What is a value stream map?

The value stream is all the steps required to bring a product or service from order to delivery.  A value stream map (VSM) represents the flow of materials and information through that path.  This type of process map is a storyboard of how the work moves from request to receipt.  It represents a great tool to understand the current condition or state and identify improvement opportunities.  The goal is to identify and eliminate waste within and between processes.  

What makes the VSM unique is that it shows the flow of all the high-level steps, what it is done, not how. This map allows us to see the entire value stream, how it works, and how value is delivered to the customer. The customer is front and center while drawing the value stream, providing a clear line of sight to the external customer.

The first two steps for Strategic Planning are to establish the Vision after assessing the current state and develop breakthrough objectives.  With the Value Steam Map, we easily see those areas where the flow stops, making it an effective instrument to understand the current environment. The improvement opportunities are the non-value-added steps, and those points the flow stop.  The future state map deploys the opportunities for improvement identified in the current-state map to achieve a higher level of performance.  This high-level of performance would be part of the strategic plan breakthrough objectives. 

A detailed explanation of how to create a VSM is beyond my scope but this how it looks.  A VSM has three parts, the information flow, the product flow, and the timeline.  

Value Stream Map Example

Before drawing the current state, it is important to go to gemba, where the action happens, to observe the processes and gathered information.  VSM uses a set of symbols or icons to represent a process, inventory, outside sources, transportation, information, and others.  The customer data box is the first thing you draw while doing value stream mapping, and it contains the daily requirements.  It also shows how the information flows from the customer to your facility, using different types of arrows for manual or electronic information. The sequenced process boxes represent product flow, and the data boxes under each contain relevant metrics, like the number of staff, process time, and lead time.  Between processes, you can add any work in process inventory.  Under them, it goes the timeline, which shows the lead time and the processing time.  Also, you can highlight non-value-added activities, to make sure that you see them as improvement opportunities.

Once completed, this map speaks to you.  You will see where the flow stops, where you have more inventory or more delays.  In the future state map, you will highlight those opportunities identifying them with the kaizen burst symbol.  Those are future kaizen or continuous improvement events.  

To improve flow, you will remove or minimize handoffs, rework, work in process, motion, transportation, batches, and other sources of waste.  You can also implement standardization, balance work, and improve quality.  

The last step of the VSM process is to create an improvement plan. Tie each item, long-term and short-term, to an objective of your improvement strategy.  

During the implementation of the strategic plan, continuous improvement events will lead the way.  These events are the part that says how to achieve the desired results.  The frequency of doing VSM can go anywhere from three to six months to a year.  Shorter times are better to drive action.

Value stream mapping is an excellent tool to analyze the current state of a value stream, which is the sequence of steps from request to delivery and design of the future state.  VSM is a strategic tool, while process mapping is a tactical tool.  Are you ready to work on your new strategy?

Customer value, what is, and how you define it?

The journey to transform your business into a continuous improvement enterprise should start with the definition of value. The CI business management model defines the value of a product or service from the customer’s point of view. How much your product or service is worth for the customer? What are the expectations?

How you find your customer expectations?

Only the customers themselves can tell you. There are a couple of ways to get their input, talking with them, or using social media. The best time for a conversation is right after they received the product or service. Ask about their experience. What do they like? Do they have any suggestions? Listen to what they have to say and watch their demeanor. Social media accounts are another way to receive feedback from customers. Review the comments and ratings often. You can also create polls to survey their opinion.

Customer Value Definition

The information from these three different sources will give you the value definition from the customers’ point of view. Value definition is a critical piece to start your continuous improvement quest. You will use it to classify each process as value-added or non-value-added. Value-added activities are those that transform input into output or change materials or information. In other words, the customers are willing to pay for it. Everything else is non-value-added or waste.

Example of value-add activities

When you go to a restaurant, you expect to receive in a reasonable amount of time the plate you ask for. You also expect that the staff follows any special instructions like cooking the meat the way you request it. You will pay for the food and the service without hesitation. If the restaurant messed up with your plate, that is a defect. Now they have to prepare a second plate, which is overproduction. Both things are waste or non-value-added activities. I bet that you, the customer, are not willing to pay for them.

Businesses need to complete various processes that are critical for operation but do not add value to the customers. Examples of necessary non-value added activities are hiring, payroll, and month-end financials.

Customer value and your business

The entire flow from the customer order to the product or service received is drawn using a value-stream map (VSM). VSM is a special type of flow chart where you can visualize the flow of information and materials. This map is a tool that allows you to see waste and plan how to eliminate it. How to create a VSM will be the subject of a future post.

The priority of continuous improvement is to eliminate waste. Waste elimination will create faster and bigger results. Second, it is to challenge and reduce the necessary non-value-added activities. Minimize the quantity of non-value-added steps will further improve flow and reduce costs. Finally, you will work on optimizing value-added steps.

What is process mapping?

An effective way to analyze a process is by drawing a process map. Process mapping is the activity of drawing the steps to complete a process following a specific format.  Process maps document a business process from beginning to end and enable you to identify areas of opportunity. There are different types of maps, each with a different purpose, scope, and level of detail.

The right map to use depends on what you want to do. Take a look at the different types:

  1. Value Stream Map (VSM) is a high-level tool used by leadership for strategic planning. It represents the flow of material and information through the value stream. The flow goes from customer request to product or service delivery. The goal is to identify waste within and between processes.
  2. Process Flow Map (PFM) presents the sequence of events to complete a single process in chronological order. This basic flow chart is a simple map of the inputs and outputs of the process. The purpose of this map is to document a process, analyze and manage workflows. PFM is a low-level chart used with the participation of supervisors and process owners.
  3. Swim Lane shows how the process ownership flows from one owner to another. This flow chart highlights how a process flows across company boundaries. It is useful to identify the key roles responsible for the process and how they relate to each other. Swim lane is for short-term tactical planning. A cross-functional team of process owners gets together to draw this map. 

Process maps are good tools to visualize the current state and design the future state with better processes and customer satisfaction. It is important to include the right stakeholders in the discussion and the creation of the map. Have the right people will improve the quality of information and team communication and performance.These process maps are good tools to improve processes and customer satisfaction. Including the right stakeholders for the discussion and creation of the map is important. This will improve the quality of information and team communication and performance.

Now that you know the different types of maps, you can choose the right one for your needs. Are you ready to start mapping?