Value Stream Mapping: What is it and how can it benefit your business?
Although the principles of Lean were originally designed to guide the manufacturing industry, it slowly found widespread usage across all demand-intensive sectors. In all its applications, Lean has helped streamline knowledge and resource management while encouraging the idea of continuous improvement.
In this blog, we will explore how businesses can leverage the Lean Principles and Value Stream Mapping to achieve continuous delivery excellence.
Typically, the path to Lean Management is governed by five core principles surrounding the customer requirements, these being:
- Identifying Value
- Mapping the Value Stream
- Creating a Flow
- Establishing a Pull
- Embracing Continuous Improvement
Rather than visualizing these activities as a waterfall flow, Lean Principles envision them as a closed-loop cycle.
What is Value Stream Mapping in Lean?
Before examining the details of Value Stream Mapping, let us first understand the idea of ‘value’ in Lean.
As with all Lean methodologies, the ‘value’ in a product or a service is defined from a customer’s perspective. That is, it is a set of qualities, features, solutions, or anything of value, for which your customer is willing to pay you. Companies use different Lean tools, such as the 5 Whys, Gemba Walks, and A3 problem-solving, to identify what constitutes ‘value.’
Once the concept of value is clear, they then devise ways to obtain it. Here’s where Value Stream enters the scene. A Value Stream is a chronological list of activities that businesses need to perform to develop the product or service and offer the said ‘value.’
From the above, one can intuitively gauge that Value Stream Mapping (VSM) is a graphical tool to demonstrate the structured details of the vital steps within the work process. It involves detailing the current state of the process and the future state envisaged by the company, then based on the discrepancies, it develops strategies to attain the future state aspirations. It also covers key activities, such as quality inspections, which may not directly add value to the customer but enhances the capabilities of the final product or service.
The role of Value Stream Mapping
The primary purpose of Value Stream Mapping is to process value stream data and discover ways to optimize operations. Since it highlights the relationship between operating steps and outcomes, it offers a high-level view of the functioning of the organization. Stakeholders can even use it to track the progress and status of a project.
Furthermore, VSM can also benefit your business in the following ways:
- It helps bring teams together as they unitedly differentiate and identify the value-adding and the wasteful steps prevalent in the business processes.
- It reduces or eliminates waste, which eventually positively impacts your bottom line.
- In addition to reducing/eliminating waste, it also helps you recognize the source and the root cause of waste, which could help streamline other processes as well.
- Value Stream Mapping can help identify wasteful handoffs, and based on these findings, teams can work towards improving communication, collaboration, culture, and behaviour.
- Customer preferences take precedence over the team or individual’s opinions or perspectives.
Profitable applications of Value Stream Mapping
To reiterate, the primary objectives of VSM can be summarized as follows:
- To identify areas of improvement in operation flows or supply chain.
- To improve performance by eliminating Lean waste.
- To improve overall efficiency and optimum use of resources.
- To satisfy customers by offering intended value.
Let us consider an example of an automobile factory, which uses VSM to outline the steps required for car manufacturing.
While conducting the review, the company notices that the handoff stage where the raw materials are fed into the production line generates Lean waste. Due to the presence of the production line and raw materials storage at two ends of the warehouse, workers have to use a forklift to carry the material from one end to another. Apart from being time-consuming, it also poses safety risks and hazards. In response, the company moves the storage adjacent to the production line, thereby eliminating the need for the forklift and mitigating the waste.
Similarly, let us also review the impact of VSM in the software development sector.
Say, a team has listed 18 features necessary for developing an app as per the customer requirements. However, the project manager, while performing, VSM notices that the same results are achievable through 12 features. The PM flags the 6 extra features as overproduction and streamlines the development process.
Overcoming challenges posed by Value Stream Mapping
If left unmonitored, VSM can itself prove to be wasteful. Here are a few measures that you can adopt to avoid such an instance:
- Balance the level of effort (LOE) required to conduct value stream mapping by quantifying the potential value offered by this exercise. The value could be in the form of savings of operational efficiencies.
- Another method to weigh the LOE would be by measuring it against the anticipated ROI.
- Since the process of value stream mapping can get rather convoluted, involve cross-functional team leaders and experienced employees from both, business end and product side.
- Since waste identification and elimination can get intense, it may be coupled with fear and uncertainty. You can combat it by educating your teams to assuage such concerns.
- Follow a step-by-step approach while transitioning from a micro to a macro level to witness overall process improvement.
- Carry out value stream mapping even if you fail to see an immediate improvement in your bottom line, as these changes, no matter how small, will accrue at a larger scale.
Ready to deliver value continuously?
As one can see from above, Value Stream Mapping is an organizational change that starts at the grassroots level. As a result, extracting value and identifying waste from all processes can get overwhelming and challenging. Fortunately, we, at dentsu World Services, are experts at deconstructing such complexities. Contact us to know how we can help you achieve measurable impact and excellence.
Author: Parvez Shaikh, Senior Project Manager, dentsu World Services.
