VSM Basics For Capacity

Value Stream Mapping
for Capacity Planning and

Verification
Ford Production System 1

Key Elements of Value Stream Map
• Process Flow
• Material Flow
• Information Flow
• Process Metrics Data
• Customer Requirements
• In-Process Inventory (WIP)
• Lead Times for Each Process Step
Value Stream Mapping is a visual means of outlining the limiting factors of

a manufacturing operation, highlighting the restrictions, bottlenecks and
contributors to inefficiencies in a complex manufacturing system.
Process Metrics Data
• Cycle Time (C/T)
• Changeover Time (C/O) & Frequency
• First Time Through (FTT)
• No. of Product Variations
• No. of Operators
• Uptime or Availability
• Overall Equipment Effectiveness
• Operating Pattern
When utilizing surrogate process data in capacity planning, historical data
from stable manufacturing sources must be adjusted based on unique design
& process complexity and re- validated as soon more data is available
How to build

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How to build

How to build

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How to build
Value Stream Mapping 11

How to Calculate Takt Time
• Ten Steps to create a Value Stream Map (continued)
10. Calculate takt time for the process
– Seconds available per day / Daily customer demand
Takt Time is the time in which a finished part or
product is demanded by the customer. Noted in
sec/part.
• Determine the rate at which product or services must be
delivered in order to meet customer demand
• Jobs Per Hour or Capacity Planning Volumes (CPV) can be
converted into takt time.
 APW – Average Production Weekly ( 5 days operation)
 MPW – Maximum Production Weekly (6 days operation)
 Annual Volumes to Weekly Volumes – divide by 47.2 weeks/year

12
How to Calculate Takt Time
The goal is to match production rate with customer demand.

• Synchronize the pace of production to match the pace of
sales
Total Available Operating Time
Takt Time =
Customer Demand
calculated for a given time period
• Example: Customer needs 1800 pieces per week and the

supplier is running Two -10 hour shifts with 2 - 15 minutes
paid break per shift: How often is a part required?
342,000 sec / 1800 pcs = 190 sec or 3.18 min Takt Time
(19 hrs × 5 days x 60 min × 60 sec = 342,000)

13
Capacity Planning & Verification Value Stream Map

14
Linkage of Subtier to Tier 1
Capacity Planning & Verification
Tier 1 Value Streams Subtier Value Chain
Sub Tier
Capacity
Planning &
Verification
Tier 1 Supplier’s submission of Capacity Planning & Verification Capacity

Analysis Report (CAR) must include Subtier Capacity Confirmation
15
Linkage of Value Stream Map to
Capacity Analysis Report (CAR)

16
Sources of OEE Degradation
Recognizing Key Contributors

Contributors to OEE Degradation
OVER PRODUCTION
 Labor and Overhead Measurables driving utilization of
people and equipment
 Losses from out of stock conditions
 Losses from blocked and starved conditions
 Material produced to speculative demand
18
Ford Production System
MOTION
 Poor workstation configuration and

organization
 Work imbalance
 Visual Factory not implemented
 Standardized Work not implemented

CONVEYANCE
 Long distances from operation to operation
 Material Handlers not on scheduled routes
 Warehouse on or off site
 Distance between receiving and point of use
 Handling excess inventory

CORRECTION
 Poor, slow quality feedback
 Incremental inspection done outside process

station
 Repair operations are viewed as acceptable
 Few effective Error Proofing devices in use
 Standardized work not in place
 Product/process incompatibility
 Product over-complexity

INVENTORY (EXCESS)
 Mass Production mindset, batch and queue
 Unpredictable productivity
 Infrequent delivery / shipment of materials internally and

externally
 Schedules not linked between processes
 Visual Factory not in use to control
 Large containers / batch sizes

WAITING
 Waiting for support, information, and/or materials
 Low Overall Equipment Effectiveness and high machine

downtime
 Unbalanced operations
 Long and inconsistent lead times
 Continual production schedule fluctuations
 Watching automated machines
 Undisciplined meetings

