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across the factory one more time to another step or pile of inventory. At some point, the nuts left the factory for a few weeks to be heat-treated, because management had calculated that contracting out heat-treating was more economical. When all was said and done, the nut-making process that took seconds for most operations —except for heat-treating, which could take a few hours—typically took weeks and sometimes months for this manufacturer. We calculated the percent value added for different product lines and got numbers ranging from 0.008 to 2 or 3 percent. Eyes opened! To make matters worse, equip- ment downtime was a common problem, idling machines and allowing for large buildups of material around them. Some clever manager had figured out that contract- ing outside maintenance was cheaper than hiring full-time people. So often there was nobody around to fix a machine when it went down, let alone do a good job on pre- ventive maintenance. Local efficiencies were emphasized at the cost of slowing down the value stream by creating large amounts of in-process and finished-goods inventory and taking too much time to identify problems (defects) that reduced quality. As a result, costs were high, and the plant was not flexible to changes in customer demand. In the original Toyota Way, I described an eighth waste, unused employee creativi- ty, which I still think is perhaps the most fundamental waste. But it does not fit cleanly into this list. The seven wastes are obstacles to flow and are observable, while waste of employee creativity is a broader concept of what could have been. Throughout the book, I emphasize the centrality of continuous improvement at all levels to reduce waste in the process and how Toyota develops people to use their creativity. STRIVING TOWARD A FUTURE STATE: THE 1 200) B ONO) OBV M BJ ORCY BN LN B Vg G W (& The traditional approach to process improvement focuses on identifying local ineffi- ciencies and making point improvements. For example, go to the equipment or value- added processes, and improve uptime, make it cycle faster, or replace the person with automated equipment. The result might be a significant percent improvement for that individual process, but it often has little impact on the overall value stream. In con- trast, lean thinking focuses much of its attention on reducing the non-value-added. Inside Toyota, the group tasked with teaching TPS to suppliers developed a way of visualizing at a high level the flow of material and information and identifying the big wastes. This technique was made available to the public through the bestselling book Learning to See by Mike Rother and former Toyota manager John Shook.'* You pick a starting point in the value stream, often at the beginning of one large unit, such as the receiving docks in a manufacturing plant, and walk the value stream as the product is transformed —and draw a diagram of the journey. At first you are mostly documenting individual processes that push into inventory, represented by triangles, or time waiting in a queue. There is usually so much waste in the process, it can be humorous. Figure S.2 is a generic example of a current-state map (I did not include data). Once you see all the inventory, which is one of the seven wastes, you may want to reduce inventory. A simple way to do this is to calculate minimum and maximum lev- els and create a visual with instructions to replenish when you reach the minimum. This is a simple type of pull system. Inventory will probably decrease. You now have eliminated waste—congratulations! But what is the purpose? This isolated action may not help much. Production Scheduling i) 'Q/w s /\ Figure S.2 Current-state value stream map. Let’s say that to be competitive your company needs to make a greater variety of products and shorten the order-to-delivery lead time so your customers can hold less inventory and still get what they want when they want it. You assemble a group of people with different specialties, including someone knowledgeable in lean concepts, and create a vision of a future state. What would the value stream need to look like to achieve your objectives? The result might look something like the future-state map in Figure S.3. In this case, you designed a system of material flow that levels out the different products so you do not build batches of one product in the morning and batches of another prod- uct in the afternoon (Principle 4). You have eliminated scheduling of indivi tions that tend to push lots of inventory and replaced the information flow v systems so each process only builds what the next process needs when it ne (Principle 3). You probably would have to do other things to support the fl reduce the time to change over a machine between products and reduce equ=——— downtime. In value stream mapping, you show these other activities as point-kaizen