02_03_P2 Drawing the Current State Value Stream Map (VSM) - Acme Case Study

Summary

The video covers a detailed case study on Acme Stamping Company, focusing on the production of steel instrument panel brackets for vehicle assembly. It explains the value stream mapping (VSM) process, emphasizing the flow of materials and information across departments like stamping, welding, and assembly. The presenter highlights the current state of Acme's operations, discussing inventory levels, cycle times, and inefficiencies in production, such as delays and imbalances between departments. The goal is to identify areas for improvement using lean manufacturing principles to optimize workflow and reduce lead times.

Takeaways

• 🔧 Acme Stamping Company produces steel instrument panel bracket assemblies for vehicle assembly plants, serving both left-hand and right-hand drive models.
• 🚚 The company's customer is the State Street Vehicle Assembly Plant, requiring 18,400 pieces per month, with 12,000 of type LH and 6,400 of type RH.
• 🏭 Acme operates in three main departments: Stamping, Welding, and Assembly, with daily shipments to the customer.
• 📦 Michigan Steel Company supplies raw material (steel coils) to Acme twice a week on Tuesdays and Thursdays.
• 📊 Acme's Production Control Department manages forecasts from the customer (90, 60, 30 days) and issues weekly schedules for internal departments and six-week forecasts to suppliers.
• ⏳ Stamping department has an automated 200-ton press with a cycle time of one second, but with a 5-day inventory backlog before processing.
• ⚙️ The welding workstations have manual processes, with varying cycle times (39 and 46 seconds), and accumulated inventory between departments creates inefficiencies.
• 🛠️ The assembly workstations have cycle times of 62 and 40 seconds, and despite 100% reliability, there's significant inventory buildup before assembly.
• 📈 The value-added time is just 188 seconds, compared to a total flow time of 23.6 days, indicating significant inefficiencies and delays in the system.
• 🔍 There is considerable imbalance (mura) in the system, with excessive work-in-process inventory and cycle time differences between departments, leading to waste and inefficiency.

Q & A

What is the main focus of the Acme Stamping case study?

The case study focuses on Acme Stamping Company, which produces steel instrument panel bracket assemblies for vehicle assembly plants. The analysis involves creating a current Value Stream Map (VSM) to identify inefficiencies in the production process.

What are the key departments involved in Acme’s production process?

The key departments in Acme's production process are Stamping, Welding, and Assembly. These departments are responsible for different stages of the manufacturing process.

Who supplies the steel coils to Acme, and how frequently are they delivered?

The steel coils are supplied by Michigan Steel Company, and deliveries are made twice a week, on Tuesdays and Thursdays.

What is the daily customer requirement from Acme Stamping, and how is it structured?

The customer, State Street Vehicle Assembly Plant, requires 18,400 pieces per month, which includes 12,000 left-hand brackets and 6,400 right-hand brackets. The components are shipped daily, with 20 brackets in a tray and up to 10 trays on a pallet.

How does Acme’s production control department coordinate with both its suppliers and customers?

Acme’s production control department coordinates with customers by receiving 90, 60, and 30-day forecasts and daily firm orders. It communicates six-week forecasts and weekly confirmed orders to Michigan Steel Company, their supplier. The department also issues weekly build schedules to Acme’s production departments.

What are the cycle times and machine reliability rates for the stamping and welding processes?

The stamping machine has a cycle time of 1 second and a reliability (uptime) of 85%. The first welding workstation has a cycle time of 39 seconds with 100% reliability, while the second has a cycle time of 46 seconds and 80% reliability.

How much inventory is observed between the stamping and welding stages?

Before the stamping process, there are five days' worth of steel coils. After stamping, there are 4,600 pieces of type LH and 2,400 pieces of type RH waiting to be spot welded.

What are the main issues identified in Acme’s production process?

The main issues in Acme’s production process include excessive waiting times and queues between processes, leading to high work-in-process inventory and low inventory turnover. There is a significant contrast between the long product lead time (23.6 days) and the short value-adding time (188 seconds).

What is the total product lead time at Acme, and how does it compare to the value-adding time?

The total product lead time within Acme’s factory is 23.6 days. In contrast, the value-adding time (the time spent on actual productive work) is only 188 seconds, highlighting inefficiencies in the process.

What lean tools could be used to improve Acme’s production process?

Lean tools such as Value Stream Mapping (VSM) can be used to identify waste (muda), imbalance (mura), and overburden (muri) in the system. Acme’s production process could benefit from reducing work-in-process inventory, balancing cycle times, and improving material flow between departments.

