Create value streams and production flow models
This unit explains how to create value streams and production flow models in Supply Chain Management.
Value stream
The value stream is defined as the sequence of processes from raw material to final customer or from product concept to market launch. The value stream should encompass the entire supply chain.
In Supply Chain Management, the value stream is represented by one or multiple production flows. It is also represented as an operating unit in the organization hierarchy of the enterprise. The value stream should be analyzed to eliminate any non-value adding activities.
Production control > Setup > Lean production flow > Value streams
Value stream mapping is the process of identifying and charting the flows of information, processes, and physical items across the entire supply chain, from the raw material supplier to customer possession.
When considering an implementation of lean manufacturing in Supply Chain Management, you must perform the initial work of defining the value streams, mapping them, and eventually setting them up.
The value stream is configured as an operating unit, which allows you to use it as a financial dimension. Multiple production flows can exist for a company that uses this operating unit for each company.
Production flows
A lean manufacturing scenario is more than an accumulation of unrelated kanban rules or material-supply policies. The flow of material and products throughout work cells and locations for a specific production or supply scenario can be described as a sequence or small network of process or transfer activities called a production flow.
The result of the mapping process, the future state value stream, can then be modeled in Supply Chain Management as a production flow version.
All processes of the value stream are modeled as process activities. Movements or transfers can be modeled as transfer activities if the transfer status must be registered or if an integration to inventory picking or consolidated shipments is required.
Many production flows can make up the value stream. The production flow can produce products for consumers or other production flows. In the case where the products of a production flow are used in another flow, it is named a feeder flow.
Production flows are considered the foundation of lean manufacturing because they perform the following tasks:
Define the process and transfer activities of the value stream.
Support the kanban rules in defining the activities that a kanban goes through.
Provide an activity-based context for the planning and production processes.
Establish a cost context for the various kanban production scenarios.
To support continuous improvement, production flows are implemented in time-effective versions. This implementation allows you to copy an existing production flow version, including all related kanban rules, to a draft version of the production flow, and then model the future-state production flow before validating and activating it for production.
Production flow model
The production flow model predefines the calendar and capacity usage for a group of work cells and for the detailed settings in the production flow processes. It also predefines the structure and behavior of the kanban schedule for the cells.
A unique production flow model should be defined for a category of work cells that have similar behavior. You can create a production flow model in Production control > Setup > Lean production flow > Production flow models.
Consider the following aspects when you are creating a new Production flow model:
The Model type field can be either Throughput or Hours.
The EPE Cycle in days field defines the Every Product Every (EPE) cycle that is used in automatic planning. The value in this field is used to calculate the period when a kanban job is scheduled: Start date = Due date - EPE cycle. After you create a production flow model, you can change the value of this field. The change does not affect jobs that are created.
The Planning period type field can be set to:
Day - The kanban schedule consists of periods of calendar days; the Kanban schedule board displays days for each column.
Week - The kanban schedule consists of periods of weeks; the Kanban schedule board displays weeks for each column.
The Planning time fence field determines the planning periods, which can be either days or weeks. The Kanban schedule board displays the kanban jobs that are scheduled during the planning time fence that is defined.
The Capacity shortage reaction can be set to any of the following values:
Postpone
Cancel
Add to request period
Distribute
Model type
The most important property of the production flow model is the model type, which selects the method to measure capacity for the work cell.
The production flow model defines the capacity settings for the work cell and has the following options:
Throughput - The capacity and load of a work cell are measured in quantities of product that are produced.
Hours - The capacity and load of a work cell are measured in periods of hours and minutes. After you create a production flow model, you cannot change the value of this field.
Every Product Every (EPE) cycle in days
EPE defines the number of days within the EPE
cycle that is used in automatic planning. The value in the EPE field is
used to calculate the period when a kanban job is scheduled: Start date = Due date - EPE cycle.
After you create a production flow model, you can change the value of this field. The change does not affect jobs that were previously created.
