Complete the future state mapping for the current state in the last slide of “Lecture 6: Value Stream Mapping”. Collected data is included within the CSM. You can draw it by hand and scan the document and submit.

WELCOME Value Stream Mapping:

Best Practices & Application to Large Scale Airplane Program

Doug Hunter, Industrial Engineer/Lean Consultant Misty Scott Ask (Dehn), 767 Industrial Engineer

Doug..L.Hunter@Boeing.com Misty.L.Dehn@Boeing.com 2004 IIE Annual Conference

Agenda • Overview

– Value Stream Mapping – Boeing – Lean Manufacturing Assessment linkage to Value

• Value Stream Mapping Project & Team Structure

• Statement of Work

• Approach

• Accomplishments

• Application

What is a Value Stream Map? Definition: A Value Stream Map depicts all the *actions both value added and non-value added (internal and external) required to bring a product through the flows of engineering and manufacturing. The map represents the flows utilized to deliver products to the customer.

Boeing 2016 Vision

•Lean Enterprise Moving Line

•Large Scale Integrator

Plug and Play

Lean Manufacturing Assessment

• Leadership • Factory • Teams • Supplier & Inventory • Mfg Process • Continuous Process

Improvement • Culture

Lean Manufacturing Assessment

Lean Manufacturing Element Traditional Lean

1. Leadership 1 2 3 4 5 Value Stream Improvement Process flows for key product lines are documented with appropriate measures (examples include lead- time, cycle time, quality yield, labor hours, bottlenecks, inventory levels, and quality/delivery performance). Define Current State Design Future State Identify and work leverage points Establish measures and targets

Product process flow charts or value stream maps do not exist for key products

Material and information flows for 90% of key product families defined for current state using flow chart or current state map. Process improvement is in infancy, but not tied to any strategic value stream improvement. Leverage points are identified.

Current state and future state defined for 90% of major product families. Process improvement in adolescence and some evidence of flow improvement being implemented according to strategic priority. Value stream improvements are consistent with site business objectives.

Process and flow improvement (PBM/AIW/3P/etc) strategically applied and tracked in pursuit of future state. Significant gains from value stream improvements evident. Evidence that first tier suppliers are conducting value stream analysis and improvements of their own.

Majority of initial future state map improvements fully implemented. Future state maps are evaluated at least annually with strategic tie-in to business site goals. Process/flow improvement is fully integrated in culture. All supplier tiers benefiting from value stream improvements.

Industrial Engineering Leadership Team Sponsored Six Enterprise-wide

Industrial Engineering Subject Matter Expert Teams

•Teams to collaborate, define, document, and share “Best Practices”across the enterprise

(1) Constraint Based Scheduling

(2) Standard Work

(3) Project Management

(4) Point of Use

(5) Value Stream Mapping

(6) Master Schedule Process

Industrial Engineering Enterprise Value Stream Mapping Subject Matter Experts

Core Team Members

Name Region Site Organization Joe McCann Eastern Philadelphia I.E.Manager Liz Cange Eastern St. Louis Industrial Engineering/Lean John Peters Eastern Philadelphia Industrial Engineering Bill Downs Eastern Philadelphia SM&P Lean Jim Pipinos Eastern Philadelphia Industrial Engineering Karlos Steele Eastern Macon Production Control - I.E. Arthur Smith Eastern Macon Production Control - Lean Misty Ask (Dehn) Northwest Everett Industrial Engineering Douglas Hunter Northwest Auburn Industrial Engineering/Lean *Shawn Bolger Southwest Mesa Industrial Engineering *Tarek Baranski Southwest Southern California, BSS Industrial Engineering

* New team members

Industrial Engineering Enterprise “VSM” Subject Matter Experts

Statement of Work Process Flow Team Comes to an

Enterprise Common Definition

Of the Topic

Each SME Brings Their Topic Expertise

To The Team

Team Member Facilitates Initial

Meeting

Team Appoints a Member as

Facilitator/Leader

Team Member Supports,

As Required

Each SME Shares Their Site’s Approach

To the Topic

What is the Cost, Resources,

Tools Required; Benefits?

Identify Training And Development

Of Resources Required

Analyze Site Topics For Commonality

Analyze Site Topics To Suggest

Improvements

Analyze Topics: Would it Work at My

Site?

