Global Food Collaborative

How many times have you told a customer, “That’ll be a week,” for a job that really only takes two hours?

Equipment changeover, other customers, batch and queue production, and downtime all delay product from moving out the door. You can even identify which tasks are “value added” and which are “non-value added.” For example, time on the sausage grinder is “value added” time that the customer is willing to pay for, but time spent changing grinder heads is “non-value added”. Customers don’t care if it costs you 1 minute or 30 to change the grinder heads. They just want it “faster, better, cheaper.”  Value is always defined from the customer’s perspective.

How much excess inventory is sitting around your shop just so you don’t have to make customers wait for products? On one hand, you don’t want to turn away customers and on the other you don’t want your money tied up in inventory. Either way as a plant manager, you’re paying for something that has no intrinsic value to your customer.

If your shop is like most in the U.S., about 95% of the time that a product spends in your processing plant is non-value added. You know your business, but when was the last time you took out a stopwatch and asked yourself, “How much time am I spending adding value that my customers are willing to pay for?” Try it, write it down, and prepare for a learning experience.

This productivity tool is called value stream mapping and it’s a great starting point for finding places to add customer value and cut waste in your business. The Alaska Manufacturing Extension Partnership, Inc.  (AMEP) did a value stream map at an Anchorage woodshop and came up with the following table.

Process                Value-Added Time (minutes)    Total Time (minutes)
Customer Order                         0                               15
Get Materials                             0                             105
Resaw Wood                              2                               49
Run Moulder                              4                               60
Run Sander                               4                                 7
Wrap & Stack                            5                               10
Ship & Close Job                        0                               30
TOTALS                                   15                             276

This particular shop could send a batch of moulding through the resaw, moulder, sander and wrap it for the customer in just 15 minutes. By contrast the time taken for tasks to support the job such as the order taking, procuring wood, equipment setup, stacking and collecting payment brought the total production time to 276 minutes. This means that only 5% of the time was spent adding value to the product. Unfortunately, this is very close to the national average. Armed with this information, the company identified points in the production process where it could achieve “faster, better, cheaper.”

As a plant manager, it is very difficult to increase productivity by making machines and people work faster. Often managers will meet increased demand by adding people and machines. A different approach is to focus your productivity improvement efforts on the 95% of the production process that is not spent meeting the core demands of customers. Using value stream mapping as a diagnostic tool for your business can help you identify and begin to make those productivity improvements.
Spending time is spending money. Value stream mapping is a great way to reduce time, reduce cost, and improve quality. And we all know the struggles of growing revenues while being faster, better, and cheaper.

For more on value stream mapping, read “Learning to See” by Mike Rother & John Shook or call the Alaska Manufacturing Extension Partnership, Inc. at (907) 777-7331.