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JMTM
25,3 Adaptation of the value stream
mapping approach to the design
of lean engineer-to-order
334
production systems
Received 11 May 2012
Revised 30 November 2012
A case study
19 January 2013
25 January 2013 D.T. Matt
Accepted 29 January 2013 Faculty of Science and Technology,
Free University of Bozen-Bolzano, Bolzano, Italy

Abstract
Purpose – The purpose of this research is to examine relevant parts of the case of an Italian steel
construction company’s green field plant design process to identify best practice guidelines for the
adaptation and use of value stream mapping (VSM) in the design of lean engineer-to-order (ETO)
production systems.
Design/methodology/approach – The paper reviews the most relevant literature in the field of
VSM and discusses its limitations regarding the application in an ETO environment. Based on the
analysis of an industrial case, the original VSM methodology is adapted with a special focus on ETO.
Information was collected through multiple site visits and semi-structured interviews with the
company’s key staff of the project, as well as examination of relevant company documentations.
Findings – A set of guidelines was developed on the basis of an industrial case research. In this
context, major attention was given to two aspects: the introduction of synchronization points in front
of merge-activities in the value stream, and the splitting of customer orders into suitable production
orders and equal time increments of work.
Research limitations/implications – The findings of this research are limited due to the focused
nature of a case study-based research. However, the obtained results encourage assuming its
transferability to similar problems.
Originality/value – This paper provides an original industrial case study with valuable insights for
the adaptation of the VSM methodology to batch-of-one ETO environment.
Keywords Case study, Value stream mapping, Production systems, Engineer-to-order
Paper type Case study

Journal of Manufacturing Technology
Management
Vol. 25 No. 3, 2014
pp. 334-350
q Emerald Group Publishing Limited
1741-038X
DOI 10.1108/JMTM-05-2012-0054
1. Introduction
Small and medium-sized enterprises (SME) are numerous and represent the backbone of
the European economy (Müller et al., 2007). Due to their flexibility, the entrepreneurial
spirit and the innovation capabilities of SMEs have proven to make an important
contribution to the economic stability and sustainability of a country. However, to
compete in an increasingly competitive global marketplace, SMEs have to strive for
world class performance through a consequent implementation of lean principles.
In literature mainly examples for the implementation of lean principles in large
enterprises can be found but there is still less documented evidence of its implementation
in smaller organizations (Achanga et al., 2006). Furthermore, the lean manufacturing
concept is well described in the literature in the context of low-mix high-volume
production, and recently also some research has been done in a high-mix small-lot size Adaptation
environment (Horbal et al., 2008). However, in small and medium sized enterprises, of VSM
especially in those working in the field of construction or construction supply where
the customer order usually determines and triggers the design and consequently approach
the production, lean tools and methods known from repetitive production usually do not
fit (Romero and Chávez, 2011). They require different manufacturing approaches and
optimization methods for so-called project manufacturing or engineer-to-order (ETO) 335
manufacturing (Yang, 2013). Major problems can be detected with the proper design of
one-piece-flow production cells and material flow based on pull system. However, recent
studies show that there are some lean concepts that can be broadly applied in most
industrial environments, such as “elimination of waste” and “just in time ( JIT)
deliveries” (Gulshan Chauhan and Singh, 2012; Yang, 2013). The purpose of the paper is
to present a case study of implementing lean concept in a craft-production oriented small
enterprise and to derive from the findings some useful insights for the adaptation of the
value stream mapping (VSM) approach to the design of lean ETO production systems.