Team Develops Schedule & Format Of Follow-on Mtgs & Communications

At Each SME Meeting The Following is Expected:

Monthly Report-Outs To Their Respective

Site Enterprise Leadership Member

Analyze Topics: Would a Portion of it

Work at My Site?

Analyze Topics: Do we Have One Topic That Would Work at All Sites?

Team Comes to Consensus on the

Results of This Analysis

Team Prepares “Package” to Give to

Enterprise Leadership Team

Appoint SME to Give Team Status at Each

Enterprise Quarterly Meeting

“Package” : Recommendations, Cost, Risks, Benefits

Appointed SME(s) Presents “Package”

To Enterprise Leadership Team

Leadership Team Reviews “Package”

For Enterprise Collaboration

Leadership Team Develops and

Plan, As Required Cascade Deployment

Also in “Package”: Recommendation on Future Direction of

SME Team

Approach

• Common understanding of definition

• Analyze site for common Value Stream Mapping similarities and differences

• Identify and Build upon “Best Practices”

• Team accomplishments • Process • Resources • Tools • Training • Application

Process

Resources

Tools

Training

Application

Common Definition – What is a Value Stream Map?

A Value Stream Map depicts all the *actions both value added and non-value added (internal and external) required to bring a product through the flows of engineering and manufacturing. The map represents the flows utilized to deliver products to the customer.

Metrics from specific business objectives associated with activities and processes are depicted on the map.

(*at a specific point in time)

Process Accomplishments • Standardized approach to VSM and MAP Elements

Process

Future State

Improvement Opportunity

Value Stream Current State Map 767 Program

Supplier

Cum Value Dial Charts

Process Data Elements

Time Frame

•Starburst activities •Targets •Timeframe •EP/Financial Assessment •Savings incorporation

•Supplier Information •Process Information •Data Elements •Information Flow •WIP/Inventory Information (Cum Value) •Timeline

Current State

Value Stream Future State Map

Improvement opportunities

Targets

Process - Accomplishments Process

41 Section 43 Section

Labor

Material

WIP

Total Cost

ACC 311, 312 Actual Cycle Time (flow days)

12 Crew Size -

Labor Hours 105 Jobs 51 Material Cost $XXXX Components 686 WIP Units 2 Internal Suppliers X WIP Value $XXXX External Suppliers Y Defect Qty 0 Square Footage - # of Shifts 1/2

Dial Charts

Data Elements Strategy

• Training • Workshops • Events

Reference Number

Workshop for Organization

Workshop Title (Focus Area)

Planned Workshop

Date(s)

Planned No. of

Workshop Days

Workshop Responsible

Phone Number

Lean Office Facilitator(s)

Workshop Type

Pre-Workshop Training Required

1 Factory Operations

10 Year Facility Requirements Forecast. Lay- out factory for flow 4.0 3P Lean Overview

2 Factory Operations

Create Gated Process Owners that focus on improvements across silos, functions, and programs 3.0 AIW Lean Overview

3 Factory Operations

Create Gated Process Dollar Metrics with visuals 3.0 AIW Lean Overview

4 MASS Project

Implement a communications process for the Work Cells 3.0 Ray Coyle AIW Lean Overview

5 MASS Project

Create Process based vs project based Work Cells. Change infrastructure 4.0 Ray Coyle AIW Lean Overview

6 MASS Project

I&T AIW Workshop for Bus Module Integration Phase to create standard work 4.0 Harold Rice AIW Lean Overview

7 MASS Project

I&T AIW Workshop for Bus Module Test Phase to create standard work 4.0 Bob Berry AIW Lean Overview

8 MASS Project

I&T AIW Workshop for Payload Module Integration Phase to create standard 4.0 Open AIW Lean Overview

9 MASS Project

I&T AIW Workshop for Bus Module Test Phase to create standard work 4.0 Marian Chao AIW Lean Overview

10 MASS Project

I&T AIW Workshop for Integration Phase to create standard work 4.0 Mike Sheets AIW Lean Overview

11 MASS Project

I&T AIW Workshop for Initial System Integration Test Phase to create standard work 4.0 Bob AIW Lean Overview

12 MASS Project

I&T AIW Workshop for Spacecraft Thermal Vacuum Phase to create standard work 4.0 ??? AIW Lean Overview

