Value Stream Mapping (VSM) is a powerful Lean management tool used to visualize and analyze the flow of materials and information required to bring a product or service to a customer. This method employs specific symbols, often referred to as “the language of Lean,” to depict the various steps and processes involved in production or service delivery.

What Is Value Stream Mapping (VSM)?

Value Stream Mapping is a type of flowchart designed to show and optimize inventory and information flows within production processes, using Lean symbols. VSM plays an integral part of Lean manufacturing by helping organizations optimize processes by identifying and eliminating wasteful processes.

It is a method of illustrating, analyzing, and improving the steps necessary to deliver a product/service. VSM is a key component of lean methodology. It examines the flow of information and steps from the origin to the delivery to the customer. 

It uses symbols, just like other types of flowcharts to show various work activities and information flows. VSM is particularly useful for eliminating waste

Purpose of Value Stream Mapping

Value Stream Mapping’s primary objective is to deliver maximum customer value while creating minimum waste through an all-encompassing value-creation process that maximizes customer benefit. The purpose of VSM is to identify and eliminate waste. Items are categorized as adding or subtracting value based on the customer’s perspective. This encompasses:

• Design: From Concept to Customer / Order to Delivery
• Build: From Order to Delivery Sustain: Through Life Cycle to Service

Why VSM?

Holistic Improvement: While improvement events often bring localized benefits, VSM provides an overall perspective that unifies all improvement activities.

Waste Identification: VSM’s effectiveness at identifying inefficiency and waste allows targeted improvements.

Enhanced Planning: VSM assists organizations in effectively planning and executing Lean transformations by offering a clear roadmap.

What Is Value?

Lean refers to capabilities provided to customers that meet specific criteria as value add. For instance: Value can be defined as what customers are willing to pay for in terms of quality, timing, and pricing.

Video: Value Stream Map

Value Stream Mapping (VSM) Terminology

Time (C/T)

The frequency of features/units produced, or the average time it takes between one completed unit/feature and the next? Using our scenario of feature development for an enterprise software solution, the cycle time is the average amount of time it takes from the completion/deployment of one feature request to the completion/deployment of the next.

Setup Time (S/T)

This is the time taken to prepare for a step. This can be used to indicate, depending on the step (application to software development), how much time is needed to fully understand the requestor to set up, spin up, or allocate a test environment.

Uptime (%)

This gives you an indication of how much time the systems or processes are in use. This can be used to show the system uptime and employee availability times in our example.

Lead time

This is the time it takes for one feature request to go through the entire development process from concept to delivery.

TAKT-Time

This term is often used in VSM. It is the time required to produce products at a rate that meets customer demand. Figure 2 illustrates how takt is calculated and applied.

Kaizen Burst

Kaizen Blitz is also known as a team activity that focuses on solving specific problems. It lasts for 3-5 days. The purpose of the mapping activity was to plan and identify the problem.

A Kaizen burst aims to solve the problem. You can use it to resolve issues that aren’t getting resolved as quickly or as planned. It is designed to help a team focus their energy and resources on a specific problem, process, or activity to remove or reduce waste or implement a solution.

Four Elements of a Value Stream Map (VSM)

• Product Flow

The product flow illustrates how the material moves through the process. How does the finished product, whether it is purchased components or raw materials, become a finished product that can be sold to customers? 

• Information Flow

Information flows govern the product flow. This document explains how the process is managed. 

• Customer(s)

Customers are the first thing you should draw on your value stream map. Start value stream maps in the shipping area and move upstream. Include a data box that shows the customer’s demands in addition to the customer symbol drawn on the map. This data can be used to calculate Takt time. This gives the company an indication of how frequently they must produce units to meet customer demand. This is important in relation to the cycle times for the products. If the cycle time is longer than the Takt time, addressing of a bottleneck or constraint becomes necessary.

• Supplier(s)

Next, draw the suppliers. You don’t have to include every supplier on the map. Sometimes, it’s more efficient to include just one type of supplier. You could do this by geographic region (e.g., capture all the Asian, European, and American suppliers) to cover at least the main flow routes of inbound material.

Also See: Lean Six Sigma Certification Programs, Mesa, Arizona

How to Complete a Value Stream Map?

One of the most powerful tools in the Lean Toolbox is the Value Stream Map. In a brief time (usually less than an hour) you can effectively communicate where the focus of your Continuous Improvement efforts will have the most effect.

