What is value stream mapping?
Value stream mapping (VSM) is a flowchart method to illustrate, analyze and improve the steps required to deliver a product or service. It is a key part of the lean methodology. The complete flow of process steps and information (from start to the customer delivery) is reviewed by VSM. It uses various symbols to depict different work activities and information flow.
Value stream mapping is very useful in finding and eliminating waste. Activities are mapped as value adding (VA) or non-value adding (NVA) from the customer’s point of view with the objective of eliminating activities that do not add any value to the process.
Value stream mapping examples can be used to improve any process wherein there are repeatable steps and especially when there are multiple handovers. In manufacturing, handovers are easier to visualize because they usually involve the handing over of a tangible deliverable through stations.
The application of value stream mapping (also termed to as “visualizing” or “mapping” a process) is not limited to the assembly line. Lean value stream mapping examples have become more popular in knowledge work because it results in more effective collaboration and better team communication.
In knowledge work, most of the waste occurs because of waiting time between team members, not within the steps themselves. Inefficient handovers lead to low productivity and poor quality. Value stream mapping examples help in identifying the non-value adding activities and streamlining the production process.
Value stream mapping can be used for both product and customer delivery flows. Product flow focuses on the steps required to optimize the product delivery and the completion. The customer flow focuses on the steps required to deliver on end user requests and expectations.
It is important to keep in mind that customers, whether external or internal, always care about the value of the product or service to them and not the efforts made to produce it. Value stream mapping maintains that focus.
A typical process is to draw a current-state VSM and then find a better way with a future-state and/or ideal state VSM. Initially, the sketching can be done by hand and then one can move to VSM software for better communication, analysis and collaboration.
Value stream mapping is used to:
- Graphically illustrate the flows of materials and information in a process. It displays the interaction between multiple organizational functions — both manufacturing as well as supplementary functions.
- Pinpoint the problematic areas, inefficiencies, defects and bottlenecks more efficiently as it integrates and maps the information flows, material flows along with the sequence of tasks. It even illustrates the cycle-times and lag-times between different tasks.
- Involve all the stakeholders in each stage of the process and hence it becomes easy to develop and implement countermeasures to facilitate cultural change in the organization. It provides a proper presentation of all the limiting factors.
- Facilitate Continuous Improvement since the direction can be focused on lean transformation teams, front line supervision and upper management.
History of Value Stream Mapping
The origin of value stream mapping is often attributed to Toyota Motor Corporation. However, this topic is gloomy. Toyota may have adopted it from other origin sources or it may have grown organically from shared ideas in the lean manufacturing community.
VSM can be traced back to the visual mapping technique used at the Toyota Motor Corporation more than 30 years ago. It was termed as “material & information flow” at that time. It came about as the company’s focus shifted to gain a better understanding of the material and information flow throughout their organization.
This mapping technique became more popular as American companies observed and studied the efficiency and consistency of Toyotas’ operations. Toyota’s success and use of lean manufacturing practices helped promote value stream mapping as a modern best practice for high efficiency business teams during the 1990s.
Value stream mapping also came to be used in Six Sigma methodologies. Lean and Six Sigma Process both have the same goal: to eliminate waste and create the most efficient system possible. But they identify waste differently. While lean practitioners focus on non-valued-added activities, Six Sigma followers focus more on process variations resulting in waste. Each has been successful in different situations, leading to the formation of Lean Six Sigma, a combined approach.
Value stream mapping has been growing in popularity in recent years and is still considered by many to be a relatively new tool in the effort to improve business efficiency. Despite still having that relatively new feeling, it has been around for quite a while and has seen a number of refinements.
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Value stream mapping examples are very effective method to find out waste in any process and not just manufacturing. That is its core purpose. You detail each significant process step and evaluate how it is adding value — or not adding value — from the customer’s perspective. The focus on the value keeps the analysis targeted on what really is important, letting the company to compete most effectively in the market.
If lean practitioners foresee or face any competitive threat, they can make good use of value stream mapping examples to add the maximum value to the customer in the most efficient way possible. It can and should be used on an ongoing basis for continuous improvement, bringing better process steps on line. Value stream mapping examples help not only in finding out waste, but also the source or cause of the waste.
Value stream mapping serves as an effective tool for communication, collaboration and even culture change. Decision makers can clearly envision the current state of the process and where waste is occurring. They can clearly see issues like inventory issues, process delays, excessive downtime, and constraints. With the Future State and/or Ideal State VSM, they can understand precisely how to improve.
Although its actual purpose is waste elimination, value stream mapping examples can also help in adding value. After all, that’s what the customer cares about. A customer is always ready to pay for value.
Value Stream Mapping Benefits
Value stream mapping is critical for business sustainability because
- Reducing or eliminating waste can improve company’s bottom line. As a bonus, the root cause and the source of the waste can be found out.
