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Apr 22, 2010

Benefits of Value Stream Mapping

Value Stream Mapping (VSM) is a proven tool. Well suited for a broad range of industries and processes, VSM is ideal for creating positive organizational changes and producing system-wide benefits in cost, quality, and flexibility. It helps eliminate waste.

But like any tool, VSM must be applied properly. That means avoiding the common errors that invalidate the mapping process. Below are tips on developing an accurate VSM. These tips will not only improve the accuracy of your map and facilitate the mapping process, they'll also help you reap its system-wide benefits.

But first, let's define a value stream. It includes all the activities required in bringing a product from "raw materials" into the customer's hands or in providing service to a target audience. Michael Porter, author of Competitive Advantage: Creating and Sustaining Superior Performance, was among the first to talk about value chains and value streams. In his definition of a value stream, he includes primary activities, like inbound logistics, and support activities, like procurement. Porter relates these activities to gaining a competitive advantage.

One key to value stream mapping suggested by Porter's definition is to clearly define the product or service to map. In other words, make sure you have a value stream to map before engaging in the process, since the objective is to identify system-wide waste occurs and then remove it. Unfortunately, some apply VSM in situations where there's no product or control part, such as in product development processes. Make sure there's a repeatable action or control part to follow before creating a value stream map. Otherwise, you'll just be wasting time and resources.

Another key to developing a VAM is observing performance first hand. While many value streams are simple, many are also complex. In some cases, the production process or service delivery effort is long and tedious. It other cases it maybe set aside for a few days or a few weeks or the person developing the process needs to complete the map quickly. All of which makes developing a value stream map difficult.

In addition, much of what takes place in the day-to-day operations of a business-- phone calls, interruptions, reprioritizations of work--isn't stored on a computer or in someone's memory. So depending on engineering standards to fill in the information boxes and determine potential savings won't work, nor will trying to develop a map while sitting in your office. While the Map might be technically correct, you would be missing many of the activities actually happening on the floor.

Unfortunately, these activities affect production time and the product's value. Therefore, you must observe the product as it is being produced or the service as it is being delivered to determine which activities add value and which do not. While it's sometimes hard to do, it's critical to gathering accurate data for your VSM. Otherwise, you're creating a process map, not a value stream map.

Also, make sure you follow the product undergoing production or the service being delivered all the way. Sometimes an observer follows the worker through a long drawn out production process. When he or she stops dealing with the product, the observer, follows the worker instead of the control part. This can spell disaster.

Let's say, for example, the product is a patient in a doctor's office. When the doctor finishes his exam, the observer needs to follow the patient, not the nurse who's updating the patient's chart. If the observer follows the nurse, he or she is mapping the nurse's work, not the work being done on the control part, which stopped when the patient went home.

In addition, be aware of product families when developing a VSM. Most firms produce more than one product family. Sometimes, it gets complicated following a single product family because the observer did a poor job of identifying the key product family before hand. By not identifying the product family, the observer risks being distracted and following the wrong processing path.

Two common problem areas in value stream mapping are ignoring shared resources and double counting time. These pitfalls can invalidate the accuracy of a value stream map.

Most companies have shared resources. These resources--which may be people, assembly lines, or equipment--often support multiple product families. If the observer forgets to identify these shared resources when developing a value stream map, the map will be incorrect. Identify the shared resources in a value stream ahead of time. Forgetting to do so will produce incorrect estimates for things like cycle times. And that in turn will affect the map's end product.

Also, makes sure you understand exactly what goes in an information box and what is a processing step. Changeovers usually go in an information box, but what about travel time. The key is separating the actual work involved in completing the product or service from the things that cause inventory to build up. Long changeovers cause inventory to build, but what about long distance travelling? Both activities may need be eliminated because they both cause inventory to build.

These tips will help you develop accurate value stream maps. The maps will, in turn, help cut waste from your production processes or service deliver sequence, streamlining operations, cutting costs, and improving customer service. More importantly, they'll help you reap the system-wide benefits VSM provides, making your efforts both productive and profitable.
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