Beyond the value judgement

The reason why the UK's Ordnance Survey maps are so well loved and - despite the advent of high-tech aids to getting about - so enduring, is because they teach us things. We can choose how to get from A to B and we learn to read the signs along the way; where the steep bits are or where an obstacle needs to be overcome. The devil is in the detail. And having learned how to read the geography and topography of one area, the lessons learned can be equally applied to another. Such are the similar virtues of the business improvement tool called value stream mapping (VSM), which facilitates an effective understanding of the flow of work through a business. It helps identify and reduce waste, opening up fresh opportunities for productivity improvements. Raymond Watson, chief operating officer at Hamilton, Lanarkshire-based automotive sector manufacturer Keihin, puts the usefulness of VSM in a nutshell. Certainly, a recent VSM initiative generated healthy savings worth around £75,000, but, just as important, he "wanted to bring in VSM to enhance the skills of the management group". A little further down, on the Borders but a million miles away from the automotive sector, Selkirk-based Oregon Timber manufactures structural timber frames for large housing developers. Given the effect of the recession on the construction industry, it might have VSM to thank for its survival. And more than 350 miles south, off the M5 just south of Bristol but also in the construction business is William Hayley Engineering. It specialises not in timber, but in manufacturing steel frames. Like Keihin, it has twin track objectives for its VSM exercise - to improve productivity and quality and to reduce costs by investigating losses and wastes, but also to fully involve the workforce in the entirety of the continuous improvement process. Keihin is in the business of manufacturing and distributing a range of engine management systems for the automotive and motorcycle markets, focusing on electronic control units, mainly for its biggest global customer, Honda. Part of the global Keihin Corporation based in Japan, Watson unsurprisingly describes the company's approach to continuous improvement as "very Japanese". It applies the principle of three-origins (the actual place, the actual part, the actual situation) known as San-gen Shugi and devotes chunks of training time to supplier quality, and cost initiatives, kaizen improvement activities and cycle study workshops. "As a Japanese company [you would expect us to be] fairly heavily into continuous improvement," he says. Production improvement activity is endemic in the whole Keihin group which had set a major corporate, strategic key performance indicator (KPI) to identify waste and deliver improvements in production support processes using VSM as a key tool. "With the global economic crisis affecting all manufacturing industries and the need to remain competitive, we identified the requirement to expand on our continuous improvement and waste reduction programmes," Watson explains. "Although we have a lot of shopfloor-based continuous improvement activity, there are other areas that don't get the same level of focus. We wanted to get the 'indirect' managers looking at their processes." Two of the departmental heads in the management group Watson had put together representing the various aspects of the business from customer order through to customer delivery had done VSM before but others had not. To bridge the training gap, Scottish Manufacturing Advisory Service (SMAS) practitioners were brought in to teach relevant value stream mapping techniques. The first step was to begin enhancing the skills of the management group by delivering training to the team on a number of techniques including big picture mapping, process activity mapping, four fields (people, phases, tasks, standards) mapping, value add/non value add mapping and 'spaghetti' mapping - a process which, over time, builds up the tracks made by target personnel or materials which can then be analysed. "With SMAS we did an overall business map," explains Watson. "We then broke the team down [to cover] the areas we wanted to focus on; three teams to do three VSMs." The members of the management group took on the work as a part of their mainstream jobs "with the purpose of improving their mainstream jobs," he added. The team also created simple project paperwork to define the projects and monitor their progress. There were lots of 'yellow stickies' about, says Watson, before a more formalised presentation was put together to "summarise the thinking and pull it all together". A key outcome is that VSM has now been established as a mainstream technique for improving processes at Keihin. The training helped to develop cross-functional teamwork on process improvement and tasks that involve a number of different functions within the business. The savings made from the exercise are reckoned to amount to around £24,000 a year along with work-in-progress savings of £50,000. The monetary savings have, of course, been welcome, but this is an exercise that has been as much about driving continuous improvement beyond production and out across more of the indirect areas of the business. "This activity will contribute considerably in helping Keihin Europe remain competitive and to achieve our key goals," says Watson. In its very different business, Oregon Timber also saw VSM as a key element in its continuous improvement programme that involved a knowledge transfer programme (whereby a process engineer worked inside the business for 18 months on efficiency programmes) and a 'top teams' initiative (focused on making improvements in individual works areas). From having 11 employees in 1998, Oregon is now one of the leading manufacturers in its sector, employing 85 people and with year-on-year growth of 35%. In 2007, again working with SMAS, the company undertook a 10-day project, beginning with the measurement and process mapping of the activities taking place