Supplemental Guidance on Extended Value Stream AIP

The FY11 annual improvement priority on extended value streams is the first time Parker has
asked for all divisions to value stream map outside the traditional “four wall” approach. There
are a number of things about extended value stream maps that are different and should be
considered by the value stream teams. The purpose of this document is to clarify these
differences.

Purpose of AIP
The purpose of value stream mapping is to reduce lead time. We reduce lead time by reducing
waste.

Parker recognizes that the most significant portion of inventory that Parker holds is in finished
goods. Most of the finished goods can be found in other Parker facilities either as purchased
components or as salable material.

The purpose of this AIP is to use extended value stream mapping to identify and reduce wastes
that are causes of high inventory in connecting Parker facilities, reducing the inventory and
shortening lead time within and between the facilities.

Due to the complexities of our operations and the importance of aligning resources, it is
important for divisions to review their extended value stream plans with their Group Lean
Manager whenever this process is extended outside their division’s scope.

Consideration of team makeup for extended value streams

Since this initiative includes mapping supplier and/or customer Parker facilities, it is essential
that the value stream team that maps the extended value stream includes representation and
ownership of both facility processes.

It is highly recommended that the teams include a Supply Chain Manager because they will
have more direct control over connections between the facilities.

In addition, since information flow between the facilities may be a contributor to the wastes
that drive inventory, teams will need to have resources that understand the information system
on the team.

Additional Value Stream Team Roles

1. Value Stream Manager in connecting Parker facility

2. Supply Chain Manager
3. IT Manager/Technician
Types of extended value stream processes
Teams should review extended value stream plans with their respective Group Lean Managers
but here are a few valid examples.
 Parker manufacturing to Parker manufacturing
o Within Division
o Within Group
o Between Groups
 Parker manufacturing to EDC or Sales Company
 Parker manufacturing to PSC or Value Added Center

Value stream mapping process

A value stream mapping event involving teams from both facilities should produce the value
stream map. Teams visiting each other’s facilities is recommended, but if this is not possible the
teams should work together to produce a map that both teams agree upon.

We try to always identify value from the eyes of the customer. Teams should begin the mapping
process at the customer end of the customer Parker facility working back to the receiving end of
the Parker supply facility.

The icons and methods to produce the maps should be consistent with any map you find in the
manufacturing environment using the Learning to See methodology. Teams should focus on
keeping maps simple and use the method of mapping a representative part number or part
family.

There are just a few additional differences that should be taken into consideration.

1. A series of material and information loops will be makeup the extended value stream.

Examples of loops

 Customer pull loop

  Customer facility make loop
 Transit loop
 Supply facility make loop
 Supplier loop

2. Lead time ladder under trucks/boats/planes need to include all inventory between
facilities (not just frequency of delivery).

3. Information flow is
critical.
a. Included detail on systems in PC&L process block.

b. Make sure information arrows include frequency of information delivery.

Additional guidance

 If waste is identified in the information flow between the facilities the team may need to
do a deep dive mapping activity specifically on the information flow. In these cases, it
would be recommended to do a swim lane map similar to the type of map you would
use in lean enterprise transactional (office) value streams.

 PFEP is required for these value stream improvement events.

 In some cases you may have multiple locations shipping the same part/part family into
one facility or one manufacturing facility shipping a single part/part family to multiple
Parker facilities. Customer demand may not be the same on the same part in these
different locations. Therefore, it will be important to understand the customer demand
for the part(s) in each location. The PFEP will be a important tool for this.
 Although Seeing the Whole, by Dan Jones and Jim Womack, is a good guide to mapping
multiple facilities it does not support our extended value stream strategy for this AIP. Do
not use the mapping strategies in this book for the purpose of mapping these extended
value streams.

 8 point criteria should be used within each location. Not across the two. For example we
would expect to see a scheduling point in each location.

 What if the biggest issue is the Parker supply side?

o It is acceptable for a facility to focus on a supplier Parker facility as your extended

value stream project if it will have the biggest business impact on inventory and
customer service.

 In an extended value stream as waste is removed customer service will be improved.