Value Stream Macro Mapping - Paper

8/6/2019 Value Stream Macro Mapping - Paper

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INTRODUCTION

Construction industry has suffered many transformations due to competitive challenges,

which have demanded a more systematic analysis of production flow. Construction businesscan be understood as a combination of five main flows: business, project, supply, job site,use and maintenance (Picchi 2001). The supply flow involves a complex chain of diverseproducts and services (materials, components, rented equipment, etc.) coming from severalindustries.

Lean Thinking is based on principles of the Toyota Production System (TPS) and hasgained recognition as a new manufacturing paradigm. The term Lean first appeared as LeanProduction (Womack et aI. 1990), and has been extended by Womack and Jones (1996) toLean Thinking, in order to emphasize that the same principles apply to the whole company,and not just to production. This extended concept of Lean Thinking demands specialattention to the suppliers relationships, requiring paradigms changes in this subject (Womack

and Jones 1996; Cooper and Slagmulder 1999).The main goal of this article is to evaluate the potential of the application of Value

Stream Macro Mapping (VSMM), described by Womack and Jones (2002), based on a casestudy in aluminum component supply chain. This paper is part of a master degree researchcurrently in progress. Firstly, a literature review has been done focusing on: supply flow froma Lean Thinking point of view, construction supply chain and VSMM. Secondly, data for thecase study VSMM was collected by semi-structured interviews with each supply chain agent,and a current state of VSMM was drawn. As result, main wastes in the studied supply chainwere identified, and potential proposals for a future state of VSMM incorporating LeanThinking principles were presented.

The article concludes analyzing the potential of VSMM application to waste

identification in construction supply flows, and its usefulness to point out improvementdirections, using lean tools, resulting in waste elimination.

LEAN TIDNKING APPLIED TO CONSTRUCTION SUPPLY FLOW

Firstly, several authors (Schonberger 1984; Suzaki 1987; Womack et aI. 1990; Cooper andSlagmulder 1999) have discussed important aspects related to the supply flow, from a LeanThinking perspective. Actually, other authors have studied the application of Lean Thinkingto the construction supply flow. O'Brien et aI. (2002) analyses the recent literature about thesubject, pointing out directions for future researches. This literature presents mostly pilotapplications, demonstrating the applicability of several lean approaches to construction, suchas:

Supply chains analysis and waste identification (Vrijhoef 1998; Vrijhoef et al.2001; Arbulu and Tommelein 2002; Taylor and Bjornsson, 2002; London andKenley, 2000; Childerhouse et aI., 2000);

Partnership with suppliers (Vrijhoef 1998; Miller et aI. 2002; Crutcher et al.2001; Shimizu and Cardoso 2002);

Value stream mapping between fabrication and installation (Holzemer et aI.2000).

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Just-in-time with suppliers (Ballard and Howell 1995; Bertelsen 1997;Tommelein and Ballard 1997; Tommelein and Li 1999; Tommelein andWeissenberger 1999).

In several manufacturing industries the final assembler leads the chain, establishing qualitystandards, information flow, technical specification, etc. The automakers, as an example,have domain of product design, sales, production and supply chain. Construction is a highlyfragmented industry, with leadership shared among developers, contractors and designers,sometimes with suppliers with higher bargain power than downstream players. Thischaracteristic results in higher coordination problems in the supply flow in construction,comparing with other industries.

VALUE STREAM MACRO MAPPING (VSMM)

Lean Thinking's main objective is waste elimination. One major tool for this purpose isValue Stream Mapping (VSM), described by Rother and Shook (2000). Using VSM it ispossible to understand the material and information flows and to see the wastes inside of acompany (door-to-door analyses). Womack and Jones (2002) extended the concept to ValueStream Macro Mapping (VSMM), used to depict an entire supply chain, evolving severalcompanies.

In an example described by these authors, by means of the VSMM it is possible toevidence several wastes in a current state VSMM of a windshield wiper supply chain. Basedon lean principles for supply relationships, the authors draw evolutionary future states ofVSMM. In the last drawing of future state, incorporating more advanced suggestions, thelead-time and inventories have a reduction of about 95% in relation to the current state ofVSMM. This example shows the high potencial of this lean tool for the optimization of acomplex supply chain.

By means ofVSMM, one can expect (Womack and Jones 2002):

Complete visualization of processes that compose the value stream of specificproduct families.