2. Literature review
In the past decades a large variety of methods and tools has been developed and used to
design, optimize or evaluate productive systems, helping to improve and to accelerate
the design of lean and agile materials and information flows in manufacturing. Several
researchers (Braglia et al., 2006; Serrano Lasa et al., 2008) reviewed different tools and
methods for the redesign and improvement of production systems. They came to the
conclusion that these “do not cover the same framework as VSM, neither the same
objectives nor the same level or degree of completion of manufacturing systems design”
(Serrano Lasa et al., 2008, p. 42). Among these methods, the most important ones are flow
diagram charts, Icam DEFinition for Function Modeling (IDEF0) and the
complementary Integrated DEFinition for Process Description Capture Method
(IDEF3), graph with results and actions interrelated (GRAI), and various tools for
material and information flow modeling.
Flow diagram charts represent a hierarchical business system modeling technique
widely used in 1990s’ business process reengineering currents. They were mostly
designed for business processes and thus did not really adapted to manufacturing
process modeling and redesign. IDEF0 is based on the established graphic modeling
language structured analysis and design technique (SADT) and is oriented towards
hierarchical manufacturing system function modeling, while IDEF3 is a complimentary
technique for producing a dynamic model of the system (Kim et al., 2003; Aguilar-Saven,
2004). The GRAI method is a decisional modeling technique and is based on hierarchical
production planning (Rahmouni and Lakhoua, 2011). The above mentioned methods
tools are purely qualitative, in addition, GRAI does not even consider material and
information flows (Serrano Lasa et al., 2008). In more recent years, different tools for
material and information flow modeling in manufacturing have been introduced that
cover the lack of quantitative aspects in modeling. However, due to their quantitative
character these tools require significant efforts in terms of education and time and thus
are not that frequently used for optimization of manufacturing systems.
In recent years, many publications have extensively documented the
implementation of VSM as a key method to implementing lean concepts, in various
manufacturing sectors. VSM is a conceptual framework popularized in many western
JMTM industrial companies since the publication of the book Learning to See – Value-Stream
25,3 Mapping to Create Value and Eliminate Muda (Rother and Shook, 1998) started
diffusion of the practice-oriented mapping and optimization method developed on the
basis of a broad empirical industrial evidence.
A value stream can be defined as a sequence of activities required to design and
manufacture/provide a product or service (Erlach, 2010). VSM represents a very
336 effective method for the visualization, the analysis and the redesign of production and
supply chain processes including material flow as well as information flow (Rother and
Shook, 1998; Womack et al., 2002; Matt, 2008). It is used primarily to identify,
demonstrate and eliminate/reduce waste (Seth et al., 2008), as well as to create
continuous flow in manufacturing processes (Marchwinski and Shook, 2003; Hines et al.,
2004). First implemented by automotive industry with a strong focus on low-mix series
production (Schweizer, 2011; Anand and Kodali, 2009; Seth and Gupta, 2005), VSM was
stepwise expanded to various applications (Tapping and Shuker, 2002; Jones and
Womack, 2003) and to other industries (Fontanini and Picchi, 2004; Braglia et al., 2006;
Singh et al., 2006; Horbal et al., 2008; Seth et al., 2008; Taylor, 2009; Singh and Sharma,
2009; Vinodh et al., 2010; Marudhamuthu et al., 2011; Chowdary and George, 2012) and
was enriched by additional tools and techniques (Singh et al., 2006; Gurumurthy and
Kodali, 2011), especially with simulation (Lian, 2002), for example by the application of
QUEST simulation software for developing the simulation models for current and future
state maps (Anand and Kodali, 2009) which is particularly helpful to quantify possible
effects of process changes in advance and to evaluate improvement alternatives without
disrupting actual production (Parthanadee and Buddhakulsomsiri, 2014).
Braglia et al. (2006) showed that VSM cannot be used directly for very complex
manufacturing processes with merging flows. Thus, the research team defined a
procedural approach: first the part families are identified, and then the machine sharing
among the targeted families is determined identifying and optimizing the critical value
stream. A key issue in all research activities involving VSM technique in a
manufacturing environment is that suitable part or product families can be identified.
However, in an ETO environment as it can be typically found for example in
construction industry (Forsman et al., 2011) the tools and methods known from
repetitive production usually do not fit or have to be limited in use for lean improvements
in simple processes (Al-Sudairi, 2007). Another shortcoming of applying the traditional
VSM approach in an ETO environment is that it fails to map multiple products with
different routings and that it lacks suitable economic measures for value or other typical
manufacturing performance parameters (Stamm and Neitzert, 2008; Braglia et al., 2006).
Moreover, the original VSM tool lacks the spatial structure of the facility layout, and the
related impact regarding interoperation material handling delays (Romero and Chávez,
2011), which, however, is a very typical issue in the large and heavy good ETO
manufacturing. In the context of construction industry, some researchers report about
value stream macro-mapping (VSMM) or value network mapping (VNM) approaches
(Khaswala and Irani, 2001; Arbulu et al., 2003; Fontanini and Picchi, 2004), especially
focusing on the supply chain of a specific ETO processes of construction industry.
The VSMM approaches focus only on the optimization of the supply chain steps but
do not consider the specific issues of an ETO manufacturing environment (Dessens and
López, 2012). VNM is able to map the complete network of overlapping flows in a value
chain; however, no recommendations regarding improvements and future state map
development are available (Romero and Chávez, 2011). Thus, a large number of small Adaptation
and medium sized companies which are mainly focusing their activities on of VSM
craft-production still cannot fully take advantage of the efficiency gains that can be
obtained by VSM/VNM guided lean implementation. approach

