The Myriad Benefits of Value Stream Mapping
Hoping that it will go away is like hoping you won’t have to pay taxes. The pressures associated with increasing cost of inputs, customer expectations and competitive pressures reducing the market price, will be there with every sunrise.
Japanese manufacturers have been systemically synchronising the value stream processes for decades to target cost reductions, improve quality and reduce lead times to customers.
The team at Shinka Management has had a long and close relationship with the best of Japanese manufacturing. Our strong relationships enables us to see and work with high calibre organisations that use forms of value stream mapping to gain a complete understanding of their operations. It is evident that they use this tool to focus discipline in targeting and extracting costs whilst also improving quality and service.
In helping organisations to implement lean manufacturing principles across their business, we see previous attempts that have been unsuccessful. Often, we see companies that have tried to bite off more than they can chew or start somewhere that just doesn’t make sense for them. This is sometimes at the guidance of others that suggest the first place to start is the development of a complete value stream map.
Our advice is to be persistent and continually try again. Learning from your mistakes, that what it’s all about. Value stream mapping will ultimately provide the one source of truth your team will need to systemically improve.
All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the time line by reducing the non-value adding wastes.
An industrial engineer, Taiichi Ohno is considered the father of the Toyota Production System, which ultimately became the basis for lean manufacturing. He also created the 7 wastes principle.
Starting with a simple map will help everyone involved understand
Why use Value Stream Mapping?
So why go to all the effort to identify and create a value steam map of your processes. Shouldn’t we just get on with applying the principles of lean manufacturing? Well the basic principle is that if your organisation just consists of you, you’re already reasonably lean. However, as soon as the business grows in the number of employees, you have two problems. The first is that waste flows into your business. Secondly, you need a mechanism to communicate and work with others to reduce that waste. If you have been part of a small growing organisation, you would have seen and be frustrated by these two points.
Below are the primary benefits of value stream mapping.
The Value Stream Map as a Strategic Management Tool
Value stream mapping activities can get everyone onto the same page from senior management, though middle management to the operations, administration, sales and logistics teams. The process places focus and priority on improving the core process that generates revenue. Value stream mapping can even help remove political agendas – now that’s a great outcome by itself.
Enhancing Sales and Operation Planning through Value Stream Mapping
Value stream mapping helps identify, manage and eliminate bottlenecks to improve demand management and customer service. A fully developed sales and operation planning process involves monthly capacity reviews and the development of mitigation strategies. It is easy to see how a well-defined value stream map will help sales and operations maximise customer service, reduce inventory and create that level load so important in the development of a just-in-time (JIT) operation. Takt time will be easily calculated from confirmation of demand, and then used to create a balanced workforce plan for the period.
The Value Stream Map as a Dash Board for the Operations of the Business
The standards for developing a value stream map help you identify, communicate and define solutions to eliminate waste. To improve, each process should have a number of key performance indicators (KPIs), demonstrating that the process is in control and improvements are being implemented to achieve targets. Incorporate these and suddenly you have an operations dashboard.
Labour Planning and Workforce Development Planning through Value Stream Mapping
Using the principles of value stream mapping in the development of step changes will improve planning and impact favourably on project budget control, and will assist in realising the benefits that have been more effectively quantified. In addition, the step change will demonstrate the new relationship between man, material, machine and method. A gap analysis will then be able to be more effectively conducted, with plans to close skills gaps executed in a timely manner.
Value Stream Mapping for Resource Prioritisation
The cost and prioritisation of support functions is a challenge for most businesses. In manufacturing, the maintenance activity is typically a constant form of debate. A maintenance regime for every piece of the value stream to ensure its success is what total productive maintenance (TPM) is all about. Using the value stream in a logical manner could cut the debate waste. Also, the seemingly uncontrolled activities and costs associated with IT management seem to be a common problem in many organisations today. It would be hard to argue alternative agendas over initiatives and resources that are logically prioritised and directed towards streamlining, improving and supporting the key processes.
So, these are five reasons to start using value stream mapping as a mechanism to focus resources in the adoption of lean manufacturing principles. There are a number of ways to start recording your value stream map. Good old pen and paper is a great start. We recommend transitioning to Microsoft Excel at some stage, especially when you introduce KPI’s. Finally, there are several specialised software tools available that can make the mapping process more efficient.
Mapping helps integrate information systems with the physical process
Where to Start with Value Stream Mapping
The first place to start is the use of standard work and 5S. Just through using basic flowcharts and organising your work area you will start visualising problems, synchronising work and getting into good habits.
Look at the principle goals of JIT and really understand and define how these principles will be applied to your business. Don’t say JIT isn’t for our business. The principles can be adopted for any business.
Once this is defined, it’s time to start integrating all those workflows and overlay value stream mapping principles and tools. Here is the key. It will require some team effort. But don’t worry, the process has been around for a while and standards have been set. No need to reinvent the wheel.
How to Prepare a Value Stream Map
- List all of the steps in a process from start to finish. All the steps, including simple things like using a forklift to move a pallet from one spot to another. It’s important to capture all the complete waste that should be targeted for reduction if not elimination.
- Select an image for each step from the standard that represents the type of activity being demonstrated. Use the template as a reminder of all the types of steps to look for and include in the value stream map.