Outlines

00:00

🔍 Introduction to Acme Stamping Case Study

In this opening segment, the speaker introduces the Acme Stamping case study. The focus is on producing components for vehicle assembly plants, specifically steel instrument panel brackets in left-hand and right-hand versions. The company works with three departments: stamping, welding, and assembly. The steel is supplied by Michigan Steel Company twice a week, while the State Street assembly plant, the customer, requires 18,400 pieces per month. The production operates on two shifts, and manual processes pause for breaks.

05:03

📊 Production Control and Forecasting

This section explains Acme's production control system, which coordinates between the customer, supplier, and internal departments. The customer provides 90-, 60-, and 30-day forecasts, and daily confirmed orders. These are entered into a materials requirement planning (MRP) system, which issues six-week forecasts to Michigan Steel. Weekly schedules are sent to Acme’s internal departments. The discussion covers the necessity of ERP software for efficient coordination and the key role of the production control department in balancing inventory and production.

10:03

🛠 Detailed Breakdown of Acme’s Departments

This paragraph dives into the operational specifics of the stamping, welding, and assembly departments. Key metrics like cycle times, changeover times, and machine reliability are provided. The stamping department uses a 200-ton press, while spot welding and assembly processes are manual. Observed inventories and production outputs are noted, emphasizing the differences in efficiency and reliability across the various workstations. The shipping department stages products for daily shipment to the customer.

15:05

📦 Visualizing Acme’s Current State with Value Stream Mapping

The speaker begins outlining how to create a current state value stream map (VSM) for Acme. The map depicts the customer, supplier, production processes, and inventory levels between processes. Details of inventory and production timing are provided for each department. The speaker stresses the importance of accurate data collection for building the VSM and explains the symbols used to represent processes, inventory, and material flow in the diagram.

20:06

⏱ Calculating Lead Time and Process Efficiency

This section covers how to calculate lead time and work-in-process inventory in terms of days. For instance, the inventory between stamping and welding workstations is 7.6 days' worth of production. The total lead time from raw material to finished product is calculated to be 23.6 days, with only 188 seconds of actual value-adding time. The contrast between available time and value-adding time highlights inefficiencies, such as excess waiting and queue time between processes.

⚙️ Identifying Imbalance and Waste in Acme’s Production

The speaker wraps up by identifying areas of waste (muda), imbalance (mura), and overburden (muri) within Acme’s production. Disparities between cycle times across departments cause bottlenecks, leading to inefficient inventory turnover. The speaker suggests that the assembly department may be overworked due to higher cycle times and concludes with the need for further analysis to reduce waste and improve the production flow. The video description offers a link to the future state VSM.

Keywords

💡Value Stream Mapping (VSM)

VSM is a lean-management method for analyzing the current flow of materials and information necessary to deliver a product. In the video, the speaker discusses drawing the current state VSM for Acme Stamping, highlighting the stages from raw material to finished product and focusing on inefficiencies like delays and imbalances in the system.

💡Acme Stamping Company

Acme Stamping is the case study company discussed in the video, which manufactures components for vehicle assembly. The company is used to illustrate the practical application of VSM, with a focus on its departments like stamping, welding, and assembly. The case revolves around optimizing the production of a steel instrument panel bracket assembly.

💡Customer Requirements

The customer in the case study is the State Street Vehicle Assembly Plant, which orders 18,400 components monthly. The video emphasizes understanding these requirements, including daily shipments and specific quantities, to map the production flow accurately and address inefficiencies in Acme Stamping’s processes.

💡Cycle Time

Cycle time refers to the time it takes to complete one production cycle at each workstation. The video discusses different cycle times for various processes at Acme, such as one second for stamping and 39 seconds for welding. These variations in cycle time contribute to imbalances in the production system.

💡Changeover Time

Changeover time is the time required to switch between tasks or reconfigure machinery for different products. The video mentions that changeover time for stamping is one hour, while other manual processes have minimal or no changeover time. This impacts the overall production efficiency.

💡Inventory

Inventory refers to the amount of materials or products at various stages of production. The video details observed inventories, such as 4,600 pieces of LH and 2,400 pieces of RH components after stamping. High inventory levels between processes highlight inefficiencies and are a key focus of the VSM analysis.

💡Production Control Department

This department coordinates production schedules and material flows between Acme’s departments, customers, and suppliers. In the video, it’s described as central to managing forecasts and issuing build schedules. Its role in receiving customer orders and managing material requirements is crucial for smooth production.