Material and information flows combined visualization, making possible tounderstand its relationships and causes for flow disruptions.

Wastes identification in that value stream.

Common language creation among value stream participants.

Possibility of lean concept and techniques application inside of VSMM, keeping

a system view aiming the entire flow improvement, and not isolated toolsapplication or isolated agents initiatives, with limited results.

Creation of a documented base (future VSMM and action plan) to guide andcoordinate all agents along lean implementation across the chain.

Possibility of describing each agent process both qualitatively and quantitatively,enabling current state / future state evolution comparisons.

VSMM helps to identify wastes in information and materials flows among supply chainagents, such as inventories, excessive transportation, communication problems, etc. This

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identification aims to be a starting point for the discussion among involved agents in order toeliminate waste across the supply flow.

CASE STUDY: VALUE STREAM MACRO MAPPING APPLICATION IN ANALUMINUM COMPONENTS SUPPLY CHAIN

CASE STUDY AGENTS IDENTIFICATION

The supply flow chosen for the case study was the chain of aluminum components for aresidential building, specifically aluminum windows. The aluminum component was chosenbecause of its significant participation in total building cost, around 4% - 10%, depending oneach project specifications'.

The builder is Concima S.A., a medium size company that acts in development andconstruction of residential and commercial buildings in Sao Paulo State - Brazil. The job sitechosen for the study is a residential eight-floors building located in the city of Campinas.

Lumibox Company is the aluminum components producer, responsible for manufacturingand supplying of aluminum components to the Concima buildings. The Lumibox plant issituated in the city of Indaiatuba, about 60 km far from the job site.

The Alcoa Company is responsible for bauxite extraction, primary aluminum producingand bars extrusion. Two Alcoa plants are involved in this flow: Alcoa in city of Sorocaba(extrusion process) and Alcoa in city of POyOSde Caldas (bauxite extraction and primaryaluminum producing)", The Alcoa company adopts Lean Thinking worldwide, using asystem named ABS - Alcoa Business System. Both plants have several evolutionary stagesof future states already implemented, using Value Stream Mapping.

CURRENT STATE OF VALUE STREAM MACRO MApPING

According to Womack and Jones (2002), previously to a VSMM drawing, a VSM for eachagent must be drawn. The builder (Concima) and aluminum components producer (Lumibox)maps were drawn based on interviews and observations in visits, following the icons, formatand steps proposed by Rother and Shook (2000). The Alcoa maps were obtained from thecompany.

Builder VSM current state door-to-door (Figure 1) to observe the three main processesinside this company concerning this component: 1) receiving and inspection, 2) installationand 3) verification and repair process. The total quantity of aluminum windows installedwere 427 units distributed along 8 floors in 8 apartments each one. The windows weredelivered by the producer in 3 lots. The 17 types of aluminum windows were installed in thebuilding, as defined by the architectural project. The installation team was composed of

seven workers. The mean time of aluminum windows installation was of five days for eachfloor. In this Figure one can observe that total lead time was 46.2 days, and the processingtime for one aluminum window is 159.3 minutes. This significant difference is result of alack of flow and is typical in most companies (Rother and Shook, 2000).

The aluminum component producer VSM current state allowed to observe all themanufacturing processes concerning the production of this specific aluminum windowproduct family(not shown in this paper). About 10.000 kg. of aluminum were processed to

3 Typical values for Brazilian residential and commercial buildings.4 Distances between these cities are presented in Figure 2.

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produce the total 427 aluminum windows for the building under study. In the aluminumcomponent producer current state VSM drawing it is possible to see that manufacturing leadtime is 36.6 days, and the processing time for one aluminum window is 32.2 minutes.

A VSMM was drawn, following Womack and Jones (2002) recommendations (Figure 2).Although it is a preliminary study, this Figure shows that production is pushed (as defined byRother and Shook 2000), that is, programming is based on forecasts, the system hasconsiderable lead times, information delays and inventories. The information presented in theVSMM drawing for inventories can be observed in data boxes below of each company icons:RM (Raw Material), WIP (Work in Process) and FG (Finished Goods). A three-monthforecast is agreed between the builder and the aluminum components manufacturer, and thereal necessity is updated in a weekly basis, so deliveries occur near the usage date in thebuilding site.

