07 Seeing The Whole

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Seeing
theWhole SHINGC
Pt<I.ZF
mappingthe valuestream
by
DanJones
JimWomack
foreword
byJohn Shook <r
theWhole
Seeing
Mapping the Extended Value Stream
By Dan Jones and Jim Womack

Forevvord by John Shook
The Lean Enterprise Institute

Cambridge, MA USA
lean.org
Version 1.1
February 2003
With gratitude to Dan Jones'scolleaguesat the Lean Enterprise ResearchCcnter, Cardiff L.lniversity,
in particularNick Rich, Dave Brunt, Dave Simonsand MatthiasHolweg, who helped pioneerextended
value-streammapping.
And with further gratitude to our reviewers,editors and designers(who bear no responsibilityfor
the remaining faults):JoseFerro, Bruce Henderson, Dave LaHore, Graham Loewy, Dave Logozzo,
Bob Morgan, Guy Parsons,Atisa Sioshansi,Peter Tassi,Jeff liimmer, Helen Zak, Maria Elena Stophe1
and Thomas Skehan of OffPiste De sign.
And with specialgratitude, as always,to John Shook.
@ Copyright 20OZThe Lean Enterprise Institute, Inc.

Onc Cambridge Center, Cambridgc, NIA02142 N{A tlSA
Tel: 617-871 -2900 o F-ax:617 -87| -2999 . lean.org
ISBN 0-96678,+3-5-9
All rights rcserved.
Design by Oi'f-PisteDesign, Inc.
Printed in thc LISA
May 2008
Whenever there is a product for a customer, there is a value stream.
The challenge lies in seeing it.
Mike Rother & John Shook, Learning to See
When you have learned to see value streams in individual facilities,

it's time to see and then to optimize entire value streams,
from raw materials to customer.
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FOREWORD
When the first item in the Lean Tool Kit, Learning to See,was launched in
June of 1998,
we at LEI began to hear from managersin many industriesthat "this is rhe tool we have
been looking for." Readersquickly realizedthat the grear power of Learning to Seelies in
focusingattention on the value stream for inclividual product families within plants. Rather
than concentratingon isolatedprocessesalong the value srreamor aggregatedactivities
serving many value streams,readerscould suddenly see how to optimize the flow of each
product from receiving to shipping. This insight was breathtakingfor many managers
caught up in narrow techniques or looking at only one activity in a complex system.
As more and more people heard aboutLearning to Seeand began to practicevalue srream
mapping' we began to hear of additional needs. "How can we introduce continuous flow at
the processlevel within facilities?"And, "How can we expand the scopeof value stream
mapping beyond individual facilities to the extended value stream from raw materialsto
the end customer?"Many readerssuspectedthat if there was vastmwda within the walls
of each facility rhere was even more mwda between facilities and firms.
We had been thinking about this issuelong beforeJune of 1998.Indeed, the initial ourline
of Learning to Seedevoted equal attention to mapping the extended value srream.However.
we knew that extended mapping is more challengingthan facility-levelmapping and we soon
concludedthat we would need severalpublications.In addition, we realizedthat managers
would do well to hone their skills by "learning to see" within a limited areabefore venrurins
forth to "see the whole".
We therefore included a diagram in Learning to Seeillustrating different levels of mapping.

We've recently addressedthe processlevel with Mike Rother and Rick Harris' Creating
Continuous Flow.In Seeingthe-Whole we tackle rhe higher, extended levels.
ollf'
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Why is an extended map harder to draw? It's not becausethe fundamental concept is
different. At every level of mapping, we are simply observingand writing down every step
in information processingand physical transformationfor individual product families.We
observethe flow of customer desiresmoving up the value stream,in the form of orders or
schedules,and then observethe progressof products moving downstreamin responseto
this information, from raw materialsto finished items.
Extended mapping is harderbecausewe need to map acrossplant, divisional,and company

boundaries.In addition,we must pay carefulattention to the variability in order and materials
flows. Finally, we need to think about untangling, simplifying, and "right sizing" complex
logisticsand informarion systems,large facilities,and high-scaleprocessingtechnologies
servingmany value streamsand operated by many firms.
Conducting extended mapping requires the cooperationof many departmentsand divisions

within firms and between firms. These entities rarely think about the total flow of individual
productsand ofren hide information from each other while pushing in opposite directions.
In addition, extended mapping requires that line managersdevote hard-to-sparetime to
direct observarionof each product family's value stream.Failing this, higher-levelmapping
easilybecomesa staff exercise(or a consulting project) yielding only another report that's
soon forgotten.
These additional dimensionsof extended mapping truly are challenges.However, we have had
considerablesuccessin overcomingthem, including recent instancesduring the prepararion
of this workbook.We now are certainthat change-agentmanagerscan meet thesechallenges
and we know that time alreadydevoted to learningto see at the processand the facility levels
will prove invaluableas you expand your field of view.
As with Learning to See,we hope usersof Seeingthe'Whole will tell us how to improve
this tool and will be willing to sharetheir experienceswith the lean community. Numerous
user suggestions,basedon hands-onexperiencewith value stream mapping at the facility
level, have permitted us to improve Learning to Seeseveraltimes since its first publication.
We look forward ro an intense and continuing dialoguewith the lean community on Seeing
the'Whole as well. Pleasesend your comments and suggestionsta stw@lean.org.
John Shook
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Senior Advisor, Lean Enterprise Institute
Ann Arbor, MI, USA
March 2002
<r
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CONTENTS
Foreword by John Shook
Introduction: Changing Your Focal Plane
Part l: Getting Started
Part ll: The Gurrent State Map
Part lll: What Makes an Extended Value Stream Lean?
Part lV: Future State 1
Part V: Future State 2
Part Vl: The ldeal State
Part Vll: Achieving Future States
Gonclusion
About the Authors
Appendix Value Strearn Mapping lcons

Appendix Facility-Level Gurrent Stite Maps
Appendix Facility-Lewel Future State Maps
INTRODUCTION
Ghanging Your Focal Plane
For yearsnow we have loved to "take a walk" along the entire value stream for a
given product, looking for value and waste.We've done chis for dozensof products
in many industriesand followed streamsacrossthe world. We presentedour first
example in Lean Thinking (1996)when we drew the path of a humble cola can.
This simple product with only three parts (barrel,top, and "pop-top") traveled 319
days through nine facilities owned by six companiesin four countriesto progress
from ore in the ground into the hands of the customer.Yet during this long march
only three hours of value creating activities were performed and the great majority
of the steps- storing,picking, packing, shipping, unpacking, binning, checking,
reworking,and endlessmovementsof informationto managethe system'scomplexity
- createdno value at all.
Looking at the whole has alwaysseemed natural to us and doing so will always
suggestways to slashcostswhile dramaticallyimproving responsiveness
and qualiry.
Yet most managerswe have encounteredon our value streamwalks want to stand
in one place and look at only one point - their machine,their department,their
plant, their firm. Often, the machine, the department, the plant, and the firm are
performing well on traditional measures- high labor and machine utilization, low
defects,on-time shipments- and the managersare pleasedwich their achievements.
However, when we get managersto change their focal plane from their assetsand
their organizationto look at the product itself and what is actually happening on its
long journey, they immediately realizethat the performanceof the entire value
stream is abysmallysub-optimal.Indeed, most wonder how they have worked for
years in traditionally compartmentalizedoperationsand somehow failed to notice
the waste everywhere.Then they wonder what they can do about the mess.
And that is the big challenge.Managersfind it easyand fun ro draw extended
current state maps.And this is a critical first step becauseit raisesconsciousness.
But providing a managementtool that permits the waste to be removed permanently
by achievingsuccessivefuture stateshas been much harder.It was only when we
first saw Mike Rother and John Shook drawing future sratevalue srreammaps ar
the facility level and coupling these maps to an action plan for implementation that
we begin to see how we might guide groups of managersfor all extended value
streamsare sharedacrossmany departmentsand firms - toward similar results
for entire streams.
In this breakthroughguide we presenrour method. It proposesa progression

through two "future states" to an "ideal state" after the current state is jointly
identified and agreed.The first future state will be relatively easyand createsrhe
setting for the second.The secondfuture state is considerablyharder and reaching
the ideal statewill require a major commitment by all the firms touching the product.
Yet we believe that the savingsin time and effort and the improvements in qualiry
at every step will encouragereams to keep going once they learn how to jointly
optimize the sharedstream.
Eventually,with some creativethinking about processand information technologies,

we believe that most value streamscan be compressedand smoothed to a point
where a large fraction of the original steps and practicallyall of the throughput time
are eliminated.This will be a true revolution and the value streamteam getting
there first will have an overwhelming competitive advantage.More important in
most cases,the team getting started first and making the quickest progressalong
the path will have a continuing comperitive advantage.
The key is to summon your courage,form your cross-departmentand cross-company

team, and changeyour focal plane to focus on the product. Then learn to see rhe
whole and ... get going to take out the waste!We will be urgingyou on and waiting
to hear about your problemsand successes.
Dan Jonesand Jim Womack

Ross-on-Wye,Herefordshire,L.lK
and Brookline, MA, USA
March 2002
What is Extended Value Stream Mapping?
An extended vah-restreamis simply all of the actions- both value-creatingand
wasteful- required to bring a product from raw materialsinto the arms of the
customer.T'he relevantactionsto be mapped consistof two flows: (a) orderstravcling
upstreamfrom the customer(clrfrom the salesdepartmentwhen forecastssubstitute
for confirmed orders)and (b) productscoming down the value streamfrom raw materials
to cLrstomer.
Tbgethertheseconstitutea closedcircuit clf demand and response.
Value stredm mapping is the simple process of directly obseruing the flows of
information and materials as they now occLtr,summarizing them uisually, and
then enuisioning a future state with mwch better performance.
Maps of the extendedvalue streamcan be drawn fcrrproductscurrently in production

'I'he
or for future products being planned. only difference is that the "current state"
map for a product in productionshowsconditionsas thcy cxist today while thc
"current state" map for a ncw product shclwsthe "businessas usual" approachto
makingthe productcomparedwith alternative"future states"and "ideal states"
with lesswasteand greaterresponsiveness.
Se l ecti n g a P ro d u ct Family
The whole point of value streammapping is to disaggregate operationalissuesro
the level of specific products,where they can be more easily acted on by managcrs.
Tir do this you need to start at the furthest point downstream(toward the customer)
to be mapped and to dcfine product families at that point. Typically a product family
will includea groupof productvariantspassingthrough similarprocessingstcpsand
usingcommon equipmentjust prior to shipmentto the customer.F-orexample:
o In a power tools business,a product family might be medium-sizcdelectric

drills utilizing a common chassisand passingthrough a common assemblycell
as the last manufacturingstep,evcn though the finished product has many
different fcaturesand customerlabels.Alternativelvthe mapping team might
define the product family as the motor going into the medium drills and map
back upstreamfrom that point.
o In the auto industry,a product family might be a car platform (e.g.,Ford Explorer
and lVlercuryN4ountaineer)produced in an assemblyplant. Alternatively it might
be a major componentsuppliedto auto assemblers - ls1'ssay an nllglnxgel-
using a common designarchitectureand assembledin a cell, but with varying
power outputs and with different attachment points for different vehicles.
PARTI: GETTINGSTARTED
. In the aerospaceindustry,a product family might be an entire airframe
(e.g.,the Boeing 737 or Airbus A320).Alternatively,it might be a major sub-
assembly,for example the vertical tail. The sub-assemblymay have many
variantsfor different buyers of the completed aircraft.F or example the tail
structure might incorporatedifferent aerialsand fairings for navigationand
communicationequipment.And the productswithin rhe family chosenfor
mapping might differ slightly in dimensions.For example,the basicrail
designmight be slightly longer for use on a srretchedairframe.However,
the verticaltail clearlyconstitutesa product family becauseall variants
follow the samemanufacturingpath and have no commonalitywith tails
for other aircraft,even if they are made in other areasof the samefacilities
by the samefirm utilizing partsfrom the samesuppliers.
Note rhat the sameproduct family may be supplied to a number of different

end customersand have cosmeticdifferencescausingthe casualobserverto
overlook product commonaliry.Neverthelessfrom the standpointof the firm or
facility at the downsrreamend of rhe map, the product is clearly a family.
Note also from the chart below that firms along similar value streamsoften
have complex relationswith eachother. Delta suppliessimilar componentsto
both Summa and Zenith; Omega fabricatessimilar parts for Delta and
Azimuth; and Illinois Steel suppliesmaterialsto Theta and Zeta as well as
Omega. Extended mapping cuts through this clutcer to focus on jusr one
streamin order to think of improvementsthar can eventually apply to all streams.
Final Component Part Rarru Material

Assembly Assembly Production Production
Summa Apogee Kappa Asia Steel

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Platform B
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Pr o d u ct F a mi l i e s fro m Summ a' s Per spectiwe
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Becausethe product family is defined from the vantagepoint of the final srep mapped, the
conceptis essentially"fractal".That is, you can define product families from many starting
points and map backwardup value streamsof varying lengths.For example,whar appearsro
be a product family for an armaturemanufacturer(largearmaturesfor alternators)is simply
one of many component parts for an alternatorproducer (who might define a product family
as largealternators).And the largealternatoris just one component among many from the
standpointof the auto assemblerwho defines product families in terms of vehicle platforms.
As you selectyour start point and move back upstream,it is best for your first map to follow
the path of a single family and a single component in the product. This is becausethe first
obiectiue of extended mapping is to achieue a breakthrougb in shared consciousnessof
waste and to identify systematicopportwnitiesfor eliminating the waste.It is highly likely
that the wastesidentified by following one component back upstreamwill occur in roughlv
equal measurein every componentgoing into the finished product.The alternativeapproach
of mapping the value stream of every component going into the product is time consuming
and costly and we have found that it overwhelms managerswith too much data.
In subsequentrounds of mapping - if the collaboratorsin the mapping processfind ways

to work together and achieve useful results- additional maps can be createdfor many or
all of the componentsand parts going into a finished product. But to ger srarred,keep it
simple and focus first on achieving a breakthroughin raisingyour team's consciousness!
D e t e r mi n i n g a Ma n a g eable Field of Vievv
The ideal map would truly show the whole. 1'hat is, it would srartwith rhe end cusromer
who usesor consumesthe product.The map would then follow the product all the way
up the value streamto moleculesin the ground (or in the rccyclingbin), showingall thc
wasted actionsand information lossen route. However, just as trying to map all of a
product'sparts back upstream is overwhelming, trying to see roo far with your current
vision may be fruitless. We advisc novice mappersthat a lor can be learncd by looking
one or two facilities and firms upstrcam from wherever you start.This is the minimum
s c o p eo f c x t e n d c dm r p p i n g .
Single Facility Field of Vievv - Learning to See
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Even at this minimum scope,note that thc scaleof mapschangesdramaticallybetween
Learning to See(facility-level maps) and Seeingthe Whole. The facility boxes that are the
primary units of analysisin this breakthroughguide are the samesizeas the individual process
boxes("stamping", "welding", "assembly")in Learning to See.Vastexpansesof people and
equipment within facilitieshave been shrunk into tiny boxes so we can see the big picture!
In this guide, we will draw mapswith an intermediatefield of view, startingat the distribution
centerfor the completedproduct and proceedingupstreamto raw materials(e.g.,rolls of steel).
For thosc with more ambition and with full cooperationfrom upstreamfacilities and firms,
it is both possibleand desirableto startnear the end customerand work far back upstream
toward raw matcrials.
Multiple Facilities Field of Vievv - Seeing the Whole
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Choosingt a Leader and a Value Strearn Team
We hope that you are experiencedwith facility-level mapping as describerl in Learning
to Seeand have appointed value stream managersfor all of the value streamswithin
your facilities.We are convinced that this is critical to gain the full benefit of mapping
at the facility level. What's more, the knowledge of facility-level value stream managers
will be invaluable for quickly drawing accuratemaps of the extended value srream.
However,by their nature,extended maps crossfacilitiesand firms. Supposemanagersare

in place for the segmentsof the stream within each facility. Who has the responsibility
for directly managingthe total stream acrossfirms, to connect the maps and lead the
improvement process?The reality in most caseswill be "no one". So there is a need for
a new type of managerwho we will call the "Product Line Manager" (pLM).
The Product Line Manager

This individual in the most downstreamfirm needs to be much more rhan a technician
concernedwith one facility. Indeed, for optimal resultsthe Product Line Manager needs
to be a businessmanager.This means"business"in the senseof taking responsibility
::::,rr:::,r',rp:i. for making money and growing market sharewith the product family in question.And
:
l it means "manager" in the senseof looking concretelyat the preciseactionsthat need
to be taken all along the value stream to remove wasre and cost while improving quality
and responsiveness.
The most successfulfirms we have encounteredusing these techniques have Procluct

