1.

Define Value - from the Customer perspective

The customer perspective of value is a critical test of any activity.   They pay for things they believe are of value, which is different from them buying things that we think are valuable.

Recently, I visited a plant where the manufacturer took pride in the presentation of their product.  They manually finished off each item, to allow for excellent presentation in the retail store.  The retailers visited the plant as part of a familiarisation and feedback process, and they commented that once the products got to the store, the product had to be cut free of the packaging – and it was sold to the public like that.

As a matter of good customer relations, routinely confirm with customers what they need.  We also need to confirm what they do not need, so we don’t spend effort creating something that is of no additional value.

2.

Identify the Value Stream

The value stream is made up of all the tasks that need to be completed to provide the finished product or service to the customer.  Many of the tasks we undertake in a value stream do not add any additional value to the customer.  By creating a ‘map’ of the value stream, we can easily identify tasks that add value – and those that do not.

There are 3 classic value streams – each making out a complete phase of a product or service

• From design concept to production

• From initiation to fulfilment of an order – This value stream is used through the rest of this document.

• From Despatch to payment of invoice

Non value adding tasks are waste.  We refer to waste as ‘Muda’ – much of which can be eliminated from the value stream.  Some wasteful tasks may need to continue to be done due to internal business constraints. However, the ultimate goal will be to remove as much muda from the value stream as possible.

3.

Optimise Flow

Traditional manufacturing has been built on a base of batch and queue.  Within a lean environment we are taking a different pathway. We are focussed on the customer and creating a specific value stream, designed to meet their needs.  We are attempting to eliminate muda from the value stream, and reduce the lead-time for delivery of the product or service.

This means we should now reduce batch sizes.  We may want to physically re-arrange the layout to mirror the value stream, and try to achieve more of a continuous movement of the product through the value stream.  When we do this at first, it will allow us to see things such as:

• Free floor space – where previously we did not have any

• We may find we have too many ‘materials handling’ devices in a manufacturing environment

• Our ability to change from one task to the next is clumsy, and needs to be improved

• Our employees may not be multi-skilled

The positive observations at this point are permanent.  The negative observations can be changed through improving our skills, or changing some resources, which more closely meet our needs.

4.

Pull from the Customer

When working on the flow in the value stream, we focussed on eliminating muda.   In a similar way, we only want to build what our customer needs, when our customer needs it.  So we let our customer be our scheduler, and tell us what we should be making day by day.

5.

Drive toward Perfection

There are many obstacles to be overcome in order to achieve a lean environment.  We have created wonderful machines that can do one element or task at lightening speed. However, the product then sits in a queue until the next rapid stage of processing, and we make things in this stop-start-stop-start environment. We need to overcome this and many other obstacles to eliminate all the muda out of the value stream.

We will not be able to do it in one project, so the cycle is continuous, and we get continuously better at it.

Don't stop.