Value Stream Mapping can be a powerful tool to help you determine how to improve supply chains that involve complex processes.
VSM can be leveraged to get a full picture and understanding of the entire process, or it can be targeted at a specific segment to achieve certain goals.
But what is it exactly about? In this article, we will take a look at what Value Stream Mapping is, what it is used for, and how to implement it properly.
What is Value Stream Mapping (VSM)?
To understand what value stream mapping is, we must first learn what value stream is.
It is a series of steps that are involved in providing the product or service that customers want or need.
Value Stream Mapping provides a better understanding of what these steps are where value is added and, more importantly, how to improve the overall process.
It is worth mentioning that the beginning and end points of the mapping process can vary depending on the objectives.
As a matter of fact, different businesses may have different value streams and may find themselves creating value stream maps for each individual product or service.
Value stream mapping has become increasingly popular in recent years and is still considered by many to be a fairly new tool in the effort to improve business efficiency.
In truth, however, value stream mapping was born more than 30 years ago at Toyota Motor Corporation.
The technique was created when the company’s focus shifted to eliminating waste and pursuing process efficiency.
Its popularity grew as American companies began to observe and study the efficiency and consistency of Toyota’s operations.
Then, this approach kept evolving from there into what we now know as value stream mapping, which is applicable and useful to companies and value streams of all types.
How to achieve value stream mapping
- Determine your product
The first step of the Value Stream Mapping process is to determine which product or product set needs to be studied and improved.
Generally, one team is constituted to execute the mapping and analysis, depending on the size of the effort.
- Current State Mapping
This step is important to visualize the whole creation flow of the product or service you want to analyze.
The whole process that the company follows to make it is brought together here.
To generate the Current State Map, data and information are collected by interviewing those people who perform each activity involved in the process.
Among them we find:
- Cycle or processing time
- Equipment reliability
- Number of workers and shifts
- Inventory levels
- Queue or waiting time
The information gathered does not necessarily have to be perfect or over-detailed.
As long as the data can provide a reasonably clear overview of the main problems, a more streamlined process can begin to be developed.
- Future State Mapping
Future State Map is meant to represent the optimized workflow through the elimination, or reduction, of waste at every step involved in the process.
To achieve an optimized process, the following questions must be asked:
- What is the Takt Time? Takt is a German word referring to the stick that a conductor uses to control speed, rhythm and tempo. Takt time, in business, refers to the rate at which a part or component must be produced to meet customer demand.
- Are there bottlenecks or constraints? From data collection, cycle times or processing times can be observed. Should any of these be greater than the takt time, then you are most likely facing a bottleneck or constraint. This could lead to waste in some areas or additional processing time, such as overtime, to meet demand.
- Where is it possible to reduce inventory or lead time? You should look at your raw material and finished goods inventories to see if these can be reduced. Finding ways to reduce inventory in a logical way is key.
- What additional improvements are required? For example, is there a need to improve equipment reliability? Are yield or quality levels on the first run acceptable? Is specific training needed for workers to cut down on errors? It is necessary to analyze individual activities to determine where there is potential for improvement and how it can be achieved.
- What activities are unnecessary and do not bring added value? The root of all waste must be pinpointed so that it can be removed.
- Create an improvement action plan
At the end of the Value Stream Mapping process, you eventually get to create an action plan that will drive overall process improvement.
Here are the questions that will help you achieve an optimized workflow:
- Which changes should be implemented first?
- What changes should be a priority for our business?
- What changes are priorities for customers?
- What specific activities must be implemented to achieve an optimized process?
- Who is responsible for implementing and monitoring changes?
- How do we gauge our changes’ success?
By answering these questions, it will be possible to lay out an improvement plan that ascertains what resources are needed, including time, people and budget.
Also, you will need to constantly monitor results across key metrics and implement further adjustments if needed.
Bottom line, regardless of the industry and business, the Value Stream Map is an effective technique to innovate and evolve.
It is worth noting that the process of work mapping is a starting point, not a finishing one, toward continual improvement in business operations.