3. Research objectives and methodology 337

The main research question of this paper is:
RQ1. What extent can the approach of VSM and optimization be adapted to the
specific requirements of an ETO manufacturing system in SMEs in order to
improve its overall efficiency in terms of time, quality and costs?
The research question is addressed by discussing the real industrial case of a greenfield
production facility project. According to several authors, case research is most suitable
for the development, testing, disproof and/or refining of a theory or hypothesis
(Woodside and Wilson, 2003; Gummesson, 2005; Vissak, 2010) as well as for the
determination of further research needs (Halinen and Törnroos, 2005; Siggelkow, 2007),
especially in a complex and dynamic context (Perren and Ram, 2004). Especially, in the
field of VSM single case study based research is frequently applied, so far mostly in the
field of series or mass production: Lian (2002) used the case of mythical train
manufacturer, many other authors refer to automotive or automotive supplier cases
(Rahani and Al-Ashraf, 2012; Schweizer, 2011; Anand and Kodali, 2009; Seth and Gupta,
2005), appliance manufacturing (Abdulmaleka and Rajgopal, 2007), to domestic
appliance and consumer electronics industries (Serrano Lasa et al., 2008) or also to batch
production in the roasted and ground coffee industry (Parthanadee and
Buddhakulsomsiri, 2014). The single case study research approach has proven to be
very suitable for studying the effects and usefulness of VSM application in different
industry environments (Chen et al., 2010; Nepal et al., 2011; Chiarini, 2012; Chowdary and
George, 2012), to derive conceptual hypotheses and to identify further research needs
and has therefore been chosen to investigate the suitability of VSM in an ETO
environment and to identify eventual research needs for adaptation. The case research
was performed by using the following main sources of information, before project start,
during the project and after the project completion:
.
observations on the shop-floor;
.
a detailed process analysis; and
.
interviews and informal discussions with the company’s project team consisting
of experienced managers, planners and foremen.

