Lean is an idea of "delighting the customer through a continuous stream of value adding activities" (Lucansky, Burke, & Ducharme, 2002, p. 1). Lean principles are derived from the Toyota Production System to improve the value added activities in an organization by explicitly defining the processes and emphasize using visual controls. There was a continual transformation of manufacturing practices starting from Total Quality Management in the 1970's that went through a process with Just-In-Time (JIT) and Reengineering by 1980's (Lucansky, Burke, & Ducharme, 2002). Transformation continued with world class in the early 1990's and Lean/ Six Sigma in the later 1990's to the present day. Even though lean transformation is a lengthy, gut-wrenching journey for any firm, the result derived is that people and process work efficiently delivering value to the customer (Mann, 2005). This paper gives an overview of the findings of how value stream mapping one of the lean manufacturing tools is used to identify and eliminate the waste in the sales and delivery process at Sify Ltd.
Introduction
"A value stream is all the actions(both value added and non-value added)currently required to bring a product through the main flows essential to every product: (1) the production flow from raw material into the arms of the customer, and (2) the design flow from concept to launch." (Rother & Shook, 2003, p.3). General perspective of value stream is to work on the big picture, not only on the individual processes, and to do processes improvement as a whole, not just optimizing the sub-processes or parts. Value-stream mapping is considered as a pencil and paper tool that will guide us through the flow of material and information as a product which is on it's way through the value stream(Rother & Shook, 2003). To make value stream more simpler and to relate it to our sales and delivery process followed at Sify Ltd is to follow a product's sale to the delivery of the product to the customer, and to draw a visual representation of each and every process in the material and information flow.
Sales and delivery process at Sify Ltd
SeekandSource is a business portal which was created by Sify. The main purpose of this portal is to find the interdependency between multiple businesses and try to link them on a need basis. Sify essentially links the service providers with suitable customers so that they can mutually benefit each other and has a coding team, customer support team, product delivery team and third parties (Seekandsource, 2011).
Description
I came on-board as Marketing Executive for Aran Systems Pvt. Limited - a third party contractor on behalf of Sify Limited. Sales order to delivery process in the firm was working in the following way
Tasks and targets were assigned by my employer (Aran Systems), and I would work and accomplish the task by the given norms, regulations and guidance provided by my employer. I actually enjoyed the work and was able to accomplish the task very easily as the Sify brand name was very useful in getting hold of the customer. Once I sold the product to the customer and the payment received, the next step was to collect all the details about the customer specifications and needs. The documents were submitted to the collection department of the office who used to accumulate all the details and once they got sufficient number of customer documents, they used to submit the same to the client (Sify).
Sify process those documents with a confirmation call made by the customer service department to the customer and submit the details to their product development team, which takes some time to finish their task by customizing the product as per customer needs and specification. Once the product was customized the information about the customer is been sent to another third party contractor for the printing and packaging of the welcome kit that has to be sent along to the customer. The third party contractor accumulates the work until it reaches a predefined number for mass production and then the final product which is the welcome kit is send back to Sify as a batch. Once Sify receives all the information and material, it ships directly to the customer. Once the customer gets all the details, he/she needs assistance of Sify's technical support team for checking out the details on how to use the product, which takes some time.
Sales people assumed that their work was done once they submitted the documents of the customer to the collection department at Aran Systems Pvt Ltd. No one accounted for the processing delay by Aran Systems as well as Sify in delivering the product. Usually it took a long time, and the customer would end up giving a call to their sales contact from whom the customer had purchased the product. Even though we achieved the highest number of sales, there was also a high rate of rejection cases from customers.
Initial Process Measurement
To understand the flow and get a clear picture of the process that occurs from the time the product is sold; until the customer has received that product in their facility a method called as Value Stream Mapping is created (Magnier, 2003). As mentioned, Value stream mapping captures or documents all of the process that includes both value-adding and non-value-adding process (Magnier, 2003).
According to iSixSigma (2011), the steps involved in Value stream mapping are as follows with the relationship to the situation at Sify Ltd:
Starts with the current state map that describes the process as it is at that point of time.
Once the overall flow of information and product has been captured, the level of magnification could be changed depending upon the need. With the description of the process mentioned, current value stream mapping is generated as follows in the figure 1.
Figure 1
From the current state map metrics such as takt time, inventory levels are captured
In general takt time is an expression of frequency of demand for a defined period of time (Hobbs, 2004). Takt time is been used to designate the "goal" or "rate" of a process were the work is balanced to the required/achievable takt time. This dramatically reduces work-in-process and finished inventories (Hobbs, 2004).
Cycle time is generally defined as "the time between a job's start and its completion."(Levinson & Rerick, 2002, p.65).
Lead time is defined as the time or duration between the order's placement and its deliver. Whenever there is a shorter or less lead time then it increases responsiveness to the customer needs and simplifies the work process (Levinson & Rerick, 2002).
Create a future state map, that describes how the process will look in future with process improvements and waste reduction
Value stream mapping is mainly used in any process by a firm for the visibility where the sources of waste are identified and eliminated by the implementation of a future state value stream mapping. So, with the information on the shop floor and the process during the creation of the current state the future state ideas will be generated (Rother & Shook, 2003).