- Get your team to work out the required time to process a batch through each process. If your batch is only one piece, fantastic. Now add that information to the value stream map and when you add all the times together to process the batches through your value stream, you will know the total throughput time. It is important to remember there is a difference between throughput time, cycle time and takt time. Throughput time could be the same as lead time, depending on how you manage customer demand.
- Now it is time to identify the wastes in and between every step. For those new to lean manufacturing, the wastes refer to the 7 types of waste; over-production, transport, inventory, motion, waiting, over-processing and defects. Any activity that is not directly related to adding value in the eyes of the customer is considered waste.
- This next step is probably the most important and why you take the time and effort to create a value stream map. Once you have identified all or most of the wastes, you and your team will need to start somewhere. The goal is to select a small number of processes to focus improvement on. By bringing the team together, you will be able to use the value stream map to gain consensus, keep focused, allocate resources and priorities
- Suggest improvement initiatives. At first keep these simple. Improvements can be made through the correct adoption of 5S and further creation of standard work. Whilst the team are making these improvements, the team responsible for the actual design of the process can be brainstorming in the background solutions to implement concepts such as one-piece flow, cellular manufacturing, line balancing, kanban, quick change over and error proofing (poka-yoke).
- Once the key target areas have been agreed, it’s time to add some relevant KPIs to enable your value stream map to become a dashboard. Things to consider about the KPIs include that they need to be relevant to the specific process and demonstrate control and improvement in safety, quality, cost and lead time reductions. Don’t overdo it, just include KPIs that are important and will help get to the root cause when looking to eliminate waste.
- Now it is time to put together a plan and make it visible to all. Ensure that your team understands the continuous improvement process that they will be a part of. Be disciplined in the regular reviews and question/challenge distractions that are taking you away from developing the core process that generates revenue for your business.
So, start small. Create your value stream map for your core process. Whether that be the production of physical goods or service tasks. Map it and start using it to target improvements in safety, quality, cost, lead time and employee skill/engagement. Practice, practice, don’t give up. Get it right. Get everyone to refer to it.
Then make it grow, bring in all the support processes. Get your entire system aligned to maximise those key objectives. Consider how you will perform in the market when you are succeeding and setting the benchmark in quality, cost and delivery.
Don’t stop. Keep it growing. Incorporate the processes between your suppliers and customers. Make your organisation so predictable and easy to deal with that your customer won’t want to look elsewhere to save a couple of percent and your suppliers will want to work with you to maximise value.
Benefits of Value Stream Mapping
By focusing your team and efforts specifically on improving your value stream you will be surprised at what will result.
- Targeted and systematic waste reduction that in most circumstances will deliver significant cost reductions through low cost or no cost improvements. A lot of the continuous improvement (kaizen) focused on eliminating the 7 wastes, typically require rethinking current practices and not significant capital investment.
- The disciple that will be gained in the control of your value stream will have significant qualitative benefits for your customer. As you reduce your lead-times and become reliable, your service reputation will grow. Dealing with the challenges of growth is so much more enjoyable.
- It will become obvious which organisations are creating difficulty in your ability to improve and maintain consistency of your value stream. Show them what you mean. Show them how you know. Show them what the benefits are to using value stream mapping as a tool to focus efforts on continuous improvement using lean principles. Show them what need to do. Ask them if they need a little guidance. This is how strong supply chain partnerships develop.
- Work with others to maximise efficient larger/longer value streams. This concept of working together is evident across Japanese industry. Value stream mapping is used as a tool to facilitate JIT principles across many different supply chains.
- For a non-automotive example, consider organisations in the paddock to plate supply chain where consumers purchase every day, yet the raw materials are produced annually. How much would each partner in the supply chain benefit when working together to systemically apply JIT principles in order to achieve improvement?
- Finally, there are benefits when your organisation wants to introduce a new product range. The skill sets developed will enable your team to reverse engineer the costs of the supply chain. This will enable effective negotiations required to develop a good cost base for the new product. Plus this will enable you to select high-caliber partners in providing this new product.
The pressures of profit squeeze are not going away. Organisations (including your competitors) are systemically targeting improvements in safety, quality, cost, lead time and employee skill/engagement.
They do this by understanding the relationship between each process and pursuing the principles of JIT. Organisations that use value stream maps are able to plan and monitor the successful introduction of lean manufacturing tools such as quick changeover (SMED), error proofing (poka-yoke), kanban, one-piece flow, and cellular manufacturing in a very structured manner to reduce waste. It is easy to see how changes affect the entire value stream and can therefore be managed and capitalised on. Through this disciplined approach to continuous improvement, organisations achieve incredible results without spending excessive capital on technology.
The value stream map also becomes a tool for strategic planning, enhancing sales and operation planning, a dash board for the operations of the business, labour planning, work force development plan, IT resource prioritisation and more. A single source of truth.
The process of getting to know your value stream through mapping is very logical and has been around for a long time.
It won’t happen overnight, but you probably do need to start. Start small with the end game in sight.
If you’re looking for some support in getting started or progressing to the next step contact the team at Shinka Management. There are several ways we can help.
Daryl Kelly is a Senior Consultant with Shinka Management, a lean training and consulting firm with clients in over 60 countries. Daryl is a hands-on lean practitioner with 24 years of solid experience applying lean principles across all operational elements of an organisation. He has a high level of expertise in distribution network optimisation and supply chain planning and execution systems, and has successfully implemented improvements across all aspects of sales and operations planning, forecasting, distribution planning, production planning, constraint management shop floor execution, inbound control, dispatch execution and exception management.