Value Stream Mapping

Image by ReverscoreOpens in new window Value streamOpens in new window basically involves a collection of all actions (value-added as well as non-value-added) that are required to bring a product (or a group of products that use the same resources) through the main flows, starting with raw material and ending with the customer.

The roots of value stream mapping can be traced to a visual mapping techniqueOpens in new window used at the Toyota Motor Corporation known as “material and information flows.”

As the West grew intrigued with Toyota’s consistent track record and began studying how Toyota’s approach differed from its own, we learned that Toyota’s focus on understanding the material and information flow across the organization was a significant contributor to its ability to perform at consistently high levels.

As a result, mapping these types of flows became one of the hallmark approaches used in the Lean movement to transform operations.

Benefits of Value Stream Maps

Value stream maps offer a holistic view of how work flows through entire systems, and they differ from process maps in several significant ways.

First, value stream maps provide an effective means to establish a strategic direction for making improvement. The inclination to jump into the weeds and design micro-level improvements before the entire work system—the macro picture—is fully understood, is a key contributor to suboptimization.

A seemingly important improvement could cause the overall work system to perform more poorly. For example, if one department successfully reduces its turnaround time, but the faster output merely causes a larger queue and/or more work for the downstream department, the improvement may have a negative impact on the performance of the overall system.

Figure X1. Granulity of Work

As Figure X-1 shows, work has various degrees of granularity. Value stream mapping, the macro perspective, provides the means for leadership to define strategic improvements to the work flow, whereas process-level mapping enables the people who do the work to design tactical improvements. This difference signals the need for a higher-level value stream mapping team than what many organizations often think they need.

Second, value stream maps provide a highly visual, full-cycle view—a storyboard—of how work progresses from a request of some sort to fulfilling that request. This cycle can be described as request to receipt, order to delivery, ring to ring (phone call to cash register), cradle to grave, or quote to cash.

A cyclical view places the customer (who is typically both the requester and recipient) in a central position, which provides a powerful means to view an entire work system as it relates to delivering customer value.

As shown in Figure X-2, visually depicting the cycle of work typically includes three components: information flow, work flow, and a summary timeline.

Figure X-2. Basic current state value stream map | Presented by ALFRAOpens in new window

Third, the process of value stream mapping deepens organizational understanding about the work systems that deliver value and support the delivery of value to customers, which aids in better decision making and work design.

By distilling complex systems into simpler and higher-level components that can be understood by everyone from senior leaders to the front lines, organizations create common ground from which to make decisions.

In addition, the mental shaping that’s needed to succinctly define complex work systems is a boon when redesigning work to deliver greater value, faster, at lower cost, and in safer and more fulfilling work environments.

There’s a logistics advantage as well: value stream mapping enables a team to fully understand how work flows through a complex system in a matter of days, whereas detailed process mapping (which serves a different purpose) can take weeks or months and is too detailed to help in making effective strategic decisions.

Fourth, the quantitative nature of value stream map provides the foundation for data-driven, strategic decision making. Measuring overall value stream performance and identifying the barriers and process breakdowns as the work flows through the value stream is a powerful way to drive continuous improvement so that an organization is able to better meet the needs of both its customers and its internal operation.

Figure X-3. Vertical organization structure versus horizontal reality | Presented by SlideplayerOpens in new window

Last, value stream maps reflect work flow as a customer experiences it versus the internal focus of typical process-level maps. Many organizations are structured as a series of function-based silos that bear little relationship to the customer fulfillment cycle.

As depicted in Figure X-3, value stream maps force an organization to think holistically in terms of cross-functional work systems and product families.

While this type of thinking can pose challenges during the future state design phase of mapping, it’s exactly the type of challenge progressive organizations must embrace.

Value stream mapping forces an organization’s hand to either make the difficult structural changes that are more in line with the cross-functional reality within which they exist, or continue to deny reality, stick with outdated structures, and continue to perform accordingly.