Value Stream Mapping 101: What It Is And Why It Matters

Value Stream Mapping_cover

Value Stream Mapping (VSM) is an analysis tool used to understand and improve the flow of materials, information, and process steps associated with a product or service. It helps businesses pinpoint inefficiencies, reduce costs, and increase productivity. The practice has been widely used in manufacturing for decades and is now making its way into other industries such as software development and project management. By understanding the value stream of a product or service, companies can identify areas for improvement and get an overall picture of the process from beginning to end.

Let’s take a look in detail at the Value Stream Mapping instrument.

1. What is Value Stream Mapping?

What is Value Stream Mapping
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Value Stream Mapping is a visual representation of the steps, resources, and information needed to complete a process or product. It can be used to identify bottlenecks, rework areas, and inefficiencies throughout the entire process.

VSM looks at every step from beginning to end and highlights potential improvements that could be made as well as eliminating redundant steps or unnecessary delays. VSM offers businesses the opportunity to make changes that will improve their overall customer satisfaction and profitability.

2. Why Does Value Stream Mapping Matter?

Why Does Value Stream Mapping Matter
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Value Stream Mapping is an essential tool for businesses that want to identify and make improvements throughout their production process. By understanding the flow of materials, information, and process steps associated with a product or service, companies can create more efficient systems that result in increased profits, shorter lead times, and improved customer satisfaction scores.

VSM also helps to ensure that businesses are operating at full capacity without sacrificing quality or incurring unnecessary costs.

3. What are the steps of Value Stream Mapping?

What are the steps of Value Stream Mapping
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Creating a value stream map is relatively simple and can be done with the help of a few basic tools. Let’s take a look at how is done step by step.

Define the scope and boundaries: Identify the process you want to map and define its start and end points. Determine the customer requirements, including quality, lead time, and cost.

Create a current-state map: Take a closer look at the process and draw a map that demonstrates how material and information are currently flowing. Add symbols, icons, or diagrams to illustrate every step of the procedure, inventory levels and queues.

Gather data: Collect data about the process, including cycle times, changeover times, and inventory levels. Use this data to calculate metrics such as lead time, value-added time, and process efficiency.

Analyze the current-state map: Pinpoint any of the following inefficiencies: waiting, unnecessary stock, overproduction, and rework. Utilize this data to determine your process cycle efficiency, discover potential blockages, and identify other opportunities for improvement.

Design a future-state map: Based on the analysis of the current-state map, design a future-state map that eliminates waste and improves the flow of material and information. Use lean principles to guide the design, such as pull flow, one-piece flow, and takt time.

Implement the improvements: Create a plan of action to bring the improvements from your future-state map into reality. Order these changes based on their significance and doability, then monitor every step until you achieve the desired outcome. Once complete, measure how much progress has been made through actual results.

Sustain the improvements: Create a culture of continuous improvement by encouraging team members to take part in the process and educating them on lean principles and tools. Use Value Stream Mapping as an engaging visual presentation that communicates your process, helping build problem-solving skills at the same time.

4. What are the 3 types of VSM?

What are the 3 types of VSM
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1. Current-state mapping: a visual representation of the current process, detailing all its steps and activities. This is often done through diagrams or flowcharts that identify sources of waste and inefficiencies.

2. Future-state mapping: involves creating a map that outlines how the existing process can be improved, taking into consideration lean principles and best practices.

3. Action-state mapping: this involves creating a plan to bring the desired improvements outlined in the future-state map into reality. It also includes details on how to measure the success of each change.

Now, it’s important to underscore that we can do an ideal state analysis as well, in order to understand how far we can go in the ideal state when all waste is removed from our process.

5. What are the benefits of VSM?

What are the benefits of VSM
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Value Stream Mapping provides a number of tangible benefits, including:

  • Improved process efficiency and lead time reduction due to reduced waste and improved flow;
  • Increased customer satisfaction through improved product quality, faster delivery times, and greater responsiveness;
  • Enhanced visibility into production processes, enabling better decision-making and resource allocation;
  • Streamlined processes that can lead to reduced costs and improved profitability;
  • A culture of continuous improvement and learning.

And not only that; VSM can also help to identify potential opportunities for cost savings, create a shared understanding of the process among team members, and increase morale through higher levels of engagement.

6. What are the symbols used in Value Stream Mapping?

What are the symbols used in Value Stream Mapping
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7. A simple examples of how a Value Stream Map should look

Value stream mapping template

Value Stream Map template
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What is an example of a value stream 2
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8. What is an example of a value stream?

