A Dummy's Guide to Value Stream Mapping

A value stream map (VSM) is a comprehensive visual lean tool that depicts the flow of “value” through a process. VSM was first used in the manufacturing industry. But now, the service industries use it to analyze their service flow processes.

Flow is a stream of information or materials you use to satisfy a customer. It’s often used to streamline complex business operations.

“A value stream map helps to understand the customer’s perspective of value. Where value is worthiness of a product or service that the customer is willing to buy.”

VSM acts as the foundation to achieve more “value” by the most efficient means. Customers are willing to pay for activities that meet their needs. So, some activities that do not add any value such as transportation or inspection become essential.

You must optimize these activities to improve customer satisfaction.

Knowledge Check

TL;DR - Value Stream Map is a lean technique that helps to analyze, design and manage the flow of required materials and information. Manufacturing companies such as Toyota and Bosch use this technique. It is a must to be familiar with various terminologies to create a value stream map. Creating a VSM comes with a fair share of challenges but has tremendous advantages.

Value Stream Map Terminologies

This tool uses standard shapes and tables that impart information in standard form. The images below represent the same terms across all value stream maps in all industries. Sometimes, there will be subtle changes to enhance the aesthetics of the value stream map.

It's also essential to understand the key terms used in depicting the value stream map.

· Inventory: Stock of materials required for the process. They include products that you store, transport, or sell. It can be raw materials, work-in-progress, or finished goods.

· Push system: A production system that manufactures goods based on forecasts. The production is complete before customers request or order.

· Pull system: A production method that manufactures goods only after receiving customer orders.

· Cycle time (C/T): Cycle time is the time taken to process the product.

· Change –over time (C/O): The time required to set up processes (or machines) for new jobs. It's also called a set-up time.

· Takt-time: The time required to process the products to meet demand.

· Idle Time: When the machine is available and not in use. Here, you don't consider maintenance time.

Knowledge Check

Cycle time and takt-time are the most essential features of the value stream map. The example below would help you understand this better.

Understanding Cycle Time and Takt Time

An assembly line, as shown below, is made up of 4 workstations and operates an eight-hour shift per day. If the demand for products is 480 units per day, what's the cycle time and Takt time? (Assuming the time spent in moving products from one station to another is negligible).

Figure 1

“The cycle time of the assembly line is the time taken by the workstation with the greatest time. Thus, the cycle time is 5mins/unit.”

Takt Time = Production time available/demand = (8 hours x 60 minutes) /480 units = 1 min/unit

Cycle time shows that the production line takes 5 minutes to make one unit of product. In other words, the time difference between two successive products is 5 minutes.

“Takt time is the time taken to meet the current demand. Each minute the assembly line must release one product.”

The present assembly line has 480 minutes of available time. But, the release of each product is only every 5 minutes based on the cycle time. Thus, the system will not be able to meet the demand and production, as only 96 products are possible in this shift.

Knowledge Check

Benefits of Cycle Time and Takt Time

Companies use cycle time and takt time to analyze demand and capacity levels. It helps to identify the supply level against the demand in a given period.

You also know how to cut waste and improve the time of processes based on the value stream map. The data box (figure 1) contains the cycle time and set-up time measures.

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Example of Value Stream Mapping

A tuna sandwich manufacturer has a demand of 800 sandwiches per day. Takt time is 31.5 seconds/sandwich based on the available time of 7 hours per day. There are three workstations in the process line: 1. Testing Bread, 2. Application of Tuna, 3. Packaging

The names of the processes are on top of the data boxes which are in order of the sandwich-making process. The data boxes also state the cycle time and the number of workers required.

The arrows show that the process activities flow from left to right. The triangle shows the inventory that's available before each workstation.

Shipping in the diagram means that the sandwiches go to the customer. This activity is sometimes denoted by a truck diagram.

Supplier-Customer Interactions

The diagram below shows the interaction between suppliers and customers. When the customer places an order, the planning and control systems capture it as information (zigzag line). As a result, the system can forecast the expected rules of the customer for the following days.

According to the map, 800 pieces of bread enter the process line for testing. The planning and control system manages the forecast by electric mode (zigzag arrow). Then the supplier sends the 800 loaves of bread, depending on the estimate.

The planning and control system helps in managing the daily schedule for the process, as well. The circulation of this information isn't by sheets, charts, and reports. That's why the arrows are straight and not zigzag.

These data help to maintain and control the production level. Then the cycle continues.

Value Stream Map Timeline

The timeline at the bottom of the value stream map depicts a 'process' time and idle time. So you can see the value-added time and lead time. Where the lead time is the time between customer orders to delivery of the order.

Value-added time (VA/T) is the sum of the cycle time (high points) of all the processes. Hence, the processing time at each workstation adds value to the sandwich.

The process lead time (PLT) is the sum of cycle time and waiting time (low points), which is 2.675 days. Since the waiting time is the time spent in inventory or transit, it adds no value to the product.

But the lead time is higher than the value-added time. Thus, the company has to analyze and find solutions to reduce the lead time.

Knowledge Check

How Businesses Benefit from Value Stream Mapping

“In many cases, simply getting the basics in place across an entire value stream - standardizing the work, building in quality at the source, and installing visual management-can yield significant results.”

-Karen Martin

Stakeholders of the company identify limitations and defects through the VSM. They brainstorm and find solutions that will help reduce or cut wastes. After analyzing and coming up with solutions, some companies build future-state VSM.

Future-state VSM shows the expected changes required in the current process.

Some of the uses of the value stream map in businesses are:

· Patient flow in hospitals

· Information flow in services

· Material flow in manufacturing.

VSM helps identify waste in different steps before the product reaches the customer. It also helps to simplify complex steps in the process, while behaving like a Kaizen.

Knowledge Check

Steps to create a Value Stream Map

Organizations should not build a VSM too early. They should wait for their processes and workmen to get a hold over the processes.

“Businesses focus on reducing the cost of operations by improving efficiency. Hence VSM is very important in industrial applications. With VSM, you also deliver better value while improving processes.”