Aligning every function of a plant towards delivering customer value is essential, for achieving operational excellence. This post explores how one manufacturing plant reorganized its operations using value stream management (VSM) principles. By restructuring its organizational framework, creating dedicated value streams for two product classes, and implementing targeted improvement initiatives, the plant achieved smoother workflows, enhanced collaboration, and a stronger focus on meeting customer needs. Let’s take a closer look at the process, the changes made, and the results achieved.
Welcome to our 'Lean in Action' series, where we bring you real stories from the field about the transformative power of value stream mapping (VSM). While we’ve taken care to keep identities confidential, the insights, successes, and lessons shared here are authentic accounts from lean experts and industry professionals across various sectors.
Production departments involved in two shifts
In a manufacturing plant operating in two shifts, the following production departments are present:
• Machining and welding
• Painting
• Two assembly lines
• Rework area
• Customer options assembly
• Final inspection and approval
The production support departments include:
• Safety
• Inbound and outbound logistics
• Warehouse
• Internal logistics
• Quality
• Time and methods and process engineering
• Maintenance
• Order processing
• Purchasing
As in many traditional organizations, the plant manager's direct reports included the heads of production, logistics, process engineering, safety, quality, order processing, and purchasing. The head of production is the leader of the maintenance manager and the shift leaders for welding, painting, and assembly. The assembly manager coordinated the shift leaders of the various assembly lines, shipping, rework, and customer options assembly.
Analysis and implementation with focus on customer value
With the goal of reorganizing the plant to orient every function and department towards customer value, the following analyses were conducted, and countermeasures implemented:
Product Classification
Products were categorized based on characteristics such as:
- Commonality of operational steps and production technologies
- Customer demand profile, considering model and demand variability and customization level. Based on these criteria, two product classes (A and B) were identified.
Value Stream Mapping
For each product class, a value stream map (VSM) was created, covering the process from order receipt to shipment. This mapping highlighted improvement spots and allowed to plan focused kaizen activities to achieve quick wins and smooth the value flow.
- Identification of Contact Points: Common phases and operations between the two flows were identified, and measures were taken to make these phases independent. Solutions included technical countermeasures (e.g., dedicated transport units, work areas, or schedules) and organizational strategies.
Organizational Structure Revision
The company’s org. chart was revised to increase commitment and ownership on the value stream. The first hierarchical level below the plant manager remained unchanged, but immediately below the head of production, two branches were established with a dedicated leader for each branch: the Value Stream Leader for Product A and the Value Stream Leader for Product B.
Each Value Stream Leader directly managed the shift leaders of the assembly lines, (either A or B) a team leader from the rework area, and one from the final inspection and approval (creating two dedicated flows, one per product). In each production area, an experienced operator (Team Leader) oversaw approximately seven workers, collecting and resolving team issues, reporting them to higher levels if necessary, and training new hires or implementing new procedures and standards.
Responsibility Allocation
The shift leaders for welding, specific to Product A, reported to Value Stream Leader A. Meanwhile, the customer options and painting areas, more involved with Product B, reported to Value Stream Leader B.
Support functions (quality, logistics, maintenance, process engineering) had designated representatives for each value stream. These representatives reported functionally to their Value Stream Leader and raised issues or project plans to their functional department heads, who were responsible for providing resources, expertise, or escalating issues based on complexity.
Value Stream Team Responsibilities
The team (direct and functional reports of the Value Stream Leader) was accountable for key indicators in safety, delivery, quality, and personnel. The matrix structure of the value stream organization allowed the deployment of specific value stream objectives in cascade to team leaders responsible for small groups of operators.
Meetings and Issue Management
A 15-minute daily meeting was established at the beginning of each shift, led by the Value Stream Leader, to review gaps in specific value stream indicators. This meeting included representatives from support functions and shift leaders (Value Stream Team), who presented problems collected from team leaders. Issues were assigned for analysis within the team or escalated to higher levels for problem-solving with the plant manager. More complex issues were addressed through dedicated workshops or kaizen events.
This value stream-oriented organization aligns the entire company towards common goals, giving significant commitment to the Value Stream Leaders. Department heads act as coaches for their team members within the value stream teams, contributing to continuous improvement and operational excellence.
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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.