Value-adding time

Costs and value-add designations can be assigned for each process step. This enables you to summarize the overall cost and value-added time of the process during the simulation. 

With any new innovation that doesn t simply plug into an existing process, the intent is to design a superior process from the outset. And a superior process is one in which value-added time is maximized while non-value-added time is minimized. The definition of value-added time is that for which customers are willing to pay because it directly relates to what they are buying. 

Productivity = efficiency effectiveness = value adding time/total time... 

Velocity refers to the percent of time spent in value-added operations. Low velocities are characteristic of high waits for processing — usually in a batch. By this measure, many operations have velocities of I or 2 percent. This means there are only a few minutes of value-adding time in a total process lead-time of days or weeks or months. ... 

Value Stream Mapping is the written or computer-based identification of the sequence of activities and information flows to produce a product or deliver a service. This represents a vital step in the lean concept because it provides the opportunity for team brainstorming to identify activities that do not add value. Lean practitioners use value stream mapping to identify major sources of non-value-added time in a value stream envision a less wasteful future state and develop an implementation plan for future lean activities. An Addendum providing a Simplified Initial Value Stream Map appears at the end of this chapter. 

Let Nk denote the number of operators in set (fe = 1,2... K). The total man-hour of each tasks including, inbound call, outbound caU, and administrations is indicated by ytdk, and Vtdk, respectively. The non-value-added time is Ztdk-... 

Identify major sources of non-value-added time in a value stream. 

An example Do you know what percentage of the turnover time of the inventory in your company is actual value-adding time What is your guess ... 

Idle times in operations that are not justifiable given the value-added times. 

How much time is the equipment actually used How much of this equipment time is value added How does machine value-added time affect worker value-added time ... 

The value of the VSM process can be seen in the diagram. We now review the VSM, attempting to find the sources of the high non-value-added times. We look for the seven types of waste ... 

For Z Base the value-added time turned out to be about 10 percent of the total part processing time. This indicates a 90 percent non-value-added time, and the Value Stream Map identified several key areas that needed detailed attention. This attention was given to each of these areas in the form of events, which will be discussed later. 

In the Lean process of eliminating waste, reducing non-value-added time, and increasing quality to where it becomes integrated with the process, we will find a dramatic shift in our organizational structure. For example, the traditional factory, as seen in Chart 9.2, will be reorganized and will become the factory seen in Chart 9.3, where the entire production process will now fit into the space of the superintendent s office. In the process, the factory will experience an increased level of output and capacity. 

The second concept that needs to be reassessed and that needs to be integrated in conjunction with SCM is Lean. Lean is a tool that facilitates the elimination of waste. And waste can be identified in a multitude of resource areas. Any, and probably all, of the resource areas identified as part of the supply chain contain waste. Lean is the methodology that identifies the waste and then utilizes a bag of tools to attempt to eliminate this waste. The more waste that is eliminated, the greater the value-added time, resulting in greater throughput, lower costs. 

On the other hand, non-value-adding time is time spent on an activity whose elimination would lead to no reduction of benefit to the customer. Some non-value-adding activities are necessary because of the current design of our processes but they still represent a cost and should be minimised. 

The difference between value-adding time and non-value-adding time Is crucial to an understanding of how logistics processes can be Improved,... 

Figure 6.11 Cost-added versus value-added time...

When end-to-end supply chains are examined in detail it usually transpires that the majority of time is non-value-adding time. More often than not this nonvalue-adding time is idle time - in other words time spent as inventory. This non-value-adding time is itself generated by the processes that underpin the supply chain. 

The second key element of time-based competition is to reduce cost and therefore improve productivity through the elimination of non-value-added time in processes. This means that wasted lead time and unnecessary tasks that are not actually adding any value in the customer s eyes should be identified and eliminated. Stopping unnecessary tasks and removing wasted time from those that remain lowers cost by ... 

An initial analysis of value-adding and non-value-adding time was undertaken. This is shown in Table 5.3, which summarises the total time, wasted time and value-adding... 

In a completely automated factory environment, where the components are being moved piece by piece rather than in batches, the effect of the transporter on delay time (the non value adding time) and machine block time is important. A balance between the number of transporters on one hand and the delay and block time on the other, has to be struck for economic viability or increase the profitability of the factory. Increasing the AGVs increase the capital investment while increase in delay time and block time adds to the cost of the product without adding any value to the product. A completely automated factory is capital intensive. Therefore all effort should be directed to keep the utilization at a higher level and at the same time ensure quick flow of jobs with minimal delay time. There should also be a built-in production expansion capability for an anticipated increase in demand. This necessitates the need to identify the potential bottleneck areas. Simulation plays an important role in this identification. 

---