13 MASS Project

I&T AIW Workshop for Spacecraft Thermal Vacuum Bus Phase to create standard work 4.0 Cathi Graham AIW Lean Overview

14 MASS Project

I&T AIW Workshop for Spacecraft Thermal Vacuum Payload Phase to create standard work 4.0 Shawn Struc AIW Lean Overview

15 MASS Project

I&T AIW Workshop for Spacecraft Thermal Vacuum Thermal Phase to create standard work 4.0 Richard Warren AIW Lean Overview

16 MASS Project

I&T AIW Workshop for Space Simulation Laboratory Phase to create standard work 4.0 Kirt Bogan AIW Lean Overview

Microsoft Project Lean Implementation Plan

Gate 10

LaunchCon- tractor

Gate 12

Gate 13

Gate 3

Gate 7

Gate 11

S/C I&TPLM I&T S/C Mate

PULL

PU LL

Bus Struct Build

Antenna I&T

Gate 9

BM I&T

I

I

PULL

PULL

Gate 3

Gate 3

Gate 3

Gate 3

Bus Units Fab, Assy, Test Gate

7U I

Bus Layout / Design

Gate 2

Validate Config,VCRI, Eng & Test Plans

Gate 1

Proposal & Negotiation

Gate 1A

Develop B/L Schedule, SOW,Config, Specs

Gate 2U

Unit Req't Definition Gate

6U

Unit Design

Gate 2A

Gnd Segment,Sat / Mission Ops Definition

Gate 4

P/L Layout / Design

Gate 5

Ant Layout / Design

Gate 18

Mission Ops

Launch Site Ops

P U

LL P

U LL

Gate 6A

Satellite Ops Design

Gate 6

System Design,Eng & I&T Plans

Gate 15

Validate & Install MCC S/W &Database

Gate 16

RT SS Build, On Station ROPs,

SCF FAT Gate 17

Gnd System Delivery & Validation

Gate 19

Transfer Customer I/F to

COSC

P U

S H

Gate 12A

Solar Array I&T

Gate 8U

P/L Products Fab, Assy, Test

I

Gate 8

Gate 14PUSH

P U

LL

PULL

Weekly Gate ScheduleUpdates (ESS)

Current State Value Stream

Map

PAS 1R Critical Path Cummulative Cost

0%

20%

40%

60%

80%

100%

120%

1 to 4 4 to 8 8 to 12 12 to 13 1 to 17 13 to 18

Cumulative Cost Curve

PAS 1R Cycle Time

30.0% 16.2% 18.2% 8.2% 20.4% 13.6% 34.1% 24.7% 30.4% 76.3% 28.1%

Test Anomalies

0.0% 0.0% 47.1% 0.0% 10.9% 0.0% 0.7% 3.8% 1.2% 7.1% 29.1%

Capital Equipment - Approx *

7.3% 1.2% 16.4% 1.2% 6.7% 2.2% 5.8% 20.4% 5.7% 1.4% 27.9%

Pareto Analysis “Dial Chart”

PUT DESCRIPTION OF PROCESS HERE BALANCE THE LINE

0.0

1.0

2.0

Description 1 Description 2 Description 3 Description 4 Description 5 Description 6 Description 7 Description 8

D AY

S DAYS TAKT

Line of Balance

Goal is Standardized VSM across the Enterprise

Resource and Tools - Accomplishments

Tier 0 Program Site

Major Sub-Assembly Tier 1 Tier 2

Tier 3 Tier 4

Tier 5

Minor Sub-Assembly Fabrication

Support

Resources

•Visions/Goals/Objectives •Who is involved •Program Management Commitment •Define Boundaries/Level •Metrics •Data Collection •Responsibility Matrix

•Involve employees •Identify improvement activities •Improvement venue (3P, AIW) •Timeline •Lean Manufacturing Assessment •Incorporate savings

Pre

Post

• Pre/Post VSM Activities checklists

Tools

ToolsTools- Accomplishments Standardized Symbols Library

11/1/99 19

Revision 3/15/00

Material Flow Icons

Assembly XYZ

Corporation

Data Box

C/O=30 min. C/T=45 min.