CURRENT STATE OF VALUE STREAM MACRO MApPING DIAGNOSES

By analysing the current state ofVSMM, several wastes can be immediately seen: There is an agent (i.e., a dealer) between the aluminum profiles producer and the

windows producer;

Lack of flexibility due to long lead time for planning and programming;

High inventory in side the involved agents (raw materials stocks, in processstocks, and finished goods).

No integrated information system between the supply chain agents;

Theses wastes be come clearer by the application of VSMM.

FUTURE STATE OF VALUE STREAM MACRO MAPPING

The current state of VSMM makes possible to identify wastes and to propose actions for thefuture state of the VSMM, incorporating Lean Thinking principles. All agents shouldparticipate in the process of drawing the current state and proposing a future state and anaction plan.

Womack and Jones (2002) propose some steps, with evolutionary future states. The firststep to waste elimination suggested by these authors would be the application of leanprinciples, specially flow and pull, inside each agent (Rother and Shook 2000 recommendeight questions to help this process). With this, improvements can be achieved for example inquality, productivity, and lead time reduction. The second step, that could be named future

state 2, would be the development of a pull system between supply chain agents. Onepotential suggestion would be an adoption of the material delivery between companiesthrough a kanban system. The kanban system implementation implies significant changes inthe work form of each involved supply chain agent, adopting the just-in-time production,where each agent would need to produce only what its customer would demand. The kanbansystem would be used to inform each company, the production necessity, changing the tooeach forecasts made with enormous antecedence for each agent. Monden (1998) and Suzaki(1987) described some details about the kanban system. This strategy can be entirely appliedbetween supply chain agents as represented in Figure 3. Many case studies were realized for

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other construction materials, some of them described by Tommelein (1998) and byTommelein; Weissemberger (1999).

The third step proposes a logistic reorganization, where each supplier creates its own

production cell as close as possible to his client. In the case study, this suggestion could beapplied for example to the aluminum components producer. The aluminum bars could bedelivered directly to the components producer cell located in the job site, and the windowscould be produced on demand, that is, just when demanded by installation crew.

Following the steps suggested by Womack; Jones (2002), future state of VSMMproposition was made, as can be seen in the Figure 3.

(1) Dealer elimination between the aluminum windows producer and the aluminumprofiles producer. This has already been done by Alcoa, adopting directshipping from profiles producer to aluminum components producer.

(2) Adoption of pulled production, using supermarkets and a Kanban betweenagents downstream the aluminum components producer.

(3) Stocks reduction inside the agents (raw materials stock, in-process stocks andfinished goods stocks), using lean tools according to priorities defined in futuresates door to door.

(4) Creation of a aluminum profile cut and knell cell inside the build. Thealuminum window producer will have its lead time reduced.

(5) Adoption of small lots and a sharing shipping to aluminum extrusion producer

and aluminum windows producer.

(6) Creation of an integrated information system among between all the supplychain agents. This system could allow a shared view of demand from job site toupstream. In this case study, the information could be available on-line to allagents, in daily basis, so they could track orders until its delivery.

(7) Additionally, supply chain agents integration can be improved by means ofperiodic meetings, to discuss goals and strategies to improve costs in the supplychain, to standardize the information flow, to warranty a self learning and toelaborate the action plans.

Wastes are evident when comparing total time (101.5 days) with acting value time (3.4days) in Figure 1, and comparing total lead time of Current state (101.5 days) and total leadtime of Future state (30.2), in Figure 2 and 3.

However, these modifications involve commercial rearrangements between the supplychain agents. Although some supply chain agents can have eventual losses, the future state ofVSMM must aim to a higher value aggregation to the final customer, bringing highercompetitiveness to the whole chain. (Womack and Jones 2002).

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CONCLUSION

Construction receives materials and components from several complex supply chains. Thisexploratory application of VSMM shows that the tool is useful to depict the information andmaterial flow from suppliers to job site, helping to understand agents' interactions and toidentify wastes along the supply chain.

The authors suggest the accomplishment of further studies, applying VSMM in otherconstruction supply chains, involving the agents in the discussion and implementation offuture states seeking waste elimination.

ACKNOWLEDGEMENTS

The authors wish to thank to Concima S.A, Lumibox S.A, Alcoa Aluminum S.A, companiesthat have collaborated with information for the case study, and to CAPES, that supports thisresearch with a graduate student grant.

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Figure 2 - Value Stream Macro Mapping-Current State

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Value Stream Macro Mapping - Paper

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