What is Value Stream Mapping (VSM)?

Value stream mapping 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. The purpose of VSM is to identify and eliminate waste. Items are categorized as adding or subtracting value based on the customer’s perspective.

Customers, internal or external, only care about the service or product’s value to them. This includes the effort it took to create it or any potential value it may have for other customers. This is what value stream mapping does. One common process is to first draw the current state VSM, then model it in a better manner with a future or ideal state VSM. Sketching can be done by hand, but VSM software is available for collaboration, analysis, and communication.

History of Value Stream Mapping (VSM)

As lean production methods were being spread to other industries and the United States in the 1990s, the term “value stream map” was becoming more common. VSM became a central part of lean methodology in many areas. Six Sigma also uses value stream mapping. Both Six Sigma and Lean have the same goal, which is to eliminate waste and create an efficient system. They identify waste in a unique way. Six Sigma practitioners are more focused on the non-valued-added activities of lean, while Six Sigma followers pay more attention to process variations that lead to waste. Both have been successful in different situations which led to Lean Six Sigma, a combination of both.

Benefits of Value Stream Mapping (VSM)?

Value stream mapping can be used to identify waste in any process. This is its core purpose. Each step of a significant process is described and evaluated from the perspective of the customer to determine if it adds or subtracts value. This focuses on value, which allows the company to be competitive in the market. VSM can be used by lean practitioners to anticipate or face any competitive threat and produce the highest value for customers in the most efficient manner possible. It should be used continuously for continuous improvement and to bring better and more efficient process steps online. VSM allows you not only to see the waste but also the source and cause.

As with all good visualizations, value stream mapping is a powerful tool for communication, collaboration, and even culture shift. Decision-makers can see the current process state and identify areas where waste is occurring. They can spot problems such as process delays, excessive downtime, and inventory issues. They can also see how to improve with the Future State or Ideal State VSM.

Value Stream Mapping (VSM) is not only used to eliminate waste but can also be used to add value. This is what the customer really cares about. The goal of creating value is to eliminate waste. Value is what a customer will pay for. 

Value Stream Mapping (VSM)

VSM symbols can be found in many places. However, they all fall under the following four categories: material, process, information, and general. Although the symbols may be complex, some simply suggest their meanings in a layman’s sense. For example, a truck icon to indicate external shipments or eyeglasses to indicate something to see. 

Some common Value Stream Mapping (VSM) symbols:

Value Stream Mapping (VSM) Symbols

Value Stream Mapping (VSM) Symbols

Analyze the Value Stream

The “value stream” is a term used to describe the entire process of bringing a product or service to market. It includes all actions that are required to get it from idea or raw material to finished product. Each action adds value to the final product. It is best to work together efficiently to create a continuous stream of value. Analyzing the value stream is the first step to creating a lean environment. This includes increasing value and eliminating waste. This is the basis for creating an improvement program. It is possible to identify opportunities for improvement by separating actions that contribute to value creation from those that make waste.

Value stream mapping simplifies complex systems into a map, which supports stream analysis. This map shows the results of the value stream analysis and provides a visual tool for communication and understanding. Next, we will outline the steps required to complete a value stream analysis. This includes creating a current map, future, and ideal state maps and finally executing a lean plan. These are the best practices in VSM. They link organizations to value stream analysis and help to create a material and information flow system that is efficient and integrated.

Value Stream Mapping (VSM) in transactional environments

Value stream mapping is becoming more popular in knowledge work, as it allows teams working in siloed environments to visualize their work and work better together.

Individual contributors can get a view of the progress of the team from a bird’s eye perspective.

This can help reduce wait times by increasing the efficiency of work handoffs. Waiting is one of the wastes of Lean. Therefore, it should be everyone’s priority to reduce it.

You can map your process to see where handoffs take place. This will allow you to identify bottlenecks in your process and devise a plan to reduce their impact on your team’s productivity.

