What is Value Stream Mapping?
Value stream mapping involves creating a visual representation of every step in a process as well as the tasks involved in each step. The goal is to identify and eliminate any non-value-adding activity that doesn’t improve the product or better serve the needs of customers.
Value stream mapping is considered one of the most important tools in Lean methodology. Project teams apply it to every type of process, allowing them to break down each step and take a deep dive into the resources, time and people needed to complete it. This analysis can lead to valuable revelations on where waste in a process has gone undetected.
The Importance of Adding Value
The entire Lean methodology is built around the idea of adding value to customers. That seems a simple enough concept. But over time, a process can accumulate many wasteful steps that may provide some benefit “in-house,” but do not benefit the person who ultimately buys the product. Organizations benefit from continuous process improvement and determining the difference between value-add vs. non-value-add in assessing processes.
Lean operates under the powerful premise that businesses should eliminate any step in a process that does not add value to the customer. The methodology offers eight categories of waste that businesses should focus on eliminating.
Product defects: A high amount of product defects lead to unsatisfied customers, failing in the main goal of Lean. It also leads to wasted time spent on rework to correct defective products or waste created by having to throw out a defective product.
Extra processing: This refers to doing more work than necessary to create a product that will meet customer demands. In manufacturing, extra processing can include issues such as using components and equipment with a capacity beyond customer requirements. In an office, extra processing may include creating reports that are more detailed than required, mandating more signatures than needed on documents, double entry of data, and the creation of unnecessary steps in a process.
Excessive inventory: This includes putting too much capital into buying more materials than needed to meet current demand, as well as overproducing work in process or producing more products than the customer needs.
Non-utilized talent: This involves not leveraging all the skills available in a business to improve processes related to product creation. Overcoming this waste requires a thorough assessment of all the skills employees have and then putting them into positions where they have the most positive impact.
Overproduction: Some businesses optimistically produce more products than current demand requires. This can lead to issues such as products not meeting customer requirements (or exceeding them unnecessarily) and an increased expense for storage of products. In the worst-case scenario, it can lead to creation of products that never get sold.
Transportation: This includes unnecessary movements of equipment, people, tools, inventory, and/or materials, especially moving them farther than necessary. Excessive transport leads to more work for employees and a higher risk of product damage and defects.
Waiting: This applies to people having to wait for someone else to complete a task before they can do their task, as well as valuable equipment sitting idle
Wasted motion: This originated on the manufacturing floor, where teams developed ways to reduce the time spent walking to find equipment or having to lift, reach, bend or stretch to reach needed tools. But it also applies to an office, where excessive motion can include having to walk to find needed files or equipment, spending time searching for files, and unnecessary duplication of data entry.
Creation of Value Stream Mapping Teams
Businesses should form cross-functional project teams to work on value stream mapping. Typically, they should include members from departments that include operations, sales, customer service, marketing, inventory, and any other department associated with the process the team will map. An ideal team size is about 10 members.
Most value stream mapping projects kick off with a Kaizen event that focuses on setting the parameters of the project and developing goals for both the analysis of how the business currently manages the process and the outcomes expected after improvements are made.
Project teams focus on the creation of two main types of maps. The first is the current state value map that shows how a process currently operates. The second is a future state value map that shows how the process will work once it’s streamlined.
The Current State Value Stream Map
This map answers the question, “How do we do things now?” While every process comes with its own challenges, teams can achieve success by following a series of steps that are common to all value stream mapping efforts.
Walk the workflow
Team members should “walk the workflow,” interviewing every person involved along the way and learning every task associated with each step. They also should look for issues such as reliability of equipment, inventory levels, wait time, processing time for each step, and changeover time between when a product is finished and the beginning of the next product. This type of detailed research is the only way to ensure teams thoroughly understand the entire process.
Create a Flowchart
Teams create a flowchart that offers a visual representation of each step, with a subset of every task associated with completing each step (The American Society for Quality (ASQ) offers some examples teams can draw from). The chart should include information on the customer, supplier, information flow, product and material flow.
Calculating Time
The value stream map should also include a place to calculate time spent on value-adding and non-value-adding tasks, as well as the overall time spent on each step (as well as time between each step). Teams also should calculate the cost of each step, producing a cost-per-hour estimate for every task.
Identify What to Eliminate
This includes any step task that does not add value to the customer, as well as any area that leads to excessive costs that reduce profits (such as unneeded high-dollar equipment or excessive storage expense from over production).
The Future State Value Stream Map
This answers the question, “How do we want things to work?” Developing a future state value stream map requires detailed analysis of the current state map. Teams can also benefit by focusing on specific issues that can improve almost any type of process.
One of those is Takt time, which refers to the time spent to create a product component at a rate that meets the customer demand rate. It’s a key feature of the Just in Time methodology designed to keep inventories from growing too large or overproduction of a product.
Teams also should consider the Theory of Constraints when designing a future state map. This theory involves identifying and improving any steps that have become a bottleneck in a process, leading to product defects, inconsistent production schedules and other issues.
Why Create Value Stream Maps?
Unlike a process map that focuses on one step, a value stream map not only maps out the tasks associated with an entire process but also determines the value or non-value of each task.
Value stream mapping also helps a business:
- Find areas where both time and money are wasted
- Visualize the entire end-to-end workflow of a process
- Give everyone a common tool to refer to when discussing a process
- Make better decisions as everyone can clearly see the flow of a process
- Provide a solid blueprint on which teams can base improvement plans
- Show how process steps interlock to create the final product
Ultimately, value stream mapping provides a way to achieve some of the biggest goals in Lean, including eliminating costs, saving time and creating products that better serve customer needs.
The six-week Principles of Lean Certificate program through SMU CAPE introduces students to essential Lean tools and concepts, like value stream mapping, and teaches how to apply these techniques to make quick and impact process improvements in an organization or team.