The content of our past columns has alternated between the broader, more strategic aspects of Lean versus descriptions of how specific Lean tools are applied. This month we will depart from exploring general principles to focus on Value Stream Mapping (VSM), an extraordinary device in the kit of Lean tools.
We will initially attempt to persuade you of the critical importance of VSM as a means of effectively focusing our continuous improvement efforts. Then we will briefly explain the process of mapping our value streams. Finally, we will outline the way in which value stream maps are used to drive the improvement effort.
Figure 1 is our (by now) familiar diagram of the Lean tool kit and the results we expect from its application. Note that Value Stream Mapping is aptly placed at the top of the chart. It is, in our view, a vital prerequisite to the selection and application of the other Lean tools.
Figure 1. Lean Tool Overview
Why Map Your Value Streams?
In every Lean implementation leaders must decide where they will apply resources and specific Lean tools to drive waste from their business processes. These are critical decisions. If the continuous improvement effort does not yield a bottom line benefit within a reasonable time frame, everyone (including the leadership team) loses interest and "Lean" becomes just another failed program. Fortunately, VSM provides a way to clearly see the focus and the sequencing of improvement activities that will virtually guarantee a future set of greatly improved performance metrics.
Finding the Value Streams
One of the benefits of VSM is that it forces us to identify our value streams. Sometimes the value streams are visible at the outset and we can simply pick the obvious and most important one to begin the mapping process.
More often, however, companies attempt to meet very disparate requirements of multiple customers using exactly the same manufacturing resources and business processes. These shared resources try to be "all things to all people" and often fail to fully satisfy any one group of customers. This becomes especially troublesome if one particular customer or group of customers provides a disproportionate amount of our revenue.
With this in mind, we often begin the VSM process with a Product, Quantity, and Routing (PQR) analysis - a special application of the "80/20" or Pareto principle. We break out product families, quantities (unit volume or revenue) and customer groups or market segments that purchase these products. We search for the "big hitters," those customers who are most important to us.
Then we look at the routings associated with meeting the needs of these customers. What resources are involved? Are these work centers cross-loaded with work for other, less important customers? Could we do a better job for all of our customers if we dedicated some or all of our resources to certain customer groups and their product families?
From this line of questioning we usually begin to clearly see the "businesses within the business", and that is the definition of a value stream. Once we have done this work, we begin the VSM process on the value streams that we believe hold the greatest potential for improved customer service and cost reduction.
Seeing Waste
The consummate treatment of VSM is in the book Learning to See by Mike Rother and John Shook. As the title suggests, through the rigorous mapping of our value streams we learn how to identify (see) the waste or non-value-added activity in our processes. Using standard icons and mapping conventions, we first create a visual, data-rich image of both the information flow and the manufacturing process currently used to meet customer demands.
Unlike operations process charts and other process diagrams, the value stream map shows both value added and non-value-added activities. It makes visible the lead time driven by over-production, inventory and other forms of waste. This initial map is called the current state map, and it provides the insight need to visualize a better future. Figure 2 is a simple, current state map for a demonstration process used for Lean training.
Figure 2. Lo-Tech Planes Current State Value Stream Map
Envisioning the Future State
With the current state map in hand and with a solid understanding of Lean principles and tools, we can now create a pro-forma image of the same value stream with much of the waste removed. It will lay out the plan for servicing customers faster (shorter lead times), better (higher quality), and cheaper (lower cost). Figure 3 is the future state map for the demonstration exercise mentioned above.
Figure 3. Lo-Tech Planes Future State Value Stream Map
We have run this demo hundreds of times and training participants rarely fail to meet the lead time, inventory reduction and productivity improvement goals set out in this future state map. It is amazing how closely real world results compare with those in the training exercise.
Creating Better Maps
Space does not permit a full treatment of the VSM process, but a few tips are in order:
Always begin with a PQR analysis that identifies or validates the value streams that the company is serving.
Work on the "big hitters".
Walk the floor; get good data.
Walk the office; get good data.
Create and analyze the current state map.
Create the future state map and annotate it with the Kaizen (improvement) activities necessary to make it a reality.
Build a consensus around the future state map. Post it up, make it visible.
Setting Up the Plan
The action indicated by the future state map(s) should now be checked against the strategic goals of the business. The value streams selected for improvement and their anticipated benefits should be in alignment with, and supportive of, corporate strategic imperatives.
Next, a detailed implementation plan is documented. Kaizen events, process reengineering projects, facilities projects, systems projects and other improvement activities are carefully prioritized and scheduled. People are assigned to each project. Detailed "scope sheets" are documented for each project. They are approved and work begins.
At this point, the Lean Steering Team mentioned in past articles must exhibit the highest order of leadership. Constant follow-up, removing obstacles, balancing resources, and "cheerleading" are critical. Even the perception of waning commitment will stifle the program.
Conclusion
VSM is tool that helps ensure we are working on the right improvements at the right time, where the "right" improvements are those that promise to make us very much better at serving our most important customers while reducing our costs and improving profitability. Learning to use VSM consistently over time can set the stage for the best possible use of other Lean tools.
We have many years experience in helping businesses become Lean using the tools of Lean and Six Sigma.
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Dave is the Executive Vice President of Xtreme Lean Consulting.
He has over 42 years experience working with senior management teams in planning and implementing growth and profitability initiatives, with an emphasis on driving market share through efficiency and extraordinary customer service. Dave is a well organized professional with strong conceptual and practical skills. He has a proven ability to identify a company's market-driven improvement needs, and then use Lean/continuous improvement techniques to increase performance and earnings.
