is Defined Using

Seven Basic Principles of Lean
1- Takt time
2- Finished goods strategy
3- Continuous flow
4- Pull System
5- Schedule only one point
6- Pitch
7- Interval
(EPEI=Every Part Every Interval)
...15

1st: Takt Time

Synchronize the pace
of production to the
pace of sales

...16

2nd: Finished Goods Strategy

Build to Stock
Build to Order
or
Hybrid
...17

Batch & Queue Processing

3rd: Continuous Flow

Process Process
Process A
B
B

Process
A

Process

One-Piece Flow
10 minutes

Process
C

10 minutes
10 minutes
3 min.

30++

12order
min.
Lead-time : ? minutes for total

First In First Out Flow

Process 1

FIFO

Process 2

...18

4th: Pull System

Pull when flow is not possible
production
kanban

withdraw
kanban

supplying
process

customer
process
new
product

withdrawn
product

supermarket

Customer goes to supermarket and gets what they need when they need it
Supplier produces to replenish what was withdrawn
...19

5th: Schedule Only One Point

Pacemaker
Customer

Supermarket

flow

Pull

Customer
FIFO

FIFO

Flow
...20

6th: Interval
(EPEI = Every Part Every Interval)

...21

7th: Pitch

...22

Future State - What to expect

Operational Changes
Drumbeat
Pitch
EPEI
Flow / Pull / Pacemaker

Set the pace

Level the volume
Level the mix
What do I work on next

Business Performance Changes

Lead-time
Inventory
Quality
Total Product Cost
Market Growth

decreasing
decreasing
increasing
decreasing
increasing
...23

Building the Lean Organization

Every one of us must realize that:
the company is in business because of our customers
Our customers have choices
those choices lay with our competition
waste adds cost, time, and service interruption thus
giving the advantage to the competition

...24

Supporting the Lean Organization

At every level
Understand what is important to the customer
See the flow of value
Recognize waste
Solve problems that interrupt the flow of value
Continuously improve the flow of value

...25