Capacity shortage reaction
The Capacity shortage reaction defines the method of kanban scheduling to use if there is no capacity available during the required period. This parameter is only used when kanban auto planning is used for process jobs. The options for this parameter are:
Postpone - The job is postponed until the day that throughput becomes available.
Cancel - Automatic planning of the kanban job is canceled.
Add to request period - The job is added to the scheduled period of the required date. The result is that the work cell is overloaded during the scheduled period.
Distribute - The kanbans of a single event are distributed to the available production periods, starting with the first available period.
Planning period type
The planning period is used for automatically planning kanbans and using the Kanban schedule board. Options for the planning period are:
Day - The kanban schedule consists of periods of calendar days. The Kanban schedule board displays days for each column for scheduling.
Week - The kanban schedule consists of periods of weeks. The Kanban schedule board displays weeks for each column for scheduling.
Planning time fence
The Planning time fence defines the number of planning periods that are defined in the Planning period type that you can use in the planning time fence.
Planning periods can be either days or weeks. The Kanban schedule board displays the kanban jobs that are scheduled during the defined planning time fence. Kanbans can only be scheduled within this planning time fence.
Simple production flow
The simplest form of a production scenario for lean manufacturing is a production flow where all operations are grouped to a single process activity in a single work cell.
Scenario
You have set up a production flow to model the process of painting covers. The Speaker Cover Paint Shop is picking unpainted covers from the warehouse. The painted covers are supplied to a supermarket where they can be picked for other manufacturing processes or for sales.
The production flow is set up for the general activity "painting," no matter what item variant, color, or specific painting process is applied, providing that it is happening in the same group of resources at the same physical location. The activity times and cycle times for a production flow activity are initially set for an average process.
A fixed quantity kanban rule is then created for the process activity for "painting," which manages the kanban signal for the painted speaker covers that replenish the Painted Speaker Cover supermarket.
High-level production flow
The high-level production flow shows the interconnection between activities and kanbans.
To help explain the high-level production flow, the following example includes a complex business requirement that consists of different scenarios in sequential order.
Scenario 1: Replenish the warehouse that processes the jobs
You have set up a production flow and kanban rules for the USMF company to model the process of assembling and packaging car speakers to be sold to the customer.
Beginning with the customer pull, the various elements of the production flow are broken down into a Packaging activity and Transfer to warehouse activity. Therefore, USMF replenishes the warehouse where material is packaged and transferred to the customer.
A process activity controls the packaging and a transfer activity controls the transfer to warehouse. A sales event kanban is used to trigger the kanban based on sales order demand and then pulls the finished goods through the packaging process to the warehouse that runs the jobs.
Scenario 2: Replenish the sales warehouse
A process activity controls the packaging, and a transfer activity controls the transfer to the Sales warehouse. A scheduled kanban is used to trigger the kanban based on demand and then pulls the finished goods through the Packaging process to the Sales warehouse.
Scenario 3: Packaging materials replenishment
The packaging process requires packaging materials that are stored in another warehouse to be used in the process. A transfer activity moves the packaging parts from a packaging material warehouse to the packaging work cell. A fixed quantity withdrawal kanban is used to control this movement.
Scenario 4: Assembly and packaging activities
A process activity controls the car speaker assembly process that is performed before the packaging process. A sales line event kanban is used to trigger the kanban based on the upper level sales demand to perform the assembly.
Scenario 5: Mechanical parts replenishment
The car speaker assembly process requires mechanical parts that are stored in another warehouse to be used in the process. A transfer activity moves the packaging parts from a mechanical parts warehouse to the car speaker assembly work cell. A fixed quantity withdrawal kanban is used to control this movement.
Scenario 6: Electrical and speaker assembly
The electrical assembly process supplies a supermarket in WIP for the Car Speaker Assembly process. The parts are not posted in inventory. A fixed quantity manufacturing kanban replenishes the supermarket for these mechanical pre-assembly parts. The Car Speaker Assembly process posts this material to WIP.