© BMA Inc. 2009. All rights reserved. Value Stream Capacity Understanding Value Stream Decision Making.

© BMA Inc. 2009. All rights reserved.

Value Stream CapacityUnderstanding Value Stream Decision Making

© BMA Inc. 2009. All rights reserved.

Understanding Value Stream Capacity

• The production quantity that can be achieved at each step in the value stream or production process.

• There are usually one or two production steps (cells, machines, or work centers) that constrain the flow through the value stream or business unit.

• We need to identify the production capacity at each step in the value stream (or production flow) so that we can understand the flow through the entire process.

• Where is the data required for this analysis?– On the Value Stream Maps

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Analyzing the capacity

Productive capacityValue added activitiesProvides value to the customerComes directly from customer pull

Non-productive capacityNon-value-added activitiesChange-overs, unplanned maintenance, making for stock,

defects/rework, etc. Also meetings, 5S, improvement activity

Available capacityCapacity that is not currently being use for productive or non-

productive activities.

© BMA Inc. 2009. All rights reserved.

OEM Value Stream Map

Supplier Customer

Kanban

Shipping

S&OPDemand ForecastsPurchase Forecasts

Order

Supplier Customer

ShippingShippingAssemblyAssemblyAssemblyAssemblyAssemblyWelding

3,000 per Month

MachineShop

MachineShop

MachineShopMachineShop

MachineShop

MachineShop

MachineShop

Qty = 30,000C/T = 70sBatch = 1500Set Up = 10,800sScrap = 10%Rework = 20%Downtime = 15%Inspection = 10%Insp Time = 120s# cells = 8Crew Size = 4# of people = 34Shifts = 1

Qty = 15,000C/T = 180sBatch = 600Set Up = 1200sScrap = 5%Rework = 10%Downtime = 5%Inspection=100%Insp Time = 30s# cells = 5Crew Size = 1# of people = 10Shifts = 2

Qty = 3,000C/T = 210sBatch = 20Set Up = 600sScrap = 0%Rework = 10%Downtime = 0%Inspection=100%Insp Time = 60s# cells = 2Crew Size = 5# of people = 10Shifts = 1

Qty = 3,000C/T = 120sBatch = 1Set Up = 0sScrap = 0%Rework = 2%Downtime = 0%Inspection=0%Insp Time = 0s# cells = 1Crew Size = 1# of people = 1Shifts = 1

DATA BOXES

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Cycle Time:

How often a part or product is completed by a process. (or: the time taken for an operator to go through all his/her work elements before repeating them.)

C/T

• Cycle time includes all processes VA & NVA• Cycle time is measured by tracking it with a stop watch• We match the cycle time to the customer takt time• The process is “under control” if the cycle time is consistent

Standard Cycle Time

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• Crew size - the number of people in the cell or operation required to produce to the cycle time recorded on the Value Stream Map

• # of cells = the number of cells running in parallel. Similar cells, working on the same products and performing the same process step.

Crew size = 5

# of cells = 1

Crew size and number of cells

© BMA Inc. 2009. All rights reserved.

Calculate the Capacity for the Machine Shop

Supplier Customer

Kanban

Shipping

S&OPDemand ForecastsPurchase Forecasts

Order

Supplier Customer

ShippingShippingAssemblyAssemblyAssemblyAssemblyAssemblyWelding

3,000 per Month

MachineShop

MachineShop

MachineShopMachineShop

MachineShop

MachineShop

MachineShop

Qty = 30,000C/T = 70sBatch = 1500Set Up = 10,800sScrap = 10%Rework = 20%Downtime = 15%Inspection = 10%Insp Time = 120s# cells = 8Crew Size = 4# of people = 34Shifts = 1

Qty = 15,000C/T = 180sBatch = 600Set Up = 1200sScrap = 5%Rework = 10%Downtime = 5%Inspection=100%Insp Time = 30s# cells = 5Crew Size = 1# of people = 10Shifts = 2

Qty = 3,000C/T = 210sBatch = 20Set Up = 600sScrap = 0%Rework = 10%Downtime = 0%Inspection=100%Insp Time = 60s# cells = 2Crew Size = 5# of people = 10Shifts = 1

Qty = 3,000C/T = 120sBatch = 1Set Up = 0sScrap = 0%Rework = 2%Downtime = 0%Inspection=0%Insp Time = 0s# cells = 1Crew Size = 1# of people = 1Shifts = 1

DATA BOXES

© BMA Inc. 2009. All rights reserved.