4. Case study
The chosen company is a medium sized Italian ETO producer of large and heavy steel
constructions, such as steel structures and facades for civil and industrial architecture,
with a yearly turnover of e48 million and about 150 employees. Every product is
unique – consequently, engineering design and production is made to the specific
customer order (batch-of-one production). Even if the final product can involve some
common materials or standard parts, every customer order requires individual bills of
materials and production routings to complete the final product within an
JMTM agreed deadline. Demand is irregular. The process typically consists of cutting,
machining, assembly (tack welding), welding (seam welding), and coating.
25,3 The company started as a very small craft business and established its niche strategy
from the very beginning focusing on the implementation of technically demanding
individual solutions. The steel constructions realized by the company are true
masterpieces of architecture and engineering and often are designed to become icons of
338 their locations. Carried by the good reputation in the world of architects, the company
was able to realize an average growth rate of nearly 10 percent per year during the last
ten years. As a result of continuous growth soon the available space in the existing
production facilities at the old site was no longer sufficient. As a further extension of the
old structure was not possible, the management decided to plan a new production plant
on a greenfield site. At the same time, the chance of planning a completely new
production system should be used in order to redesign production processes and layouts.
During the last ten years of steady growth production management had paid more
attention to the timely order fulfilment and neglected the necessary organizational and
structural improvements in manufacturing. The organization was not prepared for these
growth rates and the growing market pressure finally led to a decline of order and
cleanliness, and subsequently to productivity losses and serious quality problems.
Instead of treating the problem at its root and initiate necessary changes in production
processes and organization, more often partial orders were outsourced to third parties
that in turn led to a decline in overall profitability. Production management therefore
took the upcoming redesign of the plant site as an opportunity to reshape the production
processes, structures and organization of according to lean principles in order to
improve its competitiveness in terms of productivity, times and quality. Traditionally,
lean focuses on high volume repetitive manufacturing industries like automotive and
consumer electronics. However, the usefulness of implementing lean concepts in an ETO
environment is also confirmed by recent literature: Yang (2013) formulates several
research hypotheses on the basis of a literature research which investigates key
practices, manufacturing capability and attainment of manufacturing goals from the
perspective of project/ETO manufacturing, highlighting for example “JIT” and “total
quality management (TQM)” as useful lean concepts that can be applied to ETO
industry. This finding is confirmed also by the research results presented by Chauhan
and Singh (2012).
A project was defined with the following 12 steps:
(1) Site selection.
(2) Current state analysis of existing manufacturing processes.
(3) Future state mapping of manufacturing processes and optimization of material
flows and layouts.
(4) Planning of new manufacturing (layout) at the new location.
(5) Architectural planning.
(6) Request for construction permit.
(7) Investment planning and cost estimates, financing plan.
(8) Static construction planning.
(9) Scheduling for construction execution.
(10) Invitations to tender (building and equipment).
 (11) Construction execution. Adaptation
(12) Official inspection and approval. of VSM
The following considerations mainly refer to the steps 2 and 3. approach

4.1 Current state analysis of existing manufacturing processes

The current state analysis was performed in the old production plant. As mapping 339
method, the VSM approach was chosen. In contrast to the usual value stream analysis,
no selection of product families was made because this step is not applicable in an ETO
environment. Instead, two types of typical projects were classified:
(1) major steel structures for civil or industrial buildings (e.g. industrial buildings,
bridges, sports centres, ski jumps, etc.); and
(2) smaller steel constructions (e.g. steel stairs, railings, etc.). In this section, only
the mapping of (1) will be explained in more detail.

First, the current state of the major steel structures value stream was mapped.
In contrast to the recommendations of Rother and Shook (1998) the current value
stream was not recorded while walking along the actual pathways of material and
information flow. Since no product families are recognizable in the strict sense a
different approach was selected: in a workshop with key representatives of the
production management the current value stream was outlined on a brown paper sheet
using, however, the same set of symbols or icons as for usual mapping tasks (Figure 1).
Based on the experience of the workshop participants the full range of possible paths
was recorded which material flow passes through depending on project type and
required processing: thus, the current state map does not display one single value stream
but the superposition of n value streams. For an ETO manufacturer, a product is the final
result of a project and thus meets the definition of being temporary and unique: it usually
has unique customer designed elements and the inventory levels are low (Yang, 2013).
Although the products are manufactured in environments similar to manufacturing
job-shop conditions, the VSM requires a different approach. Due to the uniqueness of the
single products/projects quantification in terms of buffers/lead times and cycle times is
not feasible. Thus, this information is not added to the value stream maps similar to the
previously outlined VNM approach.
The following weaknesses in the production and information processes were
identified; the five main weak points are highlighted in lightening bursts (Figure 1):
(1) The production often gets the needed drawings late or drawings are not yet
defined when production is supposed to start; according to two years of data
recording this problem happens in about 25 percent of the cases. This leads to
rejection and increased coordination effort between production and technical
department. The resulting additional times in production and technical
department were roughly estimated at about 5-10 percent by the responsible
managers.
(2) The shipping list is often not available or arrives too late. This leads to
problems in order picking.
(3) There is a lack of coordination to bring together the materials for assembly.
The single parts are independently produced and delivered to assembly.
 25,3

