The first step in designing and implementing the lean supply chain can be looked upon as a series of progressive steps. The first of which involves drawing and understanding the current state value stream. To do so, you need to know:
- How do you draw the value-stream map of the current condition of your supply chain?
- What information is key to understanding the current condition of your supply chain?
- How do you break down the supply chain into manageable pieces in order to paint a realistic picture of the current state?
- Who should be part of a cross-functional team to complete an accurate value stream map of the supply chain?
- How do you analyze the value-stream map of our supply chain to understand the current condition?
1. How do you draw the value-stream map of the current state of your supply chain?
The value-stream map is a popular tool for the lean enterprise. Most importantly, the value stream map gives you a global picture. This understanding of the current condition of your organization is critical to the lean supply chain. However, mapping the supply chain can be more challenging and complicated than mapping a manufacturing process because:
Considering the above challenges, the most difficult part of drawing the current state is determining where to start. In order to simplify the complicated, start asking yourself: What do I want to learn by creating the value stream map of the current condition?
2. What information is key in order to understand the current condition of your supply chain?
Although a value stream map of the supply chain may seem different from a map in a manufacturing process, you cannot lose sight of the basic principle of the value stream map. That is, the value stream allows you to see the whole by painting the overall picture of the supply chain. To accomplish this, you need to look at basic information relative to the current condition of the supply chain:
- First-time Quality (FTQ)
- Asset and resource availability
- Process time (PT)
- Wait time (WT)
- Value-creating vs. non-value-creating process determination
- Inventory levels
- Overall supply-chain lead time
The above information will be used to develop the value stream map of the current condition. However, from what perspective do you draw the map? You need to pick one customer, a small group of customers, one supplier or a group of raw material part numbers. Somehow you need to break down the supply chain into manageable pieces in order to paint a realistic picture of the current state.
3. How do you break down the supply chain into manageable pieces in order to paint a realistic picture of the current state?
Choose a product that could be considered a lean candidate for pull and flow. Look at your finished goods SKUs (stock-keeping units) relative to volume and frequency of demand. Map a finished-good product that has significant demand and relatively stable (level) demand. This will eliminate arguments that develop around variability of demand, not to mention the fact that you want to drive pull and flow in the future-state of the supply chain. High-volume, stable products should be the first to begin using pull-replenishment techniques.
4. Who do you need as part of a cross-functional team to complete a value stream map of the supply chain?
Supply chain initiatives, of any kind, cannot be completed using silo mentality. Cross-functional participation is required to drive lean in the supply chain and logistics disciplines. Although this may seem obvious, however many organizations continue to ignore this critical point. It is never too early to begin the drive for cross-functional participation, and the creation of the current-condition value-stream map is a perfect time to bring the enterprise (all functions) into the process. Use this opportunity to invite a representative from each functional discipline to the mapping of the current state. The goal will be to develop a team of people that will in fact stay intact as a functioning team during and after the mapping exercise.
Each functional area should be represented. With that, some functional areas may resist being part of the mapping team, claiming that they have little effect on the outcome of supply-chain activities. For example, Purchasing, Finance and Marketing may take this stance in the beginning. Do not allow this to happen! While certain functional areas may believe they do not drive supply chain outcomes (or outputs), they certainly are involved with creating inputs that drive waste into the supply chain.
Mapping the current condition of the supply chain is about learning to see the whole. This means the whole enterprise needs to become aware of how their functional behaviors affect the overall performance of the organization. Once you have assembled the correct team of cross-functional representatives, you will be ready to draw and analyze the current state of your supply chain relative to a particular product.
5. How do you analyze the value stream map of your supply chain to understand the current condition?
Once the value-stream map of the current condition is completed, you need to be able to stand back and ask yourself what it all means. What does the map tell us, and more importantly, what should you do next? What action needs to happen?
- As you analyze the current state map ask yourself:
- What is the takt time or rate of customer demand?
- What processes do not create value?
- Where is first-time quality an issue?
- Where is there an issue in availability of resources?
- Where are excessive inventories creating long lead times?
- Where can you implement flow and pull? Where is push being used as an inventory strategy?
- Where do you need to “go see”? Where is there clearly a problem but you have no idea what it is?
The current condition map provides a wealth of information. The next challenge is to come to a decision about what to do with it! At this point, you simply need to go back to lean basics. You want to eliminate waste. Ask: Where is the waste? Once we understand the current state of our supply chain, we are the privilege of designing the future state.
Posted by LeanCor Supply Chain Group
LeanCor Supply Chain Group is a trusted supply chain partner that specializes in lean principles to deliver operational improvement. LeanCor’s three integrated divisions – LeanCor Training and Education, LeanCor Consulting, and LeanCor Logistics – help organizations eliminate waste, drive down costs, and build a culture of continuous improvement.Facebook LinkedIn Twitter Google+