Optimising Customer Value Through Value Stream Mapping
What is a Value Stream?
A Value Stream comprises all the activities that a company must do to design, order, produce and deliver its products or services to customers*. A Value Stream Map is an illustration that uses simple graphics or icons to show the flow of information, materials, and actions in a company’s Value Stream.
Value Stream Mapping (VSM) is a powerful and flexible Lean methodology that transforms business processes and ideally creates an optimised Value to Non-Value ratio for Customers.
Popularised through the work of Rother and Shook ‘Learning to See’ in the late 1990s this Lean tool continues to be a regular project for Efficiency Works clients.
VSM essentially seeks to identify and eliminate as many Non-Value added process steps in the design and production of a product or service.
Comprising four principal steps:
1) Current State, how the process is currently from initiation of customer enquiry to satisfaction.
2) Ideal Future State, what a perfect process could look like based on existing technology.
3) Interim State, what can reasonably be achieved in 6-12 months.
4) Action / Implementation Plan, taking action to remove process steps to increase value added ratio.
Executing a VSM workshop follows a typical Lean Business Improvement journey with the establishment of a cross functional team of process step representatives, ensuring a balance of those who can make decisions, local experts and those impacted by change.
A product or product family is chosen as the target for the VSM, this is often a challenging step as too broad can potentially make the exercise difficult to manage but too narrow may not generate enough opportunity, ideally an 80/20 approach, choosing something that impacts multiple processes or is a problem area.
A SIPOC (Suppliers, Inputs, Process, Outputs, Customers) approach can often be a useful exercise prior to mapping the Current State as it allows the team to collectively understand the overall picture.
The team then creates a Current State Map detailing as many steps and their individual configurations and linkages plus a categorisation of Value and Non-Value Added to each step.
During this stage the team should identify on the map ‘Kaizen Bursts’ which are known issues, ideas, flashes of inspiration associated with steps in the process, these support action planning later.
The Ideal Future State is based on the idealistic removal of all Non-Value Added steps and could be achieved through the application of known / existing technology, no magic carpets.
The Interim State is where the team should be focussed on eliminating or reducing as much Non-Value Added steps as possible through different ways of working, new equipment, process, or product redesign.
Finally, actions to achieve the Interim State are brainstormed by the team, taking the Kaizen Bursts into account to produce an Action Plan that can be achieved in a reasonable time frame, potential actions can be prioritised through consensus reaching and an evaluation tool.
A completed Value Stream Mapping workshop can produce a process map specifying before and after end to end process lead times plus Value / Non-Value Added ratio along with a road map to achieve an improved Interim State and eventually an Ideal Future State.
*Lean Enterprise Memory Jogger