340
JMTM

Figure 1.

as a superposition
of n value streams
The current state map
construction
“Direct deliveries directly to the construction site site
Suppliers
supplier” subcontractors zinc plating
project timelines,
technical drawing
Purchase assembly drawing, Ø2 trucks/day
order Production cutting list order per
Purchasing Internal Technical Order fax/e-mail
order Planning 1
Department Office Department
and Control steel construction to be
zinc plated 5
packing list, delivery notes
reservation, availability check CNC data SHIPPING
production shipping
papers 2 list
Single part
production drawing
manager
steel plates zinc plated steel sheets
INCOMING METAL SHEET BENDING
CUTTING
GOODS
GRINDING PUNCHING
steel girders
steel plates
steel plates PLASMA
paint TACK WELDING
CUTTING
small parts PLANT 2
DRILLING
steel 3
INCOMING griders
GOODS SAW
transiting parts BENDING

Buffer for screws 4

transit parts sheets, panels, insulation ... THREAD
SEAM WELDING
CUTTING
Steel girders are delivered in the following states:
cut
cut + drilled
cut + notched COATING SAW
sanded
 (4) The capacity balance between tack welding and seam welding is not sufficiently Adaptation
flexible. The consequence is a high incidence of uncontrolled buffer stocks. This of VSM
can only measured indirectly by an evaluation of the occupied spaces; according
to management estimations, space requirements in this area could be reduced by approach
about 50 percent with a better capacity balancing between the two areas.
(5) Lack of overview in the shipping area lead to faulty deliveries to the construction
site. This must be compensated with additional rework and transports. In almost 341
10 percent of cases there are additional deliveries due to missing parts.

On this basis, ideas for improvement and future state mapping could be developed.
4.2 Future state mapping of manufacturing processes and optimization of material
flows and layouts. Rother and Shook (1998) presented a set of guidelines helping to
develop a lean value stream. However, these recommendations are mainly based on best
practice obtained in series or mass production. In an ETO environment, every product is
usually “a project” and is therefore unique. At first sight, a strict orientation at
continuous flow does not seem an appropriate approach. On closer examination,
however, some approaches for achieving a continuous flow can be used quite
productively.
ETO extends the make-to-order (MTO) strategy by a stage in which a product is
designed to order according to individual customer needs. The logics and sequence of
the main processes in the ETO model is very similar to the MTO case; however, the
products tend to be highly influenced by the interaction with customers even after
production order release and start of production (Meredith and Akinc, 2007).
To develop systematically a future state map, the guidelines proposed by Rother
and Shook (1998, pp. 40-50) were analyzed during the case research regarding their
usability for an ETO environment and changed or adapted accordingly. On this basis,
a set of guidelines for ETO value stream optimization could be developed:
Guideline no. 1. Identify merge-points in the current state map and introduce
synchronization-areas in front of them.

This guideline is based on guideline no. 3 proposed by Rother and Shook (1998) and
adapts it to specific ETO requirements. Merge-points can be defined as those points
where two or more components or modules are simultaneously needed to perform a
next production activity, e.g. assembly (Stamm and Neitzert, 2008). In the original
sense, a lean supermarket is an area between processes that cannot be synchronized to
a continuous flow, where a standard amount of stock is kept in order to supply a
downstream process without interruption; synchronization between two processes
with different cycle times is realized by introducing a pull-principle (e.g. Kanban).
However, as there are nearly no standard components in a pure ETO production it is
difficult to implement pull principles between production stages. In this context,
supermarkets need a different alignment: they serve as synchronization and picking
zone in front of a merge-activity. This requires a planning of the upstream
manufacturing steps such that the components that have to be synchronized arrive in
the supermarket at the same time or with a minimum time lag. This aspect will be
discussed in guideline no. 3:
Guideline no. 2. Combine machining processes with strongly fluctuating workload
in one workshop area operated by a highly flexible workforce.
JMTM Since the workload of the various machining processes (grinding, drilling, etc.) is
25,3 subject to very strong fluctuations due to the unpredictable mix and sequence of
different products/projects, they were combined into one shop called
“machining” (Figure 2).
Workforce was trained to be able to operate all machines within this zone so that
due to a flexible shifting of personnel it is now possible to rapidly react to fluctuations
342 in workload. Production planning and control department early detects extreme load
peaks that exceed even the improved capacity flexibility and outsources these
processing volumes to external suppliers:
Guideline no. 3. Split customer orders into suitable production orders, and release
equal time increments of work.