💡Lead Time

Lead time refers to the total time it takes for a product to move through the entire production process, from raw material to finished goods. In Acme’s case, the lead time is calculated as 23.6 days. The video contrasts this with the value-adding time of 188 seconds, emphasizing the significant delays and inefficiencies.

💡Supplier

The supplier in this case is Michigan Steel Company, which provides steel coils to Acme Stamping. The video highlights the importance of coordinating with suppliers, noting that raw materials are delivered twice a week. Effective communication with suppliers is essential for maintaining the flow of production.

💡Uptime/Reliability

Uptime, or reliability, refers to the percentage of time a machine or process is operational and productive. The video notes that stamping has 85% uptime, while other manual processes have 100%. This disparity in machine reliability is another factor contributing to inefficiencies in Acme’s production system.

Highlights

Acme Stamping produces steel instrument panel bracket assemblies for both left-hand and right-hand drive versions of an automobile.

The customer is the State Street Vehicle Assembly Plant, which requires 18,400 pieces per month, broken down into 12,000 left-hand and 6,400 right-hand drive brackets.

Acme operates three departments: Stamping, Welding, and Assembly, with products shipped daily to the customer.

Michigan Steel Company supplies raw materials to Acme, delivering steel coils twice a week, on Tuesdays and Thursdays.

The production control department manages both supplier and customer interactions, using an MRP system to coordinate activities.

Acme receives 90, 60, and 30-day forecasts from the customer and sends six-week forecasts to the supplier.

The Stamping process uses an automated 200-ton press with a cycle time of one second and a changeover time of one hour. Machine reliability is 85%.

Spot welding processes (two workstations) have manual operations with varying cycle times (39 and 46 seconds) and 100% and 80% reliability, respectively.

Assembly workstations have cycle times of 62 and 40 seconds with no changeover time, and both have 100% reliability.

Acme has significant work-in-progress (WIP) inventory before and between processes, indicating inefficiency in material flow.

The product lead time, from raw material to finished product, is 23.6 days, but the value-added time is only 188 seconds.

A notable imbalance exists between the cycle times of different departments, leading to inefficiencies and potential bottlenecks in production.

There is a large amount of waste (Muda) in the system, with substantial waiting time and queues between processes.

The total available time at each workstation is 27,600 seconds, compared to the minimal value-adding time, reflecting significant unused capacity.

The current state Value Stream Map (VSM) reveals several areas for improvement, with potential focus on reducing waste and improving inventory turnover.