3 Shifts. 2% Scrap

I

Inventory Supermarket

Shipment Push Material Flow to Customer or From

Supplier

Physical

FIFO

First-In-First-Out

Process Box

Supplier/ Customer

Mon + Wed

Pull

5

Max. = X Pieces

Min./Max.

11/1/99 20

Revision 3/15/00

Information Flow Icons

Manual Information Flow

Electronic Information Flow

Weekly Schedule

Information Box

OXOX

Load Leveling Box

Transport or Purchase Kanban

Ordinary Kanban

Signal Kanban

Kanban Post

• Library of Common and Unique symbols

Procurement

Production Control

SCHEDULE

ORDERS

Stockroom

Trim Drill Assembly

Shipping

2 4 1

Shift = 1 Shift = 1 Shift = 1

CT = 2.0 CT = 2.0 CT = 2.0

Set up = 3.0 Set up = 3.0 Set up = 3.0 Avail

Hours = 4.0 Avail

Hours = 4.0 Avail

Hours = 4.0 Std Hr. = 5.0 Std Hr. = 5.0 Std Hr. = 5.0

Hr. = 6.0 Hr. = 6.0 Hr. = 6.0 7.0 7.0 7.0

8.0 8.0 8.0

9.0 9.0 9.0

sq. ft. = 800.0 sq. ft. = 1000.0 sq. ft. = 2000.0

Production 3 2 1 2 Lead Time = 8 days

Process Time = 1.5 days

Sample Current Value Stream Map

DAYS

MRP

0.5 0.5 0.5

No. of Defects No. of Defects No. of Defects

Suppliers

I

BARCHARTS

PUT DESCRIPTION OF PROCESS HERE BALANCE THE LINE

0

1

2

3

4

5

6

Trim Drill Assembly

D A

YS DAYS

TAKT TIME

PUT DIAL CHART HERE

Customer

II I

Tools

Standardize Value Stream Mapping Template

Tools – Accomplishments

TrainingTraining - Accomplishments Standardized Training

• Developed “Best Practices” VSM training Course (adopted “Best Practices” from all Sites) and a Information flow supplement

TrainingTraining - Research

• Use large post-its • List each step/process. • Arranged until proper sequence/order • Place process boxes below • Leave space between process boxes • Post data in data boxes under each step/process • Identify where flow stops and batch and queue occurs • Lead time is calculated by dividing inventory quantity by daily customer requirement (inventory is information in queue).

• Use a pencil to transfer to 11” x 17” paper after consensus has been reached.

• Title and date map.

Mapping “White Collar” Operations

TrainingTraining - Research

Data Elements

•TAKT TIME • Cycle time • (Rework) First Time Yield • Wait Time • Number of People • Set-up Time • Number of Queues • Value vs Non-valued added time • Distance between processes

Typical Data Elements and Tips

Tips

• Obtain a physical copy of the output (each process)

Process Summary “Best Practice”

Boeing Limited

Boeing Limited Physical Inventory

79%

Other 1%Property, Plant &

Equipment 13%

Program Equipment 7%

Materials 62%

Overhead 27%

Labor 11%

$38M $7M

$17M

767 Program 5 Year Goals

Unit Cost Per A/P $62.7 M w/o Engines

Gross Assets In Millions

$1,205M

$192M $371M

Program 5 year Goals:Program 5 year Goals: ••Reduce airframe unit cost by 25%Reduce airframe unit cost by 25% ••Achieve > 10% operating margins Achieve > 10% operating margins ••Attain and stabilize a build rate of 4 airplanes per monthAttain and stabilize a build rate of 4 airplanes per month ••Improve Asset turnsImprove Asset turns

Program Goals

Vision 2016

Current State Map Future State Map

Improvement Plan

Metrics

Rolled up into Site/Program Business Plan/Metrics

Boeing Limited

Boeing Limited

POP SUPPLIER ALIGNMENT 767 Unit Cost Savings

4Qtr 2001 1Qtr 2002 2Qtr 2002 3Qtr 2002 4Qtr 2002 1Qtr 2003 2Qtr 2003 3Qtr 2003 4Qtr 2003 1Qtr 2004 2Qtr 2004 3Qtr 2004 4Qtr 2004

U ni

t C os

t S av

ng s

Cumulative $ Value Packages Submitted-SCDT Cumulative $ Value Packages Contracted-SM&P

