In a previous blog post, we discussed making a simplified value stream map.* In this post, we look at product-quantity analysis and product-revenue analysis and how they are used up front in Value Stream Mapping to select the product family that will be mapped. Then we finish with a short video on another approach to determining the product families: product family matrix.
Product Quantity Analysis: A Lean Tool
A short article titled “The other approach to Lean manufacturing” by author Nicole N. Snurkowski contains a brief overview of Product-Quantity Analysis.
“A well-executed PQ analysis helps companies see the highest to lowest demand for all products produced within a facility. To do a PQA, graph the total quantity of products over a timeframe (six months to a year) on the y1 axis of a chart, with the cumulative percentage of the total products on the y2 axis of the same chart.
This exercise typically reveals the 80/20 rule, where approximately 80% of production volume exists in 20% of the products.”
Copy and paste the following link into your browser to access the article.
Product Revenue Analysis
In a paper titled “PQ$ Analysis: Why revenue matters in product mix segmentation” author Shahrukh Irani discusses why the traditional product-quantity analysis must be extended with product-revenue analysis.
“Instead of focusing on a sample of products selected using a single criterion--quantity--this analysis brings revenue into the equation.”
You can read the paper here.
Having introduced product quantity analysis and product revenue analysis, we now turn to their use in selecting the product family to be mapped using value stream mapping.
Product Quantity Analysis as a First Step in Value Stream Mapping
In their case study titled “Value Stream Mapping using Simulation at Metal Manufacturing Industry” authors Raja Zuraidah R.M. Rasi and others apply product quantity analysis as a first step in value stream mapping.
“The first step to any VSM activity is to start with selecting a product family. The identification of the product families were done from the customer end of the value stream. A family is a group of products that pass through similar processing steps and over common equipment in downstream processes. The tool used for this step is Product Quantity (PQ) analysis.”
You can access their case study here.
Using P-Q and P-R Analyses to Identify the Product Family for Value Stream Mapping
In a case study titled “Value stream mapping in a discrete manufacturing: A case study” authors Anup P. Chaple and Balkrishna E. Narkhede use product-quantity and product-revenue analyses to identify the product family for value stream mapping.
“The combination of two Pareto analyses (P-Q and P-R analysis) leads to the Classification Matrix (Table. 1) that defines nine distinct products classes ranging from High-High (upper class) and Low-Low (lower class).”
You can read the case study here.
Using a Product Family Matrix Prior to Value Stream Mapping
We have covered how to use product quantity analysis and product revenue analysis in order to determine product families for value stream mapping.
Using a product family matrix is another approach. Get a quick overview of the practice in this short video from Enna.com.
You can watch the video here.
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