What is Value Stream Mapping?

What is value stream mapping?

Value stream mapping is a flowchart method to illustrate, analyze, and improve the steps required to deliver a product or service. A key part of lean methodology, VSM reviews the flow of process steps and information from origin to delivery to the customer. As with other types of flowcharts, it uses a system of symbols to depict various work activities and information flows. VSM is especially useful to find and eliminate waste. Items are mapped as adding value or not adding value from the customer’s standpoint, with the purpose of rooting out items that don’t add value.

It’s important to keep in mind that customers, whether external or internal, care about the value of the product or service to them, not the efforts it took to produce it, or the value that may flow to other customers. Value stream mapping maintains that focus. A typical process is to draw a current state VSM and then model a better way with a future state and/or ideal state VSM. You can start off sketching by hand and then move to VSM software for better communication, analysis, and collaboration.

History of value stream mapping

This type of mapping may be older than many people think. Examples of diagrams showing the flow of materials and information are contained in a 1918 book called Installing Efficiency Methods, by Charles E. Knoeppel. Later, this type of diagramming became associated with the vaunted Toyota Production System and the whole lean manufacturing movement, although it was typically called material and information flow mapping, process mapping or other names, not value stream mapping. The people most often credited with creating the Toyota Production System, starting in earnest in the 1950s, include Shigeo Shingo (1909-1990), a Japanese industrial engineer, Toyota consultant and namesake of the Shingo Prize for lean excellence; and Toyota executives Taiichi Ohno (1912-1990); Kiichiro Toyoda (1894-1952) and Eiji Toyoda (1913-2014).

By the 1990s, as lean production methods in manufacturing and other fields were spreading to the United States and worldwide, "value stream map" became an increasingly common term for them—and VSM became central to lean methodology in many places. Value stream mapping also came to be used in Six Sigma methodologies. Lean and Six Sigma 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.

Other key people in the lean movement and the use of VSM include James P. Womack, founder the Lean Enterprise Institute; Daniel T. Jones, founder of the Lean Enterprise Academy in the U.K.; John Y. Shook, chairman of the Lean Enterprise Institute; Karen Martin, founder of the Karen Martin Group for lean consulting; and Mike Osterling, founder of Osterling Consulting.

VSM purpose and benefits

Value stream mapping is a powerful method to ferret out waste in any process, not just manufacturing. That’s its core purpose. You detail each significant process step and evaluate how it’s adding value—or not adding value—from the customer’s standpoint.  That focus on value keeps the analysis targeted to what really matters, allowing the company to compete most effectively in the market. Foreseeing or facing any competitive threat, lean practitioners can make good use of VSM to produce the most value for the customer in the most efficient way possible. It can and should be used on an ongoing basis for continuous improvement, bringing better and better process steps on line. VSM allows you to see not only the waste, but the source or cause of the waste.

Value stream mapping, as with other good visualizations, serves as an effective tool for communication, collaboration and even culture change. Decision makers can clearly visualize the current state of the process and where waste is occurring. They can see problems like process delays, excessive downtime, constraints, and inventory issues. And with the Future State and/or Ideal State VSM, they can see precisely how to improve.

Although its typical purpose is eliminating waste, VSM can also be seen from the perspective of adding value. After all, that’s what the customer cares about. Eliminating waste is the means to an end of creating value, such as a lower price and/or better-quality product or service. Value is something a customer is willing to pay for. The title of a popular VSM book is even:  Learning to See: Value Stream Mapping to Add Value and Eliminate Muda, by Mike Rother and John Shook. (Muda is lean terminology for waste.)

VSM caveats

While Value Stream Mapping is core to lean methods, it often requires a substantial investment of people and time to do it, and if not applied wisely, it can be wasteful in itself. You of course want profitable applications of value stream mapping.

It requires team members skilled in carrying out advanced VSM, and it may take days, weeks or even months to carry out some involved mapping projects. Think of it as a powerful tool central to lean methods, but not every circumstance lends itself to value stream mapping. You need to balance potential value with the work necessary to conduct the VSM.

You might choose to start small, with a limited focus and a limited budget, get the win and then move on to something more complex and potentially rewarding. Oftentimes, senior leaders may try to bite off something too large initially, and the effort may struggle due to its complexity and possible inexperience of the team.

Potential uses of more extensive VSM include:

• Cases involving multiple functional areas or departments.
• When a less detailed process map isn’t likely to uncover the information you can act on.
• To make the case for a large investment that will result in much larger savings.

Remember, an improvement in one process step or in one part of production won’t always translate to a bottom-line improvement. Often, a fuller look will be required.

However, keeping those caveats in mind, an individual could try VSM on a budget for a simple review that might produce results or at least help you to better understand VSM. After reading up on the basics (and you’re off to a good start with this article), you might just grab a pencil and legal-size pad, and armed with the step-by-step instructions listed later in this article, start mapping. You’ll map out the process steps, data for each step (such as cycle time), improvements you think you could make for an “ideal state,” and a summary showing how your improvements help each data point and overall value. Just keep in mind that this would be a tiny taste of what expert value stream mapping can accomplish.

How VSM is used in different fields

In manufacturing: To find waste in the production process by analyzing each step of material handling and information flow. This is where lean methodology got its start in the 1950s at Toyota, and lean methods and value stream mapping remain key to manufacturing throughout the world. Of course, they have since spread to other fields and have become intertwined with Six Sigma methods and Lean Six Sigma.

Supply chain and logistics: To root out waste and costly delays at the various points on the supply chain leading to finished product.

Software engineering/development: To find inefficiencies in software development, from idea to implementation, including feedback loops and rework. Although some critics question the value of VSM in an agile development environment, others find it useful to gain efficiencies, such as reducing wait time between steps or reducing the need for rework.

Service industries: To improve the value and find waste in the activities required to carry out any service for external customers.

Healthcare: To improve the steps required to treat patients in the most effective, timely, cost-efficient, high-quality way possible.

Office and administrative: To find wasteful steps and improve the service provided within a business to internal customers.

In value stream mapping, the process items that flow through the value stream are determined by the field. For example:

• In the manufacturing industry, materials are your items.
• In the design and development field, designs are your items.
• In the service field, external customer needs are your items.
• In the administration field, internal customer needs are your items.