Please view on a larger screen
In the intro we saw a busy line: lots of movement, lots of output. But many items were rejected by the customer, and profit was under pressure. We weren't clearly distinguishing "good" from "defective" until the end—and a defect here means anything that makes the product wrong or unacceptable to the customer (wrong spec, bad quality, or obsolete once the market changed). So we kept spending labour and material on things the customer wouldn't accept.
In TPS, the customer defines value. If we don't listen to the market, we overproduce the wrong thing—the worst kind of waste. So first we get clear on what the customer actually wants. In the sim we're going to introduce a red bin at the end of the flow: anything we identify as defective goes there instead of to the customer. That way we stop shipping defects and start seeing them. We'll also show defects as they move through the line (as they are created). Catching them before they reach the customer cuts the high cost and risk of shipping something wrong or unsafe.
Run simulation to see Profit & Loss