Value Stream Mapping
 
Recent research has shown that there is little correlation between the well-known corporate improvement programs and long-term, sustained high-performance results. An especially good example is in Jim Collins’ new book, "Good to Great." Collins stresses two attributes that distinguish the companies that grew from just “good” to long-term “great.”  First, having good, bright people in the right positions, and second, engaging the workforce in “thousands of little pushes on the flywheel,” the metaphor Collins uses.
 
A Value-Stream Map  (VSM) creates a visual picture of business processes that increase understanding and improve management decision-making.  A VSM equips a management team with the methods and data needed to analyze complex process relationships and to determine optimum solutions for process designs, and the value-adding components of a process. 
 
 
Put the Flywheel into motion with Value Stream Mapping
Value Stream Mapping methods are an excellent way to display the flywheel in a way that is understandable to everyone.  It displays the core value-adding portions of a business’s processes in visual map form and calls attention to the waste elements that need to be worked out.  It can show many of the organization's day-to-day practices that make it difficult for people to operate at a sustained level of excellence.
 
Value Stream Mapping has evolved in recent years with the Lean Manufacturing movement taking traditional process analysis and flow-charting methods to the next level. Value Stream Mapping techniques are particularly useful for Lean Process development project work.  They serve an important role in making “the goal,” the game plan and the improvement opportunities clear to everyone.…so everyone can contribute every day. 
 
Let’s take a closer look at the role Value Stream Mapping can play in business.  A VSM provides a starting point for beginning a lean manufacturing initiative.  Look at the two maps below.  The first map shows how management thinks the information flows in this business.  Typically, people think information flows in an orderly fashion.
 

Map 1

 
Information and product is being pushed from one step to the next.  The second map shows how information really flows.  It's a lot more complicated, and clearly shows many process steps that add no value and actually impede the production process.  This can be the start of identifying key changes needed in a business.  It also visually shows how people can be overwhelmed by the many information transactions that add no-value to a business from a customer's perspective.
 
Map 2

 
Information flows are often difficult to see.  The Value Stream Map simply provides a way to create a picture of the current situation before starting improvement activities.  After the "As Is" process is mapped a "Future State" map can be created.
 
In the above example it was taking this company over 34 days to go from raw material to delivery to customers.  In the improved process they were able to reduce most of the above transactions to visual signals and to move from raw material to delivery in five days.  Most materials were moved within 24 hours.  The still had some delay time in the new process due an inability to influence suppliers of some semi-conductor components to deliver more frequently.
 
 
Benefits Expected
The benefits listed below were realized by one company after creating a Value Stream Map and implementing lean manufacturing processes.  The numbers are fairly typical of what most companies can expect to accomplish:
 
•   Cycle time reduction from 3 plus weeks to 24 hours for most order fulfillment
•   Productivity improvement 65%
•   Sales per associate plus 50%
•   Space requirements reduced by 20%
•   Scrap reduction 50%
•   Product obsolescence reduction 70%
•   W-I-P reduction 60%
•   Less need for command and control management
 
 
How do you do it?
Value Stream Mapping by itself will not change your whole world.  But, it is an effective improvement tool.  It can be one of the steps in an organization's continual improvement journey.  The steps to get started look like similar to any well managed project.  The more holistic change described by Jim Collins in "Good to Great" require on-going focus by management, an avoidance of jumping from program to program, hiring and keeping good people and taking actions to promote employee buy-in to actions that are important to
customers and the overall business.  In the case of VSM, what does it take to get it done?
 
•   Clear, strategic drivers for making the change
•   The right owner or project sponsor that has sufficient clout for decision making
•   Good project management skills
•   Time (training, improvement teams, planning, etc.)
•   Persistence to stay the course
•   Ultimately, the transformation needs to be led and driven by people inside the organization, not outside advisors
 
 
Should I use outside assistance?
Outside assistance can help with a more rapid start and help companies move up the learning curve.  Ultimately, the changes need to be led and driven by people inside the organization.  What can an outside advisor bring to the table?
 
•   Experience, insight and guidance
•   More objective assessment of the current reality
•   Resources to get moving quickly
•   Initial training methodology, simulations and materials
•   Faster movement up the learning curve
•   Someone to listen and help implementers modify the tools, techniques and the strategies for their unique situation
 
 
Enhanced Value Stream Modeling

You can give the Value Stream Map more longevity in a continual improvement (CI) management process by separating the process data from the visual map and putting it in a form that can be easily maintained.  We will describe a data picture tool called Value Stream Modeling in our next article to do this.
 
As with most successful human endeavors, the speed and effectiveness of the team is dependent on their common mental image of the future and the roadmap to it.  VSM helps them build that image while also establishing the process measures needed to define the transition from the present to the future state.  VSM clarifies the journey ahead — and makes it predictable.