How to Create a VSM for a Six Sigma Initiative - dummies

How to Create a VSM for a Six Sigma Initiative

By Craig Gygi, Bruce Williams, Neil DeCarlo, Stephen R. Covey

Originating from Japanese manufacturing, another format of process mapping has its advantages for a Six Sigma Initiative. It’s called a value stream map and often is abbreviated simply as VSM. A properly constructed VSM provides insight into the end-to-end process in ways that no other method does.

Here’s a quick rundown of the creation process:

  1. Assemble a cross-functional team that has representatives from all areas of your process.

  2. Consider the customer.

  3. Draw the customer near the top right of your VSM and capture the events or signals that trigger the start of the process.

  4. Capture the process steps.

  5. Add the process time line.

  6. Summarize the key operational metrics for your process on the VSM.

  7. Identify improvement opportunities.

Get team input

Because of a VSM’s end-to-end scope, you need to gather input from a wide set of domains: production planning, supply chain, inventory/stores, manufacturing, shipping, and so on. Including all these inputs is critical to creating an accurate and useful VSM.

Start with the customer

After gathering inputs, consider the customer. You can see the “product customer” drawn toward the upper right. Ask yourself what the customer does to signal the need to start the process. Whatever the impetus is, the customer always does something to start the ball rolling.

Draw the customer near the top right of your VSM and begin by capturing the events or signals that trigger the start of the process.

To follow typical VSM conventions, use thin, solid lines to indicate signals or the flow of information in your process. Use thick solid lines to designate external material flow, like from a supplier. And use thick dotted lines to document material or flow that occurs within your organization.

You can see a customer order being first routed to production control. Production control, in turn, sends out forecasts and weekly material orders to suppliers. In a parallel path of the value stream, the production supervisor also receives a signal from production control and sends out daily production instructions to each of the process steps.

Capture the process steps

Next, you want to capture the process steps. Usually, you place the as-is internal process steps at the bottom of the VSM in a horizontal layout. These steps are designated by blocks with characteristic measures for each step. Capture as much information as possible about each step, including cycle time, changeover time, number of operators, number of pieces, work in process, inventory quantities, reliability, yield, and so on.

Add the process timeline

Value stream maps contain a unique feature — a highly insightful timeline — beneath the horizontal line of main process steps. The timeline captures not only the time required for each step but also the time spent waiting between steps. In this way, you document how long the entire process takes to be completed.

The timeline also includes a vertical component. To highlight waste, any segment of process time that doesn’t add value is drawn in the timeline with an elevated step. So, you can see what portion of overall process time is spent adding real value and how much isn’t.

Don’t confuse takt time with cycle time. Cycle time is a measure of how long a process takes to complete. Takt time is the pace needed to exactly meet customer demand. It’s calculated by dividing the available production time by the number of parts needed to meet customer demand during that time. To minimize waste, a process should produce its output no faster or slower than the customer-determined takt time.

When you compute takt time, take into account your current production efficiency. A realistic takt time is multiplied by your efficiency number (for 80-perent efficiency, multiply the takt time by 0.8). This step means you build in enough capacity that you can meet customer demand while sustaining production losses of 20 percent.

Supply the box score

Place a summary of the key operational metrics — known as the box score — right on the VSM, usually near the top. Be sure to include the total lead time, including the value add and non-value add times. You may also include information like the total distance traveled, total parts per shift, scrap, pieces produced per labor hour, changeover time, inventory turns, uptime, downtime — whatever is critical in your situation.

Identify improvement opportunities

With your VSM in hand, you immediately begin to see opportunities for improvement. A few of our favorite improvements include the following:

  • Reducing or eliminating waste: Anything in the process that doesn’t contribute value to the customer should be a candidate for improvement.

  • Matching/balancing cycle time with takt time: Ideally, each step of the process should match the pace needed to meet customer demand.

  • Cutting back on bottlenecks and flow: Think of a smooth, flowing river. Anything that chokes, diverts, or disrupts the flow of your process is a candidate for improvement.

  • Decreasing inventory: Reduce or eliminate unnecessary inventory (whether that’s raw materials, work in process, or finished goods inventory).

  • Speeding up changeover times: The ability to rapidly switch production from one item to another opens up a new dimension in adding value to the customer. For example, quick changeover times allow you to hold less inventory because you can respond rapidly to changes in customer demand.

  • Improving information flow: The right information gets to the right people at the right time.

  • Optimizing physical layout: Reconfigure the layout of the process to eliminate or reduce movement and transportation.

  • Standardizing work: Deviations from set patterns always lead to an uptick in waste. Which process steps need better or improved standards?

  • Maximizing equipment uptime and availability: Equipment issues no longer limit the effectiveness of your process.

  • Enhancing process capability: This category of improvement is what the analytical tools of Six Sigma are geared toward. You can make dramatic breakthrough improvements in how well the output of each process step meets customer requirements.