How are operations best measured for a value stream map?

The main objective of lean system is to augment effectiveness and efficiency of various processes in the organization by reducing waste in operations like long lead times, defects and bottlenecks in material and information flows. One tool that can be used is through ‘Value Stream Mapping’. Value stream mapping provides a visual representation of the flow of materials and information throughout the organization. It helps to identify, demonstrate, reduce waste and finally create effective flow through all the processes in the manufacturing organization.

Value stream mapping constitutes all the value added as well as non- added values required to make the product. It consists of the process flows starting from the raw materials to make the product finally available in the hands of the customers.

What Does Value Stream Mapping Do?

• Graphically illustrate the flows of materials and information in a process. It displays the interaction between multiple organizational functions- both manufacturing as well as ancillary functions.
• Pinpoint the problem areas, inefficiencies, defects, bottlenecks more efficiently as it integrates and maps the information flows, material flows along with the sequence of tasks. It even shows the cycle- times and lag- times between different tasks.
• Involves all the stakeholders in each stage of the process and hence, it becomes easy to develop and implement countermeasures to facilitate cultural change in the organization. It provides a proper presentation of all the limiting factors.
• Continuous improvement is facilitated since the direction can be focused on lean transformation teams, front line supervision and upper management.

Value Stream Mapping Symbols

How to Make and Use a Value Stream Map

Step- 1: Understanding the current state

The very first step is to select the product or product family, decide on the goal of improvement and train the team for value stream mapping. Select cross- functional team and include all the stakeholders of the process. Then, walk through the physical path of the material flow. It is necessary to map all the primary as well as secondary materials flow of the manufacturing. While walking through all the material flow paths, observe and document all the communication points carefully. This will help to prepare the current state value stream map.

Identify the start and endpoints of your process.

In the end your process owner or project sponsor is the final rule on when a process begins and ends but in a value stream analysis this is typically from the moment a customer makes a request to the moment when they receive the product. Arguments could be made for capturing the whole process by including things like transaction settlement (funds clear an account, restocking or retooling takes place, all “technical debt” is completed, etc.)

Draw the process flow.

Map your process including sub steps. It’s helpful to trace the flow of one unit (product or service) going through the process.

Note areas that require inputs or outputs. Does that alter your diagram? Did you miss a step. Be sure to include those interactions with external teams.

Include metrics for each process step.

What measures you take depend on what kind of project you are doing. What you can afford to measure? Some processes are trickier or more expensive to measure than others. Even with unlimited resources the spread and center of your process distribution might affect the measures you need – perhaps an average is OK in a normal distribution case but in another you might want to measure the median.

Before measuring you may want to validate your measuring systems first / auditors to ensure their accuracy with a repeatability and reproducibility study. Gathering this data can be time-consuming; best to get it right to the level of precision required the first time. No matter what you measure you might want to test your measurement tools

What are the bounds of the case? The lower bound, or fastest time be the ‘happy path. The upper bound, or slowest time, might be the worst-case scenario.

• What is the average time – or most likely time?
• What is the median time?
• Is there any changeover or prep time required?
• What’s the uptime?
• Identify resources in each step
• Manpower – how many people, how many shifts.
• What are the machine capabilities?
• What is the throughput of this step and delivery performance?
• How much inventory stacks up?

Step-2: Analyze and reflect

In this step, analyze the current state value stream map with all the stakeholders in order to gain consensus on the current performance of the process. Next, identify the limiting factors, deficiencies, defects and bottlenecks in the current process. The performance and cost of each limiting factor should be quantified. It is also important to identify the root causes and not the symptoms of the limitations of the current state value stream map. Based on the root causes of the limitations, cost effective solutions should be developed. Finally, the current state value stream map should be amended to reflect the proposed solutions and changes in eliminating the limitations of the process. The amended value stream map is now called as the ‘future state value stream map’.

Look at value being delivered and waste incurred.

• Note any of the wastes including, but not limited to, wait time, rework time, retooling, and down time.
• Note any process steps that are unnecessary or not valuable.

How to tell if a step is valuable or not?

• Call out the value-added activities.
• Is it done right the first time, every time?
• Is the customer is willing to pay for it?
• Has the process object has physically changed?

Calculate Touch Time / Cycle Time

The time a product (physical or completed service) takes to complete the entire  process to churn out one piece of the product.

The total time physically spent on a process. This is different than the overall time it takes to complete a process step or task in a stream from start to finish because the waste is not built in.

This is heavily dependent upon defining your starting point and your end points. A SIPOC can help you identify these. In the end, the process owner (or the project sponsor) are the final rule on when a process begins and ends.

Cycle Time Examples:

Sales: An example cycle time could be from when a prospect first makes contact with your company and ending when they complete a purchase.

Hospital: An example could be from when the patient enters the ER to when they are discharged.

Step- 3: Improve

How can we cut out, remove, or avoid those wastes we identified? What are the bottlenecks in our process? What step in the process stream has the slowest throughput or cycle time? Is there a way to make that more efficient?

Before implementing the future state value stream map, socialize and gain consensus from all the stakeholders involved. Then, the changes need to be implemented and in that process, the affected procedures, bills of materials and training materials should be modified. Training should be imparted to the staff based on the new procedures and requirements. Finally, the implementation of the changes should be facilitated on a descending priority basis.

Optimize the Whole.

The point isn’t to achieve a high score for any individual process step but to rather get a service complete or produce a product for a customer quicker utilizing less resources while maintaining excellent quality.

 Step- 4: Sustain

The implemented changes should be verified and validated through establishing and measuring performance and cost related parameters using effective key performance indicators. The new standard procedures should be monitored and reinforced on a continuous basis.

Difference between Process mapping and Value stream mapping (VSM)

Process mapping is a tool that graphically shows the inputs, actions, and outputs of a process in a clear, step-by-step map of process. Process mapping specifies the tasks within the function, and also shows the interaction between functions or departments. It helps the participants to visualize the details of the process closely and guides decision making.

Value stream mapping provides a visual representation of the flow of materials and information throughout the organization.. It visually shows the important parameters like cycle time, lead time, inventory or waiting time, % complete and accurate, number of operators. It helps to identify, demonstrate, reduce waste, and finally create effective flow through all manufacturing or business processes. Three important steps of VSM:

• Create as-is current state process how an organization delivers products and services to the customers
• Identify wastes in the process and draw the proposed improved state map using lean principles
• Develop and implement action plans to achieve the proposed improved future state

Organizations selects either process mapping or value stream mapping based on business requirement.  Use VSM to determine how much time the product spends on each step and waste in the process. While, process mapping is to visualize a series of steps and determine the decision-making within the process.

Value Stream Videos

A great introduction from Gemba Academy

A great practical example from Gemba Academy

ASQ Six Sigma Green Belt Value Stream Questions

Question: In order for value flow analysis to be effective, a team must take which of the following steps first?

(A) Define the value stream
(B) Eliminate backlogs in the value stream
(C) Identify overlapping functions in the value stream
(D) Identify specific work practices within the value stream

Answer:

A: Define the value stream. This includes a starting point and an ending point of the process. You cannot do any of the other answers until you have mapped the value stream.

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