6.6 Tools: Future State

The current state map gives a picture of the process as it is operating today. There will undoubtedly be numerous opportunities for improving the process, however, and this is the job of the future state map! The role of the future state map is to identify sources of waste in the process and work to minimize or eliminate them. The following checklist will allow you to work your way through these improvement opportunities in a step-by-step fashion. Apply this process using the current state map we drew for the plastic spiral cat toy process (also Question #2 of the End-of-Topic Case).

Step 1

What is the takt time of the process? Recall that the takt time is the rate at which items need to be produced at the final step in order to meet customer demand, given the work time available. This also means the takt time is the ideal rate of production for each activity in the process. Keep in mind that the takt time we calculated for our current state map does not take into account any time for total preventive maintenance, machine downtime, set-up or changeover times, or lost production due to defects or scrap.

Step 2

How should finished goods be stored? This involves an assessment of the quantity of finished goods to be stored, as well as the specific pull mechanism for storing them. A supermarket is often a good choice here. The supermarket “shelves” hold the forecasted demand for a specified period of time (for example, two weeks or one month). As demand is pulled from the shelves for shipping, Kanban cards can be sent to the next upstream activity to signal replenishment of those delivered orders. The appropriate Kanban size would be directed by the average customer order size.

Step 3

Can any inventory triangles be eliminated? This step is focused on trying to balance the workload across activities to the highest extent possible. First, take note of the cycle times of the current process activities; you may find it helpful to display them in a bar chart format with the takt time noted on the chart (see Figure 6.3 for a bar chart derived from the plastic spiral cat toy operation). Notice the FTE is also accounted for on each process activity name. How might the work activity be reorganized so that the cycle times approach, but do not exceed, the takt time line? Think about things like combining work activities, or moving people from one process to another. For example, the work content at the Inspect and Cutting stages (1.8 seconds + 2.2 seconds = 4 seconds) is still under takt time, so the work activity could be combined and performed by just one of the two FTE performing both operations. But be careful! Activities that are separate cannot always easily be combined; in this case, there is a third process—Injection Molding—that occurs between Inspect and Cutting, and so the practicality of combining those two process activities may be difficult to achieve.

As another example, we could focus our efforts on the Injection Molding activity. Currently, the process cycle time is 2.9 seconds and uses 6 FTE, each of whom operates their own injection molding machine. Would it be possible to free up some of those resources? Specifically, if we cut the number of machines in use (and presumably the FTE) in half, what would be the impact on activity cycle time? Again, it is important to run the numbers, but it is also important to think through practical implications. Are there any potential downsides to making this change, and how can we best manage the change process?

As a final example, it is clear we have an issue meeting the takt time at Packaging. The current cycle time is 9 seconds, which equals a utilization rate of 150% (utilization = 9 second cycle time ÷ 6 second takt time). This means that the four people working at this station must work more than their allotted 25% designated time to this activity if they are going to complete the required output; this means either working overtime (more than their scheduled 8-hour day) or cutting into the 75% time that is assigned to other activities within the organization. Either of these outcomes is costly and undesirable. Are there places where we can obtain additional resources, such as from the newly organized Injection Molding activity?

This step requires both creative thinking and critical thinking! Think creatively about ways that the work can be restructured to accommodate the balance we are seeking. But be critical about the implications of those work design choices. We need to think through any new challenges we are posing to the workforce, whether it be learning new tasks, ergonometric implications, or diversity of work content (whether it be too complicated or too mundane), to name a few. Can you think of other managerial implications to the changes you are considering in the plastic spiral cat toy production process?

Step 4

What pull mechanisms can be implemented at remaining inventory triangles? Where we cannot merge activities and create continuous flow, we will still need to keep some inventory between activities. It is important to control the amount of inventory, though, and we do this through two mechanisms.

1. We can focus on the batch sizes being produced. Currently, the batch size is 1,000 toys at every activity except Packaging, where the batch size is 100 toys. What is the rationale for these batch sizes? If we were to reduce the batch size, what is the optimal size to adopt and why? At some activities it may be the average customer order size, but we have to consider whether that makes sense at every step as we move upstream.

   For example, should the inspection activity only process the pellets equivalent to 100 toys at a time? Probably not, as this would be more a function of the size of the orders coming in from the supplier. However, the process from that point on is not subject to the same kind of constraints, and batch sizes can likely be reduced to the average customer order size. Similarly, the Packaging department wouldn’t package less than the customer order size, meaning a batch size of 100 toys is probably appropriate here.

2. Second, we should then consider how many batches to hold at each inventory triangle, and the specific mechanism used to pull production when inventory is used downstream. The initial decision may be to hold several batches as people get used to the new system and operating on leaner conditions. Think back to the river and rocks analogy from Topic 2: There are likely to be problems uncovered as we reduce our reliance on inventory; reducing inventories gradually will help us become lean but with some safety net for resolving those issues along the way. Ultimately, we would like to reduce down to just a few batches, or even to continuous flow! We also can introduce any of the production signals presented previously in Table 6.1 to initiate production of a batch upstream.

Step 5

What activity in the process will serve as the “pacemaker process,” or the single activity where the Scheduling Department sends information about what to produce? This will be a function of how Step 4 is designed; the most downstream pull activity should be the pacemaker activity. The pacemaker process will also determine the workload pitch, which means it is responsible for pacing production in accordance with the takt time. A good pitch is equal to the takt time multiplied by the customer order size.

Step 6

Are there opportunities to level the production mix? Mass production thinking favors long production runs, which minimizes the number of changeovers needed on the production line, but produces in a way that is not matched to customer demand. The value-stream approach favors smaller batch sizes. As batch sizes decrease, there is an opportunity to produce more variety in shorter timeframes, problems with the production process can be identified and resolved earlier, and lead times are shortened. The process can be more responsive to changes in customer demand, and yet keep inventories low. However, the increased frequency of changeovers means doing everything possible to minimize the amount of time those changeovers take.

Step 7

What other process improvements do you see? Your efforts should be focused on minimizing waste in the process, so search your current state map for opportunities to reduce transportation, inventories, worker motion, overproduction, overprocessing, and defects. These opportunities can be noted on the future state map with a kaizen lightening burst, as shown in Figure 6.4. Also, do not forget to involve your supply chain partners in the improvement process. In our cat toy process, the very first activity is inspection of incoming raw materials. Does our supplier have a quality problem that is making this step necessary? If so, perhaps we need to search for a new supplier!