ETO producers usually release work by customer order. This has several
disadvantages: large projects especially in construction are usually subject to changes
from architects or clients often long after the production has already started. This leads
to the following dilemma: expecting changes from the customers, the technical
department holds back the production release as long as possible even risking a
non-compliance of the delivery date. The production management on the other hand
tries to anticipate as much work as to optimally balance the manufacturing capacities.
To solve this problem, first the customer order must be split into several production
orders that are released according to the progress on the construction site (Figure 3).
A single production order might contain different components or modules each
following one of n possible different value streams (Figure 3). In this context, a value
stream may be defined as one of n possible pathways through the production system’s
manufacturing steps or stations. For every value stream a unit of work based on a time
increment or “pitch” (Rother and Shook, 1998, p. 47) can be defined. In contrast to the
traditional definition of a pitch as a standard time increment, in ETO production it has
turned out to be more practical to define an upper limit for the time increment.
Its maximum length usually is determined by the single value stream’s bottleneck
process. In total, four different base types of value streams and their related pitches
could be identified:
(1) VSM-1: metal sheet cutting – machining (pitch , 1 h).
(2) VSM-2: plasma cutting – machining (pitch , 4 h).
(3) VSM-3: sawing – machining (pitch , 1 h).
(4) VSM-4: sawing (pitch , 1 h).

Introducing this scheduling mechanism, production can be flexibly scheduled

according to the highest priority regarding the production orders shipping schedule,
and at the same time the material flow becomes much more continuous:
Guideline no. 4. Avoid crossings of material flows.

In a workshop oriented batch-of-one production, typically material flows tend to cross

due to numerous possibilities of processing sequence combinations. Especially, in an
environment of large and heavy goods production, crossings of material flows create a
lot of non-value-added activities, also often referred to as “muda” or “waste” in the
context of lean manufacturing, such as excessive material handling and material buffers;
 direct suppliers construction site
Technical
Puchasing Sales orders
Office
purchase
orders drawings, customer
suppliers BOMs order

MANUFACTURING Production ASSEMBLY

METAL SHEET Planning &
Control ASSEMBLY 1
CUTTING
pitches
cutting raw tack and seam zinc plating
production
materials welding
INCOMING I orders
GOODS I

PLASMA MACHINING PICKING SHIPPING

ASSEMBLY 1
CUTTING CENTER ZONE
cutting raw Grinding, Picking of tack and seam order picking
materials punching, production welding and shipping
I drilling, bending orders
I

Material that
SAW ASSEMBLY n COATING
has not to pass
I
through
cutting raw tack and seam Corrosion
manufacturing
materials welding protection and/
goes directly to I or top coat
the picking zone
approach
Adaptation

The future state map

Figure 2.
of VSM

343
JMTM
customer
25,3 order 1

production production production

344 order 1.1 order 1.2 order 1.n
picking picking picking
list 1.1 list 1.2 list 1.n

mfg. mfg. mfg. mfg. mfg.

