What is Value Stream Mapping (VSM)?
As Brian Rome, the Senior Consultant at The Next Step, likes to put it, “value stream mapping is the key tool in the lean assessment process.” When working with our clients, it is the first step we take with operations consulting services because it is prescriptive. The company is viewed from a high level with value stream mapping, showing how it flows, and where the problems are.
What is a value stream? A value stream is the set of tasks from raw material to delivery that are value-adding and non-value-adding for your customer, from your customer’s standpoint. The customer determines what adds value to the product. With lean process management, the value stream is essential because the goal is to maximize value-added work and minimize waste. Watch this video to learn more about the basics of VSM.
A value stream map looks at four specific parts of your business and their relationships to one another:
Transformation processes are the high-level process steps in your value stream. Process detail is not needed at this point. Those details will be reviewed in the process improvement phases.
Material flow is how your material flows from step to step. Is it a push or a pull system? With a pull system, production is a reaction to current demand. With a push system, production is in anticipation of future demand.
Data flow is how information is given about what needs to be done. It is the flow of information (like order details) from the customer to production control to supplier.
Leadtime is determined by how much inventory you have at any given time. What is the production lead time? What is the processing time?
Value stream mapping allows you to analyze, design, and manage how material and information flows through your value stream. You start by creating a current-state map from the items above. When you map out the value stream, large-scale problems are easier to identify.
After the current state map is created, a future state map is created to determine how material and information should flow. As the first step in lean manufacturing, value stream mapping aims to identify where waste is in your business.
The Benefits of Value Stream Mapping
Mapping your business’ value stream is critical in encouraging internal growth. A value stream map lets you discover the source of waste in your business, remove the waste, and prioritize value-adding work for the customer.
The seven waste types that VSM identifies are:
- Overproduction waste
- Inventory waste
- Motion waste
- Defects waste
- Over-processing waste
- Waiting waste
- Transport waste
Learn more about each waste in our article about lean manufacturing.
The Challenges of Value Stream Mapping
Mapping a business’ value stream is an investment of time and resources. Value stream mapping can itself be wasteful too if not applied carefully.
When conducting value stream mapping, make sure the team includes people experienced in both the business and product. Pay attention to the potential return on investment when spending time on your value stream map development. You don’t want to overdo it. It is the first step in a series of actions to improve your operations.
How to Create a Value Stream Map
The steps in creating a value stream map are as follows:
- Choose a value stream to map.
- A value stream can be made for any product or service. Some things to look at when selecting a Value Stream include higher costs, customer complaints, bottlenecks, or similar issues.
- Identify the customer and their needs in the value stream.
- Map out the value stream using a system of standard icons, like those found below. Pay attention to which items add value and which don’t.
- Identify transformation processes, or large events in the value stream, and note important data like the number of employees involved, the average number of working hours, the cycle time, wait time, uptime, downtime, defects, and lead times.
- Identify material flow between transformation processes. How does the product get from one step to the next, starting with the customer? Mark push and pull systems differently.
- Identify information flow. Data flow starts with the customer. How does the customer order the product? How does the order get processed? How does the order get launched to the fulfillment team?
- Look at lead times. Look at the inventory data for each transformation process. How long does material take to flow between specific transformation processes? From this information, make a lead time ladder (see examples below).
- Analyze the value stream map and list the kaizen bursts (aka waste in the value stream). To find non-value-adding work, we recommend you:
- Compare your lead times to your takt times.
- Takt time is the theoretical rate of customer demand. It helps set the pace and capacity of output. To find takt time, find the net time available for a process and divide it by the customer demand. So, if you have 10 minutes to complete 50 items, you have 12 seconds per item.
- If Takt time is longer than the cycle time, you are in good shape. Otherwise, there is a potential issue because the product takes longer in the transformation process than takt time/demand allows.
- Find where inventory is piled up. These are bottlenecks.
- Look for quality issues that are taking away from the output.
- Compare your lead times to your takt times.
- Conduct an impact/effort analysis.
- Rank kaizen bursts based on priority. Which will have the biggest ROI?
- Design your future value stream map.
- Nothing is set in stone so don’t worry about the final version. Make a new map that aligns with your customer’s needs. Map where the customer needs to be.
- Create a plan for your first kaizen event.
- Determine which tools you need and how to solve the burst.
- Execute your plan.
The Value Stream Mapping Symbols
Value stream mapping symbols, or icons, are standard symbols used when mapping out a value stream. Below are examples of the value stream mapping icons that The Next Step uses with business consultations. You decide which icons you will use when creating your value stream. Keep it simple.
Current Value Stream Mapping Examples
Enough talking about how to make one. What do value stream maps look like? A few examples for visualization are below:
VSMs can be made with flowchart software but drafting one with post-it notes can make for a fun team exercise. Check out the article ’getting the most out of value stream mapping’ from Lean Enterprise Institute for more tips.
Value Stream Mapping VS Process Mapping
People often get value stream mapping and process mapping confused. Both VSM and process mapping play their part in establishing flow in your production. VSM identifies problems in the value stream, process mapping solves them. Once you identify processes within your value stream that are wasteful, you can analyze the process with a process map.
Why Bring Value Stream Mapping to Your Business?
VSM is a unique tool. It helps you visualize your processes and handoffs, identify problems, and ultimately optimize your flow and savings. It is the first step in bringing continuous improvement to your business.
Mapping out the value stream of your business, with a focus on your customer, will lead to happier customers. Every business should understand how their products flow through their production and where the value-adding and non-value-adding activities are.
Want assistance conducting value stream mapping for your business or have additional questions?