Finding the Right Family for VSM
Hello colleagues and welcome back to Week-15 of the Weekly Lean Series. Today we are going to discuss an important aspect in Value Stream Mapping, which is the selection of the right group of product families to draw the best Value Stream Map for our organization.
First of all we are not ignoring anything due to this selection process. We are simply finding the right product families that go through the process steps existing in our value stream and that can represent a majority of our Value Stream in order to create the maximum benefit from the VSM; that is the analysis and definition of the next improvement steps towards the VSD (Value Stream Design). Also we want to improve our value stream that best serves the overall portfolio of our customers. As you may imagine your organization maybe serving many different types of customers with different product families and you want to make the maximum benefit for your customer groups.
It is also very clear that if you select all your product families, VSM may be too complicated to manage. For instance the Takt calculation can be very messy especially the different complexity product families can lead to an incorrect takt. Secondly due to many changing process sequences in order to represent different material flows you may have to draw duplicate representations of the same processes. Another drawback will be simply the calculation of lead times between processes , since you will treat parts as if they are for the same product group ,counting the inventories and adding them to the same lead time calculation may simply be erroneous. So it is very clear that you need to draw your VSM ideally for one product family or if the representation is not as you want it to be, maybe two product families.
So, it is clear that you need to select some product families to be in your VSM. The question is how to. In general terms the shop floor may already can tell you what is the representative product family by experience; which is generally the case. You may also check the product families and their process steps against total production volume and come up with a selection; which is yet again another way to go. However, if the product family structure is too complicated and the volume is volatile, these selection methods can be misleading.
Let us put on our thinking hats, shall we ? How can we select a certain subset of items based on a selection criteria? The answer is obviously an integer programming solution. Suppose you have got 6 product families that have different quantities, sales prices and that go under different processes. So we can maximize the overall value coverage in Sales Revenue, based on certain constraints like overall process coverage and quantity coverage and the maximum amount of product families we want to include in VSM and let the integer programming optimize the selection for us. Here you can see an example selection.
As you can see in the example our model identifies that we need to select Product Family-2 and Product-Family-6 to obtain over 40% process step coverage, 50% production quantity coverage while maintaining close to 50% of overall sales revenue. You can also go and maximize the production quantity and set a constraint on the revenue as well. Nevertheless now you know that you have selected the optimum mix for your VSM :)