The Value Stream Map is full of pictures and friendly symbols which make it a simple tool to understand and develop.

Step 1: Understand the Value

The first step to developing a Value Stream Map is to understand the concept of “value-adding activities”. There are three criteria for Value-Adding Activities:

• The customer wants you to do it
• The process transforms or processes the material or information into final products.
• It is done right the first time

Activities that fall outside these three criteria are “Waste”. Once we understand and define value for the organization and we understand the focus, we start to develop the VSM. I have worked with hundreds of teams and have found that developing a Value Stream Map manually with Post It notes and flip charts works best.

Step 2: What is our Focus?

Before we learn how to define our focus, let’s correct a misunderstanding that I see in many teams when developing a Value Stream Map.

A Value Stream Map is not a process flowchart. What I mean by this is that a Value Stream Map does not track all paths that the process can take. A Value Stream Map tracks one part, service, or transaction or a family of parts, services, or transactions through the process. We only track one path of the “value stream”.

To define our focus, we can use a tool like a Product Family Matrix to help us understand which of the products or family of products has the “biggest bang for the buck”. Value Stream Map example: An example of the Product Family Matrix is below.

When choosing the product or product family to map, consider:

• Customer Return Rates
• Greater Proportion of Units
• Largest Dollar Volume
• Defect Rates
• Complex Products (use the most processed)

Step 3: Go to Gemba (Walk the Process)

I see lots of teams draw a VSM in a room far removed from the process that they are trying to improve. Worse, they try and develop a VSM from reports and SME accounts without ever experiencing the process themselves. Go to Gemba! Draw the Ohno Circle! Get a notepad, take notes, and watch the process unfold in front of you. Develop the VSM somewhere that the team has quick and easy access to the process. Optimally you will be in the process.

Step 4: Work Backwards

The most difficult part of drawing a VSM is not turning it into a flowchart where we track all the different paths of the process. There is a trick to avoiding that mistake… Start from the end of the process and work backward. When you start from the end customer and work backward, you have no choice but to track that “one thing”.

Step 5: Define the Basic Value Stream

From the data that we have collected from “going to Gemba” and SMEs, we define the basic steps in the value stream

Step 6: Fill in Queue Times

After we define the basic steps in the value stream, we fill in the Waiting (Queue) Times between each process. In most VSMs, the focus is on the Process Cycle Time. Separate the cycle times between NVA time and VA time. Recall our discussion in Step #1 to define what is a Value-Added Step (VA).

Step 7: Fill in Process Data

Enter all pertinent process data in Boxes beneath each main process step box (from step #5).

Examples of Process Data:

• Process Cycle Time
• Changeover Time
• Pace / TAKT Time / Rate
• Defects / Problems Per Day
• First Pass Yield
• Batch Size
• Shifts

Enter any data that you and the team have defined as important to the process.

Step 8: Include Smiley Faces

It is important to understand the amount of capacity in labor at each process. When developing the VSM, you might see that a bottleneck exists because of an imbalance in labor. Add a smiley face over each process box to define the number of laborers involved in the process when capturing the value stream.

Step 9: Include the Value-Added Percentage (%VA)

Add up all the data in the VA section and divide it by the total process cycle time (the time it takes for the product or product family to travel through the entire value stream). Convert the resulting number to a percentage (%) by multiplying by one hundred. This will give you the Percentage of Value-Added activities or %VA.

Step 10: Interpret the Value Stream Map (VSM)

The VSM should now be a very pictorial view of the process and what has happened to that product or family of products.

• Bottlenecks / Constraints
• Long Process Cycle Times
• Poor Uptimes
• Excessive Setup Times
• Poor Quality / Rework

Key Benefits of VSM

• Visual Representation: VSM gives a visual overview of the flow of materials and information within a production process, helping users better comprehend its connections and dependencies.
• Basis of Analysis: VSM provides the foundation for process analysis, making it easier to identify areas for improvement and identify waste or inefficiency that impede productivity or value creation.
• Plan Improvements: By Highlighting Inefficiency VSM helps plan improvements by highlighting waste or inefficiencies that hinder productivity or value creation resulting in greater productivity or value creation.

Final Words

Although originally used in manufacturing environments, people can apply VSM across numerous fields and sectors. For example: Logistics, Software Development, Healthcare and Government Services are some of the main focus areas for VSM.

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