Written by: Nigel Richardson
Value Stream Mapping (VSM) is an invaluable tool in the arsenal of your Lean efforts, but before you can create your current and future state maps you must be in a position where you understand the different symbols, terms and analyses that must be conducted.
In this guide I will examine the four essentials you must have to be successful with VSM.
Let’s start with a picture below as an example value stream map viewed from two perspectives - the information and material flows:
This can be created on multiple A3 sheets of paper.
There is a long list of symbols and icons that you can apply to value stream map readily available on the internet, so I will not replicate those here.
I would also add, in all honesty, I have never used them.
Most workshops are completed using post-its so the option for sophisticated iconography is limited, although a consistent use of post-it color to the type of content is recommended.
What you should aim for is simplicity of information, such as these information boxes:
This is where things get interesting and really bring that ‘operating model on a page’ reference point to life.
Different sections of the VSM are related to the analysis and visualization of performance of distinct components or your business as per this list:
The Voice of the Customer can be broken down into two key components for customer analysis when considering the information to gather for your map:
Understanding what customers expect as ‘good’ is critical to understanding the level of performance that you are aiming for and also what requirements you may be able to modify should it help your overall performance improve.
We introduced the Kano model in our overview of Lean, and this serves as a great tool to understand expectations of your customer base.
Understanding how customers ‘order’ your product or service is also critical to establishing the rate that you need to ensure your end to end process is able to support through the capacity that is in place within your manufacturing or service environment.
Consider this the scope of your ‘normal’ process map.
What are the logical process steps that your product goes through as it gets converted into the final product for dispatch from your site?
From a service perspective, what are the steps that a customer goes through in their service journey?
Remember in our earlier principles of CI article, y=fx.
Everything is an output of a function being applied to inputs.
Everything is a process, the challenge is to understand how it should work but then also see how it actually works.
3. How long do our processes take to be completed?
When it comes to your process analysis each process step will normally have actual performance data collected against the following ‘Process Data Box Structure’.
The data within will depend on the level of detail you apply to this section of the VSM.
I would encourage you to summarize these process steps where possible based on the assumption that you are focused on cross functional improvements for this exercise.
The top-level question is how many suppliers do we rely on for this Value Stream to be successful, and for each supplier we are looking for the following key information from a manufacturing / supply chain perspective:
A supplier analysis in the service industry is not as straight forward.
I have seen the following differing perspectives be applied and all have been successful providing there is agreement on the option used and definitions that sit behind that.
A. Supplier channels
What channels are the origins of your customer flow, maybe customers are referred from one or more third parties?
If so, what is their performance and lead times (e.g. how long has a customer been in the process from their perspective prior to them moving into the part of the value stream that you control)?
Is there any variability in your suppliers’ performance which may adversely impact on their customer feedback to your organization.
B. Supply of enabling IT
If your customer journey is supported by a large amount of technology, who are your technology suppliers and how are they performing in terms of SLA, up time, integration frequency or any other performance that could impact the customers experience of the service that you provide?
C. Supply of service providers
If your value delivery process requires a reliance on third parties to help deliver value (e.g. our house that needs repairing, our technology supplier that provides replacements), then ask:
Questions to consider when understanding how your Value Stream is being monitored and controlled with informed decisions:
How does information flow, how frequent is this information, how robust and accurate is it?
B) How are you integrated with your suppliers?
How is information flowing between you and suppliers as per the customer questions?
C) How are you integrated with your own value delivery?
How is information on the actual performance flowing to this layer of business review and decision making?
D) How do you manage the demand you receive from customers?
Once you understand how demand and capacity is being managed across the Value Stream you can explore cross functional consistency as an improvement opportunity, and how improvements within this space to the information flow will sustain any improvements that you implement in delivery.
Creating a VSM may appear to be daunting in scope, but with this practical guidance in mind I trust that feeling is replaced with clarity and enthusiasm.
When created with these guiding principles in mind, VSM is an incredibly beneficial technique, and one that can be used time and time again to drive down wastage.
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Nigel Richardson is a continuous improvement expert. His background spans 20 years in business transformation and continuous improvement across retail, pharma, aviation and IT supply chain. He is passionate about supporting organizations to achieve their strategic, transformational and improvement goals, and outperform their peers year after year.
If you’d like to talk more about your strategic challenges, reach out to him on nigel.richardson@i-nexus.com or connect with Nigel on LinkedIn for the latest Strategy Execution insights.