Planned Savings of Packages Submitted Planned Savings of Packages Contracted

Unit Cost Savings Target

Boeing Limited

Boeing Limited

767 Value Stream Alignment VSA Metrics 2001/2002

12 Month VSA Window

Number of Low Dollar Suppliers (<$20,000 total production hardware per year)

Long Lead Time Part Numbers (>=250 days)

Number of Unique Part NumbersNumber of Suppliers

664 663 667 661 661 662 668 668 657 656 656 655

38 38 37 37 36 36 36 35

598

38 38 360

100

200

300

400

500

600

700

800

Ba sel

ine Jul

-01 Au

g-0 1

Se p-0

1 Oc

t-0 1

No v-0

1 De

c-0 1

Jan -02

Fe b-0

2 Ma

r-0 2

Ap r-0

2 Ma

y-0 2

Jun -02

Jul -02

Au g-0

2 Se

p-0 2

Oc t-0

2 No

v-0 2

De c-0

2

Baseline Total Suppliers Target Internal Suppliers

48,510 48,649 47,634 47,877

48,261 47,843 46,645

42,667 42,704 42,885 41,422

48,264

30,000 32,000 34,000 36,000 38,000 40,000 42,000 44,000 46,000 48,000 50,000

Ba sel

ine Jul

-01 Au

g-0 1

Se p-0

1 Oc

t-0 1

No v-0

1 De

c-0 1

Jan -02

Fe b-0

2 Ma

r-0 2

Ap r-0

2 Ma

y-0 2

Jun -02

7/2 /20

02 8/2

/20 02

9/2 /20

02 10

/2/ 20

02 11

/2/ 20

02 12

/2/ 20

02

Baseline Actuals

2,094 2,024

1,884 1,9611,9631,914

1,789

1,5641,5541,526 1,422

2,001

1,801

1,000

1,200

1,400

1,600

1,800

2,000

2,200

Ba sel

ine Jul

-01 Au

g-0 1

Se p-0

1 Oc

t-0 1

No v-0

1 De

c-0 1

Jan -02

Fe b-0

2 M

ar- 02

Ap r-0

2 Ma

y-0 2

Jun -02

Jul -02

Au g-0

2 Se

p-0 2

Oc t-0

2 No

v-0 2

De c-0

2

Baseline Actuals Target

283 287 278 282 284 292 290 285 279 283 285283

7 7 7 6 5 5 4 3 3 2 2

255

0

50

100

150

200

250

300

350

Ba sel

ine Jul

-01 Au

g-0 1

Se p-0

1 Oc

t-0 1

No v-0

1 De

c-0 1

Jan -02

Fe b-0

2 Ma

r-0 2

Ap r-0

2 Ma

y-0 2

Jun -02

Jul -02

Au g-0

2 Se

p-0 2

Oc t-0

2 No

v-0 2

De c-0

2

Baseline Total Suppliers Internal Suppliers Target

767 Value Stream Alignment Application

Application

• Integrated business vision, goals, strategy

• Identifying data elements

• Develop value stream maps

• Implementation strategy

• Capturing financials

• Case studies

Business Objectives Integration of Goals and Vision

2016 Vision oLean Enterprise oLarge Scale Integration

Program Goals oReduce Airplane Cost by 25% oAchieve > 10% operating margins oImprove asset turns oIncrease throughput

767 Program Strategy for Large Scale Integration

Application

Incremental Value Stream Improvements for Large Scale Integration

Installation Supplier

Consolidation

Advanced Kitting / Sub-Assy

Larger Assemblies

Horizontal Integration

Future State

Current State

Large Scale Systems Integration

KittingMetrics/Cost Supplier Alignment “Integrated” Sections

Integrated Partners

Future State

Integration over time

Build Section

767 Program Strategy for Lean Implementation Application

Data Elements Information Collected Application

Physical Invt 79%

Other 1%

Property & Equp 13%

Program Equp 7%

o Labor o Material o Overhead o Defect Quantity

Data Elements

Cost

Assets

Strategy Metrics

Materials 62%

Overhead 27%

Labor 11%

Economic Profito Flow time

o Work-In-Process o Inventory o Crew Size/Shifts o Square Footage o# Components o Suppliers