along its timber panel production benches. "We wanted to see where we could be a bit smarter; where we could do things a bit differently to make it more efficient," says operations manager Peter Wade. "Although we started by being focused on the panel benches, the inputs had a big impact on the performance of those benches, so the project broadened. We looked at the saw shop and how the material was presented from the saw shop to the benches; we looked at the yard. We found that the guys were spending as much time trying to work out what they were meant to be doing and then having to find the bits they were missing. We took the approach of trying to make it like a jigsaw. In order to do the jigsaw quickly, you need the picture to know exactly what it is you are trying to make and you need all the bits of the jigsaw. And that's what we focused on - making sure that once that kit was presented to the bench, they didn't need to go away to find more information or more materials. It was about organising the bench, then organising the feeds into the bench." And VSM provided the tool by which this was achieved. The mapping highlighted opportunities to drive significant improvement in the build rate of the company's internal and external timber frame products. A daily log was implemented, capturing actions from the work benches; the log then being used to investigate any issues with final products and tracing them back to the source of the problem. Shopfloor output had traditionally been measured by counting the number of timber panels made regardless of the work content intrinsic to their manufacture. The new method for monitoring output provided a more consistent measurement. This new way of looking at things identified a number of improvement opportunities including tighter stock control, improved material flow and more efficient manufacturing techniques. But that was then - as Wade puts it, "before the recession" - and this is now. "I have to be honest and admit we didn't get the sustained improvement figures we had hoped to achieve," he says. Increased throughput had resulted in a projected annual labour saving of £25,000 and Oregon had planned to turn the additional labour released by the project outcomes, into a £150,000 increase in sales turnover. "We didn't quite get to those kind of levels but we did see a sustained benefit and a lot of the changes we identified through that project we are still using now. The recession really put a dampener on things but now we are getting back to normality, we are now talking about doing another project in a different area of the business. We definitely saw the benefit of undertaking that type of project and we are now keen to kick on again and continue the work." And if Oregon had hit the recession without instigating some of the efficiencies? "There are plenty of timber frame people who aren't here any more and we still are," Wade offers by way of answer. Down in the south west at William Haley Engineering, the six-strong VSM team was one of three set up as part of a wider improvement project being undertaken with the help of Leanpal's Mark Colvin on behalf of the south-west Manufacturing Advisory Service (MAS-SW). In addition to the VSM team a process machinery OEE (overall equipment effectiveness) improvement group was set up to look in depth at bottleneck equipment, and a problem-solving team established to examine internal quality issues. As with Keihin, the VSM team included representation from across the business; in William Hayley's case, the production manager, production team leaders and a combination of process workers, fabricators, welders and maintenance. The team was trained in VSM and in the five lean principles established by the Toyota Production System (specify what creates customer value, identify the process steps, create processes flow, manufacture only to customer demand, and strive for perfection by eliminating waste) and in the seven wastes described by TPS author Taiichi Ohno (overproduction, idle time, double handling, overstocking, non added value movement, over-processing, and defects producing scrap or necessitating reworking). The team mapped and measured their processes door-to door - from goods-in to despatch -analysed opportunities for improvement and prioritised those opportunities based on benefit and ease of implementation. Both the existing manufacturing process and a proposed process for a future subcontract customer were mapped. The losses and wastes that were identified resulted from identifying time lost looking for tools, poor work flow, lost time loading trailers and balanced work content. They were addressed by the quick installation of simple tool shadow boards at every work station in fabrication and welding, a smaller batch flow system was trialled, a faster lorry loading system implemented and a shopfloor performance measurement system was introduced and driven by the team leaders. Better productivity, improved delivery times and reduced work in progress ensued. Meanwhile, the process machinery OEE group had identified that significant contributions to downtime were the necessity of having to retrieve small parts that dropped into a difficult-to-access area and the cleaning of a vacuum system designed to extract dust. An automatic conveyor system solved the first issue and the in-house improvement of the vacuum system was proposed to overcome the dust extraction problem. The third 'problem-solving' group analysed two recurrent problems and overcame them by introducing an improved system for flagging repairs required to the maintenance department, and developing a root cause solution for an internal quality concern. Managing director Will Hayley is enthusiastic about the spin off from the changes that the initiatives have brought about. "We have noticed a step change in the way that the team leaders and others involved have taken this on board," he says. "Involving them in this programme has rubbed off on their management style in other areas in a very positive way."