A method for a comprehensive value stream evaluation

The optimization of value streams inmanufacture will always present alternative solutions to planners as a result of the interdependencies between all the optimization parameters. In the search for an ideal value stream in terms of cost and benefit, relevant monetary and non-monetary parameters have to be considered. The method introduced describes a mathematical calculation bringing different parameters of a value stream into one equation. After a normalization step, and a systematic prioritization of the parameters, a value is calculated for each alternative solution. This value allows planners to compare alternatives and to find the best-case solution with the current state process. 2013 CIRP. 1. Background and introduction The escalating changes brought about by introducing new products with an increasing number of product variants force production companies to optimize their processes as a whole. Isolated departmental thinking is replaced by a process-oriented view [1]. Thus, Value StreamMapping (VSM) has established itself as a procedure for process optimization in industrial plants. It provides a method for analysis and design of production processes which will address these rapid changes [2]. VSM was originally developed as a method for analysis and optimization of industrial processes. It was introduced by Rother/Shook, based on the principles of Lean Thinking [3]. VSM is a simple, effective method of gaining a holistic overview of the value stream within an organization. Based on a current state analysis, floworiented target value streams are planned and implemented [4]. A value stream includes all activities, i.e. value adding, non-value adding and supporting processes that are necessary to create a product and to make it available for the customers [3]. Since lead time is often considered as a sole performance criterion, difficulties arise with the VSM method in selecting a unique variant of different value streams (target conditions). Subsequent cost calculations can only provide limited conclusions/predictions about a best-case solution. In the light of these shortcomings, the objective of this paper is to describe a method that evaluates different value streams in terms of costs and benefits. This evaluation considers both the material and the information flow of a company. Firstly, it aims to answer the question, what criteria (targets and indicators) are relevant for the assessment of value streams, and secondly, how these different criteria can be summarized as one comprehensive evaluation model. * Corresponding author. 0007-8506/$ – see front matter 2013 CIRP. http://dx.doi.org/10.1016/j.cirp.2013.03.042 2. State of the art and derived requirements for a comprehensive evaluation method In scientific literature, especially in journal publications, many authors focus on the optimization of the VSM method by standardizing the analysis process or by defining future target conditions. The lead time itself is always paramount; different methods are combined with VSM itself [5], or VSM or other lean methods are introduced as well as ways of measuring lean implementation [6–10]. Evaluating the impact of costs on a value stream is described, e.g. in dependencies of flexibility parameters and product changes [1,6]. The method described combines the lean approach by linking different parameters concerning performance and costs within a value stream. The principles used to establish this method are drawn from literature reviews about scientific publications which deal with the applied concepts andmethods as well as fromhandson experiences. A comprehensive evaluation of different value streams therefore implies the connection of non-monetary (performance) and monetary (e.g. expenses, costs, savings) indicators of the value stream. All the defined indicators must be individually adaptable and prioritizable for the user’s requirements. They must also be clearly defined and their correlation to all other indicators has to be depicted transparently. For the subsequent comparison of future value streams distinct reference values are required to make an explicit statement, regarding the evaluated alternative target conditions. Measurements for the optimization of the existing value stream must be evaluated, as well as their impacts on particular resources or on the whole production processes. Therefore the following requirements are relevant for the evaluation of value streams regarding their performance: D escription of impacts on the material flow (plant level of operation). W. Sihn, M. Pfeffer / CIRP Annals Manufacturing Technology 62 (2013) 427–430 428