Value Stream Mapping (VSM)
This article explains Value Stream Mapping in a practical way. After reading you will understand the basics of this powerful problem solving and continuous improvement tool.
What is Value Stream Mapping?
In a Value Stream Mapping business processes are analysed and identified. The sequences of the activities that create a product or service are analysed and a value is assigned to each separate activity.
Value Stream Analysis is also known as LEAN Manufacturing Value Stream Mapping.
The objective of VSM is a continuous improvement of business processes. The business process is represented diagrammatically. The steps in the process and the flows of information and materials are represented visually in this diagram.
The diagram identifies where improvements need to be made in the process. As a joint idea is created by using the current situation including waste, employees will better understand each other’s work and problems.
Furthermore, VSM is a good model to work towards a future situation.
Value Stream Mapping steps
Before analysing the current situation, the objective of the analysis must be determined first, for instance decreasing lead times or improving quality.
It is important that the objectives are acceptable to the employees. Subsequently, the customer value per product is identified. Then a team is formed that will be involved in the value and information stream activities. The following step-by-step plan can then be used:
- Identify the activities (process steps) and assign the right order.
- Determine frameworks for the roles of the activity.
- The data on processing, waiting and recovering times of an activity can be determined. The extent to which an activity is completed correctly the first time is expressed as a percentage.
- The efficiency of the process is calculated (operation time versus lead time)
- Waste in the entire process is identified.
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The objective of a Value Stream Mapping is to provide an overview of the current situation and to identify waste. The source of waste will surface when the ideal and future value stream is detailed. Eight types of waste can be identified:
It is wasteful when machines and/or employees must wait before activities can be carried out. Examples: inventory shortage, no instructions and waiting for decisions.
An inefficient flow of commodities, products, documents creates waste. Examples: bad lay-out and routing of and on the work floor, overlapping of transportation, inefficient agreements about transport.
Producing more than required is wasteful. Examples: not knowing what the customer needs, excess inventory causing obsolescence.
A safety stock is necessary but only to a limited extent. A large inventory costs money, takes up much space and loses value (obsolescence).
The first time an activity is carried out correctly forms part of Value Stream Mapping, It is a waste when errors have to be corrected at a later date. For instance: corrections performed during an activity, subsequent repairs.
Any wasted movements during the performance of an activity cost time and money. Examples: looking for tools, documents that cannot be found or are stored in a place that is located far away from the work floor (records kept in the basement).
It is expensive when too many steps must be taken to process a product. Therefore it is important to asses in advance what the customer requires and to adjust the processing method to match this.
The key elements in a LEAN Manufacturing organization are the employees. This is why it is important to use their skills in the best possible way and in the right place. If this does not happen, waste exists.
As Value Stream Map provides a good insight into waste, an organization can cater for the customer’s needs and requirements in a much better way.It quickly becomes clear how the business processes work. As the focus is on the team, there is a common element of involvement resulting in a better communication. A Value Stream Map is a starting point for improvement projects in which an overview is created of the lead time, processing time and recovery time.
It’s Your Turn
What do you think? Is Value Stream Mapping applicable in today’s modern (production) companies? Do you recognize the practical explanation or do you have more additions? What are your success factors for the good Value Stream Mapping exercise?
Share your experience and knowledge in the comments box below.
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- Abdulmalek, F. A. & Rajgopal, J. (2007). Analyzing the benefits of lean manufacturing and value stream mapping via simulation: a process sector case study. International Journal of production economics, 107(1), 223-236.
- Hines, P. & Rich, N. (1997). The seven value stream mapping tools. International journal of operations & production management, 17(1), 46-64.
- Rother, M. & Shook, J. (2003). Learning to see: value stream mapping to add value and eliminate muda. Lean Enterprise Institute.
- Seth, D. & Gupta, V. (2005). Application of value stream mapping for lean operations and cycle time reduction: an Indian case study. Production Planning & Control, 16(1), 44-59.
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