Digital Model Factory

Value Stream Mapping 4.0 | Digital Model Factory Roadmap #4

In the traditional Value Stream Mapping technique, movement of the material is examined. We want the material to progress by using the shortest, most value-added path while moving through the system. We try to minimize the time between the material entering and leaving the process. While doing this, we look at the flow of information at a limited level. The flow of information is in the lens, again related to the movement of the material. According to the push or pull principle, we look at how information about the progress of the material is transmitted, and how information about the order is transferred. In Value Stream Mapping 4.0 technique, the flow of information is the priority. In the age of Industry 4.0; the digital age, the flow of information is one of the most important productivity resources and naturally one of the potential waste sources. Today, communication is one of the criteria that determine the success of information companies, and as of now, we can say that there is no business asset that is more valuable than information.

This is true for many companies, and in an environment where information is so valuable, after the information is created and entered into the system, it should proceed as quickly as possible and be recorded after the need is finally fulfilled. This is not only necessary for fast communication, rapid operation of processes within the enterprise, but also for the formation of corporate memory and increasing corporate experience. Just like individuals, institutions learn as they experience and develop their knowledge and institutional memories.

Toyota does not use expressions like “Just in Time” or “Lean” in its production system, but they have a very nice definition they use for themselves; “Rapid Experimentation System”. Because they experience fast, they learn faster, get faster results and constantly improve as a result of applying them quickly. For this reason, it is very important to use the information quickly within the institution, to produce new information and to record it for evaluation for later processes.

However, when we look at today’s institutions, we can see that even in the age of Industry 4.0, manual processes are still intense, and institutions follow and manage processes with paper and pencil instead of using advanced systems. I estimate that the rate of institutions that currently perform their capacity planning on ERP rather than Excel, close their work orders and measure their efficiency and metrics on ERP in Turkey, is below one percent. Even very large companies still use this information just for accounting processes after entering the customer order into the ERP systems, cannot advance this information to other processes of the enterprise, cannot evaluate it, in short, manual operations are required. Results vary based on individual performance.

In many businesses, after customer orders are created, they are checked every day in an environment such as Excel, the priorities of the day are frequently reviewed, and the next day’s priority order is created every day again. As a matter of fact, this is a very serious workload, a workload with a very high potential for error, and it becomes a very difficult task to standardize because it is based on the initiative of the employee. When you ask the production planners who work in this way on what basis they determine the priorities and according to what the production plan schedule is made, the answer is that he has its planning in his own mind. The person cannot describe it, or give you the information necessary to standardize it. However, it is very easy to determine these priorities in an ERP system, what determines the priority is your customer and your customer’s order deadline. While checking this order priority every day, inefficient priorities can be made, as well as inefficiencies due to overlooks and ordering errors.

Many companies still use ERP systems as an accounting program. These are now conventional and integrated systems. If your customer cannot manage the entire process from order entry to shipment, it is not possible to define it a complete ERP, unfortunately as many ERP software companies do, producing patch solutions with arguments that the dynamics of the business do not fully match the program during the adaptation phase after installing the program disrupts this integration. The adaptation that needs to be made in this process should be minimal, and the need for adaptation should be considered after all the functions that the ERP can perform with its current possibilities are fulfilled.

We can see that even some elements that are basic functions are tried to be solved with patch solutions, one of the reasons for this is that software companies do not have control over the production processes. Since they do not have a good command of the production processes, they do not know how to make that integration and how the program can bring solutions to these production processes. Therefore, an ERP Integration is not just a software purchase, it is essentially the digitization of production systems, the creation of a digital production subsystem. As a matter of fact, it should be done from the point of view of production process design. The process that you did not design is automatically designed by the system elements and is not always fully compatible with the goals and objectives of this business. It is not possible to be optimal, such systems must be specially designed for the outputs and behaviors that the system wants to produce.

When we look at the MES systems, which is the next step of the vertical hierarchy after ERP, we can see very serious deficiencies in the integration of MES and ERP. As such, knowledge must arise from a single channel and proceed on the simple, shortest path. However, there are serious problems with ERP – MES integrations.

This dual integration often does not match at all, and errors arise such as getting information from two separate programs or using two separate programs independently of each other. However, these two systems should be integrated and MES should take over the part that ERP is not designed to do at the shop floor. MES must fully handle shop-level work order management. To execute this, it should get the information it needs from the ERP and then give the information about the work order back to the ERP and it should be the same as the reports produced by MES. Of course, reports can be obtained from MES, but these reports should not be different from the reports produced by ERP. On the other hand, the accuracy of the algorithms used by MES systems when calculating metrics must be checked. We time to time encounter MES that make the OEE calculation incorrectly. Also, the important thing is not to collect as much information as possible from the workshop level, it matters to gather useful information.

There is no point in collecting data and information that you do not use or will not use. If you are going to use and evaluate it, it makes sense to do so. Just as there are value-added works in the movement of materials, there are also non-value-added works in the movement of information. In MES systems, the priority should be to calculate OEE. Later, in order to gain the predictive ability from the 6 stages of Industry 4.0, it is necessary to collect other data through sensors. This is related to the maturity level of the firm, as the firm matures in its digitalization journey, it can collect more data and generate more information. For this reason, the established MES systems must be expandable, firstly to establish systems for OEE account with base structures, to integrate with ERP and then to collect other data.

In the Value Stream Mapping 4.0 system, which we use to enter, produce, evaluate and record this information correctly, we examine all the information that occurs at the enterprise level beyond the limited information with the material movement. How this information is created, how it enters the system, how it is evaluated, where it is recorded, how much it is evaluated and how much is used is our focus here. After examining all the movement of information in the system, it is possible to determine the potential for improvement. Just as our aim in traditional Value Stream Mapping is to identify problems and evaluate the potential in these problems, our aim in Value Stream Mapping 4.0 technique is to find the same non-value-added areas and transform them into value-added and minimize the loss of value. When this is done, when the flow of all information becomes clear within the business and the roadmap to evaluate this potential is studied, the Digital Transformation Roadmap of the company in the industry 4.0 journey is also revealed. For this reason, another inefficiency arises when digital transformation is not based on any object, without planning to eliminate any value loss, without planning concrete steps to increase added value.

Digital systems should not be built, bought or installed just for digitalization. These must have a benefit to productivity, must solve a problem within the enterprise, and the solution to this problem must necessarily appear as an increase in productivity within the enterprise. Otherwise, even if there is an increase in efficiency with the arrival of digital systems, the investment made is considered inefficient because the full potential cannot be utilized. At this point, there is inefficiency of the investment capital. In order for this not to happen, this roadmap should be created with a system such as Industry 4.0 and the company should proceed with the steps with this roadmap on its digital transformation journey.

Dr. Doğan Hasan

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