docs 1.2.1 docs 1.2.2 docs 1.2.3 docs ... docs 1.2.k

pitch pitch pitch pitch pitch

order 1.2.1 order 1.2.2 order 1.2.3 ... order 1.2.k

Figure 3.
Hierarchical splitting of
documents for production VSM-3 VSM-1 VSM-4 ... VSM-1

interviews with material handlers showed, that 10-20 percent of their time is wasted with
unnecessary material handling caused by bad accessibility of parts in buffer stocks.
Moreover, problems with occupational safety and unnecessary waiting times were
shown in high traffic flow of material intersections. As overlapping of different value
streams may not be completely avoided, it makes sense to reduce the crossings wherever
possible. However, as demand varies widely and data are not enough reliable for doing a
material flow optimization with a traditional transport matrix (Schenk et al., 2010). In the
practical application, the following approach for the use of the transport matrix has
proved to be suitable. The data fields eij in the from-to-matrix contain the transport
intensity information about the relationship between the source Qi and the sink Zj
(Schenk et al., 2010). Transport intensity may be defined as follows:
Transportation intensity ¼ Transportation frequency £ Transportation unit
Both transportation frequency and unit cannot be clearly defined due to the huge variety
of different products/projects in a batch-of-one steel construction environment. Thus, an
evaluation based on experience of workforce and production management can be
applied. During a workshop with production personnel, for every eij the transport
intensity is calculated assigning to transport frequency a value in the range from 1 to 3
(1 ¼ low, 2 ¼ medium, 3 ¼ high frequency). The same is done for the transport unit,
assigning a value of 1 to easy-to-carry items that can be transported by every worker,
a value of 2 for components or subassemblies that need to be carried by a forklift truck
and a value of 3 to heavy steel constructions that need to be handled with an indoor
crane. The multiplication of the two parameters opens a series of values ranging from 1
(very low transport intensity) to 9 (very high transport intensity). For example, there is a
high transport frequency (value ¼ 3) between the plasma cutting station and the
grinding machine; these parts are usually transported by forklift truck (value ¼ 2). Adaptation
From this we calculate a transport intensity between plasma cutting and grinding of of VSM
3 £ 2 ¼ 6. This calculation is done for all data fields eij in the from-to-matrix. Then, the
individual transport relations are sorted in descending order according to their value. approach
The resulting range can be split in three clusters: stations with transport intensity values
of 7-9 have to be disposed in close proximity to each other, 4-6 are arranged around the
core section in a suitable way, and 1-3 do not need special attention and can be located 345
where it is most opportune. In a later layout design, this information is extremely useful
in order to select the right location for the single work stations and machines:
Guideline no. 5. Flexibly assign assembly spaces in accordance with production
progress, priorities and space requirements.

As the modules for each production order differ much in space requirement and priority,
they must be flexibly assigned to varying places in the assembly shop. This can be done
with a space pattern table. This space pattern table simply subdivides the available
assembly area in suitable rectangles Rij, similar to a chessboard. In this industrial case,
a total of 16 rectangles with uniform dimensions of 7 m £ 14 m were chosen, from
R11 ¼ “A1” to R44 ¼ “C4”. These are distributed over a 28 m £ 56 m section of the
production hall. However, this choice depends on the product related
assemblies/subassemblies and their average space requirements and therefore cannot
be generalized. When a production order is released from the picking zone to assembly,
number $ 1 of these rectangles (in case they are more they clearly should be located near
to each other) is assigned to this production order. The commissioned material is
transported together with the accompanying documents to the designated assembly
area and handed over to a “mobile” assembly work group which migrates with the
assigned production orders from one assembly space to the next. This mobile assembly
group accomplishes both tack and seam welding in the defined assembly space; this way
the capacity between tack welding and seam welding is balanced and uncontrolled
buffer stocks in assembly can be avoided. The completed production order is then
forwarded to the next station which is coating or shipping:
Guideline no. 6. Avoid the storage of residual material near the machines and
workplaces.

In a project driven batch-of-one production a habit originating from craft production is