What is an example of a value stream
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An example of a value stream could be the production process for a widget. This process would begin with the receipt of raw materials, followed by steps such as machining, assembly, and quality testing. Once these processes are complete, the finished product then moves to packaging and shipping. Each step in this value stream is critical to creating the finished product and creating value for the customer. This value stream would need to be monitored, measured, improved, and maintained in order to continue to produce high-quality widgets efficiently.

Now that we have a better understanding of what VSM is, let’s provide an example of a Value Stream Mapping process for a manufacturing company that produces electronic goods.

Define the scope and boundaries: The company wants to map the process for producing a specific electronic good, from the receipt of the raw materials to the delivery of the finished product to the customer. They define customer requirements, including quality, lead time, and cost.

Create a current-state map: By navigating the process, our team will construct a map that profiles the current flow of products and information.

Colorful symbols and illustrations are used to portray each step, stock levels, as well as wait times in queues. In order to measure cycle times, transition periods, and inventory counts, we collected data from this process. With these facts in hand, we can then work out metrics such as lead time values-added duration plus efficiency rate of the progress).

We identified different procedures which also took into account respective timings:

  • Receiving of raw materials: 4 days
  • Inspection and quality check: 2 days
  • Inventory storage: 5 days
  • Production: 10 days
  • Final inspection: 2 days
  • Finished goods inventory: 5 days
  • Shipping and delivery: 4 days

The team calculates the process cycle efficiency to be 40% and identifies several areas of waste, including excess inventory, long lead times, and rework.

Gather data: The team gathers information concerning the magnitude of customer orders, commodities that have been completed, and any quality control problems with production processes.

Analyze the current-state map: Our team has pinpointed a number of areas that require optimization, including hastening raw material receipt time, increasing quality control measures, and limiting inventory in the process.

Design a future-state map: Our team has crafted a future-state map that outlines the following improvements:

  1. Shortening the time for a raw material receipt from 4 days to 2 days by improving the supplier relationship and logistics.
  2. Improving quality control by implementing automated inspection systems and training personnel.
  3. Reducing the amount of inventory in the process by implementing a pull system and reducing batch sizes.
  4. Shortening the production time from 10 days to 8 days by improving the process flow and reducing changeover times.
  5. Implementing a final inspection system that reduces defects and allows for faster throughput.
  6. Reducing the amount of finished goods inventory from 5 days to 2 days by implementing a just-in-time (JIT) system.
  7. Shortening the shipping and delivery time from 4 days to 2 days by improving logistics.
  8. Implement the improvements: The team develops an action plan to implement the improvements identified in the future-state map. They prioritize the improvements based on their impact and feasibility. They assign responsibilities and timelines for each improvement.

Sustain the improvements: Our team continually strives to optimize our processes through engagement and training on lean principles. We use Value Stream Mapping as a means of demonstrating operational flow, allowing us to quickly spot issues that need solving.

To ensure we remain at peak performance levels, we review the VSM regularly and make necessary adjustments accordingly.

9. Conclusion

Conclusion about VSM
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Ultimately, Value Stream Mapping (VSM) is a helpful instrument for evaluating and refining the flow of material and information within an operation. By constructing a visual depiction of the current stream of the procedure to identify inefficiencies and areas needing improvement, VSM provides organizations with data-backed decisions about process enhancements that can generate great cost savings, produce higher-quality products, as well as augment customer satisfaction. Organizations that employ Value Stream Mapping (VSM) benefit from shorter lead times, enhanced processes, and greater efficiency.

This proves to be a major competitive advantage in the current global market space, leading to improved productivity as well as longer-term success.

For any company looking for optimal operational performance, VSM is undeniably critical!

10. Other questions you might have

Other questions you might have about VSM
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1) What is the connection between Value Stream Mapping and Lean Manufacturing”?

Value Stream Mapping (VSM) is a key tool in Lean Manufacturing, a methodology derived from the Toyota Production System. VSM is a visual method for identifying and eliminating waste in the material and information flow through a process. It provides a value stream analysis of the process, from raw material to customer demand. VSM uses a value stream mapping template to help visualize the current process, identify bottlenecks, waste, and inefficiencies, and design a future state that reduces non-value-adding activities.

Waste value stream mapping is a critical component of VSM, enabling organizations to identify and eliminate all forms of waste in the process. Information flow mapping is also a part of VSM, helping to identify inefficiencies in information flow, as well as material flow. VSM is a part of value stream management, which aims to improve process efficiency and meet customer demand with minimal waste. By implementing lean value stream mapping, organizations can streamline their processes, eliminate waste, and reduce lead times, ultimately delivering higher-quality products to customers at a lower cost.

