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Value Stream Mapping

Value Stream Mapping

A Value Stream Map (VSM) is a high-level visual representation of a business process. It helps to understand the flow of value in the process as perceived by the customer. Its primary goal is to identify and eliminate waste (Muda) and make the process as close to lean as possible. Although it is often associated with manufacturing, it can also be applied in product development and service-related industries such as healthcare, hospitality and logistics.

A value stream map is considered an improvement tool rather than just a definition of how the process operates or should operate. It is a dynamic tool as it is continually be updated as the process improved. It tends to display more information than a typical process map or flowchart. However, a value stream map does not track all possible paths and decisions a process can take. It focuses only on the high-level flow of value from start to finish.

A typical value stream map for manufacturing

A value stream map helps identify opportunities for reducing waste and improving performance by making the non-value added activities more easy to identify. It can effectively communicate where to focus the continuous improvement efforts to deliver more value. It enables to see where problems and inconsistencies lie within processes such as non-value-added activities, delays, bottlenecks, and excessive inventory levels. This in turn will provides the opportunity to discuss and plan improvement actions to make the process as close to lean as possible.

So What is a Value Stream?

A value stream is the set of activities required to convert raw materials to finished products in the hands of the customer. It spans from the event the materials are received from the supplier until the finished products are delivered to the customer. It includes other functions such as order-taking, order communication and detailed scheduling. Examining the value stream helps to identify waste and non-value-added activities, and this is the main purpose for using value stream maps.

Material and Information Flows

A value stream map analyzes both material and information flows. The material flow is where products flow through the stream and includes processing, handling, transport and storage. For simplicity, you don’t need to map the flow of every product, but the production of a single product or single product family. Focus on products with long lead times, or the product that has a high volume or high business impact.

A product family matrix may help in selecting the appropriate product

What makes the value stream map unique is the representation of information flow along with the material flow. An information flow is important to the effective control of the material flow and the execution of any process. Information flows may include forecasts, orders, instructions, schedules, approvals, reports, replenishment cards, verbal discussions, and whatever necessary to support the process.

Current and Future States

Value stream mapping begins by defining the current state as it is today. This allows to identify waste and areas where improvement can be made in the existing operation. Once the current state is mapped and waste areas are identified, move your focus on designing the future state of how the process should operate.

A future state is the ideal state or blueprint that you want to achieve toward implementing a leaner operation. Thus, it should be based on Lean principles such as flow, pull and perfection to create a more streamlined production flow. It is important, however, to define what is meant by the ‘future‘ before developing the future state.

An implementation plan should then be developed to get to the future state taking into consideration the gaps between where we are and where we want to be. An action plan should be developed along with milestones, review periods and responsibilities. Remember that this is a project that needs to be owned, tracked and monitored throughout its life cycle.

When the future state becomes a reality, it becomes the new current state and the process will start all over again, and this is the essence of continuous improvement!

VSM Symbols

Value stream mapping uses a set of symbols to denote the various details. The type of symbols used usually depends on the industry and the type of work. There are symbols that are used pretty much universally, however, you may design your own symbols to indicate your specific details. Keep in mind that they should be simple and understandable by everyone working or visiting the area. The following are the basic symbols that are applicable in most situations:


Data Boxes

Value Stream Mapping

Data boxes are optionally used to list key information related to processes, transportation, inventory, key customers, and key suppliers. They help later when creating the timeline and the summary box, and when comparing between the different workstations or processes. The following are some of the data and metrics that are listed below Supplier, Process, Customer, Transportation, and Inventory:

Supplier data box

Number of suppliers
Demand rate (items/day)
Packaging size requirement
Actual and required lead times
Error rates
Supplier shift pattern
The different types of materials
Shipping frequency
 
 
 
 

Process data box

Cycle times (C/T)
Changeover times (C/O)
Net available times (NAT)
Defect or scrap rates
Machine uptime rates
Production rates or EPE
Processing times
Setup times
Workers per workstation
Batch sizes
Maximum capacities
Number of product variations

Customer data box

Number of customers
Demand rate (items/day)
Packaging size requirement
Actual and required lead times
Error rates
Customer shift pattern
Product mix
Shipping frequency
 
 
 
 

Transportation data box

Distance traveled
Transportation time
Transportation frequency
Number of product types

Inventory data box

Inventory type
Amount of inventory
Queue or delay time
Number of product types


Value Stream Mapping Timeline

Value Stream Mapping

In order to get the most of value stream mapping, it has to be summarized in a single metric, and this metric needs to be improved continually. Many organizations use the Value-Added Ratio (VAR) metric to measure the performance of their end-to-end process.

VAR = Total Value-Added Time (Processing Time) / Total Lead Time

The value stream timeline is used to facilitate the calculation of VAR. The timeline is the sum of time spent at all stages represented in ‘hills’ and ‘valleys’. The hills represent the waiting non-value-added time whereas the valleys represent the processing value-added time. Remember that not all processing time is value-added.

The results are often summarized at the right of the timeline in a summary box. Other metrics can be added to the summary box as required.

How to Conduct a Value Stream Mapping Exercise

  • Establish the team and include people working in the process.
  • Clearly explain the purpose for creating the value stream map.
  • Identify and agree on the product family and the value stream.
  • Physically walk the flow starting from the customer and working backwards.
  • Capture all relevant data and performance information as you walk.
  • Walk the information flow and collect examples of relevant records.
  • With your team, use a flipchart or whiteboard to draw the current state.
  • Map the material flow including processes, inventory, delays and transportation.
  • Map the information flow and the secondary processes.
  • Add the value stream timeline and calculate value stream summary metrics.
  • Look for the non-value-added activities, delays and other form of waste.
  • Visualize the ideal state and develop the future state map.
  • Plan and implement actions to achieve the future state.

Example – Non-Manufacturing

This is an example of a value stream map for a non-manufacturing process (equipment installation).

Example – Manufacturing

The following is an example of a value stream map that was created for a specific product family in a manufacturing facility. This current state value stream map was created based on a real team exercise.


Click to enlarge

There are many tools that can help you to create value stream maps. One of the simplest ways is to use this template.

Further Information

There are many software applications and online services that allow the creation of value stream maps. For example, you can generate value stream maps in Minitab Workspace.


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