Line Managerswho think about product marketing and engineeringas well as production
and purchasing.With all the elementsof marketing,design,producrion,and supply chain
under his or her oversight,this individual is in a unique position to judge the performance
of the many functions touching the product. Indeed, as we will see in a moment, a
continuing assessmentof functional performancealong with preciseprescriptionsfor
improvement is one of the most important benefits of product line management.
However, we do not usually recommend what is sometimescalled a "product team"

structure in which all of the engineering,operarions,purchasing,and marketing
employeessupporting the product are put on a dedicated team. Doing this causesa
large amount of organizationaldisruption during the transition and this structure still
does not addressthe behavior of upstreampartner firms. Whai's more, it is really not
necessaryin most casesif the P[,M takes an energeticapproachto the job.
Perhapsche best known example of what we are talking about in the
manufacturingworld today is the Chief Engineer for a car platform
at Toyota (a job position also called the shusa).This individual is
widely known by everyone in the company and takes responsibility
for the successof the product in terms of return on investment and
market share.Yet the Chief Engineer,like our proposedPLM, actually
has no direct authority over marketing (which is done by a large
marketing department),over engineering(which is done by the
variousparts of the large engineeringdepartment),over production
(which is done by the operationsdepartment),and over suppliers
(who are managedby the purchasingdepartment,and the production
controland logisticsdepartment.)Insteadthe Chief Engineer,working
with a tiny group of assistants,is the one person who can "see the
whole" and think about the necessarycontributions from every
functional activity and every upstream firm to createand deliver
a successfulproduct as judged by the end cusromer.
The PLM in the most downstreamfirm will be even more effective

if there are similar individuals in each of the upsrreamfirms so that
for any product a quick evaluationcan be conducted by a small
group composedof one PLM per firm.
But this is not likely to be the case.Indeed, in today'sworld very

few firms have true PLMs. (One of our concernsin preparingrhis
breakthroughguide has been that the very managersmosr able ro
benefit from it don't currently exist in many firms!) Thus to get
started,someonefrom one of the functional areasin the most
downstreamfirm will probably need ro take the lead and aim to
achieve a breakthroughin consciousness.
This individual probably
will have little formal authority for overseeingrhe value stream and
will therefore need to lead by example and by raising hopes about
possiblejoint gains.
We can't guaranteethat anyone anl.wherealong a value stream can

succeedin raisingevery participant'sconsciousness
to transformthe ''.
entire stream.We can guaranteethat anyone anywherecan raisethe
important issuesand make construcrivechangea possibilitywhere ir
was previously impossible ... if they have the courageto acr.
To be successful,the mapping leader needs to be someonewho can gain the respect
of upstreampartnersby conductinga rigorousand fair process.Logical candidatesare
from purchasing,production control, logistics,operations,or a processimprovement
function like quality or processengineering.Any of these can work. However,
assigninga buyer from purchasingto be a mapping leader can lead to problems if
upstream participantsbelieve that the real purpose of mapping will be to uncover
'Ihus
waste at suppliers,followed by demands for immediate price reductions. a
purchasingfunction will probablyneed to assignmapping leadershipto someone
from its supplier development group if all participantsare to be convinced that the
processis fair, balanced,and aimed at win-win-win outcomes.
The value streamteam needs to include representativesof all the firms and facilities
that shareownership and managementof the stream.Ideally, it would also include
the relevant departmentswithin each firm - sales,operations,production control
and logistics,purchasing,manufacturingengineering,informationmanagement,and
product engineering.However, this can make the team too large to walk the value
'fhus
streamtogether,which is often a critical learningexperience. we generally
recommenda small team with a minimum of one representativeper company.
The team can query the functions supporting the value stream as necessaryto fill
in missing information.
The Wrong Role for Consultants and $taffs

A n u n d e r s t a n d a b lien c l i n a t i o ni n a n y f i r m w i t h b u s y l i n e m a n a g e r s
-and this surely includespracticallyall firms-is to delegatethe
task of creatingvalue stream maps to outside consultantsor to
fi'|)
internalstaff groups,typically in operationsplanning or process
improvementdepartments.However,in our experiencethis is
misguided.The findings of the consultantor staff expert are
rarely credibleto the managerswho need to take action and the
ilil -L
consciousnessraisingexperienceof walking the value stream
ilil | t
flll a
together-discovering the waste and jointly agreeingto a cross-
firm action plan-simply never happens.A beautifulreport is
produced by the consultantor staff team-and in our experience
the beauty and precisionof the maps is generallyinversely -
\J
proportionalto their usefulness-but the findings are then fildd
away and soon forgotten.
Remember:Only managerstaking clear responsibilitycan fix

the mess. So the same managersought to draw the maps.
T a ki n g a Wa l k
Once designated,the leaderand the team need to take a walk together
along the value stream,draw the current statemap, and then ask, "Which
stepscreatevalue?,Which stepsare waste?,Why is order flow so erratic?,
Why is quality so erratic?,Why are deliveriesso erratic?,How can value
be enhancedfor the end-customer?"
Once the map is drawn so that the current state of an existing value
stream is known precisely,it's time to createthe first of two "future
state" maps that remove wasted stepswhile stabilizingprocessesand
simplifying information flows. Future State 1 achievesthe luture state
shown in Learning to Seewithin each facility touching the product.
This means introducing continuous flow (as describedin Creating
ContinwowsFlow) wherever possibleand instituting smooth, leveled
pull between the areasof continuous flow.
Future State 2 then introducessmooth, leveled pull with

frequent replenishmentloops between every facility
touching the product. In the process,most
warehousesare eliminated, or converted
to crossdock operations.
An Ideal State may then co-locate

at one site all of the activities required
to proceedfrom raw materialsto finished
goods,in the processeliminatingpractically
all transportlinks and needs for information
management.
You may or may not find this particularsequence

appropriatefor your own value streams.In particular,if
you are mapping a new value stream for an entirely new product
you will probably want to skip directly from the current (business-
as-usual)state to an ideal state.We follow the three-step.sequence,
beginning with Future State 1, in this breakthroughguide because
we believethat this is likely to be the most typical approach.
Tvvo Final Benefits
A Diagnostic for Functions

As teamsdraw their current statevalue streammaps,they are likely to make a surprising
discovery.Most problems identified along the value srreamwill trace direcrly to the
performanceof variousfunctions - information technology,production control, logistics,
product engineering,operations,purchasing.What's more, weaknessesin functional
performancediscoveredin the sample value streamwill almost certainly be present
in every other value stream the firms touch. In our experience,the functions want to
support the value stream for each product. But they have a hard time seeing the
connection between their activities and the needs of the product.
Thus an important benefit of the mapping processin addition to a breakthrough

in consciousness
about the magnitude of waste and the enormousopportunities for
improvement - can be to give much clearerguidance to each function about its role
in supporting value streams.A real bonus can be achieuedif the improued functional
performance can then be applied to all ualue stredms within the participating
firms.
A Diagnostic for Relations Betrrueen Firms

As teams start mapping, they are likely to make yet another discovery.Today we all use
languagestressingpartnershipand cooperationbetween firms sharingvalue srreams.
However, mapping teams in most caseswill discoveran enormousgap between these
high-level principles of collaborationand the day-to-dayreality down ar the level of
each value stream.If the value stream map showswidespreadconfusion and counter-
productive actionsbetween firms at the value stream level, it will be obvious that
"partnership" at the top isn't translatinginto competitivenessat the bottom.
Fortunately,value stream mapping provides a clear and consistentlanguagefor firms

to start an intelligent conversationwith each other about the root causesof their shared
cost, quality, reliability, responsiveness,
and communicationsproblems.(Indeed, we
believe a relentless,fine-grainedfocus on improving each value srream,rather than
high-level agreementon principles, is what has given Toyota its edge in creating the
world's leanestsupply base.)A real bonus can be achieuedif the practical lessonsof
sbared ualue stream management can then be applied by each'firm to its relations
with its other customers and swppliers.
The Current State Map
With the basic principles of extended mapping in hand, it's time to accompanya value
streamteam creating a map of the current state for a specific product family. This map
will characterizethe value stream as it is today.
We've chosento focus on a high-volumeautomotivecomponentoffered with a small number

of options- a windshield wiper consistingof a blade holding the actualwiping edge and the
arm attachingthe blade to the vehicle. This product is similar in complexity and variery to
the steeringcolumn bracket used to illustrate Learning to See.
We've decided to map only an intermediate portion of a total value srream,which runs its
entirety from the end user (you in your car) at the downsrreamend to raw marerials(iron
ore in the earth) at the upstream end. The portion we will map srartsat Alpha Morors, rhe
final assemblerof the finished vehicle, toward the customer end of the value stream.We
then proceedback up the streamthrough che facilitiesof Beta Wipers and Gamma Stamping
to the shipping dock at Michigan Steel, a raw materialsservicecenter.The five-member
team, from the four firms sharingthis portion of the value stream,will be led by the head of
supplierdevelopmentin the purchasingdepartmentat Alpha Motors and includesrhe product
line managerand the assemblyplant managerat Beta Wipers,the value streammanagerfor
this product family at Gamma Stamping, and the salesmanagerat Michigan Steel.
Windshield W-per Valrre Strearn Tearn

Information
flow
Michigan Steel Gamma Stampers Beta Wipers Alpha Motors
f ProductLine Head of Supplier

Value Stream I
f s.r". Manager Manager
Manaoer Development
(Team Leader)
+ f ,,"n.*t*un",
I
Material
flow
PARTII: THE CURRENTSTATEMAP 11

Windshield Wiper Assernbly ancl Fabrication path
$
\B
.,
f
.--
brackets
stiffenerand wiping edge
windshield wiper Assembly and Fabrication Steps

A. Rolled steel stamped into blade
spine
B. Four brackets attached to blade
spine
G' Wiping edge attached to blade spine
and brackets assembly
D. Blade assembly attached to arm
E. Assembled wiper attached to automobile
Before we start mapping, let's look at an exploded view of this product showing the parts
going into the wiper and its fit-point on the end product. Note that we will only map the
circled areain this initial map. This is to keep the map simple and to concentrateinitially
on raisingeveryone'sconsciousness
of the extended value stream.
.---
arm components

our windshield wiper comesin two specifications- high trim and standard
(HT and sr) - and in two sizes- small and large (s and L) -
to fit
two different vehicles (A and B). The right-hand and left-hand wipers
are identical on the vehicles in this example.The trim levels differ only
in the paint - a matte-black finish for the standardtrim vehiclesand a
glossy-blackfinish for the high trim models.The designsfor the two
models differ only in the size of rhe parrs,not in their number or basic
design.This means that the wipers are inrerchangeablefrom a final
assemblystandpoint becausethey use the same fit points and require
the same installationtime. The wipers clearly form a product family
becauseall of the actionsoccurringupstream- component assembly,
painting, and stamping - are in the same processsequencein the
same firms and use the same processingequipment with a few tool
and fixture changes.
with the product family clearly identified, the first step for the team is to
"take a walk" along the entire length of the value srreamto be mapped,
recordingthe facilitiesvisited, the transportlinks, every action performed
on the product' all information managementactions,and the time
required. we alwayssuggesrstarting at che customer end becausethe
customeris the point - indeed, the only point - of these materialflows.
No product should be advancingthat the customer doesn't wanr and
nothing should be happeningthat rhe cusromerdoesn'rconsiderof value!
For the wiper example, the list of actionson the product is shown in the
following list. Note rhat we have numbered all of the steps (73) in the
left hand margin of the list and comparedthese with value creating
steps (8) in the first column on the right. We have also recordedthe total
elapsedtime (total product cycle time) which sums the time required to
conducr all of the srepson a product (44.3 days) and compared this time
with the actualvalue crearingtime (54.7minures),which is the sum of
only the value creating steps.
Ph y s ica l A cti o n s R e q uir ed to Gr eate a W indshield W iper
Total Steps Value Total Value

Creating Time Create
Steps Time
Raw Materials Supplier:
Michigan Steel, Dearborn Heights, Ml
1. Load coils for twice weekly direct ship 10m
Transport Link 1
2. Directship (truck),Tonawanda,NY (500 miles) 8h
Second-TierSupplier:
Gamma Stamping, Tonawanda, New York
3 . U n l o a dc o i l s 10m
4. Receive& create ticket 10m
5. Store coils 14d
6. Conveycoil to Stamping Press1 10m
7 . M o u n t o n c o i l r o l l e ra n d f e e d p r e s s 5m
8 . S t a m p i n i t i a l( f l a t )s h a p e 1s 1s
9. Accumulatestamped parts during run 4h
10.Convey parts bin to storage 10m
1 1 .S t o r e p a r t s 48h
12.Convey parts in bin to Stamping Press#2 10m
13. Load parts in magazine,auto feed to press 10m
1 4 .S t a m pf i n a l ( c u r v e d )s h a p e 10s 10s
1 5 .A c c u m u l a t ep a r t sd u r i n g r u n 4h
16. Convey parts to storagearea 10m
17. Store parts 48h
18. Convey parts to paint shop 10m
19. Rackparts on moving conveyor,clean, 130m 52m
d i p , p a i n t& b a k e
20. Remove parts,inspect,sort & accumulatein bin 2h
21. Convey parts to storage 10m
22. Store parts prior to shipment 48h
23. Load parts for twice weekly direct ship 10m
Transport Link 2
24. Directship (truck)to Harlingen,TX (1500 ols-Slrfi 96h
First-I'ierSupplier Warehouse:
First-lrer
Har,insen.
rX Sl*wt(.
/rq$' .,;Kar-. b
T:tH,ffis, /r"gqo;.f..1*$ 10m

26.Formallyreceive \? V\F' . cnr$)lo'"
-
10m
27. Store Parts D - ' ' n '' i ! 48h
28. Retrieveand load truck for daily direct ship 10m

Creating Time Create
Steps Time
Transport Link 3
29. Directship (truck)to Reynosa,Mexico 6h
( 1 0 0m i l e sw i t h q u e u e a t b o r d e rc h e c kp o i n t )
First'lier Supplier Assembly Plant:

Beta Wipers, Reynosa,Mexico
30. Formally receiveand move to storagearea 10m
31. Store in receivingstoragearea 48h
32. Conveyfrom storageareato first assemblystep 10m
33. Store at first assemblystep 8h
34. Insertfastenerclip and securewith pin 10s 10s
35. Accumulateparts in first assemblystep 4h
36. Convey parts to second assemblystep 10m
37. Store at second assemblystep 8h
3 8 . C l a s pw i p e r b l a d ea s s e m b l yt o s u b a s s e m b l i e s 10s 10s
39. Accumulateparts in second assemblystep 4h
40. Convey parts to third assemblystep 10m
41. Store at third assemblystep Bh
4 2 . I n s e r tw i p i n g e d g e i n b l a d ea s s e m b l y 10s 10s
43. Accumulateparts from third assemblystep 4h
44. Convey parts to inspection,test & pack step 10m
45. Store parts at inspection& test 8h
46. Conductinspection,test & pack in protectivesleeve 20s
47. Accumulateparts at pack 4h
48. Convey parts to shipping dock 10m
49. Store awaiting shipment 12h
50. Load truck for daily direct ship 10m
Transport Link 4
5 1 . S h i p b y t r u c kt o H a r l i n g e nT, X 6h
( 1 0 0m i l e sw i t h q u e u e a t b o r d e rc h e c kp o i n t )
First-TierSupplier Cross-Dock:
Beta Wipers, Harlingen,TX
5 2 . U n l o a dt r u c k 10m
53. Cross-Dock 10m
54. Store awaiting full truck 12h
5 5 . R e l o a dt r u c k f o r d a i l y s h i p 1Om
Transport Link 5 l
56. Ship via multi-pick-uproute (truck)El Paso,TX 96h

{ 6 0 0m i l e s )
Greating Time Create
Steps Time
Car Company Cross-Dock:
Alpha Motors, El Paso,TX
5 7 . U n l o a dt r u c k 10m
58. Cross-Dock 10m
59. Store awaitingfull truck 12h
6 0 . R e l o a dt r u c kf o r d a i l y d i r e c ts h i p 10m
Transport Link 6
61. Directship to West Orange,NJ by truck 96h
( 2 0 0 0m i l e s )
Car Company's State Street Assembly Plant:

Alpha Motors, West Orange, NJ
62. Formallyreceive 10m
63. Conveyto storagearea 10m
64. Store awaiting need 48h
65. Conveyto kitting area 10m
66. Transferto assemblybins 10m
67. Store in assemblybins awaiting need 2h
6 8 .A s s e m b l ew i p e r b l a d ei n h o l d e rt o a r m 1m 1m
69. Attach wiper arm with blade to vehicle 1m 1m
70, Line off vehicle and test 10m
7 1 . S t o r ef i n i s h e dv e h i c l e s 12h
72. Load train for daily direct ship 2h
Transport Link 7
7 3 . S h i p t o C l e v e l a n dD i s t r i b u t i o nC e n t e rb y t r a i n 12h
( 5 0 0m i l e s )
Summar1y of Physical Actions
Value
Total Greating
Steps 73 I
Time 44.3Days 54.7 Min.
Distance 53OO Miles overT TraneportLinke

