This article is Part 2 of a 3-part series exploring the journey toward operational excellence through Value Stream Management (VSM). Check out Part 1, “Assessment and Prioritization of Improvement Activities”, and stay tuned for Part 3, which relates to governance and S&OP.
Massimo Zucchelli
Phase 2 - Shop Floor Management
One of the primary clusters of corrective actions identified during the analysis of the company’s strengths, weaknesses, and opportunities was Shop Floor Management, focused on improving operational management and production flow. This initiative was prioritized as a critical enabler for fostering a culture oriented toward shared goals of delivering customer value and ensuring smooth production flow.
At the time of the initial analysis, operational management was characterized by a siloed organizational structure. The main departments—pressing, welding, machining, painting, and assembly—operated in isolation, each focusing on its own performance indicators (primarily OEE), often at the expense of overall flow, warehouse management, and lead time. Additionally, each department had its own distinct hierarchy, with misaligned roles and competencies across supervisors, shift leaders, and other operational staff. Communication challenges with support functions such as safety, quality, and personnel development further exacerbated the issue.
Revamping the Daily Meeting
The first intervention was the reorganization of the Daily Meeting, which became a 30-minute session held every morning to monitor and discuss key indicators. During the meeting, the following points were addressed:
- Incidents or near misses from the previous day, with immediate definition of corrective actions.
- Scrap and defects identified in production, with root cause analysis and containment measures.
- Departmental performance against the production plan (OTD) from the previous day, assessing any gaps caused by machine breakdowns, staff shortages, or other issues.
This structured analysis shifted operational priorities toward maintaining a steady and balanced flow across all departments. The focus was no longer on maximizing the productivity of individual departments but on ensuring a stable, consistent flow, reducing bottlenecks, and improving communication both between departments and with support functions such as quality and safety.
Introducing the Escalation Meeting
To address unresolved issues from the Daily Meeting or those requiring strategic decisions, an Escalation Meeting was established mid-morning. This meeting involved the production manager, the plant manager, production planning, logistics, and industrial engineering. The focus was on resolving critical issues that could jeopardize the day’s production or required broader company-level actions.
Value Stream Mapping a key component
To further strengthen the organization and align it with the production flow, a Value Stream Mapping (VSM) exercise was conducted for each product family. The mapping included:
- The number of direct and indirect personnel involved in each production stage.
- Material flows between intermediate warehouses and departments.
- Information flows provided by production planning.
The VSM highlighted significant issues, such as the high number of indirect resources dedicated to material handling and the complexity created by fragmented planning across departments. While less apparent during daily operations, these barriers posed significant challenges to overall efficiency.
Reorganizing Production Departments
Based on insights from the VSM and the initial SWOT analysis, a new operational structure was implemented:
- Introduction of operational team leaders: In departments with numerous operators, specialized team leaders were appointed. They were responsible for training and supporting colleagues, resolving quality-related doubts, and supervising compliance with safety standards.
- Enhancing the role of shift leaders: Shift leaders assumed responsibility for regular audits of operational standards, including operating instructions, control plans, and safety procedures. They also organized production orders to optimize productivity and engaged in continuous improvement projects driven by daily meeting discussions, observations, or team suggestions.
- Creating an internal logistics function: Material handling was centralized within a dedicated team responsible for moving materials between departments and ensuring a pull flow from the warehouse to shipment. This eliminated logistical silos between departments and reduced the number of indirect resources required.
Results Achieved
These actions led to significant organizational improvements, maintaining the same number of direct operators while reducing indirect personnel:
- Shift leaders and department supervisors: Reduced from 14 to 11.
- Material handlers and forklift operators: Reduced from 13 to 10, with their work optimized through the centralized logistics function.
Additional benefits included:
- A 15% reduction in total inventory value (raw materials, WIP, and finished goods), improving the company’s cash flow.
- Improved delivery punctuality, resulting in fewer customer urgencies.
This cluster of countermeasures, combined with the Sales & Operations Planning (S&OP) cluster, established the foundation for the next step: optimizing the Footprint of the plant, including its layout and flows.
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As you can see, the benefits of value stream mapping go far beyond the theory—it’s about real results that drive impactful change. Our lean professionals have helped countless organizations streamline operations, eliminate inefficiencies, and achieve measurable gains. Ready to see what VSM can do for you? Book a meeting with our experts today to discuss your unique challenges and get hands-on with our VSM software. Let’s start mapping your path to lean success.