- Once wasteful handoffs are identified as part of value stream visualizers, teams can consciously improve behavior, culture, communication, and collaboration.
- Teams discard individual opinions and prioritize based on the customer’s perspective.
An additional benefit is that the value stream mapping examples encourage cross-team collaboration. This often results in more effective, higher-quality team output and more well-rounded team members in terms of arming them with improved skills and capabilities, as well as an increase in the type of workflow experiences wherein the team members directly get involved.
As in manufacturing, boosting the productivity and reducing the waste in knowledge work can also increase the bottom line. However, the intangible benefits are equally valuable. Value stream mapping in knowledge work can:
- Help team in practicing systems thinking and creating a culture wherein the team members prioritize their actions based on the needs and capacities of the team
- Help team in improving communication, replacing the status updates with higher-level discussion that supports key business efforts
- Help team in creating policies and guidelines to guide employee behavior even for implicit work, resulting in more effective communication
- Help team in enjoying higher job satisfaction because of more effective collaboration
- Help team in implementing and maintaining a culture of continuous improvement
Lean value stream mapping can also provide top management with a clear picture of how work is moving through the system. This visibility into team’s process enables one to offer the insightful support required for continuous value delivery.
Identification and reduction of waste by VSM
VSM originated in the manufacturing industry. Let us imagine, as an example, an automobile factory receives orders for new cars and needs raw materials to produce cars. The company uses value stream mapping to outline the steps required to produce a new car.
After reviewing car production steps, the company identifies a handover stage in the development that appears to be a waste. This handover stage requires a forklift to move raw materials from one side of a warehouse to the production line. However, this move has safety risks and is time consuming. Based on this observation, the company decides to move the raw material storage permanently adjacent to the production line. This increases efficiency and potentially removes the requirement of the forklift altogether!
There are seven types of wastes in lean manufacturing.
Overproduction leads to many other forms of waste. When a manufactured product is overproduced it leads to other wastes through unnecessary costs like wasted raw materials, extra storage, and money frozen in unnecessary inventory.
Inventory waste is the liability cost that comes with storing and preserving a surplus inventory. This waste includes waste caused from deterioration of housed products, waste of space for housing inventory, waste of rent for storage space, and waste of transportation costs,.
Motion waste is the cost of all the motion by machine or person that could be minimized. The previous example explained with the forklift and supply location is a great example of motion waste and optimization. Motion waste has many wasteful by-products, including fuel waste from operating vehicles, maintenance repairs, pollution, and costs from equipment breaking down.
Defect waste management is the effort to identify and mitigate accidents and failures that lead to defective final products. Defects are costly as they need to be replaced, might have additional recycling costs or may be a complete loss of raw materials.
Over-processing waste refers to any step of the manufacturing component that can be considered unnecessary. Examples include polishing areas of a product that may not be visible to a user or adding features not asked by customers.
Waiting waste is the cost of any step in the manufacturing processing that is slow and causes a delayed reaction to the final output. Waiting causes expenses in heating, lighting, cooling, and the risk of materials, or contracts might expire.
Transport waste is similar to motion waste. Transport waste is linked with external transport movement between multiple locations or third-party partnerships whereas motion is linked with internal movement in the same location.
A software development organization does not deal with physically moving raw materials around warehouses to build a finished product. Software development needs shipping ideas into tangible user experiences that provide value to the customer.
VSM for a software business looks at the flow of taking “idea input” from different sources like sales requirements, competitor analysis, customer support, and delivering that as valuable output to the end customer. The value stream mapping flow stages for software development are mainly concerned with cross-team communication.
User requests a feature, product teams design the functionality, engineers receive the design and build the software and the software is shipped to the end user. Value stream management for software can be utilized to find out points of waste between these stages.
The following is a list of seven types of waste found in software development or other creative work.
Partially completed work
This occurs when software is released in an incomplete state. It may happen because of lack of complete specification, or lack of automated test coverage. Partially completed work also causes a cascade of other waste since additional work is needed to push more updates and fill in the missing functionality.
Also referred to as “feature creep”, extra features cause waste by doing more work than is required. Extra features are features not requested by users directly but developed internally based on guess or speculation. Extra features may present themselves as well intentioned but often are a by-product of disconnect from actual customer needs.
The reason for relearning waste can be lack of the internal documentation. If a software failure or outage occurs it is a best practice to investigate and document why the outage happened and how it was remedied. If a failure occurs again and it has not been documented, there will need to do another investigation and remediation.
Relearning waste also occurs when a team or individual needs to overcome the learning curve of an unfamiliar technology. Technology trends rapidly come and go. Even though an organization already knows how to build a certain feature they may have to relearn how to build it in new framework.