L e a rn i n g to S e e V alue
As we write down the actions,the ability to distinguish value-creatingsrepsfrom
currently necessarybut wasteful steps and value-creatingtime from currently
necessarybut wasted time is critically important. The enormousgap between total
time and value-creatingtime and between total actionsand value-creatingactions
is the opportunity the value stream team must seize.
Given the importanceof telling the difference between value and waste, it is not
surprisingthat we often encounter readersand audienceswho are anxious about
their ability to categorizeactionscorrectly.Actually, it is very simple. Put yourself
in the position of the consumerand ask if you would pay less for the producr or be
lesssatisfiedwith it if a given step and irs necessarytime were left out.
In the caseof attachingthe wipers to the vehicle in the Alpha assemblyplant, the
answeris clear.Consumersdo not expect to receive their vehicles with the wipers
in the front seat,accompaniedby a polite note stating, "Some assemblyrequired".
The final attachment step clearly createsvalue for the customer.So do the seven
actionsof stampingthe metal arms,painting them, and sub-assembling
them prior
to attachment on the vehicle.
By contrast,look at the many movementsof the product within each plant between
processsteps,the long transportlinks between plants, the warehousingand cross-
docking activities along the value stream,the numerous testing and inspection
steps,and the repeatedpacking and unpacking of the product. Would you, as a
consumer'be less satisfiedwith your vehicle if these currently necessaryactivities
could somehow be left out? Of coursenor. And would you be happier if the car
company could get you the model you want with the trim level you wanr quicker
becausethese steps were left out? Of courseyou would. Indeed, the more these
stepscausea delay in receiving exactly the product you want, the lessyou probably
are willing to pay for it. Far from creatingvalue, these shipping, packing, inspecting,
and warehousingactionsactually destroy it!
D r avvi n g a U se fu l Map
The long list of steps,categorizedby waste and value, is highly provocarivebecause
it helps the team realizethe enormousopporrunity for savings.. What's more, rhe
ratiosof value-creatingtime to total time (54.7 minutes out of 6S,792or 0.08%) and
of value-creatingstepsto total steps(8 out of 73 or ll%) and the amount of transport
distance(5300 miles) are quite typical for discretemanufacruredproducts in the
world today.Our example is the norm, not the exception,and similar ratios are
likely to emerge from any maps you draw.
18
First Vievv of the Gurrent State Map
Showing the Gustorner
-zLzL-1
I Atpha I
I Dietribution I
I Center I
Cleveland,OH
ar6oEi--]
640^
| |
| 4265r I
| 214Hr I
| 32ob I
| 213er I
| 1o7Hr I
However, for this information to be useful we need to simplify it and put it in a form
managerscan act on. The best way to do this is to group and summarize the data by each
of the facilities and transportlinks the product encounters.Again, the place ro starr is with
the customer,at the most downstreamend of the map. In this case,the customer is the
Alpha Motors Distribution Center, which interactswith car dealersto get end consumers
the products they want. We'll representthis organizationwith a facility icon placed on rhe
right side of the map. Underneath this icon we'll draw a databox recordingthe customer
requirement for size and frequency of shipmenr.
Note that this facility is a cross-dockingoperationwhere vehiclesare sorted and sent

onward as quickly as possible to several regional storageareasacrossNorth America.
From there they go to auto retailersand then into the hands of the customer.Thus our
intermediate-viewmap stops considerablyshort of the total value stream map thar ir may
be useful to draw at some point in the future.

a-L-14
lVichiganSteetl
ferviceco. I
DearbornHeights,
4--14
Gamma
lbetaWipers I
I WarehouseI
I I
stampins I betaWipereI
I lrr I Agsembty
I I I
fonawanda,NY |.t l Reynosa,Mexico
Harlingen,TX
To get from raw materialsto the Alpha Distribution Center, the procluctflows through
seven assembly,fabrication,warehousing,and cross-dockfacilities.These are:
o Alpha Motors' State street Assembly Plant in west orange, New
Jersey
o Alpha Motors' Cross-Dock,for many componentsfrom many suppliers,
in El Paso,'Ibxas
o Beta Wipers' Cross-Dock,for parts sent from severalplanrs ro many
customers,
in Harlingen, Texas
o Beta Wipers' ComponentAssemblyPlant in Reynosa,Mexico
o Beta Wipers' PartsWarehousein Harlingen, Texas
o Gamma stamping's stamping and Painting plant in Tonawanda,
New york
o Michigan Steel'sServiceCenter in Dearborn Heights, Michiean
Gurrent State Map Shovving All Facilities
ZLzL-1
| ,"llr,lf""^
Center
|
I I
Cleveland,OH
1160| orv I
| 640A I
| 426er I
| 214Hr I
I zzoo
213er
I
| I
| rc7Hr I
I betaWipers I
I Cross-Oock I
-=
lhl
I +l
West Orange,NJ
Harlingen,fX El?aeo,TX
We have createdtwo new facility icons not seen in Learning to See.One is a cross-dock
icon for facilitieswhere productsare not stored but instead moved immediately from an
incoming vehicle to an outbound shipping lane. The other is a warehouse icon for facilities
where incoming goods are sorted and stored before shipment to their next point of use.
(The iconsused in this workbook are displayedon the inside back coverand explainedin
Appendix A.) You may want or need to createother icons,of course,in particularfor
activitiesnot encounteredin our example.Just make sure that everyonc working on the
extended map Llsesthe same icons.

trn;Ww;1
I Warehciuee I
I Gamma I
stampins I I oetaWipersI
I
ll
Tonawanda,NY In
Harlingen,TX
I I
Assembty
I
Reynosa,Mexico
t--RMaa6r'.-l
wrPl1o
h.
RM56 h.
I I wtP41h.
I FG O\. I FG12h
tathrrb"-l 2Shifts
I s;"v.- 5Oavs
I E?E=ro"vt.]
-1 E?E = 1 Dav
Dd".t
a-=2oooppm Defects =
| I 4OO ppm
You will soon discoverthat you can't successfullygather and summarizerhe informarion
needed for improving the value stream without drawing detailed currenr state in-facility
value stream maps for products as they move through manufacruringfacilities.This is why
masteryof the material in Learning to Seeis a prerequisitefor macro-mapping.
We've drawn current scatefacility-level maps for the three manufacturingfacilitiesalong

this value stream- Gamma Stamping, Beta Wipers Assembly,and Alpha Motors Assembly
- in Appendix B of this workbook, and you'll want to append yorir facility-level maps ro
your current state macro map as well. Note that the data box under each facility contains
data on inventories (Raw Materials,Work-In-Progress,Finished Goods),rhe amount of
productive time (the number of shifts per day and the number of working days per week),
the frequency of the production cycle (showing how ofren every part is made, such as
Current State Map Shovving All Facilities
and Data Boxes
/L-L-1
| ,"il?,lf"",
Center
I
I I
Cleveland,OH
l%otD"v--]
| 640^ |
| 42651 |
| 214Hr I
| 32oB I
| 2135f I
| 1o7Hr I
I oetawipersI
I Cross-DockI
| .'---+ a
lsl
1 -l
WeslOran6e,NJ
Harlingen,TX El?aso,TX
RM50 h.
wt?2h.
FG14h.
2?hifts
SDavs
E?E=1Day
Defects =
5P?^
"EPE = 1 Day" meaning "every part every day"), and the defect level (in parrs per million)
as reported by the customer at the next downstreamfacility (or by the customer'sinspector
at the point of shipment in the caseof the Alpha Morors Assembly Plant.)
We have not drawn facility-levelmaps for the Alpha and Beta cross-docksand for the Beta
partswarehouse.This is partly to keep the size of this guide manageableand alsobecausewe
will endeavorto eliminate these facilities altogetheras we move through progressivefurure
states.If your value streamswill require large distribution warehoutesin any imaginable
future for example for serviceparts - or cross-docks,you should also draw maps
of these facilitiesas a guide to improving their performance.Exactly which facilitiesmerit
in-facility maps and in what detail will alwaysbe a matter of judgmenr, so be preparedto
adjustyour approachas your experienceaccumulatesand you encounterdifferent siruations.
PARTII: THE CURRENTSTATEMAP

T h e Ou a l i ty S cre e n
As we look at the data in the facility boxes,we nore a trenclworthy of further crarnination.
At Alpha Motors Assembly the defect rate for wipers installed on rhe vehicle - def'ects
discoveredby a representative from Alpha'sDistribution Division in a final inspectionjust
-
prior to shipment is 5 per million. (SinceAlpha is assembling250,000vehiclesper year
with two wipers per vchiclc, this means that two to three wipers per ycar arc rejccted at
final inspection,usually for scratchesin the finish.) Yer when we look at defects emerging
from Beta Wipers Assembly (asjudgcd by Alpha), we note that there are 400 def'ccrsper
million and when we look at defects emcrging from (]amma Stamping (asjudged bv Beta)
we note that there are 2000 defectivc parts per million. F'inally,when wc look at defccts
arriving ar Gamma from N,lichiganSteel the figure soarsro 10,000pcr million.
In brief, clualityis worseat every step up the value stream,a common phenomenonin
practicallyevery industrytoday.This meansthat to achieve5 clefectsper million (approaching
the Six Sigmalevel of 3.4 dcfectsper million), the prodr,rct
is flowing through a scriesof
qualitv screensin each facility,cach of which resultsin scrapand inspectioncost.The
slope
of this clualitygradient can surely bc reduced in firturc sraresanclit is importanr to nore
carefully the current slope to aid our thinking on how to do this. We therefore recommend
drawinga Quality Screen(asshown below) on the (lurrent Statemap. In this casewe have
placedthe diagramin a convenientspot in the rowerright-handcorner.
O.rrality Screen
ppm
defects
2000
r500
1000
500
MICHIGAN GAMMA BETA ALPHATO

TO GAMMA TO BETA TO ALPHA ALPHAPC
24
Mapping the Transport Links
'fhe
next step, oncc the facilitv-level maps are drawn and the data have been summarized,
in facility boxes,is to add the transportlinks between the facilities.Tb do this, you may
need boat, train, and airplane icons,in addition to the truck icon frctmLearning to See.
In this example,we will use the airplaneicon with a dotted line for shipmentsexpedited
by air and a truck icon with the same stylc of dotted line fr-rrthose expedited by truck. Thc
numbersin the regularshippingicon (a truck or a train) show the fiequency of shipments
(e.g.,"1 x day" : on shipmcnt per day) while the number in the expeditingicon shorvs
the number of costlyexpeditedshipmentsin the past year (e.g.,"2 x year" : rwicc a year).
With these data in hand, we are ready to complete the physicalflow portion of the map Lry
drawing in the normal product flows between facilities, using broad arrows.Notc that thcse
arc striped,"push" arrowsbecauscproductsare mclvingaheadat thc commandof a centralized
informationsystemand not necessarilyin accordwith the immediateneedsof the next
downstreamfacility.l.lnder eachof the transportlinks we recordthe distancein milcs, the
shippingbatch sizc,and the percentageof defectivedelivericsas reportedbv thc cusromcr.
As thcse flows are drarvn,the team shoLrldnotc one additionalpoint - the trcnd in
def'ectiveshipments:latc, early,or incorrect(the wrong product or in the wrong amount).
As is alscltypical in most industriestoday,we note that the furthcr up the value streama
facility is, the morc likely it is to make defectiveshipments.This situarionis analogousto
the quality gradientand equallyworthy of improvementin future sraresbecauseever_v
defectiveshipmcnt generatcscorrectioncostsdownstreamand perturbsthe schcdule.Fclr
economyof spacewc have summarizedthis trend in the samebox as thc qLralitvdata on
the Current Statemap, changingthe label to the "Quality and Delivery Screen".
O.ualitlz and Delirrerlz lScreen
PPM
DEFECTS
2000 % DEFECTIVE
DELIVERIES
1500 10
1000
500
MICHIGAN GAMMA BETA ALPHA TO

TO GAMMA TO BETA TO ALPHA ALPHA PC

The "Bottom Line"
Finally, we can draw a time-and-stepsline along
the bottom of the map. Note that
the first figure above each segment of this line is the
total rime within each facilitv
and along each transportlink, while the figure in parentheses
ro the right is the
value creating time. The first number below each segment
of the line showsthe
total actions(steps)taken on the product in each facility
and transportlink, with
the value creating actionsshown to the right in parentheses.
Note that information
needed for each facility is contained in the .,steps,, .,Time,,
and summary boxes at
the ends of the time-and-stepsrines on the indivicluar
facility maps.
-2LzL-1
luichisansieetl
Sewiceco.
I I
DearbornHeights, Ml
I SteelCoits I
_N-
:\
. l- 2"1_
o
. lweekl I
u---*-
t\
ra;L
laf"a"lal r1,l
t.\
4-/14 I P,, l-l
U-T -2LzL-1
ril-
|Drv+
oooo.or> Gamma
I I
stampins
I I
Tonawanda,NY
rrrrrrr+
3t"w4#+
Reynosa,Mexicot....
RM336h. 1 r^ ' o ' . . ,
a l - ' FRM
f 56 h.
wrP110h.
FG4Ah. wt? 41h.
FG12h
35hifts
z5ntftq
5Davs
E?E=3Davs SDavs
Defec.ts E?E=1Dav
=zoooppm Defects =
4OO ppm
o.3d.
o.25d.
20.6d.(3131e.)
4.6 d. (3o s.)
22(3)
21(3)
Gurrent state shovving all Facilities, Transport Links,
Defects & Delivery, and Time-and-Steps Line
zz't-21--1
| ,"flr,l&,",
I
Center I
I
1 Cleveland, OH
//
/r ,rooio^v
|
|
640^
4265r
-1
|
I
// | 214Hr I
qfil | 32oB
2135r
I
l xDay | I
| rc7Hr I
WeetOrange,NJ
RM50 h.
wt?2h.
2xYear FGIAh
2Shitrs
SDavs
E?E = lDav
Defects =
Sppm
4.Od. 4.Od. o.5d.

o.5d. 1 o.5d. 1 2.Od. (12os.) 1
4 4 11(2)
Ouality and Delivery Screen
.PPM
DEFECTS
defeds
2000 70 OEFECTIVE
DELIVERIES
1500 10
1000
t
,r,',r?*'
s00
0
TO GAMMA TO BETA TO ALPHA AIPHA PC
M a p pi n g th e l n fo rma ti on Flow
The tcam has now completcd mapping the physicalflow of the product but the valuc srream
map is onlv half done. This is for the simple reasonthat if no clrstomcrsignalsa demand
for products from upstream,then nothing will flow. Or at least nothing shor-rldflow! We
thereforc need to go back to the upper right corner of our map and draw the flow of order
and prroductioninformarion going back from rhe customcr.
Howevcr, as we do this we nccd to warn you that mapping the information flow is the
'l'he
hardestpart of the task. salcs,productioncontrol,and operationsgroupswithin most
companiestend to communicatepoorly and a managerwho fLrllytrnderstandsrhe infrrrmation
managementmethods of all thrcc groups is a rarity.Whcn you add the complexity of going
acrossseveralcompaniesand through sales,productioncontrol,and operationsdeparrmenrs
within eachcompany,it's not surprisingthat very feu, line managersseem to have useful
knowledge of how infclrmationis managedon a macro-scalc.
Cliven this rcality, vou shor"rldstart where ordersenter the sysremand follou' the ordcr flor,v
fiom department to department and from information managementsystem to infbrmation
managementsystem,first through the most downstreamfirm and then upstream through
the supplierfirms. Bc sure to use a pencil as you skctch informationflows and kccp an
eraserhandy! What's more, if you can, requcstthesedata aheadof your visit becausemany
facilitiesand IT departmcntsdo not have them readilv at hand.
To actuallydraw the informationportion of the extendcd map wc will need an additional

icon for production control, which we have drawn in the shapeof a compurer rerminal.The
first of these is for Alpha N,IotorsSalesOrder Bank. At this point orders are aggregatedand
placed in inventory (shown by order queue icons along the information flows). Thcv are
held trntil the weekly salesplanningmeeting that decidesthc specificarionof thc orders
that should be relcasedinto the system,given orders in hand from dcalers.These ordcrs
are then releasedupstream to the following firms and departments:
o Alpha l\{otors HeadquartersProduction Control

o Alpha N,fotorsAssembly Plant ProdLrctionControl
o Alpha NlotorsAssembly Plant Ntlarerials
Control
o Beta Wipers Headcluarters
ProductionControl
. Bcta Wipers AssemblyPlant ProductionControl
o Gamma StampingHeadquartersProductionControl
r (iamma StampingPlant ProductionControl
o Ntlichigan
Steel ServiceProductionControl
2A
In almostall manufacturingcompanies,the salesand prclrlucticln
control departmencsactually
send a seriesof forecasts,schedules,and productionreleasesback upstream.For example,
in the car industry a rhree-month forecasr,a one-month rolling schedule,a weekly fixed
schedule,and a daily shipping releasemight be typical.For our purposes,the impolant
informationis the weeklv fixed scheduleand the daily shippingreleasebecauserhese
actually trigger production in facilities and shipmenrsbetween facilities.These arc the
information flows wc will capture on this map.
If we follow the weekly schcduleand write down the infrrrmationmanagemcntstepsand

the time involvcd, as we did earlicr with physical actionspcrformed on the producr, we
note the following alongthe longestpath.
Information Actions Currently Required to

Manage the Value Strearn
Steps Delays*
Production at Alpha Motors
1. Dealer Ordersqueue in the SalesOrder Bank 10 Davs
2. Tiansmit weekly ordersfrom Alpha SalesOrder Bank
3. Queue at Alpha HeadquartersProduction(lontrol 14 davs
4. Releasevl'eeklyproduction requiremcnts to Alpha plant
5. Queue at Alpha Plant ProductionControl 6 davs
6. Releaseof daily productionsequence
Production at Beta Wipers
7. Tiansmit weekly orders fiom Alpha HQ to Beta He
B. Queue at Beta HQ ProductionControl 6 davs
9. Ttansmit weekly production requirementsto Bera plant
10. Queue at Bera Plant ProductionC<tntrol 6 davs
11. Releaseof weekly productionschedule
12. Beta Plant issuesdaily ordcrsfrom Beta Warehouse
13. Alpha N'Iaterials
control rransmirsdaily requiremenrsto Beta plant
14. Beta Plant ProductionControl issuesdailv shippingrelease
Production at Gamma Stamping
15. Tiansmit weckly ordersfrom Bera HQ to Gamma He
16. Queue at Gamma HQ ProductionControl l,l davs
17. Tiansmit weekly production requirementsto (iamma plarit
18. Queue at Gamma Plant ProductionControl 6 davs
19. Releaseof weekly productionschedule
20. Beta Nlatcrialstransmitsrwice-weeklyrequiremcnrsto Gamma planr
21. Gamma Plant Producti'n control issucstwice-weeklyshippingrelease
* All transmissions
areelectronic
and essentially
instantaneous.