Step 1. Calculate the Total Available Employee Time(#employees x #days x Labor Hrs per shift)

Step 2. Calculate the Employee Productive Time(Qty per Month x Cycle Time x Crew Size)

Step 3. Calculate the Emp. Productive Capacity Percentage.(Employee Productive Time / Total Available Time)

Step 4. Calculate the change-over time, scrap & rework time, downtime, inspection time. C/O = (quantity/batch size) x Change-over timeScrap/rework = (Qty produced / (1- (scrap + rework %) ) * (scrap + rework%) x Cycle Time x Crew SizeD/T = Downtime% x Total Available TimeInspection= (Total produced + scrap/rework) x Inspection % x Inspection timeOver-production = OP Qty x Cycle Time * Crew Size5S & Clean-up = 5S Time x #Employees x #daysMeetings = Meeting Time x #Employees x #daysTPM = TPM Time per day * #days

Step 5. Calculate the Total Non-Productive TimeSum of Step 4

Step 6. Calculate the Emp. Non-Productive Capacity PercentageTotal Non-Prod Time / Total Available Time

Step 7. Calculate the Emp. Available Capacity Percentage. 100% - (Prod. Capacity + Non-Prod Capacity)

CELL DESCRIPTIONMachine

Shop

Employee Productive Capacity 46%Employee Non-Productive Capacity 47%

Employee Available Capacity 8%Quantity Required per Month 30000Quantity Produced in the Cell 31500

Over Production 1500Unit of Measure Units

Employee Cycle Time (per Crew) 70Maximum Pieces per Hour (per Crew) 51

Internal Change Over Time Sec 10800External Change-Over Sec 0

Labor Hours per shift 7.50# Shifts per day 1

Average Batch Size 1500Number of Change-Overs 20

Scrap Rate 10%Rework Rate 20%

Scrap/Rework Quantitiy 13,500Downtime % 15%Inspection % 10%

Inspection Time Sec 1205S & Clean Up Time per Day 600Meetings & reporting per day 600

TPM Time per Day 1800Other Non-Productive - User defined 0Other Non-Productive - User defined 0

Crew Size 4# cells 8

Number of Employees 34

Days per month 20

Calculate the employee capacity

© BMA Inc. 2009. All rights reserved.

Machine Shop Capacity - employees

7%Available Capacity

100% - (46% + 47%)Step 7

47%Non-Productive Percentage

8,562,000 / 18,360,000Step 6

8,562,000 secTotal Non-Productive TimeStep 5

216,000 sec3,780,000 sec2,754,000 sec540,000 sec420,000 sec408,000 sec408,000 sec36,000 sec

Non-Productive TimeChange-Over: 20 * 10,800

Scrap/ Rework: (31,500 / 70%) * 30% * 70 * 4Downtime: 15% * 18,360,000

I nspection Time: (31,500+13,500) * 10% * 120Over production: 1500 * 70 * 45S & Clean Up: 600 * 34 * 20

Meetings & reports: 120 * 34 * 20TPM: 1,800 * 20

Step 4

46%Productive Percentage

8,400,000 / 18,360,000Step 3

8,400,000 secProductive Time30,000 * 70 * 4

Step 2

18,360,000 secTotal Employee Time

34 * 20 * 7.5 *3600 secondsStep 1

7%Available Capacity

100% - (46% + 47%)Step 7

47%Non-Productive Percentage

8,562,000 / 18,360,000Step 6

8,562,000 secTotal Non-Productive TimeStep 5

216,000 sec3,780,000 sec2,754,000 sec540,000 sec420,000 sec408,000 sec408,000 sec36,000 sec

Non-Productive TimeChange-Over: 20 * 10,800

Scrap/ Rework: (31,500 / 70%) * 30% * 70 * 4Downtime: 15% * 18,360,000

I nspection Time: (31,500+13,500) * 10% * 120Over production: 1500 * 70 * 45S & Clean Up: 600 * 34 * 20

Meetings & reports: 120 * 34 * 20TPM: 1,800 * 20

Step 4

46%Productive Percentage

8,400,000 / 18,360,000Step 3

8,400,000 secProductive Time30,000 * 70 * 4

Step 2

18,360,000 secTotal Employee Time

34 * 20 * 7.5 *3600 secondsStep 1

© BMA Inc. 2009. All rights reserved.

Machine Shop Capacity

EMPLOYEECAPACITY

Cell output is driven by Employee

Time rather than Machine Time.

