Value stream mapping is an effective technique to understand your organizational process flow and areas of improvement across the functions and hierarchies. As it focuses on customer value, it is capable of helping organizations become efficient and agile. Let us understand what value stream mapping is, how to do it, and the benefits.
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What Is A Value Stream?
Before we dive into the value stream, we need to understand what value is?
What Is Value?
Value provides a measurement of what you achieve at what relative cost. For example, value indicators are how cost-effective the product is, how fast you can create it, how good and defect-free it is, and how complete and accurate it is.
You can increase value by cutting down on the wastes. The seven wastes that the lean approach identifies are;
- Partially Done Work
- Extra Processes
- Extra Features
- Task Switching
- Waiting
- Motion, and
- Defects
A value stream is a collection of activities your organization performs to create or deliver products and services. It’s the process by which an organization creates, delivers, receives, uses, maintains, repairs, disposes of, recycles, recovers, retires, restores, upgrades, downgrades, decommissions, re-manufactures refurbishes, re-configures, redeploys, repurposed, recycled, reuses, repairs, retires, and returned a product.
Value Stream Mapping is a process of identifying the critical activities in an organization’s supply chain. It helps companies identify bottlenecks that are slowing down their operations and then develop strategies for eliminating them. Value stream mapping can be used as part of any business improvement project or improve your productivity. Value Stream Mapping is a technique used to analyze the flow of information required to complete a process from start to finish and determine elements of waste that you can remove from the process to improve its efficiency. It involves creating visual maps (value stream maps) of the entire project.
Steps to perform Value Stream Mapping
Value Stream Mapping is a process of identifying the flow of work in an organization. It helps you understand what happens at each stage of your business processes and where there are opportunities for improvement. You can use value stream mapping as part of Lean Six Sigma projects or any other project that requires understanding the current state and future vision. The primary purpose of VSM is to identify bottlenecks and improve efficiency by eliminating them.
Value Stream Mapping is a process of identifying and analyzing the flow of work in an organization. It helps identify bottlenecks, improve efficiency, reduce costs, increase quality, and enhance customer satisfaction. You can also apply VSM at any level within an organization – from individual tasks or processes up to entire departments or even divisions. This article aims to provide you with some basic steps for performing Value Stream Map analysis on your own.
Step 1: Identify all the activities required to deliver customer value.
Step 2: Create a list of these activities by using the following questions as guidelines:
- What are the inputs?
- Who performs each action?
- Where does it happen?
- When does it occur?
- How long does it take?
- Is there anything that happens before or after?
- Does anyone else have access to the information?
- Are there any special considerations?
Once the information is collected identified, we create the map for the entire process, which identifies all process steps, process time required to complete those steps, the queues for WIP, delays between steps, related information flow, and loopbacks involved process. This process is the stream mapping exercise.
Step 3: Analyze the data collected in step two. Use the map to find out instances of process delays and wait times, waste & constraints.
Step 4: Draw out a diagram showing how the activities relate to one another. This diagram will help you understand what goes into delivering customer value. You may also want to consider drawing out a timeline so you can see when things happen over time. Next, analyze and determine a future, desired map state by removing or reducing delays, wastes and constraints. Finally, decide how you will achieve the future state of the process.
Step 5: Use the results of your stream analysis to make changes where needed. It would be best if you planned to review the state of the process periodically, using these exact steps to facilitate continuous improvements.
To identify the delays in the value stream, we can use the following approach;
- For each process step or action, find out the total time taken to complete the stage.
- Now, identify how much time you take to work on the step and how much you spend waiting.
- Find out the time taken for the process to move from one step to another.
- Identify any loopback actions involved between various steps. Loopback actions are actions where the information flows to the predecessor activity from the successor activity. For example, if code development and testing are two steps, the forward flow would be from the code development step to the testing step. Based on the testing results, information about defective pieces of code may flow back to the code development step, and once the defects are corrected, the code may again go to testing.
- The next step would be to find the difference between the total cycle time taken to complete the process end-to-end and the time spent on value-added activities. The difference denotes the non-value-added time. This difference indicates how efficient the operations are. Based on these calculations, you can identify the exact steps and actions to remove or reduce the delays and wastes.
Examples of Improvements Using Value Stream Maps
While many techniques sound fascinating in theory, they are not helpful unless proven in the field. Nevertheless, many organizations have used VSM in their transformational efforts. Let’s see some of the examples.
Example 1: The Case for a New Process at an Insurance Company
Dr. Womack, who developed this technique, wrote this case study. It describes how value stream mapping helped to improve processes at an insurance company. The process improvement project began with a review of existing business practices and procedures. A team from the organization identified many areas of improvement. They then created a plan to implement changes based on the results of the analysis. After implementation, the team conducted another evaluation using value stream maps. Based on these findings, the team implemented additional improvements.