Handoff waste occurs when project owners change or when roles are changed or there is an employee turnover. Key team members leave and a project gets handed over to a team member without context. This scenario is hard to avoid. Handoff otherwise occurs from poor management and changing team member priorities while in action. Handoff waste can also occur through communication pipelines.
Delays usually occur when there are tightly coupled dependencies on a project Downstream execution of a project might be stopped due to a dependency on an upstream decision or resource. While it is best to avoid dependencies between these tasks, it can be challenging to perfectly decouple tasks. A delay in one task may cost delays in dependents tasks. Delays can cause a cascade of waste.
Task switching waste has similar qualities as handoff waste. Handoff waste occurs when tasks switch owners between team members, task switching waste happens to an individual. Mental context switching is expensive.
There is a mental cadence or “flow” that software engineers achieve to optimally produce good code. Efficient organizations work to optimize this mental state for their engineers. Incompetent organizations load their engineers with non-critical interruptions like meetings and emails that disrupt their workflow.
Defect waste happens when there are bugs in software. Defects are similar to partially completed work but can be more wasteful because defects are unknown and partially completed work is usually known ahead of time. Defects may be identified by customers and then reported to customer support, which can be an expensive pipeline that causes delays and task switching.
How to create a value stream map?
1. Identify the problem
What is the problem that is to be solved from the customer’s standpoint? Do your customers feel that it takes too long to deliver new features or improvements to a product? Publish the problem statement and bring everyone on the same page.
2. Identify and empower the right team
Identify an experienced and mature team which is capable of addressing these problems in a timely fashion and empower them. The management of the company should set aside sufficient budget to ensure that execution is uninterrupted.
3. Process bounding
Once the problem statement is published, limit the scope of your value stream mapping accordingly. You may not need to completely map the release process and focus on a particular area instead.
4. Map the bounded process
Make sure that the bounded process is reviewed. This can make a difference because personal experience cannot be substituted by narratives and documentation done by others.
Define the steps. Conduct a value stream mapping analysis multiple times. While this may seem to be redundant, missing pieces can be found in the second pass that were not exposed in the first pass.
5. Collect process data
As you conduct value stream mapping, note the process data in the data boxes of the map. Process data includes the average number of working hours, the number of people involved, cycle time, uptime, downtime, and wait time.
6. Create a timeline
Map out process times and lead times.
7. Assess your current map
Try to find out answers for the following questions:
Do teams have multiple dependencies on each other? Is your lead time too long? Do you have stable environments, or do you observe occasional test failures that the teams cannot reproduce?
Or, you may have activities that you think are valuable but do not mean anything to the customer. In the information flow, look for the stagnation and drag in the flow. Find out if it was a pull versus a push.
8. Design the future map
You may not be able to map a full and final version. That is okay. Make sure your new map aligns with the company’s vision. Also, nothing is set in stone. Based on customer needs, make continuous adjustments.
9. Implement the future map
Follow the value stream mapping of the future and validate that it makes sense for the customers. It should have solved the problem statement that you started with. Monitor KPIs regularly and learn from trends. Make sure everyone is rowing in the direction of customers
Important tips for VSM
- Experience yourself: You or your team should follow the whole value stream yourself. Do not rely on assumptions or impressions about how things generally happen. If it is a physical thing, walk it, use a stopwatch to time various steps, and experience it all as directly as possible. The whole stream must be walked through at least by one member. If you rely on sub-teams to walk different portions, and nobody walks the whole thing, you will miss an essential perspective to VSM.
- Draw initial VSM by hand: Initiate by drawing with pencil as you document the steps. Later the chart-drawing software can be used to communicate and collaborate better and map out a future/ideal state.
- Do initial walk-through: It can be started with a quick walk to experience it at an overview level and then do it again in more detail.
- Try doing it in reverse: Try it in reverse order, that is from end product to its origins. Different items will become more meaningful and clear in this way. Many veteran VSM practitioners do it this way.
- Keep asking why: In Lean Six Sigma, it is sometimes called the Five Whys. The idea is to simply keep on asking why something is done as it is. To the response, one more why is asked. This goes on until you drill down to the ultimate basis for the action.
Value stream mapping is a very useful tool to identify waste, reduce process cycle times, and implement process improvement. VSM is quick and easy to learn, and it helps to find bottlenecks. It is a group exercise and therefore workforce can be involved as a part of lean improvement program.
A completed value stream map can be used as an improvement aide to document transitions to a future state value stream map. It is not just for manufacturing! Value stream mapping examples are there that show its usage in offices, service industries and healthcare.
It helps in portraying the process from the start of the production process till the end. This way it helps in accurately finding the waste in the process.
I have done three value stream mappings myself and results were amazing. These three value stream mappings helped us in finding out the non-value adding activities in the processes. The cycle time was reduced by 15—20% after eliminating the non-value adding activities.
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