Lean Tools which will be utilized in this process of creating a future state value stream mapping that would be applied to the situation at Sify Ltd. are as follows:
Eliminating waste
As the current state value stream mapping is performed, it's important to have a closer look at the current state, as there are many tools of Lean and also with the principles of Toyota way that would help us to identify value added and non-valued added activities (Liker, 2004).
First step when observing the current process is to start from the customer's perspective in order to define the value by asking a question "What does the customer want from this process?" (Liker, 2004, p.27). When the process is examined through the customer's perspective it will help us to observe the process and will differentiate the value-added activities from the non-value added activities. By doing this, it would help us to minimize the amount of time spent on non-value added activities by positioning the materials, people and equipment as close as possible to the point of production or assembly (Liker, 2004).
One-piece flow.
Create continuous process flow to bring problems to the surface. The best thing a firm could do to implement lean is to generate a continuous flow wherever applicable in its core manufacturing and service process. Flow reduces the elapsed time from raw materials to finished goods that will lead to lowest cost, shortest delivery time and the best quality. The goal in a lean environment is to create "one-piece flow" by consistently eliminating wasted effort and time that is not adding value to the process (Liker, 2004).
Teruyuki Minoura, former President of Toyota Motor Manufacturing, North America says that "if some problem occurs in one-piece flow manufacturing then the whole production line stops. In the sense it a very bad system of manufacturing… but when production stops everyone is forced to solve the problem immediately. So, team members have to think and through thinking team members grow and become better team members and people" (Liker, 2004, p. 87).
As per Liker (2004), the following criteria's would play a major role in achieving one-piece flow
Consistent capability should be ensured on a daily basis were the process followed has to be capable enough in fulfilling the requirements of the customer
Consistent capability involves coherent availability of resources and application like materials, people and equipment.
"Reliability of process and equipment is imperative. Initially this would encompass the larger issues such as downtime or changeover, but as the process is refined it would include lesser issues such as ease and simplicity of use."(Liker, 2004, p.14)
Standardized work
Toyota's definition of "standardized work" is "to define the method used to perform work tasks with the least amount of waste"(Liker, 2004, p.). This is one of the primary tool where the principles of work process is defined by who, what, when and where work is to be executed (Liker, 2004).
Initially each and every part of the work process is broken down and a standard is created which serves as a separate function of that activity. Standards could be related to work standards that deals with the quality, safety and environmental needs of the firm or the process standards that deal with the time, product specifications etc or standard procedures which are developed by the manufacturing group and are used for defining operating rules. Standardized work document will comprise of all the work process in the required sequence that will result in a desired result which will be based on the achievement of other standards (Liker, 2004).
Myths of standardized work as described by Liker (2004, p.) are as follows
"If we have standardized work, anyone can learn everything about the job by looking at the documents"
"If we have standardized work, we can bring anyone off the street and train them to do the job in few minutes"
"We can incorporate all details of the work and standards into the standardized work sheet"
"We will post the document so operators can look at the sheet each day to remember how to do the job"
"Employees develop their own standardized work"
"If we have standardized work, operators will do the job properly and will not deviate from the standard"
Kaizen
5S
Next step involves all the stakeholders and the team members to have a high-level look at the organization's flow of goods or services from customer to customer thereby identifying waste in the process so has work to work in the transformation of current state value stream mapping to future state value stream mapping
The process, how will this change be implemented
For this product there are only one third parties which provide the services in terms sales and another third party to provide printing and packaging for this SeekandSource product.
From the value stream we can analyze that the delay is being caused mostly by batch processing and since these contractors are located at different places, shipping adds up to the delay. If the process is made into a single piece flow by incorporating the services of the third parties at one place then the following value stream will be obtained:
Why Change is required?
Reduce the waiting time
Deliver the product and services at the right time to the customer
Avoid confusion between the contractor and Sify in delivering the services
Example
If a customer places an order on Monday, the company policy is that the product and the service will be delivered to the customer in next 15 business days. But actual calculation shows that it takes 20 working days for the work in progress to deliver the product to the customer, which means the actual delivery date is been delayed by 5 business days that creates a delay.
Benefits of making this change
Customer will take delivery at the right time - may be earlier than the promised
Inventory will be reduced
Incoming complaints will be reduced.
This can reduce the number of employees in Customer Service who can be used to form a Continuous Improvement team
Increase in the number of customers / orders
Steps to Implementation
(With the current state map as a reference, walk the path of the material and information flow once again. While performing this activity, identify and list the cause of those processes that are fundamentally complex where continuous flow is not currently possible.)
Brainstorming with all the Stakeholders & team members
Meeting third parties on the proposed change to explain the need and their responsibilities
Allocation / acquisition of space as required for the project
Buy and install equipments for printing and packaging - if needed by the 3rd party
Form and train kaizen teams
Meeting with the employees to ensure the visibility of the process
Demonstrate how the process works and train the employees on the process
Conclusion
This proposal would change the process of Seekandsource project from batch processing to single piece flow by adding the benefits and eliminating waste thereby focusing to provide the best service for the customer on what, when and how they need the product from my company .
Lucansky, P., Burke, R., & Ducharme, L. (2002). The Lean Perspective. Pharma Chem. Retrieved from http://www.lda-us.com/Articles/1_%20LeanEnterprise.pdf.
Mann, D. W. (2005). Creating A Lean Culture - Tools to Sustain Lean Conversions. New York, NY: Productivity Press.
Liker, J. K. (2004). The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer. New York, NY: McGraw-Hill.
