What is Value Stream Mapping (VSM) in Lean Manufacturing?

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Value Stream Mapping (VSM) is a simple yet powerful lean manufacturing technique that manufacturing businesses use to visualise and improve each step in the delivery process of a product. It represents the flow of goods in its entirety from start to finish – from the supplier, throughout the organisation, right to the customer.

Here we give you all you need to know about VSM – including a step-by-step guide, and the benefits of using this technique for manufacturers small and large.

What is a value stream in lean manufacturing?

A value stream is a series of steps or actions taken to add value to a product or service for the consumer.

Before getting started on the Value Stream Mapping process, it’s important to understand the concept of value-adding activities. The three basic criteria for identifying value-adding activities are:

  1. The customer wants it done
  2. The processed material / data is being transformed into finished goods
  3. The process is done right the first time
A manager looking at floor plans

Value Stream Mapping is a simple but extremely effective tool for analysing and improving your production flow

What is Value Stream Mapping in manufacturing?

Value Stream Mapping (VSM) is a lean manufacturing technique used to analyse, design, and manage the flow of materials and information required to bring a product to a customer.

Production flow analysis through mapping value streams begins with the initial concept, moves through various stages of manufacturing and production, then on to delivery and customer support.

Also referred to as ‘value stream analysis’ or ‘lean process mapping’, a value stream map illustrates the production flow of materials and information from the supplier to the customer.

VSM helps identify waste and streamline the production process and has three distinct parts – a process map, the corresponding timeline, and the information flow:

  1. The process map contains the actions and information associated with each step of a process.
  2. The corresponding timeline illustrates cycle times, differentiating between value-adding and non-value-adding cycle times to help identify waste.
  3. The information flow further clarifies the interaction and activities between the stages of the value chain.

A value stream map can be created using templates, flow software, on a whiteboard or simply using butchers’ paper and post-it notes.

Who is involved in the Value Stream Mapping process?

For the Value Stream Mapping process to work efficiently, all key stakeholders should be involved in the process. This includes senior management teams, production staff, and process & line operators.

It’s realistic to assume that managers and operators should know all facets of their process steps. Therefore, each will be able to contribute valuable information to identify value-add and non-value-add actions – allowing you to make improvements to the process.

How is VSM different from flowcharts and process maps?

VSM is significantly different from flowcharts and process maps, since these show only the steps involved in the process. VSM displays considerably more information, using a more linear format that enables teams to see where the real value is being added in the process.

Staff talking at a desk

Be sure to involve key stakeholders in the VSM process – from senior management through to staff directly involved in production

What are the 7 steps of Value Stream Mapping?

The aim of Value Stream Mapping is to analytically chronicle each step in a manufacturing process to identify and reduce or eliminate wasted labour, time or materials. Any activity that occurs outside of these three criteria isn’t value-add and is considered waste.

Before creating a value stream map, consider all the processes and stakeholders involved, and visualise how each of these relates to others.

Value Stream Mapping consists of input, value-add and output, and doesn’t track all possible paths that each process can take. Instead, VSM tracks a single part, service or transaction, or a family of parts, services, or transactions, through a process.

When selecting the product or product family to map, only track one path of the value stream, and take into consideration factors such as:

  • Customer return rates
  • Greatest dollar volume
  • Defects: physical, functional and aesthetic
  • Complexity of products

Once the value of a process has been defined and the product or product family has been selected for Value Stream Mapping, you can develop your map.

The following seven steps of Value Stream Mapping help to examine and improve practically any manufacturing process.

1. Document the current process

Document what you are currently doing, being sure not to skip any process or activity, looking both upstream and downstream and at the machining cycle itself.

Once you have created a current state map this should identify waste, inefficiencies, and any excess inventory. These can then be eliminated in the ideal state map, providing the company with an effective working plan to help achieve lean efficiency.

The goal of your value stream map is to identify and visually record for each step of a process:

  • Work and wait times
  • Labour needs
  • Error rates
  • Downtime at individual process steps
  • Excessive shortfall in inventory
  • Production or process delays

2. Identify and list each step of the process

Identifying and recording each step of the process requires asking and answering two basic questions:

  1. What is the first step in this process? Is it when an order is received from the customer, or when the part print is received?
  2. What is the last step? Is when an item is shipped, or when the customer receives it?

Start with the earliest possible step of the process, and finish with the stage at which the customer is completely satisfied.

3. Identify customer value

After listing each step in the process, look at these critically to determine the ones that add value to the customer and those that do not. Customer value is not always easy to determine: for some value means price, and to others value is the benefit they receive from the product.

Customers perceive value through what a product or service is worth to them on a benefit over cost basis relative to possible alternatives. Eliminating all steps that don’t add value can reduce process costs and improve customer satisfaction.

A man delivers goods to a customer

A key part of VSM is identifying each step in the production process – which runs right through to when the item is shipped or the customer receives it

4. Define what the perfect process looks like

Determine what the perfect process would look like if you were to eliminate every bit of waste and deliver a product that has 100% value. This could mean taking simple steps to improve processes, such as replacing hard copy files with electronic ones.

While it is not entirely feasible that you can always achieve the perfect process, it is important to visualise how it would look if you could. The future state VSM provides organisations with an integrated, holistic view of all processes.

5. Identify areas of the current process that hamper perfection

In this step you aim to identify any areas of your current processes that hamper the ideal state or perfect process. Look for hotspots, backlogs and bottlenecks to cultivate process improvements and targeted objectives to work toward.

Once these are identified and considered, it will be possible to develop an implementation plan, take corrective measures as required, and track performance objectives to ensure VSM activities are having the desired result.

6. Identify initiatives that can reduce or eliminate waste

Identify any area for improvement in each step of the process, and develop ways to make necessary enhancements.

This could be as simple as providing additional training for machine operators and production staff. It might be achieved by automating certain functions, upgrading machinery and equipment, or developing a more effective preventative maintenance program.

7. Assign tasks and responsibilities

After the initiatives needed to implement VSM have been determined, it’s time to develop a plan that identifies workable resources, considers all options, and records final decisions. Then the steps of the plan can be implemented using clearly defined tasks for staff involved and deadlines for the various steps and phases to be delivered.

By following these seven steps, it’s possible to vastly improve manufacturing efficiency, reduce costs, eliminate waste, and maximise customer value.

Staff members working together on planning

The last task involved in VSM is developing a final plan so that improvements are implemented

What symbols are used to draw a value stream map?

Value stream mapping uses unique symbols to provide a standardised visualisation of various processes. Flowchart software can be used to create VSM, and most of these products will have the necessary symbols installed in their symbol library.

  • A process is represented by the word ‘process’ inside a rectangle and often represents the combined processes of an entire department to improve readability of value stream map.
  • Inventory exchange or movement during a process is represented by a triangle with a capital I in the centre.
  • Shipments of raw material from suppliers are represented with blank wide arrows.
  • The pushing of materials from one step in the process to another is shown as a black arrow with three white squares inside.
  • Shipments using an external supplier are represented with a vehicle such as a truck, boat, or train.
  • Suppliers and customers are represented by the same symbol in the form of an abstract, geometric depiction of a factory. Suppliers will usually be located to the left of the value stream, to mark the start of a process while customers are often the final step, located at the far right of the value stream map.
  • Electronic flow refers to electronic information and data exchanges and is represented by a line with a zigzag in the centre. It’s important to focus on electronic exchanges as well as on raw materials and products because these exchanges may be a root cause of waste and delays.
  • A Kaizen burst refers to a short burst of activity undertaken to solve a problem with urgency and concentration. This is why it is represented with a cartoon-like explosion symbol.
  • A ‘go see’ is generally represented with a pair of glasses because it refers to the action of visually confirming an activity or step during the process.
  • A quality problem anywhere along the process chain is characterised using an octagon, much like a STOP sign, with a large letter Q inside.
VSM symbol examples

Examples of the many symbols VSM uses to map manufacturing processes

An example of how to use Value Stream Mapping

Novartis Pharmaceuticals, a multinational pharmaceuticals company, provides a good example of how Value Stream Mapping can be used.

Novartis uses VSM techniques as part of its strategic priority for building better productivity and freeing up resources that can be invested in innovation.

Value streams in a highly aseptic environment like a pharmaceutical company require enough accuracy to have actionable findings but must be sufficiently expansive for the VSM process to be repeated and modernised without excessive effort.

For Novartis:

  • Mapping sterile value streams required their analysis to be divided by families of products that share similar characteristics.
  • Metrics were standardised globally, with data collected for each line and family, to allow any new metrics to be accurately measured.
  • A current state value stream map was then created, permitting more in-depth analysis.
  • After determining significant and feasible projects, the desired future state was envisioned.
  • Finally, improvement strategies for short- and mid-term projects were created to express a clear vision of projected improvements.

The Global Operational Excellence team at Novartis Pharmaceuticals has implemented Value Stream Mapping for all processes, including standardised metrics and monthly review meetings to improve data visibility and clarify process performance.

How does Value Stream Mapping reduce waste?

There are several types of waste in manufacturing, including defects, inventory waste, transportation waste, motion waste, waiting, overproduction and overprocessing.

Value Stream Mapping is an important tool to help businesses identify and reduce process waste in manufacturing. It does so by helping them create an effective implementation plan that maximises available resources and ensures materials and time are used efficiently.

VSM looks for non-value-adding activities in all processes, and brings value-adding activities into focus, and this helps to achieve set goals more efficiently. Eliminating waste will deliver significant cost reductions through the establishment of low-cost or no-cost improvements.

Staff plan processes using sticky notes on wall

VSM has numerous benefits when applied correctly, and when coupled with inventory management software will improve your stock management significantly

The benefits of Value Stream Mapping

The aim of Value Stream Mapping is to pinpoint and reduce or eliminate waste at each step in a process, and this results in numerous other benefits:

  • By providing a clear view of the workflow, VSM identifies value-add and non-value-add processes.
  • It helps companies spot activities that have an efficient process flow and pinpoint the processes where a disruption in the process flow will lead to lost time and threaten on-time delivery.
  • A value stream map labels and links material and information flows to determine takt, lead, and cycle times between each step in a process.
  • Information flow is improved because communication is shared among clients, suppliers, and processes.
  • VSM highlights current workflows and encourages focus on future improvement.
  • Manufacturing operations overall become more efficient.

In addition, Value Stream Mapping helps manufacturers establish accurate timelines, expected customer demand, and encourages analysis to determine adequate delivery methods.

The challenges of Value Stream Mapping

The primary challenge of implementing Value Stream Mapping in an organisation is when VSM is not applied correctly. When this happens, VSM may complicate waste identification and lead to misinterpretations or assessment mistakes that potentially undermine the implementation of future improvements.

Another potential problem is unstable processes, which are nearly impossible to improve using VSM because this technique doesn’t always represent the actual process if there are variations in the way it behaves. Standardisation of every process is therefore an important preparatory step for VSM.

VSM delivers major benefits to production process when applied correctly, but can result in poor decisions – both technical and financial – when implemented incorrectly. 

Value Stream Mapping and inventory management

VSM partners well with manufacturing inventory management software, and effective use of these in tandem will reduce capital tied up in inventory and the associated inventory carrying costs.

VSM identifies the areas of your production process that carry excessive on-hand inventory, as well as those steps that aren’t carrying enough. By detecting where a more continuous flow could reduce the need for storage, VSM can help businesses plan their inventory handling more accurately – and stock can then be managed using an inventory system. Value Stream Mapping also assists in determining if an inventory push system can be replaced with an inventory pull system.

Inventory management software, on the other hand, supports Value Stream Mapping by enhancing inventory analysis, helping to diagnose problems, and by optimising inventory management for the manufacturing processes in place.

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Alecia Bland - Unleashed Software
Alecia Bland

Article by Alecia Bland in collaboration with our team of inventory management and business specialists. Alecia's background is in ancient languages. When she's not reading a book with her cat for company, you can usually find her cooking, eating or trying to make her garden productive.

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