767 Program Current State Map Application

767 Program Future State Map Application

767 Program Implementation Plan

Application

Large Scale System Integration Lean Enterprise

Current State Future State

Part Alignment

Team

Kitting/ Assemblies

Team

Moving Line (9 Tactics)

Team

Value Stream Maps On-Going

Development

Process Schedules Resources

Priority

Value Stream Alignment 9 Tactics

767 Program Tracking the Financials Application

Current Activities o Stages of Implementation o Estimated Savings (ROM BC) o Booked/Incorporated Savings

Program Targets o Unit Cost o Asset Base o Throughput

Strategy Metrics o Suppliers o Parts o Flow time

767 Parts and Assembly: Flaps Case Study

Objectives/Benefits:

Background:

Proposal: • Reduce the external POP part suppliers from 25 to 1 • Have selected supplier integrate all the POP parts going into flap installations • Have selected supplier conduct some pre-assembly if technically feasible

Approach: • Identify all the POP parts going into similar installations • Seek opportunity for integration (advanced kitting and HLA) and flow reduction (point of use) • Evaluate supplier capability and review requirements for program • Establish procurement board, send out letters and obtain bids • Award contracts

Current Status:

ROM Estimated:

Schedule:

Dollars:

• Reduce part unit cost and contract administration cost • Reduce internal transaction and handling cost • Enhance relationship with suppliers, improve delivery reliability and part quality • Reduce inventory and order lead time

High dollar Flap installations involve 124 unique POP parts from 25 different suppliers. There is great potential in cost-savings by aligning these parts as well as the suppliers.

•Non-Recurring (SM&P, MMO) Boeing Limited • Recurring Savings (10%): Current Annual Material Cost: Boeing Limited Proposed Annual Material Cost: Boeing Limited Annual Savings Boeing Limited • NPV: Boeing Limited • MIRR: 63%

Strategy Check

Bidder Board

TBD

Supplier Alignment

Comp

Bids Rec’d

Contract Awarded

Data Validation

5/01

Source Board

TBD6/01 8/01 TBD

Black - complete Green - on schedule Yellow - delayed Red - Stopped Clear - Future

TBD

• Bidder board to be complete 7/31

Application

Reduce unit cost by: • Reducing the number of end items • Reducing the variation between minor models • Reducing internal transaction and handling cost • Reducing supplier base and improving supplier relationships • Reducing inventory and order lead time

Objectives/Benefits:

Background: The vertical fin build-up is currently performed in one control code. There are approximately 146 mechanic hours in this control code, 341 unique parts and 86 suppliers. There is great potential in cost-savings for a higher level assembly and/or advanced kitting.

Proposal: Reduce 767 material cost by 10%.

Approach: • Seek opportunity for integration (HLA) • Determine SOW, parts and suppliers • Develop ROM business case

Current Activity: • Prepare integration package for higher level assemblies (HLA)

Fully Integrated Fin/Rudder Partially Integrated Fin/Rudder

• Feasibility of Transportation-complete • Weight and Balance Issues – in work • Business case for Full and Partial Complete Unit 6/28

Collecting tooling non-recurring

ROM Estimated:

Schedule:

• Non-Recurring Boeing Limited (Proof of process, engr., ME, tooling, etc.)

• Recurring Annual Costs (using 31A/Ps for 2002) : Current IHC (at 10.5%) Boeing Limited Current Material Cost Boeing Limited Current Factory Labor Boeing Limited Current All Other Labor Boeing Limited

• Recurring Annual Savings (10% material only): Annual Savings Boeing Limited

• NPV (minimum estimated) Boeing Limited • MIRR (estimated): 47%

Dollars: StrategyCheck

ROM Business

Case

Supplier Alignment

Comp Work

Transfer Prog. Dir.

SOW

4/02

Plan. Dir.

8/025/02 7/02 TBD TBD

767 Large Assembly: Case Study Vertical Fin and Rudder Application

Support Organization: Case Study Program Planning & Control

Support Organization: Case Study Completed Records

Program Process Summary

Value Stream Mapping: Best Practices & Application to Large Scale Airplane

Program Summary

• Industrial Engineering is a key component in implementing Lean /Improvement Activities

• Value Stream Mapping is a visual tool to identify large leverage items for improvements and focuses lean activities

• Supports prioritizing projects and resources

• Results: Projects in work will reduce annual cost and asset base in the millions this year