Delivery from Michigan Steel
22- Transmit weekly ordersfrom Gamma He to Michigan Steel
23. Queue at Michigan Steel
14 days*
24' Gamma Materials conrrol transmirs twice-weekly requiremenm
to Michigan Steel
25. Michigan Steel issuestwice-weekly shipping release
Total number of steps

25 steps
Elapsedtime for an order from the first to the last step
58 days
(alongthe longestinformation
path)
Actual processingtime (assuming eachMRprunsovernight) 8 nights
* All transmissions
areelectronic
and essentially
instantaneous.
The Value of Information

Note that we have made no effort to categorizeinformation management
steps as .,value
creating" versus "wasteful", as we did for the list of physical steps.
This is becausefrom
the end customer'sstandpoint none of the information processing
steps creacesany value.
To test this - perhapsshocking - assertion,just ask yourself whether
you would be less
satisfiedwith a product if it could be ordered and delivered to you
with no managemenr
of production and logisticsinformation. Obviously you would not
be less satisfied.Indeed,
you would be more satisfiedif the cost savingsfrom eliminating
information acquisitionand
managementcould be passedalong to you. Yet in the modern era
of automatedinformation
management'most managershave implicitly acceptedthe notion
that information is good,
more information is better, and all possibleinformation is best. In fact,
information fbr
control of operationsis necessarywaste (Type One Muda). Managers
ought to be minimizing
the need for it rather than maximizing it's availability.In the future
sraresand ideal state
we will show how
As the weekly order information flows acrossthe top of the map from
headquartersto
headquarters,it is also flowing from each headquartersdown to plant
production control
departmentswhere weekly schedulesfor each plant are set. For example,
Alpha Motors,
AssemblyPlant ProductionControl takes the schedulesfrom Alpha
Headquarrersproduction
Control, runs them through its computerized Materials Requiremenrsplanning
(MRp)
system (after a delay averagingsix days),and crearesa rolling six-day
ahead schedulefor
the assemblyplant. This scheduleis fully sequenced(e.g,a blue
Model A with high trim,
then a green Model B with standardtrim) and takes into account
iine balancingconstraints.
For example, there are limits on how many Model As or Model Bs
can be run down the
line in a row without overloadingsome workstationswhere work
content variessignificantly
between Model A and Model B. These schedulesare rhen released
to the plant floor.
At the sametime information is being releasedto the floor in each plant it is also being
sent upstream,from plant-level materialscontrol departments,in the form of daily
shipping releases.These are the preciseamounts of each part number the upstream
plant is authorizedto ship to its downstreamcustomer on the next pickup. These daily
releaseamounts are basedon known order lead times and the stocksthought to be on
hand at the downstreamplant.
From this it is apparentthat there are two separateinformation flows coming into each
plant - the weekly schedulefrom each firm's production control department and the
daily releasefrom the customer.Often, these flows are nor preciselysynchronized.So
a third information managementloop comes into play, which is direct communicarion
betweenthe materialshandling departmentin the downsrreamplant and the shipping
department in the upstream plant.
This direct link, usually a telephone voice line, becomesthe real production control
and shippingmechanismwhenevermanagersat the ends of this link overridethe
shippingreleasesand, in extreme situations,productionschedules.They usuallydo this
basedon their direct observationsof emerging shortagesand their judgment about what
to do in response.We have drawn these information flows between the plants with a
dotted line and our information expediting icon - an old-fashionedtelephone.
A Warning on Order Data

As you move upstream don't confuse the customer's official
releasewith the amount each plant actuallymade. Instead
gather from each facility data on what was actuallyproduced
daily over an extendedperiod and compare this with customer
daily requestsin the form of shipping releasesso you can see
the relationof one to the other and the amount of variation in
both. We're alwaysamazedthat companiesawash in information
about what ought to happen do a poor job of recordingand
preservingwhat actuallyhappened.So you may need to dig a bit
or even assign an observerto captureaccurateinformationon l
plant-levelproductionand shipping performance.What you find
will be invaluablefor achievingyour future states.

Gurrent State Map Showing Information Ftovv
-
I-"",,*I
| ?roduction I
Controt I lr-J I +_
f I 6 days
14 dayo f-MEI-I
Cleveland,OH
Fuffalo, NY
tdr
1
V
/v44ffi
luichiqanst,utl
servtceco. frji. I lr{ |
I I 6 daye
, I-1
DearbornHeights, Ml
-<
1""il?,21,"^l
Tonawanda,NY ,zl Control
I
f-- MiF--]
Harlingen,TX
I,
I Dailv
I
7..'''''''''
(, T'"-1-
oooo..>
_/1/L.-1 llr+
-+
,=;,,.;;, ,Trrrr+
Tonawanda,NY
RM336h.
wt?110h.
o
t .2.*.Y"7"...'
1 '...fr..J
Harlingen,TX
Reynosa,Mexicot....-
t E TRM
] 56 h.
wt? 41h.
-.''o..
FG4Ah.
SShifts 25hif'rs
2 UaVS
5Davs
E?E=3Davs E?E=1Dav
Defects Oefects =
=2000p?m 4OO ppm
o.3 d. +.od. o.25d.

20.6 a. (3131e.) 4.6 d, (3o s.)
32
.
I lf'J I
lrN I 10 dayo
Plymouth,Ml 14 daye
birmingham,Ml
t
4
t--:-;----l
I vaity I
Atpha
T
I I
I Dietribution I
Center I
L
<1 Ctevetand.oH
/r-J -
//- PrE?-1
// | +zosr I
// | z+ur I
f--H----l | 32oD I
r k 2135T
'txDay | I
| r c Zn r I
f 1"-L I--r-x{':'- '\

1,3"l.' l.i,' l.l
Crrrr-r>
WeetOrange,NJ
Harlingen,fX
aaaaaaaaaloaaaaaaaaaaaaaaa RM50h
wt?2h.
2xYear FG14h.
2Shifts
5 Days
EPE = 1 Day
DefecI.s =
5ppm
4.Od. 4.O d. o.5 d.
o.5d. 1 o.5 d. 1 2.8 d, (12Oe.) 1
4 4 11(2)

Demand Amplification
For the pasr year,Alpha Motors sales order Bank has senr very stable
weekly
orderscalling for 960 vehicles per day, five working days per week
to Alpha's
HeadquartersProductionControl. And HQ ProductionConrrol has releasecl
level
weekly buckets of orders to Alpha's Assembly Plant Production Control
and to
Beta HeadquartersProduction Control.
The actualbuild still variesfrom the schedule- due to pulling vehicles

out of
sequenceto correct defects or becauseof problems in the paint booth
or due ro a
lack of parts. However, by adjusting the scheduleand working overrime
at the end
of each shift as necessary,rhe output of Alpha Morors Assembly varies
by only
about SVofrom the 960 units planned for each day and all vehiclesbuilt
are shipped
on the daily train to the Alpha Distribution Cenrer.
Dernand Arnplification for Arpha Motors

wipers/day
amplification
2800 ot +l-
2600 4Oo/"
3OVo
2400
2OVo
2200
10o/o
2000
1920
OVo
1800
-1Oo/"
1600
'20o/o
1400
-30o/o
1200
-40o/"
1000
March 15 20 25 30
ALPHA PRODUCTION ALPHA ORDERSTO BETA

Similarly,the mix of models (A versusB) variesby only about 5% daily as does the
mix of wipers (StandardTiim with flat paint versusHigh Tiim with glossypaint.)
On average,Model A accountsfor two thirds of production and Model B one third
while StandardThim wipers accountfor two thirds of demand and High Tiim the
remainder.Thus production and shipments are fairly stable ar rhe cusromer(rieht)
end of our map.
Yet, as we plot the production and order/releasedataback upstream,we nore that

the amplitude of changesin both production and releasesincreasesmarkedly from
facility to facility. Minor variationsin production at Alpha Motors Assembly become
much larger by the time we reach Beta Wiper's assemblyplant, as shown below.
Dernanel Arnplification -nclrrding Beta Wipers
wipers/day amplification
2800 ol +l-
4OVo
2600
30Vo
2400
I
I 2OYo
,
2200 ,
,
,,,
I
I 1Oo/o
I
I
2000 I
,
1920 I
0o/o
I ?J'
l, I tl
1800 1t tl
t
I
ll
1t
'- - 'l--,' l,
ll i;{ I '1Oo/o
I
ll
I I
1600 I
l, I
I , t
-20o/"
I
, I
I
t
1400
-30%
1200
-4OYo
1000
March 10 15 25 30
ALPHA PRODUCTION ALPHA ORDERSTO BETA

BETA PRODUCTION BETA ORDERSTO GAMMA

Bv the time we reachGamma Stamping,the variationsarc very large.Indeed, Gamrna
Stamping'sreleasesto Nlichigan Steel varicd by nearly 40% in the month prior to thc arriyal
of the mapping team.This infbrmationfor Gamma Stampingcompletesthe Demancj
Amplification Screenlbr our current state.as shown below.
'lb
make this verv common phenomenonclearer,we've summarizeclthe maximum perccnrage
changein dailv productionand dailv releasesover rhe past month for each facility and alignecl
them in a simplified Demand Amplification chart as shown at right. We've placed this chart in
a box in the upper left cornerof our Current State map, as shown on the ncxr page spread.
Dernancl Arnplification screen in Grrrrent state

wipers/day
amplification
2800 oI +l-
40o/o
2600
2400
2200
2000
1920 t
ivi
1800 ti"
il-z \
r i 'i -1Oo/o
j
r .'t
ri .j
r'tt'
:'r
:tt
1400 t.
:
i
-40o/o
10
ALPHAPRODUCTION ALPHAORDERSTO BETA

BETAPRODUCTION BETAORDERS
TO GAMMA
GAMMA PRODUCTION GAMMA ORDERSTO MICHIGANSTEEL
'Ib
deal r'viththc erraticorder flow, Beta,Gamma,and NlichiganSteel must either maintain
extra production capacityor carry large stocksof finished goods in inventory or disappoinr
downstreamcustomersa significant fraction of the time. Becausefailing to ship on tirne to
meet customcrneedsis an unacceptablcalternativefor suppliersin thc auto industryand
bccauscextra tooling can be very expensivc,most firms in this industrv includine Beta.
36
Sirnplified Dernand Arnplification Screen
% variation Demand Amplification
GAMMA GAMMA BETA BETA ALPHA ALPHA

ORDER PRODUCTION ORDER PRODUCTION ORDER PRODUCTION
Gamma,and N'IichiganStecl,carryextra inventrlricsro protectthe customcr.T'he cost

implicationsof demand amplificationare therefcrre
apparentin the amount of errra
inventoriesin the value stream.
Whv doesthis growingvariationexist?For the simple reasonsthat productionproblemsoccur

in cvery plant (even the lcanest!),transportproblemsoccuron evcry link, feedbackon crlrrcnr
conditionsand amountsof product on hand is nevcr completelyaccurate,and largeminimum
productionand shipmentquantitiescausevcry small changesin the amountsnecded
downstreamto producemuch largerchangesin the amountsrequcstedand producedupstrcam.
To take the u'orst-caseexample, if one wiper is discovcredto be defective at thc asser-r-rblv

plant and the re-orderamount is just on thc cdge of one new;rallet (containing320 r,ripcrs in
our example)che re-orderwill jump to 2 pallets- or a total of 6,10wipers- even though
only onc additionalwiper is needcd.And this phenomenoncan be repeatedseveralmore
times as the order flows back upstream,creating a wave. The reasonthis wavc grows largcr
as we move upstreamis becauseof the numbcr of schedulingpoints (B) and the length of
the delays(totaling .58days) before infcrrmationis acted upon. Each system recalculatesits
schedulebascdon its own (not very accurate)forccastsand on information from cusromcrs
that is alreadyup to a week old. This is the familiarand dreaded"F orresrerliffect"
documentedby Jay Forrestcrat MIT in the 1960s.
The irregularitiesin the systcm are tlrther exaggeratedby the misalignmentof what the
official schcdulingand releasingsystem(in the ccntralizedcompurers)are sayingand what
the individualsin shippingand receivingjobs are seeingand doing.Then, as misalignments
grow,confidencein the formal systemdeclincsand more and more of thc actualscheduling
and rclcasingmay be done manually despitc the largeinvestmentsin informationtcchnologv.


ORDER PROOUCTION ORDER PRODUCTION ORDER PRODUCTION
-
I ",",*I
| ?roduction I
Controt I lf{ |
I I 6 daya
f-- MRp-l
Cleveland, OH
Fuffalo. NY
I wTkryI
(anffi 1
V
-
lY2n?:"7:"1;'"*" l-t ^,1
6 days
DearbornHeights, Ml
r-]
-,- : -rt\ -;c"ltt-]
- 'fonawanda,NY
r lr,flX,li,"l
<
ts
i ..,.
,zl Control
: I
\
3. . f2"-1---' C MRp-l
l w e e k ll t ' . . t
'. T-U 2a\
'... 19)'\'
\ \
I- 6.-l--
+.+J x
Tonawanda,NY Reynosa,Mexico
RM336h. RM56 h.
wt?110h.
wt? 41h.
FG40h. EClCU
SShrtbs
SDays
25hifts
SDavs
W
E?E=3Davs Shipdarch
E?E=1 Dav I
Defecte | =6?allets
Defects =
=2oooppm 4OO ppm @
o.3 d.
20.6d.(3131s.) 4.6 d. (3O s.)
22(3) 21(3)
3a
Final Gurrent State Map Showing Demand Arnplification
ll'{ r
{-'N,l 10 dayt
Plymouth,Ml 14daye
6irmingham,Ml
i
4
EI
-4-4-1
I ,,Jl?,1,i,
I
center I
I
1 Cleveland,OH
/f ar6ot-6oto-o"
640^ |
////
i"f:i II
|i 32ob
|
a- l-lJ---]
--
.rr,*o^t
'
I
21zgr I
roznr I
rl;-l I-T*-L:'t.'\. \
| 9etaWivers I
I Croes-Oock I
lJ'v l.t l.i'v l.l
Trr) ' -=*-l t
l----,-+
-l
|
I -t TIME
I J
El?aso,TX WestOrange,NJ
Harlingen,TX
n-s\-
t--> RM 50 h. 44.3 day
zl
-z* wl?2h.
| zooo"rA FGIAh
Year 31.Oday:
@ 2Shifte
| = 6?alteto I SOaya
@,"-J4 E?E = 1 Dav 13.3 dayt
Defecl,s =
Sppm
32b1 sec
54.7min
4.O d. 4.O d. o.5 d.
o.5d. 1 o.5 d. 1 2.8 d. (12Oe.) 1
4 4 11(2)
Ouality and Delivery Scrgon
' PPM | 10,000
DEF6CTS
defeds
2000 7o DEFECTIVE
DELIVERIES
1500 10
1000
ttr?*- t
500
o
TO GAMMA TO BETA TO ALPHA ALPHAPC
The Limits of Our Map
As thc team finishesrecordingthese product and information flows, it seemssensibleto
conclude the Current State map at this scopeof mapping. The map does not go all the rvay
downstreamto the customertaking dcliveryof a car at the dealershipand it doesnot go all
the way upstreamto the steelmill, much lessto ore in the ground.Mapping theseaciditional
stepswould doubtlessprovide additionalinsights,but to do so would require largeamounts
of time and expenseto examine organizationswhose behaviorthe team has little prospectof
changing right now. Yet cven within this scope,the map coversa considerablepgrtion of a
lengthy and complex value streamand uncoverssomevery provocativepcrfclrmancefeatures.
What We See When We See the Whole