Finally, after several months had passed, the team again reviewed the data collected during the project’s initial phase. In addition, they gathered new information about customer satisfaction through focus groups. These two sets of data allowed the team to make further adjustments to the system. As a result, the overall level of customer service improved significantly.
Example 2: Improving Customer Service at a Large Retailer
David Maister, who worked with a large retailer to identify problems in its operations, provides another example. He found that most customers received poor service because employees did not know what products or services were available. To address this problem, he designed a training program that included role-playing exercises. First, employees practiced interacting with customers while wearing headsets to hear what the customer exactly said. Then, when they returned to work, they repeated those interactions as if they were real life. At first, the employees thought that the exercise was silly but soon realized that it helped them understand what customers wanted. Soon, all employees participated in similar activities. As a result, customers also reported better experiences.
Example 3: Reducing Errors at a Hospital An article published in Harvard Business Review described how one hospital reduced errors by implementing a simple change in workflow. When patients arrived at the emergency room, nurses took vital signs and recorded them into a computerized patient record. However, sometimes CPRs weren’t completed properly. So, instead of having nurses complete the forms themselves, doctors checked boxes indicating whether they performed each care step correctly. The doctor called the nurse back to correct the error before sending the form to billing if any mistakes occurred. Because the physicians were checking off the boxes, they became more aware of potential problems.
What Are Some of The Alternatives To Value Stream Mapping?
Value stream mapping is a process that helps you to understand the flow and value chain in your business. It’s an essential tool for any organization, but it can be challenging to implement without clear goals or objectives. In this article, we will discuss some alternatives to VSM, including:
1) Lean Six Sigma – LSS focuses on eliminating waste from processes using tools like DMAIC (define-measure-analyze-improve -control). This approach has been used successfully by many companies over the years. However, it requires training and implementation time which may not always be available. Also, while LSS does help with improving efficiency, it doesn’t necessarily improve customer satisfaction.
2) Process Improvement – PI focuses more on identifying problems than optimizing existing processes. For example, one company I worked with was having issues with their shipping department because they took too long to ship orders out. They decided to use PI techniques to identify what caused these delays so they could fix them. Unfortunately, while this helped reduce the time to ship orders, it didn’t solve the problem. So, while PI might have identified the root cause of the issue, it couldn’t provide a solution.
3) Customer Experience Management – CEM focuses on understanding how customers perceive your product/service before deciding whether or not to buy it. For example, if you’re selling something online, you will want to make sure that you have optimized all aspects of your website for conversions. You also need to ensure that your products are easy to find and purchase. An excellent way to do this would be through user experience testing, where users interact with different versions of your site to see which ones work best. Another option is to hire someone who specializes in UX design to create wireframes for your site.
Criticism of Value Stream Mapping
Value stream mapping is a method for improving the efficiency and effectiveness of business processes. Michael Hammer developed it in his book The Reengineering Revolution, published in 1989. Several examples show that VSM has improved many organizations, including manufacturing, healthcare, financial services, retailing, government agencies, education, and non-profit organizations. In addition, VSM has improved many organizations, including manufacturing, healthcare, financial services, retailing, government agencies, education, and non-profit organizations. In addition, other industries such as telecommunications, insurance, hospitality, construction, transportation, and energy have also used it.
However, there is some criticism about its use. These include:
There may be no improvement at all if value streams do not exist or cannot be identified. This criticism comes from those who believe that any change will only happen when people start thinking differently. If this is true, then we should expect to see improvements before we implement new methods.
Some critics argue that VSM does not work because it assumes everyone involved knows what they are doing. They claim that most employees don’t understand how their jobs fit into the overall process flow. Therefore, they say that you can’t make changes until someone else tells them what needs changing.
Others criticize VSM because it requires too much time and effort to identify and map out value flows. According to these critics, companies spend more money implementing VSM than they save through improved productivity. Critics also point out that VSM doesn’t always lead to better results. For example, one study found that after using VSM, customer service representatives were less effective at resolving problems. Another study showed that VSM did not reduce costs or increase profits.
Finally, critics note that VSM often leads to increased bureaucracy within an organization. As a result, they feel that VSM makes things worse rather than making them better. There are two main reasons why VSM fails to produce positive outcomes. First, it takes a long time to get started. Second, once implemented, it tends to become institutionalized and, therefore, difficult to modify. Both of these factors contribute to the fact that VSM rarely produces significant benefits.
To Sum Up
The goal of the value stream analysis is to remove all obstacles to the overall flow of activities. These obstacles include rework, WIP, bottlenecks, handoffs, and other related aspects of the process flow. This analysis helps teams increase the throughput and reduces the cycle time. Analyzing the value stream provides us with the focus to improve process efficiencies.
By using Value Stream Mapping effectively, you can improve efficiency throughout your organization. By doing so, you can increase productivity, reduce costs, and ultimately grow revenue.
Featured Image: Photo by Philipp Mandler on Unsplash