Value Stream Mapping (VSM) Terminology

There are many terms and features in a VSM that can be confusing. While we will explain some of the standard VSM features, it is possible to modify them to meet specific goals. 

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 value stream mapping. 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. Kaizen burst can be a valuable component of performance management. It helps to overcome barriers and find solutions to help you get to the next level in your value stream performance.

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 material, 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 Takt time is longer than the cycle time, it means that there is a bottleneck or constraint to be addressed.

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 of the Asian, European, and American suppliers) to cover at least the main flow routes of inbound material.

10 Easy Steps to Complete a Value Stream Map (VSM)

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.

Below is an example of a Value Stream Map for a Printing and Binding Operation

Step 1 – Understand 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:

  1. Customer wants you to do it
  2. The material or information is being processed or transformed to final products
  3. It is done right the first time

Any activity that exists outside of these three criteria is considered “Waste”.

Once we understand and define value for the organization and we understand the focus, we now 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.

Basics of the Value Stream Map

The video below is from a pre-recorded online training “Basics of the Value Stream Map” course. If you want to watch the course without the promotions skip to 8 minutes and 20 seconds (8:20). The course is around 40 minutes long. If you would like to take the online Value Stream Mapping course, CLICK HERE.


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 “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

Product Priority Matrix
Value Stream Map Example – What is our focus

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 processes)

Once we understand and define value for the organization and we understand the focus, we now 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 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 at the process.


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Root Cause Analysis Toolset

This FREE Downloadable ZIP file contains seven templates (Including the Value Stream Map) in the Lean Six Sigma Root Cause Analysis toolset: Project Charter, SIPOC, Value Stream Map, X-Map, C&E Matrix, and FMEA. Each template is in a Microsoft Excel format. These tools are used in the DMAIC (Define, Measure, Improve, and Control) phases of a Lean Six Sigma Root Cause Analysis.


Step 4 – Work Backwards

The most difficult part of drawing a VSM is not to turn 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 backwards

When you start from the end customer and work backwards, 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 SME’s, we define the basic steps in the value stream

Value Stream Map
Value Stream Map Example – Basic Value Stream

Step 6 – Fill in Queue Times

After we define the basic steps in the value stream then we fill in Waiting (Queue) Times between each process.

In most VSM’s, 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 considered to be a Value Added Step (VA).

Value Stream Map
Value Stream Map Example -Queue Times

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 important to the process.

Value Stream Map
Value Stream Map Example – Fill in process data

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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 that we were in the process when the value stream was captured.

Value Stream Map
Value Stream Map Example – Include Smiley Faces

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 100. This will give you the Percentage of Value Added activities or %VA.

Value Stream Map
Value Stream Map Example – 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

The VSM should help build a roadmap for continuous improvement projects to get your process to the desired state.


Value Stream Mapping Product

FREE! Value Stream Mapping Online Training (Normally $19.99)

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

There will be a quiz at the end of the module. Once the course is completed and the exam is passed, you will be immediately awarded a Certificate.


Value Stream Mapping (VSM) tips and tricks

Go to Gemba

Your team and you should be following the entire value stream. Do not rely on assumptions, impressions, or conversations about “normal” things. If the thing is physical, you can walk it and use a stopwatch for timing various steps. You will be able to experience it as closely as possible. At least one member of the team must walk the entire stream. You will lose the essential perspective of VSM if you rely on sub-teams for walking different sections.

Begin with a rough draft

Begin by drawing in pencil. Then, you can document your steps. You can later use chart-drawing software for better communication and collaboration and to map out the future/ideal state.

Start with a walk-through

It might be helpful to start by taking a short walk around the area, then go back and do it in greater detail. Do it in reverse from the product or service back to the origins? This perspective could make many items more meaningful and clearer. 

Keep asking “Why?” 

It’s also known as the Five Whys in Lean Six Sigma. It is simply asking why something is done the way it is. The answer is followed by another question. Continue this process until you get to the final basis of the action.

Conclusion

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.