With regardto physical flows we note that 421.3days and 73 acrionson thc product are
nceded to achieve3,281seconds(54.7minutes)of value crearioninvolving only cight
actions.This meansthat 99.9992%of the elapsedtime and 89% of rhe roralacrigns,
while currently unavoidable,are of no value to the customcr.
we can expressthese findings in terms of lead times and invenrory rurns:
LEADTIME(in days)
Gamma + Beta + Alpha : In-plant*
CurrentState 20.6 4.6 2.8 31.0
+ Tiansporr = Total
13.3 44.3days
TURNS(annually)**
INVENTORY
1149805
*lncludesthreedaysspentin warehousesand
cross-docks.
**Notethatfacilities
with simple,frequentactivities
(e.g.,assemblyoperations) will havehigher
turnsthanfacilities
with manybatchoperations, and individual
facilities
will havehigherturns
thanthe entirevaluestream.
With regardto qLralityand delivery reliability,we nore that end-of-the-valuesrreamindicators

of both measuresare very good (5 ppm and lVa defecdveshipmentsto the customer)br-rtthis
is achieved through a sericsof screenswith significantcosrsand delays.
With regardto information about customer clemand,\\,e note rhat ordcr information is acted
upon up to 17 times and storedfor up to 58 daysin queues.What is morc, six inclividualsin
receivingand shippingdirectly intervenein mediatingorclerflows within an expensive,
tcchnicallysophisticatedinformationmanagementsysremrhat on its face is totallv ar,rtomated.
Evcn with this intervention- and in somecases probablybecauseof it - demancl
amplification,with compcnsaringinventoriesto protcct customers,increasessteadilvto
a very high level as onc looks back up the value stream.
40
Grrrrent State Srrrnrn ary'
Gurrent
State
Total Lead Tme

44.3
days
Value Percentageof Time

( v a l u ec r e a t i n gt i m e o.oB%
t o t o t a lt i m e )
Value Percentageof Steps

(valuecreating steps 11%
to total steos)
Inventory Turns 5
Ouality Screen
(defectsat the downstream end 400
over defectsat the upstream end)
Delivery Screen
(% defectiveshipments at the B
downstream over o/"defective
s h i p m e n t sa t u p s t r e a me n d )
Demand Amplification Index

( % c h a n g ei n d e m a n d a t d o w n s t r e a m 7
e n d o v e r % c h a n g ei n d e m a n d a t
u p s t r e a me n d )
Product Travel Distance 5300

(miles)
Finally,we must note a suddenlyobviouspoint about the performanceof the manv

departmcntsand firms touching the physicalproduct on its 44-dayjourney and order
information on its 5B-dayjourney: However effective the variousfunctions - operations,
productioncontrol, logistics,manufacturingengineering,quality, and purchasing- may be
in achievingtheir own objectives,they are not at all effective in supportingthis product on
its path to the customer.What's more, becausethe processesinv<r.lved
are common to all
productspassingthrough these departmentsand firms, it is highly unlikely that they are
doing a better job of supportingother product families.The functionaldiagnosticaspect
of our extended mapping process- which we believe is its most important contribution
to firms in the long run - therefore revealsseverelymal-performingfunctions all thc wav
up and down the value stream.

If this is an accurateportrayalof the current state- and, becausethe value streamteam has
directly observedit, there is good reasonto think that it is - there are surely opportunities
to speed the accuratedelivery of products to the customerwhile eliminating large amounrs
of cost.To begin to do this we need to specify in rhe nexr secrionthe featuresof a lean
extended value stream that can deliver these benefits.
The Power o f S i mp l i city

"What do you consider the largest [scale]map that would be really useful?"
"About 6 inches to the mile."
"Only six incbes!...Weactually made a map on the scaleof a mile to the mile!"
"Have you used it much?,I enquired."
"It has never been spreadout... the farmersobjected [that] it would cover rhe whole
country and shut out the sunlight! So now we use the country itself, as its own map,
and I assureyou thar it does very well."
- Lewis Carroll, Syluie and Bruno Concluded, Chapter l1
As you experiment with drawing extended maps suitable for your product families,you
may wonder just how much detail to include. We often find that novice reams- like
Lewis Carroll'smyopic mapmaker - want to record every conceivable{etail about the
current state,as well as mapping the flow of every part in the finished product. To make
room for all this detail they even createwall-sizedmaps in corporarewar rooms.
But too much detail in an extended map interfereswith clear thinking about how to
improve the value stream.We therefore urge teams to keep extended maps as simple as
possible.The objective must be to truly "see the whole" by summarizingthe value srream
on a singlesheetof paper (11" x 17" is a good size,43 in Europe) and to use this big
picture to raiseconsciousness among all the value stream participants.Only then can you
identify ways to quickly improve performanceall along the value stream and motivate the
firms involved to optimize the whole.
r-) e^
Principles of a Lean Extended Value Stream
Fifty yearsago Thiichi Ohno at Toyota enumerated seven types of waste in value streams.
You may have them memorized by now but they bear repeating becausethe types of waste
are the same at the process,the facility, and the extended value stream levels of analysis:
Overproduction- Making items upstreambefore anyonewants or needsthem downstream.

Defects- Errors in products,paperwork supportingproducts,or delivery performance.
Unnecessaryinventory - Products in excessof the amount needed to insure meeting
customer needs.
Unnecessaryprocessing - Activities not adding value that could be eliminated, such as
a separateinspeccionstep replacedby a self-monitoringmachine with auto-stop,or flash-
removalafter molding eliminatedwith higher mold tolerancesand better mold maintenance.
Unnecessarytransportation between work sites - Moving products between facilities
that could easilybe consolidated.
Waiting - lJsually production associateswaiting for machinesto cycle.
Unnecessarymotion in the workplace - Associatesmoving out of their work space
to find materials,lools, work instructions,and help.
When mapping at the facility level and at the processlevel within facilities,we are always
concernedabout overproduction due to poor information flows withiz facilitiesand the
desireof managersto move productsaheadto meet performancemetrics for equipment
utilization. (Ohno alwaysstressedthat overproductionis the worst waste.)We are also
looking carefully for unnecessaryprocessing,defects,waiting, and motion.
When we more our analysisof product and information flows to the extended, macro
level, overproductionis still a critical concern but now due to erratic information flows
between firms and facilities.And we are now speciallyinterested in the two final forms of
waste:unnecessaryinventories (due to erratic information flows as well as incapableand
batch-orientedupstream processes)and unnecessarytransportation (causedby location
decisionsthat seek to optimize performanceat individual points along the value stream
rather than the whole value stream).Reducing these three forms of waste - largely by
better managing information flows and logistic.s- will be centrai concerns for our
extended-mappingof future states.
PARTIII: THE EXTENDEDVALUESTREAM

What shoulda lean extendetlvalue streamlook like?
First, everyone in the entire value stream should be aware

of the rate of customer
consumption of the product at the end of the stream.
You are probably familiar with takt time, which is the amount
of procluctdcmanded
per unit time adjustedfor the amount of production
rime available.This is a
wonderfully uscful concept within every facility becauseit
tells everyone rhe
necessaryrate of production from minute to minute to meet
the neeclsof the nexr
downstreamcustomer.Howevel note that takt time will
vary from facility to facility
along a value stream if the amount of availableproduction
time differs from facilitv
to facility and if downstreamsteps incorporatemore than
one unit of an upsrream
component'Thus takt time at the Alpha Motors Assembly
Plant is 60 seconds(tcr
build 960 vehiclesduring the sixteenhoursof production
time availableeachdav)
but is 30 secondsat Beta'swiper assemblyplant running
the sameshift pattern
(becauseeachvehicle needstwo wipers)and
would fall to l5 secondsif the wipcr
assemblyplant switched to only a single eight hour shift
each day. T.hus,in most
cases'there is no single takt time for the entire value stream.
However, every facility along on the stream needs to be aware

of the encl rate of
consumption to calculatefacility-specifictakt time. Production
ar every Llpsrream
stageshould run on averageat the same rate, as adjusteclfor
the availablcamounr
of productiontime at each step and the neeclt' make multiple
copiesof some
productsto incorporatein productsdownstream.Any
time we see a chronic pattcrn
of imbalancedproduction rates in clifferentfacilities we
know we don,r have a
lean value stream.
However, pleaseunderstandthat every facility upsrream

should not conduct its
activities in lock step with the current rate of the end facility
in the stream.This
seemsto be the implication today of many naive claims for
e-commerceand the
web: "If you know the rate of end consumptionright now you
can schedule
y'urself accordingly."In facr, what each facility should
produce each m.rning
is a leveled mix of what the next downstreamfacility requests
for delivery this
afternoonor tomorrow Knowing changesin actual consumption
at the end of the
stream(particularlythe amplitude of the changes)is extremely
importantfor
capacityplanning but is not sufficient for controlling productioh
todav.
44
-
What u'e can learn from comparingproductionratesupstreamwith actualconsumption
downstreamis hou, faithfully the production control systemis sending true customer
demand (which we call "signal") upstreamversusdistorted demand (which we call
"noise"). If there is significantnoise,producing"demand amplification"unrelatedto
true customerdesires(aswe see in our Current State map), stepsneed to be taken
to eliminate these gyrationsin future states.
A second feature of a truly lean extended value stream will be very little inventory.
This inventory will consistof the minimum amount of (1) raw materials,(2) work-in-
process,and (3) finished goodsrequired to support the needsof the next downstream
customergiven (a) the variabilityof downstreamdemand,(b) the capabilityof
upstream processes,and (c) the inventory reqr-riredbetween processingsteps due to
batch sizesand shipping quantities.Toyota calls the minimum amountsof invcntory
neededto supportthe customersin a value streamat any given time the standard
inventory. The standardis calculatedfor each categoryof inventory depending
upon its function in the value stream.Toyota continr.rallyseeksto reduce this
amount by decreasingbatch sizes,increasingshipmentfrequencies,leveling
demand,and improvingcapability.
Lovv lnwentories vvith High Demand Variability and

Low Process Gapability = Ghaos
W e s o m e t i m e se n c o u n t e rl e a n i m p l e m e n t e r sw h o s e e kt o r e d u c ei n v e n t o r i e s
along a value stream without botheringto calculatethe standardinventory
n e e d e df o r t h e c u r r e n tl e v e l so f v a r i a b i l i t ya n d c a p a b i l i t yA. n i m m e d i a t e
"lowering of the water level" may indeed "expose the rocks" and put
pressureon everyoneto go fasterto reducevariabilityand improve
capability.However,a more likely consequenceis chaos and outraged
customerswhen the newly "lean" value stream fails to deliverthe right
a m o u n t sw i t h t h e r i g h t q u a l i t ya t t h e r i g h t t i m e .
A better strategyis to calculatethe standardinventoryat every storage

p o i n t a l o n g t h e v a l u e s t r e a mi n t h e c u r r e n ts t a t ea n d i m m e d i a t e l ye l i m i n a t e
i n v e n t o r i e sg r e a t e rt h a n t h e s t a n d a r d T
. h e n l o w e r t h e s t a n d a r da n d r e d u c e
inventoriesto the new standardin a future state after variabilityand
capabilityissuesare addressed.
PARTIII: THE EXTENDEDVALUESTREAM

The Many Forms and Uses of Inventory: Greating a Strategy
We've definedthe three traditionalcategoriesof inventoryand comparedthese with
severaladditionalcategoriesin common use (as shown in the next page).Note that these
categoriesoverlap."Finishedgoods" can be "safety stocks", "buffer stocks",or "shipping
stocks".What's more, the same item-a pallet of windshieldwipers in Beta'sfinished
goods area,for example-can be included in severalcategories-a "safety stock" and
a "buffer stock" in the case of our wiper-depending on the practiceof the firm and the
facility.The key point with regardto definitionsis for the members of the value stream
team to agree on a consistentuse of this sometimesconfusingterminology.
The key point with regard to the inventoriesthemselvesis for the team to make a strategic
plan for every part in a future state,describingthe reasonsfor keeping specificamounts of
materialsand goods in specificplacesas standardinventory.As they do this, many value
streamteams decideto actuallyincreasethe amount of inventoryin a downstreamfinished
goods area near the schedulingpoint, both as a buffer stock and as a safety stock.This
guards againstdemand amplificationtraveling upstreamand facilitatesthe reductionof
work-in-processand raw materialsto a very low level in upstreamfacilities.By increasing
inventoryat one point - seeminglya step backward- it may be possibleto reduce
inventoriesat every other point along the value streamand for the value stream as a whole.
The Manyz Forrns of lnrrentort/
E:E
lT.
EE:
ll #, ll#=l
l'T'all F+l|mql
46
Tlrpes of lnrrentory
TRADITIONAL CATEGORI ES
Definedby their positionin the valuestream
Raur Materials
Goodsenteringa facilitythat havenot yet beenprocessed.
Work-ln-Process
Itemsbetweenprocessing
stepswithin a facility.
Finished Goods
Itemsa facilityhascompletedthat awaitshipment.
A D D IT ION A L C ATEGORIES
Definedby their purposein the valuestream
Safety Stocks
Go o d sh e l da t a n y p oint( in RawM ater ials,
W lP,or Finished
Goods)to prevent downstreamcustomersfrom beingstarved
by upstreamprocesscapabilityissues.
Buffer Stocks
Goods held, usually at the downstream end of a facility or
process,to protect the downstream customer from starvation in
the event of an abrupt increasein point demand by a customer
-a demand spike that exceedspoint production capacity.
Shipping Stocks
Goods in shipping lanesat the downstreamend of a facilitythat
a r e b e i n g b u i l t u p f o r t h e n e x t s h i p m e n t .( T h e s ea r e g e n e r a l l y
proportionalto shipping batch sizesand frequencies).
PARTIII:THE EXTENDEDVALUESTREAM 47
A third feature of an extended lean value stream is as few transport links
as possible between steps in the production process.
As we have noted earlier,no customer attachesvalue to moving thc product
around.Indeed,customerswill often be willing to pay more for a product if it
can be supplied in the eract specificationthey want very quickly. Thus we
need to ask about every transportlink: Is this really necessary?
SLrbstituting
modes, notably air fbr truck, is certainly an alternativeway to reduce
thftrughputtime, but typicallyat an unacceptablecost premium. In general
\\rewant to eliminatetransportratherthan speedit up.
A fourth feature of a lean value stream is as little information processing as

possible, with pure signal and no noise in the information flows that remain.
This meanspulling information managementdown from highcr levels of the
organization,in remote informationmanagementdcpartments,to the shop
floor where each processingstep and each facility can signal the previous srcp
and facility directly about its immediatenecds.We should schedulethe cntire
value streamfrom only one point, in this casethe assemblyline of Alpha, and
pull materialsback up rhe value streamfrom this point.
A fifth feature of lean value stream will be the shortest possible lead time.
Indeed, this may be the most importanrof all. Thiichi Ohno ofren remarked
the whole point of the Toyota Production System was simplv to reduce lead
times from raw materialsto the customer.The shorter the lead timc, the morc
likely it becomesthat thc entire value stream can respond to real orders rathcr
than inaccurateforecasts.And the more likely it becomesthat defects,proccss
variations,and every other problem will be detected before significantwasre
is created.
A final principle of a lean value stream at the macro level is that changes
introduced to smooth flow, eliminate inventories, and eliminate excess
transport and lead time, should involve the least possible or even zero cost.
What's more, capital costs,when they are necessary,should be deferred until
casierand quicker actionshave alreadybeen taken.
48
The Plan for the Remainder of this
Breakthrough Guide
'l'he
last principle suggeststhat we addressin-plant product flolr,sfirst using
the methods describedin Learning to See and Creating Continwous Flow.
'Ihese
entail practicallyno capitalcostsand will creatcwhat we will call our
Future Statel, as describedin Part IV of this Guide.
Once flow and pull have been introducedwithin eachfacility,eliminating

many wastefulstepsin the process,it will be time to examine the information
and transportlinks between facilities.Often it will be possiblc to smoorh
the value stream and reduce the need for buffers by introducing direct
feedback loops with leveling mechanismsfor information flowing from each
downstream"cllstomer"to the precedingupstream"producer".We will do
this in Future State 2, as describedin Part V of this Guide, noting rhar a
smooth pull of orderscan often be tested on an experimcntal basisfor one
product family without effecting information flows for other productsgoing
through thc samefacilities.
With information flows smoothed and noise reduced, it will be timc to

reduceshipmcnt sizeswhile increasingshipment frequenciesbetween each
facility and it's upstreamcustomer.We will also do this in FurLrreState 2.
Frequent delivery in small lors will require the introductionof some tvpc of
"milk run" logisticsbetween facilitiesand for the first time will raisethe issue
of relationsbetween multiple product families.This is becauseorganizinga
milk rLrnfor the parts needed for only a single product family ar rhe next
downstreamfacility will often be impractical.Instead, major portions of a
facility or an entire facility may need to make rhe leap from dedicated
shipments arriving infrequently to sharedshipments arriving often.
Finally, after Future State 1 and Fr-rtureState 2 are achieved,it may make
senseto begin re-sizingand relocatingactivitiesin order to "compress"the
value stream.Doing this may make it possibleto remove large remaining
blocks of time and cost and move the value streammuch clgserto perfection
in an ldeal State.
PARTIII:THE EXTENDEDVALUESTREAM 49
Becausevalue streamcompressionwill often require significanrinvestments
by a firm at Point A that lower costsfor a firm downstreamat point B, some
method will be needed to justify these investmenrsand to determine how the
firms can sharethe cosrsand benefits. We'll provide some simple guiclelines
in Part VI of this Guide, describingthe Ideal State.
A truly ideal state will be the happy circumstancein which all actionscreate
value with zero defects and consumerresponseis instantaneous.No one is
likely to reach this perfect realm soon,bur it is highly provocativeto ask
what types of product designs,production technologies,and locarionallogic
can close as much of this gap as possible.what's more, the processof
developing an Ideal State can provide an invaluable North Star for steering
each value stream through succeedingproduct generationsthat come closer
and closerto perfection.
5()
Future State 1
Once the team completesthe Current State map and everyone agreesthat
it is accurate,the key question becomes,"What should be done in what
sequenceto create a better future state?" In our experience,the easiest
placeto start is to createfuture stateswithin the walls of each of the facilities
the product visits en route to the customer.By drawing and then achieving
a future state of the type describedin Learning to Seewithin each major
facility it will be possibleto achievea substantialimprovemenr in the
performanceof the entire value streamand to do this within a short time.
This createsconfidencein the processand give teams a sensethat much
more is possible.
Beginning with this step also has che critical advanrageof imposing a
"price of admission" on all of the value stream participants.Drawing the
current state map is fun but entails no real commitment. It's when you get
to the, "What are we going to do today about the waste?"question that the
hard issuesarise.Insisting that each participatingfacility and firm quickly
implement actual improvements as the price of continuing with the exercise
also tends to gain buy-in for the process.Yet the hurdle is nor roo onerous
becauselittle capital investment is needed to achieve a future state within
t h e i n d i v i d u a lf a c i l i t i e s .
Level Pull and Flovv Within All Facilities