Transcripts

welcome back

this session we will uh discuss acme

stamping case study

and we will draw current vsm for acme

stamping

so first we will go through the

available information

and i will request you to highlight or

note down

important information so that you have

that

information with you once we draw the

current state

we asm so acme stamping company produces

several components for vehicle assembly

plants

this case concerns one product family a

steel instrument panel bracket assembly

in two types one is for left hand

and right hand drive versions of the

same automobile model

these components are sent to the state

street vehicle assembly plant

that is the customer so

basically there are three departments in

acme they are stamping

welding and assembly and the components

are

then staged and shipped to the vehicle

assembly plant on

a daily basis and we will go through

this information

of change over time later the steel

coils are supplied by michigan steel

company so that is the

supplier for acme and it supplies

the steel coils at twice a week

on tuesday and thursday then we have the

customer requirements or the

requirements of the

state street uh vehicle assembly plant

so

it requires 18 400

pieces per month out of which 12 000 per

month of type lh

and 6400 per month of type rh

customer plant operates on two ships

with overtime if necessary

pelletized returnable tray packaging

with

20 brackets in a tray and up to 10

trays on a pallet the customer orders in

multiples

of trays and there are 20 brackets in a

tray or

in other words there are 200 brackets

on a pallet one daily shipment

to the assembly plant by a truck

now the work time of acme

20 days in a month two shifts operation

in all production departments

eight hours every shift with overtime if

necessary and

two ten minutes breaks during each shift

manual processes stopped during breaks

now acme production control department

that is actually the central department

in this system because it coordinates

with both customer and supplier as well

as different departments of acme

so this department receives

a 90 60 and 30 day forecasts

from the customer and enters them to

materials requirement planning system

it issues six-week forecasts to michigan

steel company

via mrp that is the supplier so

receiving information from a customer on

one side and

and then and giving information

to the supplier on the other side

so it squares it secures coil steel

by weekly order release to michigan

steel company so there is a weekly order

to the supplier to supply the

steel coil it receives daily

firm order from the state street or

or the customer so apart from these

forecasts

there is a daily confirmed order from

the

customer as well so this production

control department

generates mrp based weekly

departmental requirements based upon

customer order

work in process inventory levels finish

good inventory levels and anticipated

scrap and downtime

so you can see there is a lot of

different difference in the time unit so

forecasts from the customer are received

based on

three months two months and one month

period

the forecast issued to the supplier

is for six weeks

then the instructions

or production requirements actually for

the internal departments of acme are

delivered on weekly basis so it's very

important to have some software in this

case they are having erp

to effectively coordinate all these

activities

so this mrp

system actually is used to issue weekly

build schedule to stamping welding and

assembly processes that are the

departments of acme

and it also issues daily shipping

schedule to the shipping department

because the products are shipped

daily to the customer

production processes as there are three

departments so first we have stamping

the press makes parts for many acme

products

it's an automated 200 ton press with

automatic material feed now these

pieces of information are important

the cycle time for stamping is one

second

so 60 pieces per minute change over time

is one hour

and machine reliability is 85

or uptime is 85

observed inventory is also important so

we have five days of coils before

stamping

4 600 pieces of type lh

finished stamping and 2 400

pieces of type rh finish stamping so

this is the inventory before

the stamping machine and this is the

inventory that

is produced by the stamping machine

and still is waiting for

spot welding now spot welding

workstation one

is dedicated to this product family it's

a manual process with one operator

cycle time is 39 seconds change over

time is

10 minutes reliability is 100 and

absorbed inventory

is 1100 pieces of lh and 600

pieces of type rh

then we have spot welding workstation 2

this is also dedicated to this product

family

it's also manual process with one

operator but the cycle time is different

it is 46 seconds

change over time is the same 10 minutes

reliability here is 80

and inventory observed for this process

is 1600 pieces of type lh and 850 pieces

of type rh

then there is assembly workstation one

this is also manual process with one

operator cycle time is 62 seconds

there is no change over time because

this is a manual process

reliability is 100 percent and observe

inventory is 1200 pieces of type lh and

640 of type rh

an assembly workstation 2 is also

dedicated to this product family

manual process with one operator cycle

time here is 40 seconds

change over time is none because it's a

manual process reliability is hundred

percent and observing

20 is 27 100 pieces of type legend

1440 pieces of type rh

and finally we have the shipping

department it removes parts from finnish

goods warehouse and stages them for

track shipment of the customer now we

will draw the current

state vsm so again we will draw

the customer on the

right side upper right corner so this is

the symbol for

the customer so that is state street

assembly plant

and then we have the data box that

specifies the information

uh the requirements for the customer so

18 400 pieces per month

12 000 of type l and 6400 type r

the product is accounted in terms of

trays

so there are 20 pieces in a tray and

this plant customer's plant operates in

two ships

then we draw the

processes for

so as we saw there is a five days

inventory before stamping department so

this is the icon for the process name of

the process

and then this is the data box specifying

the data related to stamping so cycle

time of one second change over time of

one hour uptime or reliability of 85

percent

and this is the time for for the two

shifts available

and ep stand for every part every two

weeks

this is the inventory between stamping

and

welding station one and this was the

observed inventory after stamping

and these are the details for for

welding workstation one i'm not reading

them because

i just saw this information on the

previous slides

again the observer inventory after

welding station

one and this is the the process icon for

welding workstation two and this is the

information about welding workstation

