Value Stream Designing a Factory

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INDUSTRIAL ENGINEER – VOLUME 48: NUMBER 01
By Klaus Erlach and Erin Sheehan

Value stream method can be used to improve the processes in a factory. In using value stream method, first we do value stream analysis that consists of an extended value stream mapping followed by two performance checks of the production system. In this phase, each production operation is surveyed, taking note of the material and information flows. When rounding the factory for the first time, the team starts by understanding what customer want and use it to dictate the requirements placed on the overall production system and on each individual operation, basically mapping the necessary production flow. In the second round, information flow aspect like order processing procedures and order sequencing criteria are collected. After doing these two rounds, the performance of current value stream can be gauged by calculating the ratio of total processing time to the lead-time and balancing.

Next, do value stream design, which is redesigning the analyzed production system from scratch. It aims to reduce as much lead-time as possible and increase production control. Eight guidelines can be used to help doing this phase. The first guideline is adjusting to takt time, ensuring that the machine capacity corresponds to customer demand. The second guideline, process integration, is to lessen the number of steps through integration to eliminate buffer and takt-time.  This may happen if two successive process steps has high reliability and no process-driven resting time. The third guideline is to connect two processes with a FIFO buffer. Guideline four is using Kanban to alternate production sequence. Guideline five calls for a pacemaker process so that all orders enter the system at defined entry point. Guideline six is to create a steady flow and prevent fluctuation in capacity. Guideline eight describes how to use the bottleneck to control the production rhythm.

The Electrolux cooking range factory in Tennessee applied value stream design method in 2014 with the goal of improving flexibility while reducing throughput time. The overall results were cutback of the WIP level, fewer indirect employees, better utilization of direct manpower, and reduction of the number of work shifts.