In Appendix B, we show the Future State Maps for the Alpha Morors Final
AssemblyPlant, the Beta Wipers Component AssemblyPlant, and the Gamma
Stamping Part FabricationPlant. At the urging of the extended value stream
team, these were implemented and stabilizedover a three-month period by
newly appointed value stream managersin each plant. (As noted earlier,no
changeshave been attempted at the Alpha and Beta crossdocks and in the
Beta warehouse.This is both to keep the exercisemanageableand because
we will seek to eliminate these facilities in Future State 2..)
The cumulative result of these actionsat the plant level is shown in the
summary boxes on the Future State 1 map.
PARTIV: FUTURESTATE 1
7ovariation Demand Amplification
35
30
25
20
15
10
5

ORDER PRODUCTION OBDER PRODUCTION ORDER PRODUCTION
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52
Wiper Value Stream Future State 1
- :
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, Ouality and Delivery Screen
4 4 7 (2)
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deteds
2000 % defedive
deliveries
r500
1000
500

Future State 1 Ghanges
At Alpha Motors Assembly it was possibleto eliminate a kitting
operation and deliver parts directly from receiving to lineside.At the
same time, a simple pull system was introduced between final assembly
and wiper subassemblyto cur the amount of invenroryin half while
smoothing the flow.
At Beta Wipers the team took advantageof the approachdescribedin

Creating Continuous Flow ro relocate4 formerly srand-alonetasks into
one cell while reducingthe number of productionassociates
needed
from five to three. At the same time, the team createdleveled pull loops
from the supermarketin the shipping areato the assemblycell and from
the assemblycell to the supermarketin receiving,to reduce invenrories
and smooth flow.
Finally, at Gamma Stamping, the batch narure of che stamping and

painting operationswas acceptedfor the moment. Rather than trying to
introduce continuous flow by cellularizingthese operarions,the team
focusedon introducing leveled pull loops berween the three operations
and reducing set-up times (from one hour ro three minutes on the two
stamping pressesand from 30 minutes to five minutes in the painr
booth). This permitted much smallerbatchesto be made,with frequent
replenishmentof the downstreamsupermarketsin small amounrs.
Note that the extended map itself seemshardly ro have changed.All

of the facility boxes and flow arrowsare as they were. Yet the summary
figures in the facility data boxes are now considerablydifferent and the
data in the summary box at rhe lower right corner is different as well.
Specifically,the total number of steps has been cut from 73 to 54 and
total throughput time has been reduced from 44 to 24 days.All of the
indicatorsof value stream performancein Future State 1, compared
with the Current State,are shown on the next page.
Euen more important, each firm participating in this shared ualue stream
has quickly taken concrete steps to eliminate wdste and improue
performance in its own operdtions.This is not an example, as we see
all too often, of downstreamfirms and facilities lecturing upsrreamfirms
and facilities on improving their performancewhile doing nothing about
their own performance.
Frrtrrre State I Srrrnrn ary'
Gurrent Future
State State 1
44.3 23.9
Total Lead Tme
daye daye
Value Percentageof Time o.oB% o.16%

( v a l u ec r e a t i n gt i m e
to total time)

(value creatingsteps 11% 15%
to total steps)
Inventory Turns 5 I
Ouality Screen
(defectsat the downstream end 400 200
Delivery Screen
(% defectiveshipments at the B B
downstream over o/odefective

(% change in demand at downstream 7 7
end over 7ochange in demand at
Product Travel Distance

(miles) 5300 5300
At the level of the scampingplant, che component assemblyplant, and the final assembly
plant these changesare often truly impressive.In the most striking instance- the Beta
Wipers component assemblyplant in Reynosa- the number of steps at has been cut by
60Voandthe throughputtime has been slashedby75%. However,in terms of the entire
value stream,as experiencedby the customerat the end, the changein performanceis more
modest:a 25% reduction in the number of steps and 46% reductioriin total throughput time,
which is still much longer than the end customer is willing to wait. Thus the whole value
stream is still producing to a forecastrather than to confirmed order.What's more, the
performanceimprovements only assumethese magnitudeswhen every facility touching
the product achievesits future state.
PARTIV: FUTURESTATE 1 55
This realizationprovides a useful insight to rhe value srreamteam abour the limits
of isolated,individual action: If you want ro achieve a breakthrough- a "game
changer" - that altersyour position in your industry or producesprofits far above
industry averages,you'll need to optimize the entire value stream rather than
stopping after improving the flow along small coursesof the streamwithin your
own facility - as many managersand firms do today.
Any firm unwilling or unable to implement the Future State I in its facilitiesis
unlikely to be willing or able to take the next steps to achieve Furure State 2.
'Iherefore,
if it becomesapparentat this point that some participantswon'r make
this commitment, it will be critical to find alternativevalue stream members befcrre
other participantswaste time in futile efforts.An obvious additional question for
thc firms downstreamto ask is, "Do we want to keep the do-nothing upstream
firms in our supply base?"
T h e D i sta n ce S ti l l to Go
While the first five items in the summary box show a substantialimprovement
between the Current State and Future State 1, the last three items - the cleliverv
screen,the demand amplificacionscreen,and travel distance- show no change.
This is becausethese indicatorsare driven by relationsbetween facilities rather
than activitiessolely within facilities.The next challengefor the team therefore
is to tackle relationsbetween the facilities.This necessarilyrequires tackling
operationalrelationsbetween firms.
56
Future State 2
As the value stream team achievesFuturc State 1 within each facility and begins tcr
sensethat collectivemanagementof the value streamis possible,it's time to take thc
next leap.This is to draw and quickly achievea Future StateZ, introducinga smoorh
and leveledpull alongwith frequent shipmentsbetween eachof the facilities.
I n s ta l l i n g L e ve l e d Pull Betwr een Facilities

In concept,this is very simple. What we want to do is to link each point of use of the
product in a downstreamfacility with the prcvious point of production or shipment
in the next upstreamfacility. In this way, consumption at thc point-of-useis tluickly
and exactlyreplenishedby the nexr upsrreamprocess.
In practice,shipping qr-rantities
u'ill be considerablylargcrthan minimum trrroduction
quantities,even in a very lean value stream.For example,the minimum shipping
quantity of wipers to the final assemblyplant in this casc is one paller with 20 tra1,s
of wiper arms with each tray containing 16 wiper arms,for a total of 320 wipers. It is
simply too expensiveto ship individual rrays,much lessindividualwipcrs.
The minimum productionquantity,by contrast,would be one tray of 16 wipers.

This is becauseset-up times and cosr ro alrernareberween -fyp" A and Type B
wipers in the two trim levels are now zero at thc Beta Wiper Plant, after
implementingF'utureState 1. But itwould still be too expensivefor materials
handlersto wrap and movc individualwipers.
Therefore, to level production to the maximum extent feasible as orderstravel back

upstream,we will want to send production signalsto the work cell at Beta by travs
ratherthan by palletsand to level theseorders.For example,if 20 trays(one pallet)
are ordered by Alpha Motors Assembly with the order consistingof:
5 trays of Type A, High Trim (which we will call Part #1)
5 trays of Type B, High Trim (Part #2)

5 trays of Type A, Low Trim (Part #3), and
5 Trays of Type B, Low Trim (Part #4)
PARTV: FUTURESTATE 2 57
we will want to sendtheseordersro the Betaassembly
cell in the sequence:
1t 2 l 3 | 4 l 1t 2 l 3 I 4 t 1t 2 t 3 I 4 t 1 t 2 t 3 t 4 t 1t 2 t 3 t 4
rather than in the sequence:
1I1I1|1I1t2t2t2t2t2t3 t3 t3 t3 t3 t4t4t4t4t4
By repeatingthis production leveling processar every link upstreamwe will continuallv

smooth production rather than creatingwaves due to batchine.
In practice,there are many ways to achieve this result. Some firms install pull systemson
a strictly manual basisby collecting kanban cardsfrom trays and phoning or faxing these
ordersback to the next upstream facility. There, kanban signalcardsare written up and
sent to the finished-goodssupermarketto assemblethe next shipment. (When plants are
very close together and shipments from the next upstreamfacility occur many times a day
- not the casein our example - the cardscan be sent
back with the truck bringing the
new parts and returning the empty pallets. For many years,this was the primary method
of information transferin Toyota City.)
A small step up in automationwould involve the use of an electronicreader ro scanthe

kanban cardsfrom emptied trays and send this information through an Electronic Data
Interchange(EDI) network to the next upstream facility. There, new kanban cardscould
be printed and releasedto the finished goods supermarkerto inserr in trays and place in
pallets for the next shipment. (When these trays are received in pallets ar rhe downstream
facility' the cardscan be scannedagain to confirm receipt and trigger supplier paymenr.
They would be scannedone last time - and discardedto complete the cycle - when they
are removed from the empty trays as the parts are consumed in the downstreamprocess.)
The cardsremoved from trays in the upstream supermarketas product is shipped would
then be placed in some type of load-leveling(heijunka) device before transmission
upstream to the previous processingstep.
A further step in automation that has become atrractiverecently is to substitute a simple

web-basedinformation transfersystem for the EDI link. The bar code scanningand the
printing of new cardsat the upstreamfacility remain the samebut now the dam are senrover
the web. (This configurationof information managementis shown in the diagram below.)
Still a further step is to eliminate the cardsaltogetherand send electronic signalsdirectly

from the downstreamprocessto the supermarketin the next upsrreamprocesswhere
shipping instructionscan be displayedon screensor hand-held devices.However, we
alwaysstart to get anxiouswhen information disappearsinto complex electronic sysrems
Electronic kanban rrsing a bar code reaeler
I
I
I
I via Web
-t
I
---1
Heijunkadevice
I
I
I t@ rytttt+l
r : l-------:
l
I
I
I I
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t - - - r - - - - ! - - - t
I !
I
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I
I
I
I
l?nnterl lg,cannerl
I
-
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Clean,?aifii"&.Bake A99EMBLYCELL
Gamma1tamping DetaWipers
Note that the rows in the heijunka box are for the four types of parts in this product
f a m i l y w h i l e t h e c o l u m n s ( a c r o s st h e t o p ) a r e f o r t h e p i t c h ( r a t e )o f w i t h d r a w a lo f t h e
cards for conveyanceto the upstream paint process.
whose inner workings are opaque to line managersand production associates.

We advise
using the simplestpossiblesystemthat can get the job done, acknowledgingthat some
businessesinherently require more complexity in information managementthan others.
The key point to note about each of these arrangementsis that there is no need to send
day-to-dayproduction instructionsdown from MRPs in the plant office or ar company
headquarters.Nor is there a need for customersto send daily releasesgeneraredby their
schedulingcomputers.Rather than requiring elaboratecalculationsin a centralized
processingsystem on what should be produced in each plant and at each machine - given
expected operatingconditions and pre-establishedlead times - the new system simply,
reflexively re-ordersfrom the next upstream point what hasjust been consumed by the
nextdownsrream point.
Note that the telephone-basedexpediting loop, which was often rhe real schedulingsysrem
in the Current State and in Future State 1, is now gone. If small amounts of parts are
re-orderedand shipped automatically,accurately,and frequently in responsero acrual use,
the need for expediting is eliminated. We've drawn this new information managemenr
system in our Future State 2 map.
PARTV: FUTURESTATE 2

RM24 RM 16
wt?62 wtPo
FG12 FG 12
3 thifr,s 2 Shitrs
5 Days 5 Davs
E?E = 1 Dav EPE=1Dav
Defects = Defects =
25O ppm 50 ppm
o.3d. 4.Od.
a.o d. (3131s.) 1.2d.(3Os.)
20 (3) B (3)
60
Shovving Level Pull Betvveen Facilities ;:,^,-
loiaeroanul
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PPM
DEFfCTS
% DEFECTIVE
)ooo DELIVERIES
10
1500
1000
dofective
deliveries
500 @....
0
TO GAMMA TO BETA TO ALPHA ALPHA rc
The Need for Gontrolled Experiments
"But," you will say,"how can you do this for information flow for only a single
value streamco-mingledwith many others?The samecompurer sending signals
to control this streamis alsoschedulingother streams.Surely the whole sysrem
must be changedin order to changeanything and this, realistically,
is a massive
and costlyundertaking."
Actually massivechange is nor necessary. Just as we have disconnectedour

sample product family from the MRPs within severalplants in Future Stare 1,
and installed simple pull loops between activities within each plant, we can
disconnectindividual value streamscurrendy running between facilities under
centralconrroland install simple pull loops.
The key point is for the value stream ream ro take this opportunity ro try the
experiment and judge the results.We confidently predict that the performance
of the value stream as mapped in Future State2 will argue forconverring more
and more product families to simple pull systemsso rhat the overly complex
production control systemscommonly in place today are graduallyconverted
to an activity where they are actually useful. This is capacityplanning on a
total systembasis.
Lean Lab
62
7^
\-t /c
HUU Futn
Installing Frequent Transport Loops

The logicaland necessarycomplementro pull systemsberweenfacilitiesis
increasedshippingfrequenciesbetween facilities.This can be achievedby
converting infrequent full-truck direct shipments between two facilities
to frequent milk runs involving severalfacilities.
This has an additional and substantialbenefit. The introducrion of milk

runs and more frequent deliveriesmakes it possibleto eliminate the srop
at the Beta Wipers warehousein Harlingen and the long excursionto the
Alpha Motors crossdock in El Paso.This saveseight steps and six days of
throughput time and a thousand miles of rransport.(Plus, if the parts for
other value streamsusing these facilities are treated similarly,the facilicies
themselvescan be eliminated with major cost savings.)
We've drawn these changesin the F'uture State 2 map

by substituting our icon for milk run replenishment loops
for the striped push arrowsused in the Current State milkrun
and Future State 1. replenishment
Introducingpull loopsand milk runs on an experimentalbasiswill require

a modest investment, but bounding the experiment can keep the amounts
small until resultsare in and a decisionis made on whether whole production
systemsshould undergo conversion.And often these days,other suppliers
and customerswithin an industry are alreadyusing milk runs. Perhapsyour
product can tag along.
PARTV; FUTURESTATE 2 6:
7o variation Demand Amplification
35
30
25
20
15
10
5