two

and same is about assembly workstation

one

and assembly workstation two and finally

we have the shipping department

and below this inventory icon

we have written the inventory that is

produced by this process so this is the

inventory actually produced by assembly

uh workstation two

then we we draw the

supplier so again

the icon for the outside organizations

so that is the same as it was for the

customer

so the material supplies is in

in 500 feet coils and it is supplied

every tuesday and thursday so you could

see

it is mentioned on this shipment icon

the finished products actually supply to

the customers are supplied daily

but the raw material is supplied by the

supplier to acme is

twice a week on tuesday and thursday so

we can have this filled arrow or

a hollow arrow to show the movement

of material from supplier to the

organization or

or the movement of finished products

from the organization to the customer

so the supplier of raw material is

identified with the factory icon as i

mentioned

it in this case they deliver 500

foot coils and a track icon and uh

and a broad arrow indicate movement of

finished goods to the customer and raw

material to the site as i mentioned

so finally we draw the production

control department

and here you will see a lot of

information flow so this is

again the symbol for for a department or

a process to

do rectangles to rectangular boxes

joined together

so you could see that there is a 1960

and 30-day forecast

from the customer to the production

control department

and there is a daily confirmed order

from

other customers to acme through its

production control department this

production control department

delivers six-week forecasts to its

supplier that is michigan steel company

as well as weekly confirmed order

to the supplier and there are

weekly build schedules and weekly

requirements

communicated from this production

control department to all departments

of acme so that is the weekly schedule

and here actually the head of the arrow

is missing

sorry for that so this is the push arrow

so that is showing the material flow

between departments of acme along with

this symbol for

inventory and again below

these processes are the data boxes for

for each of the process

so push arrow symbol of inventory

and the amount of inventory so this is

uh almost the complete vsm we are

missing just timeline so far

so moving from right

the customer its

requirements then flow of information so

this symbol

is for electronic information flow

and these symbols are for

manual information flow

and then on the on the left side we have

the

supplier and these are the departments

of acme and flow is shown from left to

right

now finally the timeline

so there was a five days of inventory

uh before the stamping department the

cycle time of stamping was one

second the cycle time for welding

station one was 39 for welding station

two it was 46

assembly one it was 62 and for assembly

two it was 40 seconds

now we have simply converted the

inventory between different processes

into into days so

for example here the requirement for

the customer was 18 400 pieces per month

so

that 18 400 pieces per month and

and the organization works 20 days a

month so 18

400 over

20 that will be equal to 920

pieces per day so that is the daily

requirement

of of state street assembly plant

now the work in process inventory

between stamping and

the welding station one is

4600 plus 2400

so that turns out to be 000 so that

divided by 920 will give us

the work work in process inventory in

terms of days so that will be equal to

4 600 plus 2400

divided by 920

that we had here so that will turn out

to be

7.6

7.6 so this inventory of 7000

brackets between stamping and welding

station 1 is worth

an inventory of 7.6 days

similarly between welding station 1 and

welding station 2

we have 1100 plus 600 so that is 1700

divided by 920 so that is

equal to 1.88

so the inventory of 1700

brackets between welding station 1 and

world welding station 2

is equivalent to an inventory of 1.8

days

and similarly we can do the same for

for this work in process inventory so

that will be equal to

2450 so 1600

plus 850

divided by 920 so that will be equal to

2.66 or about 2.7

and similarly this one uh

18 040 divided by 920

will be equal to a work work in process

inventive worth

two days and finally

we have this 2700 sorry 2700

plus 1440 divided by 920

so that will be equal to 4.5

so if we add these together they all

turn out to be 23.6 days so in other

words we can say that

the raw material starting from here

till this final process of

assembly before shipping

takes 23.6 days so the

product lead time actually total flow

time

of the product within the factory is

23.6 days

and more importantly here is that the

value adding time is just

188 seconds so that is a big

big contrast so if you if you make some

calculations

so we saw somewhere here actually

that the available time at each

workstation is

actually two shifts so that turns out to

be about

this 27 600 seconds

but the value-adding time throughout the

whole

value stream is just 188 seconds

within the organization within acme it

is just 188 seconds

while we have 27 600 seconds available

at each workstation so in simple words

a lot of time is actually being wasted

between processes

there is a lot of weight or a lot of q

is there

between processes so the time spent

within the organization is too much

and the value adding time is too small

so

this will also result in actually low

inventory turnover so that is actually

how fast the

raw material

starting from here and these these coils

is converted into the finished product

here so the faster it is done the higher

is the inventory turnover the slower it

is done the lower is invented turnover

so we can think about it we can

analyze this system using different

tools of lean

and see how we can improve with these

processes because there is

a lot of imbalance so you can see

actually

there is a lot of

mura as well in this case

there is a lot of weight there there is

a lot of q

but there is a lot of unbalance uh

there is a lot of imbalance in the

system as well so a lot of work in

process inventory here

relatively less here but still it is a

lot

and of course you can see the difference

of

cycle time here as well one second in

stamping but 39

in welding station 1 and 46 62 40 so

there is

a lot of mura in this system as well

so maybe practically speaking the

assembly department

one may have to work harder because of

the higher

cycle time as compared to others so

eventually

we may have mori in the system as well

so the slower department will have to

work harder

in order to meet the customer

requirements

so we can further analyze it

and see where improvements can be made

and how we can move from this current

state to the future state vsm

and you can follow the video given in

the description actually

to see how the future state for acme

was drawn thank you very much