OVERPROCESSING
 Standards unknown / unclear to operators
 Customer specifications are vague or fluctuate
 Product testing and re-testing occurs
 Functional departments have misaligned goals and poor

communication
 Concept that more is better

Achieving Sustainable Manufacturing
Five Growth Phases
• Production schedule smoothing,
Level volume and mix distributed
Production evenly over time
• Steady workload
• Marketplace based pull replenishment (linked

Pull System to customer withdrawal)
• Inventory management/discipline (JIT)
• All operations and work stations synchronized to pace of

Synchronous customer demand rate (TARGET TIME)
Production • All work stations balanced (standardized work)
• Improved product flow, ideally single piece (batch of 1)

Continuous • Flow from value-add station to value-add station
Flow • Where flow is not possible, reduce batch sizes and work in process (WIP)
• Process is under control and predictable output

Stability • Basic workplace organization in place (to recognize abnormalities)
• Begin the elimination of waste using FPS tools

Value Stream Mapping Capacity Threshold Analysis
Focus Elements
Potential
Focus Elements Threshold Assessment
Mitigation Actions
• Subtier Value Chain • OEE Improvement
Value Stream Constraints • Bottleneck Operation • Rebalancing Operation
• Validity of OEE and Changeover

assumptions for multiple part • Banking Plan
Equipment Shared variants • Qualify Back-Up Manufacturing
• Impact of Launch Ramp Up Plan Sources
Loading Robustness to Capacity Availability • Rebalancing Operation
• Impact of OEE shortfalls & • OEE Improvement
Degradation
Process & Quality • Process Capability Corrective

• Process Capability and resupply
Actions – Design, Tooling &
Stability impact on OEE
Process Improvement
• Alignment of Industrialization • Establish Robust Capacity Prove-
timing with Ford Launch Ramp Up Out plan utilizing lessons learned
Industrialization Ramp Up Schedule • Bank Planning for parts requiring
Lead Times • Support of Increased Premium mix long lead industrialization ramp up
beyond tooled capacity during • Add resources to compress
launch ramp up industrialization timing
Back Up Equipment & • Contingency planning for launch, • Qualify back up sources for
Resources bottleneck and unstable operations constraint operations

26

VSM Basics For Capacity

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Value Stream Mapping

for Capacity Planning and

Ford Production System 1

Value Stream Mapping is a visual means of outlining the limiting factors of

Value Stream Mapping

Value Stream Mapping

Value Stream Mapping

Value Stream Mapping

Value Stream Mapping

Value Stream Mapping

Value Stream Mapping

Value Stream Mapping 11

Value Stream Mapping

The goal is to match production rate with customer demand.

• Example: Customer needs 1800 pieces per week and the

Value Stream Mapping

Value Stream Mapping

Tier 1 Value Streams Subtier Value Chain

Tier 1 Supplier’s submission of Capacity Planning & Verification Capacity

Value Stream Mapping

Ford Production System 17

 Losses from out of stock conditions

 Losses from blocked and starved conditions

 Material produced to speculative demand

 Poor workstation configuration and

 Visual Factory not implemented

 Standardized Work not implemented

Ford Production System 19

 Material Handlers not on scheduled routes

 Warehouse on or off site

 Distance between receiving and point of use

 Handling excess inventory

Ford Production System 20

 Incremental inspection done outside process

 Repair operations are viewed as acceptable

 Few effective Error Proofing devices in use

 Standardized work not in place

Ford Production System 21

 Infrequent delivery / shipment of materials internally and

 Schedules not linked between processes

 Visual Factory not in use to control

 Large containers / batch sizes

Ford Production System 22

 Low Overall Equipment Effectiveness and high machine

 Long and inconsistent lead times

 Continual production schedule fluctuations

 Watching automated machines

Ford Production System 23

 Customer specifications are vague or fluctuate

 Product testing and re-testing occurs

 Functional departments have misaligned goals and poor

 Concept that more is better

Ford Production System 24

• Marketplace based pull replenishment (linked

• All operations and work stations synchronized to pace of

• Improved product flow, ideally single piece (batch of 1)

• Process is under control and predictable output

Ford Production System 25

• Validity of OEE and Changeover

Process & Quality • Process Capability Corrective

Value Stream Mapping

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