4-/v/l W^Â
luicrtisansteetl J Daity I ba;i;tr ^ |
center
lsewicecenterla_\- | I <-
Dearborn{eiqhts,Ml -1
ii
ii
iv
I beta I
wipe.g
I I (
Reynosa,Mexico
F.M24 RM 16
wtP 62 WIPO
FG'12. FG12
3 thifr,s 21hifr,s
SOays 5Davs
E?E = 1 Dav E?E = 1 Dav
Defects = Defects =
25O ppm 50 ppm
o.3 d. 4.Od,
4.o d. (3131e.) 1.2d. (3Os.)
20 (3) I (3)
64
Shovving Frequent Transport Loops W
loraeraanu
I
-
birmingham,Ml
+
L
_T
I ouiryI
Alpha ZLa-'1
Atpha
?roduclion I I
Alpha Diotribution I
Materials Control I
I Cenrer I
Conl,rol
Cleveland,OH
(\7 "*^-1
ll I x: I
l-J-J
I
Ioxoxl---%
1x D a y
Weet Orange,NJ
RM15
wl?2
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25hitts
SDavs
E?E =1 Dav
DefecLs =
5PP
4.5 d, o.5 d.
1.3d. (12Os.)
7 (2)
o'uality and Delivery Screen
PPM
DEFECTS V DEFECTIVE
' DELIVERIE
2000 defeds
10
1500
1000
de{ective
deliveries
500 @.....
0
Frrtrrre State 2 Srrrnrnary
Current Future Future
State State 1 State 2
Total Lead l-ime

44.3 23.9 15.8
days daye daye
( v a l u ec r e a t i n gt i m e o.o8% o.16% o.6%
t o t o t a lt i m e )

(valuecreating steps 11% 15% 21%
to total steos)
Inventory Turns 5 I 14
Ouality Screen
(defectsat the downstream end 400 200 50
Delivery Screen
(% defectiveshipments at the B I 3
downstream over Yodefective

( % c h a n g ei n d e m a n d a t d o w n s t r e a m 7 7 5
e n d o v e r 7 0c h a n g ei n d e m a n d a t

(miles)
5300 5300 4300
Totaling the Results

The consequenceof smoothpull signalsand frequent replenishmentfor our eight
indicatorsof value stream performanceis shown in the summary boxes on the
Future State 2 map and in the chart above.The most striking change from Furure
State 1 to Future State 2 is the dramatic reduction in demand amplification,qualiry
problems,and late shipments as the orders move back upstream.The amount of
variation experiencedat Michigan Steel is now much closerto the very low level of
variation at Alpha Motors Assembly.In addition the dramatic reduction in shipping
complexity and lag time between the creation of a defect and its discoveryat the
next downstreamprocesshas causeddefects and shipping errorsat the upper end of
the value stream to convergeon the low levels at the lower end of the value stream.
66
Compressing the Value Stream
So far we have left every value creatingactivity in its original place,changing
only informationflows and shipment frequencieswhile eliminating unneeded
warehousesand cross-docks.Although the value stream team has cut the
number of stepsfrom 73 to 39, reduced throughput time by 64%, and greatly
damped demand amplification,much waste and long time lags remain.
Becauseit appearsthat moscof the remaining waste and time are due to the
need to move the product between many facilities and over long disrances,
a logical next step is "value stream compression"to relocateand co-locate
value-creatingactivities so they can be performed fasterwith lesseffort.
What is the logic of relocation?

The first principle is simply that all manufacturingsteps in the product
shouldbe moved as closetogetheras possible.Ideally this would even be
in the same room.
A secondprinciple is that the closerthis compressedsequenceof activities

is to the customer- Alpha Motors Assembly in our example - the better.
The objective of lean thinking, after all, is to reduce cosrsand improve
quality while getting customersexactly what they want when they want it.
Remote manufacturingalwaysworks againstthis goal becauseit increases
responsetime once the customers'desiresare known. The unavoidable
consequencefor remotely located manufacturerswho are determined to
immediately serve their customersis to createinventoriesof finished units
produced to (usually inaccurate)forecasts.In the currenr global security
environment, where shipments acrossbordersare subject to disruptions,
this is even more the case.
"Do it all in one place" and "locate that place next to thg customer" are
useful principles to get started.However, a critical third rule is necessary:
That if proximity should entail extra manufacturingcosts(although the
reversewill be more common), these cosrsmusr be weighid againstthe
value of the time savinqs.
PARTVI: THE IDEALSTATE

These principlesin combinationsuggesta very simple locationalgorithmfor
most products:
1. If the cusromcris in a high labor-cosrcounrry(e.g.,the [J.s.,

Japan,Germany)
and needsimmediateresponseto orders,and if the product has relativelylittle
labor content, conduct all of the manufacturingsteps in close proximity and close
to the customer in the high-wagecountry.
2. If the customeris in a high labor-costcountrv,is willing to wait for some shipping

interval, and the product is price sensitive,manufacturethe entire product, from
raw materialsto finished goods,in closeproximity in a low-cosrlocale,shipping
Only the final goods.In our experiencethe correct location is almost alwaysat a
low-wagecountry within the region of sale.F-orexample, Mexico for the fl.S.,
China fbr Japan,Poland fbr Germany.Shipment of the finished product by rruck,
or a short ferry ride, and acrossonly one border can still permit responseto thc
customerwithin a few days,while shipment by seafrom anothercontinent
requireswecks.
3. If the customerin a high labor-costcountry needsimmcdiate responsebut thc

product has high labor content, do a careful costing exerciseto determine the
correctlocationof manufacture.The best locationmight vary from a very low-wage
site in anotherregion of the world, with the product even deliveredby air, ro a new
technologyremoving high-costmanufacturinglabor in the high-costcounrry of sale
and permitting the conduct of all manufacturingstepscloseto the customer.
4. If the customeris in a low labor-costcountry and scalerequirementspermit,

manufacrurethe entire product - from raw marerialto finished goods- in
geographicproximity in that counrry.
As the wiper value streamteamslooked at the situationand ponderedtheserules

it becameapparentthat the best locationfor an iclealstatein this casewould be
immediatelyadjacentto the vehicle assemblyplant in the high-costcountry (the
L.f.S.)This was becausethe amount of direct labor content in the product was
actuallyvery small,indeed only thirty secondsat rhe wiper assemblyplant and a
vanishinglyslight amounr ar rhe stampingplant. (The number.ofwiper assembly
operatorsrequired had already been reduced from five in the Current State to three
in Future State 2.) The team found that a small increasein direct labor costsfrom
relocationof this assemblystep from Mexico ro rhe tl.S. - even when traditional
corporateoverheadswerc added to direct wage costs- would be more than offset
by a big reduction in shipping, inventory, and generalconnectivity costs.
68
--
l d e a l S ta te Changes
The value stream team therefore created the Ideal State map shown on the
next page.Note that wiper assembly(inclLrdingthe blade-to-armassemblystcp
previouslyconductedin Alpha'sassemblyplant),painting,and stampinghave
now been compressedinto one room in a "supplier park" clnthe site of the Alpha
Motors assemblyplant. A cheaper,low-speedstampingpresshas been introduced,
which we call a "right-sized"tool becauseits capacityis prt-'portional
to the
requirementsof this value stream.This pressis also able to make both the ;rrimary
and secondarystampingsfor all of the other parts needed for the wiper assembly
(seethc schematicdrawingon pages12 and 13 showingtheseparts)and in very
small batchesto minimize inventoriesand lead times.A mini paint booth - a
secondright-sizedtool - has also been designedand is located between the
stampingstep and wiper assembly.
Bccausethc new wiper manufacturingmodule gets an electronic signalon what

to build next as eachvehicle leavesthe paint booth in the vehicle assemblyplant
(a 3-hour lead time) and becausethe time neededfrom the startof wiper assemblv
until delivery to the final assemblylinc is lessthan thc availablelead time, wipers
with high and low trim for vehicle models A and B can now be assembledto line
sequence.They are then placedin line-sequencedtraysof 40 wipers and conveved
to the fit point on the final assemblyline every twentv minrrtesby a "water spider"
(a small cart pulled by a converted fork-lift). The water spider lo<-rp
connectsseveral
similarcomponentplantsadjacentto the Alpha final assemblyplant, bringing back
empty trays and needed parts to the wiper assemblyareaon each circuit.
Oc
s
PARTVI: THE IDEALSTATE

Demand Arnplification

ORDER PRODUCTION ORDER PRODUCTION ORDER PROOUCTION
NewJersey1beel
5ervice Center
Wiper Value Stream ldeal State EaetOrange,NJ
o.4 d.
70
W Dearborn.Ml
Alpha
Alpha Distribui;ion
?roduction Center
Alpha
Materials Control
Control
/
% Daily
t--J'
-l
I I--ELL I-cE[_-l
I AlphaMotors
t
@Gl-ffiful
o.5 d.
1 . 1 d(.3 1 6 1 s . ) O.8 d. (12Os.) 1
20 (6) 7 (2)
Ouality and Delivery Scron

PARTVI: THE IDEAL STATE 71

ldeal State Srrrnrn ar,y-
Gurrent Future Future ldeal

State State 1 State 2 State
Total Lead Time

44.3 23,9 15.8 2.&
days daye daye days
( v a l u ec r e a t i n gt i m e o.oB% o.16% o.6% 1.5%
to total time)
Value Percentage of Steps

(value creatingsteps 11% 15% 21% 27%
to total steos)
Inventory Turns 5 I 14 79
Ouality Screen
(defectsat the downstream end 400 200 50 2.5
Delivery Screen
(% defectiveshipments at the
downstream over lo defective B B 3 1
shipments at upstream end)

( % c h a n g ei n d e m a n da t d o w n s t r e a m
e n d o v e r % c h a n g ei n d e m a n d a t
7 7 5 1

(miles) 5300 5300 4300 525
Dramatic Changes
Throughput time from raw materialsto customerhas now been reduced
by 94Vot<tZ.t3days,
and practicallyall of the transport links, invenrories,and handoffs-
the key drivers of
connectivity costs- have been eliminated, from thc final assembler
back through the
wiper maker to the stamperand raw materialssupplier.In addition,
it is hard to tell where
one company leavesoff and the next picks up the valuc stream bepause
activities formerlv
conducted by Alpha, Beta, and Gamma at locationsthousandsof
miles apart arenow being
conducted in continuous flow in one room located acrossthe road
fiom the customer.
72
Winners Need to Gornpensate Losers
As future state and ideal state maps are drawn up, it will quickly become
apparent that positive change is most likely if the team can find a way for
'l'his
winnersto compensatelosers. is becauseit will commonly be the
casethat a downstreamparticipant can get better value at lower cost if an
upstream participant leavesout wasted steps,implements leveled pull
systemswith its suppliers,introducesmore capableprocesstechnologies,
and relocatesactivities.However, even when everyonecan see that
the incremental savingsexceed the incremental costsof these
initiatives,little is likely to happenunlessupstreamparticipants
are compensatedby downstreambeneficiariesfor taking costly
actionsthat <,rptimize
the wholc.
If it were easily possible to compare total product cost before

and after the future state improvemen[s, compensation might be
an easierissue.Howevel traditionalpurchasingand accountingsystems
are often incompatiblebctween value stream participantsand in any case
are poorly suited for calculatingproduct costsfor each product family.
Thesc systemstypicallyrequire enormousamountsof data to allocate
overheadsby product and they usually fail to calculatecostsin a way
that all participantswill acceptas valid.
We proposekeeping it simple by ignoringtraditionalsystemsand instead

determiningthe incrementalcost (in some common currencyunit) and the
incremental benefit (in the same currency unit) of each proposedchange in
'I'his
the value streamin future and ideal states. is surprisinglyeasyin manv
casesand can change the focus of the value stream team from redressing
(or defending)the mistakesand inequitiesof the past to discovering
win-win-win alternativesft-rrthe future.
The problem of cross-firmcompensationwill not be such an issueif the

product being mapped is new and the courseof the value streamis not
constrainedby existing facility locationsor even existing suppliers.
However, it will still be important to calculateconnectivity costsfor various
configurationsof the value stream to see which one will actbally produce
the best combinationof low cost and rapid customcrrcsponse.
PARTVI: THE IDEALSTATE 73

Timing the Leap to the ldeal State
Lower-speedpresseswill be cheaperand more capableif used on new part
designs,and a change in the raw marerial provider will be required as well.
(Note that New Jerseysteel is to be substitutedfor Michigan steel in rhe
Ideal State,to reduce shipping distancefor steel coils from 500 miles and
eight hours to 25 miles and one hour.)Therefore, the best time to leap to the
Ideal state will be with the next product generation,when new process
equipment will be needed in any case.
The exerciseof creating an ideal srate ro contrastwith a business-as-usual

state should be conducted for every new product generation.This can lead
to a very creativejoint mapping of the ideal sratefrom the very start of the
next design,when the barriersto doing everything right are greatly reduced.
A Final Risk to Avoid

In developing the examples for seeing the'whole we have learned of
another risk for the value srreamteam to avoid. This is ro turn the mapping
exerciseinto a conventionalcost study for a product family by trying ro map
the flow of every part going into the product. when teams do this we've
found that they lose sight of the key point. This is that the types of wasre
exposedand the demand amplification discoveredare also presenr in every
product family passingthrough all of the participant firms. The first purpose
of the exerciseis to raiseconsciousness about systemicproblems and to
spur the development of systemicsolutionsrequiring better performance
by the functions, not to shavea bit of cosr out of one specific product and
then declarevictory.
74
Achieving Future States
Value stream maps at the macro-levelare very useful for raising
consciousness
about wasteand the lack of customerresponsiveness
in
today'stypical current state,a situation often invisible to value stream
partnerslooking only at their own operations.However, if consciousness
is raisedbut no future stare is achieved the whole mapping exercisejust
createsmore corporatewallpaper- pure mwda.
How can you actually achieve future stateswhen many departments

and firms must cooperateand no one person or firm is legally "in charge"?
We have already suggestedthat progressis best made in a seriesof steps
beginningwith the easiest.If a Future State 1 can be achievedthat reduces
time and effort within each participatingfirm, this will give all of the value
stream partnersthe courageand incentive to go further.
Then, if Future State 2 can be achievedas well - addressingproduction

control problems to stabilize demand, remove noise,cut costs,and enhance
responsiveness to the customer- the momentum for improvement will be
much stronger.The prospectsfor successfulintroduction of the Ideal State,
with its requirementsfor investment and relocationof activities,then
become much brighter.
Running the processin the oppositedirection, beginning with a big leap to

an ideal state,may be possiblein some cases- particularlyfor entirely new
products- and we certainly don't want to discouragevalue streamteams in
a position to make rhis leap. However, in the great bulk of instances,small
stepswill be essentialat the srartro lay the groundwork for big leapslater.
PARTVII: ACHIEVINGFUTURESTATES
In our experience,Furure state 1 can be achievedin about three months
after completion of the Current Stare map. F uture State Z canbe in place
in six months after the achievementof Future State 1. Howeveq conditions
will vary and it may be more practicalfor the value stream ream ro begin
implementingFuture state 2 even if Furure state 1 is not completelyin
placeand stabilized.This is becausemany of the activitiesinvolvedare
quite separateand can proceedin parallel.
'I'he
timing for the ldeal State may range from "soon" (particularlyfor
new products)to "much later". The team in our exampleconcludedthat
the new supplier park configurarioncan be in place in four years,at the
point that the nexr generationof vehicle Models A and B with redesigned
wiper sysremsis introduced. Tiying to move faster would mean that Beta
and Gamma would need to continue their remote operationsfor their other
customersand would incur substantialcostsfor duplicate rooling and
underutilization of their existing facilities.
Even if the precisetiming of the later sraresis harclto determinenow

the simple act of writing down all of the necessarysteps and agreeingon
specific target dates for achieving specific steps has the highly useful effect
of converting vague intentions and "no year" projectsinto concrete,
trackabletasks.
76
The Value Stream Plan
We suggestthat the value streamteam develop a value streamplan for their
product family at the end of their initial walk, when the Current State map is
drawn. This exerciseshould only take a few days.If it dragson the odds are
very high that nothing will ever be implemented.Just as in the caseof lean
production,velocity is criticallyimportantin lean improvementactiviries.
A value streamplan shows:

o exactly what your team plans to accomplish,step by step
. measurablegoalsfor team members
o clearcheckpointswith real deadlinesand responsibleindividuals
. the formula for sharingcostsand benefits among participatingfirms
'I'his
planning processwill be familiar to you if you have had experiencewith
policy deployment or if you have alreadydeveloped facility-level value stream
plans of the type shown in Part Y of Learning to See(and Part VI of Creating
Continwous Flow). However, it will be a bit more complicated becausethis plan
builds on the "YearlyValue Stream Plan" for each facility being developed at
the same time, as illustrated in Learning to See.
The wiper value stream team developed a simple value stream plan, as shown
on the next page.
?aul Doe, Beta; J oe baker, G amma: YEARLY
9 ally J ones, Steel 5 up plier
Product-Family Value Stream GOAL OUAR T ER LY