There is more machine capacity

than employee capacity

CELL DESCRIPTION

Employee Productive CapacityEmployee Non-Productive Capacity

Employee Available CapacityQuantity Required per Month

Quantitiy Produced in the CellOver ProductionUnit of Measure

Employee Cycle Time (per Crew)Maximum Pieces per Hour

Internal Change Over Time SecExternal Change-Over Sec

Labor Hours per shift# Shifts per day

Average Batch SizeNumber of Change-Overs

Scrap RateRework Rate

Scrap/Rework QuantitiyDowntime %Inspection %

Inspection Time Sec5S & Clean Up Time per DayMeetings & reporting per day

TPM Time per DayOther Non-Productive - User definedOther Non-Productive - User defined

Crew Size# cells

Number of Employees

Days per month

CELL DESCRIPTION

Machine Productive CapacityMachine Non-Productive Capacity

Machine Available CapacityQuantity per Month

Quantitiy Produced in the CellOver ProductionUnit of Measure

Machine Cycle TimeChange Over Time

Machine Hours per Shift# Shifts per day

Average Batch SizeNumber of Change-Overs

Scrap RateRework Rate

Scrap/Rework QuantitiyDowntime %

5S & Clean Up Time per DayMeetings & reporting per day

TPM Time per DayOther Non-Productive - User definedOther Non-Productive - User defined

# Machines per CycleNumber of Machines

Days per month

MACHINECAPACITY

Machine Shop

31%35%33%

30,00031,5001,500Units

3010800

81

150020

10%20%

12,85815%600120

9,60000210

20

Machine Shop

46%47%8%

30000315001500Units

7051

108000

7.501

150020

10%20%

13,50015%10%1206006001800

0048

34

20

© BMA Inc. 2009. All rights reserved.

Capacity Calculations when you have Multiple Product FamiliesCalculate the weighted average of the cycle time, change-over, etc.

WEIGHTED AVERAGE CALCULATION

PRODUCT FAMILY TOTALProduct Family A

Product Family B

Product Family C

Quantity Required per Month 10,500 2,500 5,000 3,000Employee Cycle Time (per Crew) 131 240 120 60

Total Cycle Time 5,520,000 2,400,000 2,400,000 720,000 0 0 0 0 0Internal Change Over Time Sec 8,293 10,800 5,400 10,800

External Change-Over Sec 0 0 0 0Average Batch Size 375 400 400 400

# Batches 28 7 13 8Total Internal 928,800 302,400 280,800 345,600

Total External 0 0 0 0Total Change Over Time 928,800 302,400 280,800 345,600

Scrap Rate 13% 20% 10% 10%Rework Rate 18% 20% 15% 20%

Total Scrap 1,514 625 556 333 0 0 0 0 0Total Rework 2,257 625 882 750 0 0 0 0 0

Total Scrap & Rework 3,771 1,250 1,438 1,083 0 0 0 0 0Inspection % 10% 10% 10% 10%

Inspection Qty 1,050 250 500 300 0 0 0 0 0Inspection Time Sec 91 120 60 120

Total Inspection Time 384,000 120,000 120,000 144,000 0 0 0 0 0Crew Size 4

© BMA Inc. 2009. All rights reserved.

Value Stream Capacity

• Value Stream demand = 3,000 units/month

• Takt Time = 180 sec• Average product has

5 welded sub-assy• Average sub-assy

has 2 machined components

• Machine Shop makes 30,000 items

• Welding Shop welds 15,000 sub-assy

• Assembly assembles 3,000 units

• Shipping ships 3,000 units

CELL DESCRIPTION

Employee Productive CapacityEmployee Non-Productive Capacity

Employee Available CapacityQuantity Required per Month

Quantitiy Produced in the CellOver ProductionUnit of Measure

Employee Cycle Time (per Crew)Maximum Pieces per Hour

Internal Change Over Time SecExternal Change-Over Sec

Labor Hours per shift# Shifts per day

Average Batch SizeNumber of Change-Overs

Scrap RateRework Rate

Scrap/Rework QuantitiyDowntime %Inspection %

Inspection Time Sec5S & Clean Up Time per DayMeetings & reporting per day

TPM Time per DayOther Non-Productive - User definedOther Non-Productive - User defined

Crew Size# cells

Number of Employees

Days per month

Maximum Capacity is3,000 units because

Machine Shop can only make 30,000 parts

Machine Shop

Welding Shop Assembly Shipping

46% 50% 58% 67%45% 26% 10% 4%9% 24% 32% 29%

30000 15000 3000 300031500 15000 3000 30001500 0 0 0Units Units Units Units

70 180 210 12051 20 17 30

10800 1200 600 00 0 0 0

7.50 7.50 7.50 7.501 2 1 1

1500 600 20 120 25 150 3000

10% 5% 0% 0%20% 10% 10% 2%

13,500 2,648 334 6215% 5% 0% 0%10% 100% 0% 0%120 30 0 0600 600 600 600120 120 120 1201800 0 0 0

0 0 0 00 0 0 04 1 5 18 5 2 1

34 10 10 1

20 20 20 20