widespread, i.e. to keep the residual material in small buffer stocks nearby the
machines or workplaces, often even for long periods. Although a survey of several
companies in the steel and facade construction has shown that many materials can be
used only once as they are ordered specifically for one project, also these materials are
usually kept in storage. But even if the residual materials can be reused at a later point
in time, it is important to keep them ordered in a central warehouse. This has various
advantages. First, the cost of the often lengthy search is reduced. In addition, the space
around the machine remains free and clean which reduces the handling effort and the
risk of injury. It may be argued that this increases the cost of internal transportation.
However, with an order-related picking of material and components in a central
warehouse, these parts are transported together with other materials and hardly
increase internal transportation. Moreover, by eliminating unnecessary searching at
the single workstations much productive time can be saved.
JMTM The six guidelines are the result of intense work and discussion process with the
25,3 VSM-working group of the company. As a result, a future state map (Figure 2) was
developed and implemented as part of the design of the new factory site. VSM offered a good
basis to raise awareness about muda within the project team and led to a series of
improvement measures which have been incorporated into the new plant layout and process
design. Of course, there are difficulties to quantify the effectiveness of these measures in a
346 typical batch-of-one ETO environment. However, the company has been working with the
new processes and within the new layout structures now already for a sufficiently long time
to draw first conclusions, and the efficiency and quality of work could be improved
significantly. Overall, since the implementation of the above described changes in the new
factory site the actual measured output rate (in turnover) – adjusted for outsourcing, price
increases and inflation – grew by 20 percent without necessity for more workforces.

Conclusions and further research work

An ETO system typically deals with projects: every product is unique and is designed
and produced according to a customer order. Customer requirements and shipment dates
vary from product to product. Consequently, there is no inventory in terms of finished
products, and also raw material is usually purchased project-oriented. Furthermore,
sequences and cycle times of the manufacturing processes vary widely and do not allow a
proper balance of the workflow through the production. Review of VSM related literature
revealed that due to the differences of an ETO environment to series or mass-production
the conventional VSM approach needs to be adapted. The conventional VSM approach is
designed for high volume repetitive manufacturing industries; in a batch-of-one
environment it can be applied only project by project. Against the background of the
missing support of meaningful data and information due to the project-related variations
in times, workload and inventory level, different approaches and guidelines are needed
for the optimization process between current and future state mapping.
In this paper, an adapted VSM approach for an ETO environment has been presented
and discussed on the basis of the practical insights obtained during an industrial case
research. The case research revealed that although an ETO manufacturer typically deals
with projects and every project is unique, the mapping and the analysis of the
superposition of multiple overlapping value streams shows general opportunities for
improvement. These opportunities were generalized in six guidelines for the future state
mapping which offer a good basis to start discussion and to raise awareness about waste
within the manufacturing teams. The results obtained are limited but could be very
useful to industry as they produced a set of guidelines for the optimization or re-design of
a value stream in a batch-of-one environment. Despite the focused nature of a case
research and the associated limitations of the findings, the obtained results encourage
assuming the transferability to similar problems. However, there are still some
shortcomings suggesting that there is still much research work to be done, including
improvements on data and information support especially regarding more details on lot
sizing, cycle time and work in process buildup at each process. Further research will
address these issues applying the approach to similar problems. As part of an ongoing
joint research project involving 12 small and medium sized ETO manufacturers special
attention will be given to the actual shortcoming regarding data support in the presented
ETO related VSM approach. Moreover, the aspect of production planning and control in
this specific context must be addressed in more detail.
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About the author

D.T. Matt is a Full Professor of manufacturing engineering at the Faculty of Science and
Technology at the Free University of Bozen-Bolzano, Italy. He studied mechanical engineering at
the Technical University of Munich and achieved a PhD in mechanical engineering at the
University of Karlsruhe. In 1994, Matt became Scientific Collaborator at the Institute of Machine
Tools and Production Science (wbk) at the University of Karlsruhe. In 1999, he entered the
Research and Engineering Center (FIZ) of the BMW Group in Munich, where he worked in
different management positions and projects in Germany and UK. In 2004, he was appointed to
the post of a Professor for Production Systems and Business Economics in the School of
Industrial Engineering and Management at the Polytechnic University of Turin, Italy. In 2008,
he accepted a call of the Free University of Bolzano to a tenured professorship at the Faculty of
Science and Technology. Since 2010, Professor Matt is also Head of Fraunhofer Innovation
Engineering Center (IEC) in Bolzano. Moreover, he is member in various national and
international scientific organizations. D.T. Matt can be contacted at: dominik.matt@unibz.it

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