Business Objective Objective (measurable)
2oo2
lmproveWofitability *continuousflow
F91 Leadtime=23.9 days
onwipersfor Alpha, wherepoeeiblein lnventnryturfls=9
Deta,Gamma,+ allfacilii"ies Qualityecreen=2OO
steel eupplier.
*level
pull within all
lacilities
*level
pullbetween Leadtime=15.8 days
allfacilities
lnventnry turne = 14
*trequent
F92 repleniehment
Quality ecreen = 50
loopsbetween Deliveryscreen=3
allfacilities Demand amplification
gcreen=5
'value stream Leadtime=2.8 daye

compreeeionby
lnvenlory turns =79
co-locating all
ete?e adjacent Quafityscreen=2.5
to customer DeJivery
ecreen=1
Demand amplification
Sareen= 1
O Start A Completion
78
::
SIGNATURES
\ 'A L U E STREAM PLAN
SCHEDULE
2()()3
Operatione
?urchaeing
?C&L
Manufacturing
5mith Engineering o
Quality
Doe o
(inevery
baker A
firm/facility)
Jones A
O On target A Behindtarget Wipersfor AlphaModelsA+b
CONCLUSION
At the end of this brief breakthroughguide for achievingfuture and ideal srateswe must
sharea secret:You'll never actually achieveyour ideal state! It rurns out that there is always
more waste to removc and that value for the customer can alwaysbe further enhanccd.
For example,wipers might some day be molded as a singlepiece in matchingbody colors,

eliminatingthe need for the stamping,painting,and final assemblyof considerablenumbers
of parts.If cycle times for these activitieswere at or below takt times for wipers on the final
assemblyline and if changeoversfrom onc wiper color and specificationto the nexr were also
essentiallyinstantaneous (or at leastwithin takt time), it woLrldbe possibleto mold wipersto
line secluencewith total throughputtime and value crcatingtime both shrinkingto seconds.
At that point, the "Ideal State" portrayed in this workbook will appearto be full of mwdal
However, there'sa companionpoint that alsoseemsto be a secretto manv managers.This is

that successivefuturc statesgetting much closerto the ideal statecan be achievedby real
managersin real firms building current product designs- in only a short period of rime even
when there is no "value streamdictator" giving orders.And even more can be accomplished
with the next generationof products,before machinesand faciliticsare locked in place.
The trick is to take a walk together so everyonecan see the whole. Then estimatethe "prize"
availableto the group if the whole value streamcan be optimized. Then devise a mutually
acceptableway to split the loot if the current state "Bank of Muda" can be robbed. It won't
happen all at oncc and you'll probably never reach that huppy land of completely frictionless
cooperationbut the challengeis to get started,gain some initial successes,
and not look back.
As firms and departmentslearn to see togetherit should alsobe possibleto make your maps
ever more inclusive,eventuallvreachingall the way from the customer'suse of the product
through the life cycle back upstreamto inchoatcmatter before any processing.And wc believe
it will be attractiveto map wider and wider range of goods and servicesincluding office
processes,as many readershave already startedto do with the micro-mapsin Learning to
See.(For example, we at LEI have alreadyheard from readersabout mapping gold mining,
fish stick manufacture,postal sorting operations,insuranceclaims processing,the writing of
technical manualsfor complex aerospaceproducts,and visits to the doctor.)Bccausethere is
alwaysa value stream whenever there is a product (whether it's a good, a service,or some
combination),we are confident that consciousness
will continue to spreadabout the pcltential
of value streammapping.
Wc wish you the best in your endeavorsand hope to hear about your problemsand your successes.
About the Authors
Dan Jones
Dan is co-author of rhe Machine That changed the'world and Lean Thinking.
He is a SeniorAdvisor to the Lean EnterpriseInstitute (LEI), and Chairman
and
Founder of LEI's affiliate organization,the Lean EnrerpriseAcademy in
the uK
(www.lean.uk.org).He has long had an interest in mapping
enrire value srreamsand
took the lead in developing the examplespresentedin Chapter Z of Lean
Thinking.
These began with the humble can of cola that requires319 days to passthrough
six
different companiesand nine facilities acrossthe world, firms and facilities
that
collectively conduct only three hours of value-creatingactivities before
the cola
finally reachesrhe cusromer.
Jim Womack
Jim is co-author of The Machine That Changed the'World and Lean Thinking and
Presidentand Founder of the Lean Enterprise Institute. He fin<isit hard not
to
think about extended value streamsincluding thoseinvolvinghealthcare,mobilitv
food, communication,construction,defense,and logistics.
82
AP P E N D IX A - E xte n d ed Value Str eam M apping lcons
The icons and symbolsfor current and future state mapping fall into three categories:
Material FIow, Information Flow, and General Icons.
Material lcons Represents Notes
Process
Manufacturing One processbox equals an area
of flow. All processesshould be
labeled.Also used for departments,
such as ProductionControl.
O u t s i d eS o u r c e s Used to show customers,suppliers,

and outsidemanufacturingprocesses.
Data Box Used to record informationconcerning

a manufacturingprocess,department,
customer,etc.
tl
| .'--+ |
Cross-Dock
lhl
| ----+ |
-
Warehouse
ln I
-?
NS_ P l a n eS h i p m e n t Note frequencyof shipments.
|-lr-.---I T r a i nS h i p m e n t Note frequencyof shipments.

Lvdl-J
I Mon. I
| + wed.l-l T r u c kS h i p m e n t Note frequencyof shipments.
H
n
A
3OO pieces
Inventory C o u n ta n d t i m e s h o u l db e n o t e d .
lDay
APPENDIX I
Material lcons Represents Notes
Movement of production M a t e r i a lt h a t i s p r o d u c e da n d
m a t e r i a lb y P U S H moved forward before the next
processneedsit; usuallybased
on a schedule.
Movement of finished
goods to the customer
M i l kR u n
o
o
ooooooooo
1
o ExpeditedTransport
Supermarket A controlledinventoryof parts

that is used to scheduleproduction
at an upstreamprocess.
Withdrawal P u l l o f m a t e r i a l su, s u a l l yf r o m
a supermarket.
Transferof controlled Indicatesa deviceto limit quantity

max.20 pieces
quantitiesof material
-FIFO* between processesin
and ensure FIFOflow of material
between processes.Maximum
a "First-ln-First-Out,, quantity should be noted.
sequence.
Information lcons Represents Notes
+- ManualInformationflow F o r e x a m p l e :p r o d u c t i o ns c h e d u l e
o r s h i p p i n gs c h e d u l e .
s ElectronicInformationflow For example via electronicdata

interchange.
Information Describesan informationflow.
84
Information lcons Represents Notes
P r o d u c t i o nK a n b a n T h e " o n e - p e r - c o n t a i n e kr "a n b a n .
(dottedline indicates Card or devicethat tells a process
I
how many of what can be produced
t k a n b a np a t h )
a n d g i v e s p e r m i s s i o nt o d o s o .
W i t h d r a w a lK a n b a n Card or devicethat instructsthe

T material handlerto get and transfer
t parts (i.e.from a supermarketto the
c o n s u m i n gp r o c e s s ) .
S i g n a lK a n b a n T h e " o n e - p e r - b a t c hk" a n b a n .
I S i g n a l sw h e n a r e o r d e rp o i n t i s
t reachedand another batch needsto
b e p r o d u c e d .U s e dw h e r e s u p p l y i n g
processmust produce in batches
b e c a u s ec h a n g e o v e r sa r e r e q u i r e d .
Kanban Post P l a c ew h e r e k a n b a na r e c o l l e c t e d
a n d h e l df o r c o n v e y a n c e .
-
,/t\\t
I I I lr r K a n b a nA r r i v i n g
in Batches
Load Leveling Tool to interceptbatchesof kanban

a n d l e v e lt h e v o l u m e a n d m i x o f
t h e m o v e r a p e r i o do f t i m e .
ControlCenter
Phone
Orders
Itr't., I
General lcons Represents Notes
Operator Representsa person viewed

from above.
APPENDIX A
Appendix B: Alpha Motors Assernbly plant, west orange, NJ
Gurrent State - February 2OO2
Alpha
Crosb-Dock
-F--
-
---->
*
E|?aso.TX
l92OWiperslDay
12bOA
\
6406
16WiperslTray
32O Wiperel?allet
4A
26
\
us
Receiving Kitting Wiper
"'?A+
2560 A 160A
5ub-aeeembly I'T-I
zAOD 808
Wipers Wipere
Alpha1ales
Orderbank
Dearborn.Ml
AlphaDist..
Center
--)(-*
.\_>
*
960WiperslDay
640 A
3200
l xDay
FACILIry9UMMARY
RM50 h.
wt?2h.
FG14h.
2Shifts
FinalAeeembly SDaye
&Test
E?E=lDay
Defects = 5 ppm
Defeciive =1%
CIT= 60 sec.
CIO= O,
29hifts
2h. 12h. 2h.

1 60 e. 1 1
1 (1)
APPENDIX B
Appendix B : B e ta Wi p e rs Assem bly Plant, Reynosa, Mexico
Gurrent State - February 20o2
Gamma
Saamping
Tonawanda,NY
Harlingen,TX
@ ZOothox
| I
I t,ooonau"t
1Z?allets
I
| I
ril--
lDuv I I
br-'d
v
Receiving Assemblyl Aseembly2
A=eP
25,600 A 4324 Qvt
ryAsf q9r
4324
zN-
4324
12,8000 224b 2249 2248
?arts ?arts Wipers Wipers
C I T= 1 9 e " " . ClT = 10 sec.
C I O= 5 m i n .
Uptime = 95%
29hifts
E?E=1Day E?E = l Day
o,zh. 48.Oh.8.2h. B.Oh. B.Oh.
4.2h.(1os.) 4.3h.(1oe.)
3 (1) 3 (1)
aa
Beta HQ
?roduction
Control Alpha
MRP
Motors
Harlingen,TX
h Detroit.Ml
weetrv
I I
Y
l92OWiperelDay
zAO A
640b
4?allets A
Z?alletsA
FACILIry9UMMARY
RM56 h.
wt?41h.
FG12h.
AssemblyS lnspect,&Test 2Shifts
Qr
ryA\il ryAsf SDays
E?E=1Day
4324
2249
Q2z 640 A Defects=4OOp?m
3200 Detective = 5%
Wipers Wipers
C I T= 1 O s e c . CIT =20 eec.
ClO =5 min.
Uptime=95%
2Shifts
E?E=1Day
B.Oh. 12,Oh.
4.2h.(1oe.) 1 4.5h. 1
3 (1) 3
APPENDIX B
Appendix B: Garnrna starnping Assembly plant, Tonavvanda, Ny
Gurrent State - February 2OO2
DearbornHeighte,Ml
Receiving
1tam pi ng2
"zA\+
336 coilg 25,600 A
fT]
12,800b
parae
CIO= th.
E ? E= 1 w e e k
10m. 14d.
4.4h. (1s.) 4.6h. (1Os.)
GammaHQ.
?roduction
Control
Cleveland,OH
9etaWipere
Warehouse
?lant,
?roduction 97AM?ED?4R79
Control 2OOlbox
1600l?allet
MRP 2 xWeekly 12?allets
Tonawanda.NY
th i p 5 ch edule
FACILIry9UMMARY
RM336h.
w t P1 1 0h .
FG4Ah.
SShifts
SDays
E?E=$Q2yg
Clean,?aint&Bake Shipping Defects=2OOO?pm
25,600 A
12,800 D
W 25,600 A
12,800B
Defective = 6%
?aft,e Parts
C IT= 5 2 mi n .
CIO = 3O min. ?roduclion _ 20.6
LeadTime
Uptime= 85% days
E?E=1week
?rocessing _ 3,1$j
Time gec,
48h. 4Bh.
3 4.5h. (312c.e.) 2
5 (1)
APPENDIX B
Appendix G: Alpha Motors Assernbly plant, west orange, NJ
Future State - May 2OO2
beta
Wipers
Alpha
Cross-Dock
El?aso,
Wiper
1ub-Adoembly
Alpha
9ales
Order
Oank
Alpha
Dist,.Center
1 960lday
/r 640 A
320b
// FACILITY9UMMARY
|_LJ-_--.l RM15 h.
t-dl-J
w t ?2 h .
l xDay
FG14h.
% 29hifts
SDays
E?E=lDay
,F Final&,eembly
_F IFO*
Defects = 5 ppm
Delective = 1%
12h. 2h.
60 s. 1 1
2 (1)
Appendix G: Beta wipers Assernbly prant, Reynosa, Mexico
Future State - May 2OO2
Tonawanda.NY
Beta
Warehouse
Harlingen,TX
rNr..... V box ,.)

Vt/'a
1T
t-
i----------------'
I
I
I
,, &the Cell l
+ Y
J I A9SEMFLY
A9SEMDLYCELL
4- -
-1 I lo\e I --
ll
?tamped
?aris = 30 sec.
CIO = 5 min.
=1OO%
25hifts
16h.
O.1h. (3O e.)
g4
beta HQ
?roduction
Control Alpha
Motorg
Harlingen,TX
Detroit,Ml
Harlingen,TX
beta?lant
?roduction 1920tNiperelDay
Control ->%
toxoXl 12BOA
6404
16WiperslTray
D- 32O Wiperel?allet
4?allets A
Z?allet'sO
RM 16 h.
wl?oh.
FG12h.
Defecfts=4OO ppm
1 2h .
2
APPENDIX C
Ap p e n d i x C : Ga mma S ta mping Asser nbly Plant GammaHQ
- ?roduction
Tonavvanda, NY Future State May 2OO2 Control
Cleveland,OH
iw
a'
DearbornHeights,Ml t
Tonawanda,NY
9tam pingl 9t amping2
ClT - l sec. C I T= 1 Os e c .
CIO = 3 min. CIO = 3 min.
Uptime = 95% Uptime= 95%
thifts =2 thifts = 2
E ? E =4 x s h i f t E ? E =4 x s h i f t
10 m.
2h.(1s.) 2 h . ( 1 Oe . )
96
BetaWipers
HQ
?roduction
Control
OetaWipers
Warehouse
STAM?ED?A'R15
2OOl6ox
1600l?allet,
12?allets
FACILITY9UMMARY
RM4A h.
w t ?6 2 h .
F G1 2 h .
SShifts
Clean, thipping SDays
?aini &6ake 7yg=1Day
Defecl,s=2OOOWm
Defective = 6%
CIT = 52 min.
CIO = 5 min.
Uptime = 95%
Shifts = 2
E?E = shift,
Trocessing_ 2131
Time gec.
13Om.(312Oe.)
APPENDIX C
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q

By Dan Jones and Jim Womack

The Lean Enterprise Institute

And with specialgratitude, as always,to John Shook.

@ Copyright 20OZThe Lean Enterprise Institute, Inc.

When you have learned to see value streams in individual facilities,

We therefore included a diagram in Learning to Seeillustrating different levels of mapping.

Extended mapping is harderbecausewe need to map acrossplant, divisional,and company

Conducting extended mapping requires the cooperationof many departmentsand divisions

Foreword by John Shook

Introduction: Changing Your Focal Plane

Part l: Getting Started

Part ll: The Gurrent State Map

Part lll: What Makes an Extended Value Stream Lean?

Part lV: Future State 1

Part V: Future State 2

Part Vl: The ldeal State

Part Vll: Achieving Future States

About the Authors

Appendix Value Strearn Mapping lcons

In this breakthroughguide we presenrour method. It proposesa progression

Eventually,with some creativethinking about processand information technologies,

The key is to summon your courage,form your cross-departmentand cross-company

Dan Jonesand Jim Womack

Maps of the extendedvalue streamcan be drawn fcrrproductscurrently in production

o In a power tools business,a product family might be medium-sizcdelectric

Note rhat the sameproduct family may be supplied to a number of different

Final Component Part Rarru Material

Summa Apogee Kappa Asia Steel

In subsequentrounds of mapping - if the collaboratorsin the mapping processfind ways

Single Facility Field of Vievv - Learning to See

Multiple Facilities Field of Vievv - Seeing the Whole

rrFrFrl - l--Ff I mr--f>

However,by their nature,extended maps crossfacilitiesand firms. Supposemanagersare

The Product Line Manager

The most successfulfirms we have encounteredusing these techniques have Procluct

However, we do not usually recommend what is sometimescalled a "product team"

The PLM in the most downstreamfirm will be even more effective

But this is not likely to be the case.Indeed, in today'sworld very

We can't guaranteethat anyone anl.wherealong a value stream can

The Wrong Role for Consultants and $taffs

Remember:Only managerstaking clear responsibilitycan fix

Future State 2 then introducessmooth, leveled pull with

An Ideal State may then co-locate

You may or may not find this particularsequence

A Diagnostic for Functions

Thus an important benefit of the mapping process- in addition to a breakthrough

A Diagnostic for Relations Betrrueen Firms

Fortunately,value stream mapping provides a clear and consistentlanguagefor firms

We've chosento focus on a high-volumeautomotivecomponentoffered with a small number

Windshield W-per Valrre Strearn Tearn

Michigan Steel Gamma Stampers Beta Wipers Alpha Motors

f ProductLine Head of Supplier

PARTII: THE CURRENTSTATEMAP 11

stiffenerand wiping edge

windshield wiper Assembly and Fabrication Steps

PARTII: THE CURRENTSTATEMAP 13

Total Steps Value Total Value

T:tH,ffis, /r"gqo;.f..1*$ 10m

PARTII: THE CURRENTSTATEMAP 15

First'lier Supplier Assembly Plant:

56. Ship via multi-pick-uproute (truck)El Paso,TX 96h

Car Company's State Street Assembly Plant: