Value Stream Mapping / Value Stream analysis

Understanding Value Stream Map (VSM): A Practical Guide

Value Stream Mapping (VSM) as the basis of Lean serves as a robust method of visually representing and studying the movements of goods and information along any process. In this text, we will explain the core concepts of these mapping in a human language, articulating our thoughts on why it is important and how can it be implemented.

What is Value Stream Mapping (VSM)?

Value Stream Map (VSM), also known as Value Stream Analysis, is a tool used to create a clear picture of activities that provide value (Value added) to consumers, as well as those that do not – so-called wastes or Non-Value added. At its heart, the purpose of the VSM is to reform processes in accordance with customer requirements, desires, and hopes; moreover, to uncover and delete processes that do not add value.

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Example of a Value Stream Map (VSM)

How Does Value Stream Mapping (VSM) Work?

The process of Value Stream Mapping (VSM) begins with identifying the key processes and activities involved in creating and delivering value to the customer. These processes and activities are visualised in a process description that shows the flow of materials and information within the process.

Data in the Value Stream Map

During the creation of the Value Stream Map (VSM), various types of data are collected and analysed, such as lead times, waiting times, inventories, quality levels, and other performance indicators. This data helps organisations identify inefficiencies and waste, allowing them to implement targeted improvement initiatives to enhance overall process performance.

Value Added and Waste

With the VSM, we visualise which activities add value for the customer and which activities are wasteful. Lean focuses on eliminating non-value-adding activities and reducing waste. The VSM always takes the customer’s perspective and aims to deliver according to their expectations, KPIs, needs, and wishes, making these quantifiable.

Activities and Data

The Value Stream Map does not focus on functions and tasks but on activities in the process based on facts (data and information). It shows how much time actions add to customer value and how much is wasted by not adding value. Unlike flowcharts and swimlanes, a Value Stream Map is more of a visualisation with images, using specific symbols frequently.

The Four Main Areas of a Value Stream Map

Value Stream Maps have four main areas in their structure and always start with the customer. Within these four areas, the necessary information is collected. The four areas of a Value Stream Map are:

Customer
Processes
Suppliers
Communication Processes

Symbols in Value Stream Map (VSM)

A Value Stream Map (VSM) uses symbols and visuals to graphically represent the flow of the process. These symbols are not standardised, so you might encounter many different variations. The most important thing is that the symbols help you quickly understand the flow of the process and identify waste or opportunities for improvement. Here are a few commonly used VSM symbols:

Process Box: A rectangle representing a specific process step.
Data Box: A small rectangle below the process box that contains key data such as cycle time, wait time, and inventory levels.
Inventory Arrow: An arrow indicating how materials move between process steps.
Electronic Information Flow: A lightning bolt symbol representing the flow of electronic information.
Manual Information Flow: A straight arrow indicating the flow of manual information.
Push Arrow: An arrow showing that products are pushed to the next step.
Pull Arrow: An arrow indicating that products are pulled by demand from the next step.
Safety Stock: A “castle” symbol representing safety stock.
Kaizen Burst: A star shape indicating where improvement initiatives should take place.

These symbols help create a clear and understandable picture of the process, allowing you to quickly see where optimisations are possible.

Data Collection within the Four Main Areas of the Value Stream Map

Within these four areas, various types of information and data can be collected. Depending on your improvement project and the specific aspects you want to enhance, you gather information on topics such as:

Lead Times: The total time a product or service takes to go through the process.
Cycle Time (C/T): The time required for a specific operation, not to be confused with lead time.
Changeover Time (C/O): The time needed to switch a machine or process to a different task.
Defect Rate: The percentage of products that do not meet quality standards.
Tool/System Availability: The readiness and availability of necessary tools and systems.
Inventory: The amount of raw materials, work-in-progress, and finished goods.
First-Time-Right Percentage: The percentage of products correctly produced on the first attempt without errors.
Cost Information: Data on the costs associated with various process steps.
Wait Times: The time products or services spend waiting between different process steps.
Transport Times: The time required to move products or materials between different locations.
OEE (Overall Equipment Effectiveness): A measure of machine or process efficiency, consisting of availability, performance, and quality factors.
Productivity: The output per unit of time, such as the number of units produced per hour.
Quality Levels: The extent to which products meet the established quality standards.
Lead Time: The time from when a customer places an order until delivery.
Process Variability: The degree of variation in the execution of a process step.
Batch Size: The number of products processed at one time.
Utilisation Rate: The extent to which machines or employees are used compared to their maximum capacity.
Rework Percentage: The percentage of products that need reworking due to errors or defects.
Distance: The physical distance materials or products travel within the process.
Resource Use: The consumption of resources such as energy, water, and raw materials.
Customer Satisfaction: Feedback and ratings from customers regarding the product or service.
Supply Reliability: The reliability of suppliers in delivering materials and raw materials on time.
Order Processing Time: The time required to process an order from receipt to dispatch.
Flexibility: The extent to which the process can be adjusted to changes in demand or product requirements.
Safety Incidents: The number and severity of safety incidents in the process.

This data helps organisations get a complete picture of their processes and implement targeted improvements to enhance efficiency, quality, and customer satisfaction. By identifying bottlenecks, inefficiencies, and waste, targeted improvement initiatives can be implemented to improve overall process performance.

Benefits of Value Stream Mapping (VSM)

Some of the key benefits of using Value Stream Mapping (VSM) are:

Transparency: By visualising and analysing processes, inefficiencies, bottlenecks, and waste can be identified and eliminated.
Value Added: By optimising processes to deliver value more efficiently, customer satisfaction can be increased, leading to a competitive advantage.
Kaizen: Value Stream Mapping (VSM) is a tool for continuous improvement, enabling organisations to constantly evaluate and improve their processes to achieve optimal performance.

Step-by-Step Guide to Value Stream Map(VSM)

There are no fixed rules for creating a VSM. When certain symbols do not cover a situation, it is possible to invent new symbols. The data to be collected and the level of detail depend on the specific situation. Follow this step-by-step guide to cover all areas of a VSM. Always start with the customer and keep the customer central.

Step 1: Identify the Product and the Voice of the Customer

Identify which product or product family you want to analyse. The goal is to deliver value to the customer. This begins with the ‘Voice of the Customer’ (VOC), which describes the customer’s expectations and needs. Use surveys, interviews, and customer feedback to gather this information. Understand the customer’s lead time expectations to align your process accordingly.

Step 2: Draw the VSM

Describe and draw the current state:

Process Steps: Activities within a workstation, represented by square boxes.
Process Boxes: Represent the process steps, drawn from left to right.
Data Boxes: Under each process step, containing data such as time, number of employees, and performance indicators.

Collaborate with process operators and be prepared to create multiple versions as you learn more.

Step 3: Fill in the Data Boxes

Collect crucial information for your improvement project:

Process Step
Total Production Time
Cycle Time (C/T)
Value-Adding Time
Non-Value-Adding Time
Wait Time
First-Time-Right Percentage
Rework Time
Uptime
Changeover Time
Batch Size
EPEI (Every Product Every Interval)
Productive Time
Non-Productive Time

This data provides insight into current performance and potential improvements.

Step 4: Add Material Flows

Understand how materials flow through the process:

Identify materials for each process step.
Estimate the usage of each material.
Note delivery frequency.
Mark storage locations and inventory.
Determine the frequency and reasons for material movements.

Step 5: Add Information Flows

Determine the information flow through the process:

Supporting Information: Manuals, procedures, etc.
Orders: Customer requests.
Schedules: Activity planning.
Specifications: Production and delivery guidelines.
Shipping Information: Delivery times and methods.
Lead Times: Expected delivery times.
Instructions: Task and procedure guidance.
Quality Reports: Inspections and audits.
Customer Feedback: Performance evaluations.
Performance Indicators: Productivity and efficiency.
Purchasing Information: Suppliers and terms.
Production Planning and Schedules: Overviews of production activities.
Maintenance Schedules: Planned maintenance.
Safety Guidelines: Safety protocols.
Compliance Documents: Legal requirements.

Step 6: Calculate the Total Process Steps

Evaluate process steps qualitatively and quantitatively:

Total Lead Time: Cumulative time from start to finish.
Actual Execution Time: Measured time including wait times and movements.

Use this data to identify bottlenecks and inefficiencies and implement improvements.

Step 7: Draw the Timeline Ladder

Visualise the total production time at the bottom of the VSM:

Segment the time according to the production steps.
Distinguish between value-adding and non-value-adding time.

This helps in identifying inefficiencies and optimisations within the process

Versions of Value Stream Map:

Create two versions of the Value Stream Map:

Current State VSM – focuses on the current processes involved in the value chain.
Future State VSM – focused ideal state where developers must get to.

Conclusion of Value Stream Map (VSM)

Creating a Value Stream Map (VSM) provides a detailed overview of the entire production process, from supplier to customer. By mapping lead times, wait times, inventories, and other critical performance indicators (KPIs), waste and inefficiencies become visible. This enables Lean Green Belts and Black Belts to undertake targeted improvement actions using methodologies such as PDCA, DMAIC, and A3.

Identifying Kaizen bursts within the VSM is a powerful way to pinpoint specific areas for immediate improvements. This systematic approach not only helps in enhancing overall process performance but also contributes to a culture of continuous improvement within the organisation.

In summary, a well-executed VSM is an indispensable tool in Lean management, leading to improved efficiency, higher product quality, and increased customer satisfaction. By continuously monitoring and optimising, an organisation can adapt to changing conditions and remain competitive in the market.