The Toyota Production System is the origin of the Lean Manufacturing approach, and VSM is a central tool in the system. It enables organizations to focus on continuous improvement, aligns their resources with customer needs, and eliminate waste throughout the process.

2) Is value stream mapping a kaizen?

Yes, Value Stream Mapping (VSM) is a type of kaizen that focuses on the process flow and identifies areas for improvement. Kaizen is a Japanese term that means “continuous improvement,” and VSM provides organizations with data-backed decisions about process enhancements that can result in significant cost savings, higher-quality products, and improved customer satisfaction.

3) Is VSM lean or Six Sigma?

Value Stream Mapping (VSM) is a tool that leans more towards the Lean Manufacturing principles, as it emphasizes ongoing process improvement in order to reduce waste and increase efficiency. Six Sigma focuses on reducing defects and improving the process through data-driven techniques, while VSM looks at the entire production process from start to finish and identifies areas for improvement. Both are important tools for businesses to optimize their operations.

4) What is Kanban VSM?

Kanban Value Stream Mapping (VSM) is a tool used to visualize the flow of materials through an operation. It uses symbols, such as cards or bins, to represent each step in the process and track inventory levels. Kanban VSM allows organizations to identify areas where improvements can be made, reduce waste, and maximize efficiency. It is an effective tool for implementing Lean Manufacturing principles.

5) Is VSM a 5S?

No, Value Stream Mapping (VSM) is not a 5S. 5S is a workplace organization methodology that focuses on maintaining orderliness and cleanliness within the workspace in order to improve efficiency. VSM looks at the entire production process from start to finish and identifies areas for improvement in order to reduce waste and increase efficiency. Both are important tools, but they have different uses.

6) What is the difference between VSM and Process Mapping?

The main difference between Value Stream Mapping (VSM) and Process Mapping is that VSM looks at the entire production process from start to finish and identifies areas for improvement in order to reduce waste and increase efficiency, while Process Mapping focuses on the detailed steps of a single process. Both are important tools for optimizing operations, however, VSM allows organizations to gain a better understanding of their entire production flow and make more informed decisions about improvements.

7) Is VSM an analytical tool?

Yes, Value Stream Mapping (VSM) is an analytical tool that helps organizations evaluate and refine the flow of material and information in their operations. Creating a visual representation of the current stream of the process, allows companies to identify inefficiencies and areas that need improvement, leading to improved productivity and greater success. VSM also provides data-backed decisions about process enhancements which can result in cost savings, higher-quality products, and better customer satisfaction.

8) Are there any opportunities for automation with VSM?

Yes, Value Stream Mapping (VSM) can be used to identify opportunities for automation. Creating a visual representation of the material and information flow, it can help organizations pinpoint areas that could benefit from automated processes in order to increase efficiency. Automation also helps reduce human error, streamlines operations, and increases productivity. In addition, VSM can also provide data-backed decisions about process enhancements that can further optimize operational performance.

9) Are there any specialized software programs for VSM?

Yes, there are specialized software programs that can be used to create and analyze Value Stream Maps (VSM). These programs allow users to visualize their operations more effectively and make informed decisions about process enhancements.

Additionally, some of these specialized software programs also provide additional features such as automated calculations and reporting, which can help streamline operations and provide more accurate data-driven decisions. A couple of them are listed below:

Microsoft Visio: is a popular diagramming software that includes templates for creating VSMs. It offers a variety of shapes and icons to represent different process steps, inventory, and queues. Visio also includes features for sharing and collaboration.

Lucidchart: is a web-based diagramming software that includes templates for creating VSMs. It offers a drag-and-drop interface for creating maps, as well as features for collaboration and sharing. Lucidchart also includes a variety of integrations with other tools and services.

iGrafx: iGrafx is business process management software that includes features for creating and analyzing VSMs. It offers a variety of templates for different types of VSMs, as well as features for simulation and optimization. iGrafx also includes features for compliance and risk management.


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About the Author

Liviu Prodan

Liviu is an experienced trainer and LifeHacker. He’s been living the ‘Corpo life’ for more than 15 years now and has been a business developer for more than 12 years. His experience brings a lot of relevancy to his space, which he shares on this blog. Now he pursue a career in the Continuous Improvement & Business Development field, as a Lean Six Sigma Master Black Belt, a path that is coherent with his beliefs and gives him a lot of satisfaction.

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