Saturday, May 27, 2006

Value Stream Mapping - Getting it Right

Value stream mapping is a tool Toyota developed for identifying improvement opportunities to the overall flow. Toyota actually calls the tool "Material and Information Flow Mapping," which is a more accurate (but less exciting) description. Before I begin a value stream mapping workshop, I often ask how many people have used value stream mapping before. In most cases, the majority of the class believes that they have used the tool. However, by the time the class has ended, 90% of those who had believed that they had used "value stream mapping" realize that they had actually used process mapping, which is a quite different but useful tool. What makes value stream mapping different? It is the fact that there are two flows on a value stream map- the material flow and the information flow. Value stream mapping helps us understand the relationship between the information flow and the material flow; ultimately, this helps us understand what the sources of our waste are. For example, the reason for overproduction is often rooted in the information communicated to the factory floor. When we understand our sources of waste, we can create a picture of a future state with less waste and develop an implementation plan to achieve the future state. Value stream mapping can be used to map the material and information flows within an organization or throughout an entire supply chain.

The first time a team creates a current state value stream map, they will likely get caught up in getting the methodology itself just perfect: using the right icons, including all of the data that "the book" says they should include, etc. Unfortunately, teams often give up because they don't have everything "the book" says they should have. Those mapping value streams need to keep in mind that the tool is not an end in itself. It is not as though a completed value stream map will actually increase cash flow and profitability! Value stream mapping is a means to an end. It is a flexible tool that should be used to identify those improvement activities that will result in an overall improvement to the value stream.

Let's take an example of a company that makes complex assemblies. Such products might have bills of material with hundreds of parts on them. Following the value stream methodology strictly, the value stream map might have hundreds of process boxes (and/or supplier boxes). This is impractical and unnecessary. The team needs to instead focus on only a few key items and ignore (for now) the rest. Key items might be long lead items, high cost items, or items causing the biggest delays/problems.

A job shop is another example of a company that might have a problem following a textbook case. Job shops often run many diverse products through the same pieces of equipment, making it difficult to identify "value streams" or "product families." However, they can still use the value stream mapping tool by redefining what a value stream is. Can their products be categorized in some way? Perhaps there are levels of difficulty, types of material used, or types of customers by which value streams can be defined. Once the value stream is defined, it can be mapped. Metrics for job shops will also be a little different. The classic approach of calculating takt time first may not make much sense. Instead the value stream map will reveal the overall capacity for various categories of products.

When you map a value stream, you should always understand that VSM is a flexible tool that should be customized to fit your company's needs. As long as your organization uses a consistent methodology and set of icons, they can differ from a textbook and still achieve their goals. The mapping activity needs to result in an actionable plan that will achieve less waste and ultimately more profits for the organization. This is the bottom line.

Please share your thoughts and experiences with VSM.


John said...

Hello. Can VSM be applied in distribution? e.g. public or dedicated warehousing operations.

Darren Dolcemascolo said...

Yes. VSM can be applied to any material or information flows. The material and information flow can be mapped through a warehouse facility as a door-to-door map, or a warehouse facility can be one part of an extended map (entire supply chain/multiple facilities/suppliers/customers).