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Value stream mapping is a tool commonly used in lean continuous improvement programs to help understand and improve the material and information flow within organizations. Value Stream Mapping borne out of lean ideology captures and presents the whole process from end to end in a method that is easy to understand by those working the process - it captures the current issues and presents a realistic picture. Through a simple to understand graphical format, future state (a diagram showing an improved and altered process) can be formulated and defined. The method encourages a team approach and through the capture of performance measurement data provides a mechanism to constructively critique activity. Participants in the activity are encouraged to suggest improvements and contribute towards and implement an action plan. As with any lean management toolset the principle aim of Value Stream Mapping is to improve processes. This is achieved by highlighting areas of waste within a process and therefore enabling businesses to eliminate these activities. Value Stream Mapping also has the benefit of categorizing process activity into three main areas - value add, Non value add (but necessary) and waste. While Value stream mapping isn’t overtly complicated it does benefit from some preplanning – it is important that for example a house style is developed using common graphics for use in the diagrams so that everyone participating does so in a common language. You need to ensure you consider including the following: * * * * * * * Material Flow Inventory Buffer stock Suppliers, Customers Material Transport IT System Information Flow
To help illustrate the Value Stream Map we’ve developed a scenario that describes the process: Scenario John Smith works for ABC Company in charge of production. ABC Company makes widgets and supplies these through several retail outlets. Recently problems have emerged where there is a shortage in supply to the retail outlets (in fact several have had stock out situations). In addition to this – John has had an email from his Finance Director querying the high levels and value of inventory that the organization currently has. Finally when he checks his morning post he sees a letter of complaint to the company from a customer stating that as a frequent consumer of the products, he’s dissatisfied at the quality of the product and that he often returns faulty widgets to the retail outlets. John’s unsure how to answer to these questions but he intends to get to the bottom of it and if possible improve the situation.
Select your team The make up of the VSM team is crucial and it is imperative that you adopt a team approach. Scenario Step 3 John targets the organizations production process to be Value Stream mapped Step 4 . ensure that output meets demand. improve the quality of the product to the customer. He has three main targets that he hopes to achieve through his Value Stream Mapping exercise – Understand the optimum stock levels for production. . he’s included members of his production team. Do not underestimate the time required to capture reliable data – remember that future state maps will be developed using information captured here so it’s imperative you have a correct understanding of the business. Purchasing. You should ensure that each area or stakeholder of the process is represented e. it is important that a sponsor or champion is appointed – this needs to be someone who can make decisions. Finance. staff from Procurement.Collect data and produce current state map One of the key foundations of VSM is that it utilizes and analyses business data this includes process times. Supply Chain and some Service orientated Organizations. When mapping your current state. The sponsor will usually select the processes that will be mapped and will usually have a firm grasp of what achievement is being targeted.Select your sponsor and set expectations As with any project. Step 2 . Sales. use icons/graphics to represent each step – the material flow. customer (or demand) requirements. the supplier and customer. Logistics.g. inventory or materials information. the information flow. and plan the project.Step 1 . Stores and IT – prior to commencing the program John held a kick off meeting to explain the current issues – the Value Stream Mapping strategy and his objectives. Step 3 -Select process to be mapped Value Stream Mapping is suitable for most businesses and can be used in Manufacturing. arbitrate solutions. John establishes the VSM activity as a Project (he brands it Project Omega) – and organizes a project room that is to be used by the team for brainstorming and displaying the end results. Scenario Part 1 John Smith appoints himself sponsor – as production manager he has the power to arbitrate decisions and is able to provide impetus into the program to ensure that it’s completed and has the right buy in from the workforce. Warehouse etc Scenario part 2 John has a team of ten staff drawn from various disciplines.
Staff) at each stage • Problems that commonly occur • Current Key Performance Measures Using a set of icons they then transcribed the process Step 5 .g.use post-it notes or labels to place ideas and possible solutions over your current state map . At each stage they: • Measure how long the particular process takes • They capture the current materials or inventory • Capture the resources (e.As part of the map calculate the total time taken including both waiting and processing time. Scenario Step 5 The current state map is then placed on the wall of the project room – John encourages his team over a couple of days to review the map and critique it. They work through the production process from the initial work request to the final output analyzing carefully the steps at each stage. Above all.Critique Current state Go mad .analyze the data and encourage your team to make suggestions as to how the process could be improved . risks or fixed elements which cannot (e. Comments will usually take the form of suggested improvements. look for areas of waste. for legal reasons) be altered.g. The team makes their contributions and the map is soon populated with many .work with the rule that no idea is a bad idea . Scenario Step 4 The VSM team map the current process – they approach the task by taping together large pieces of paper which is used to transcribe the map on.challenge the current thinking.encourage everyone to play a part .
Material Flow. Remember that mapping the future state does not change the existing process – it is merely a method of graphically representing changes that could be made. • There are significant wait times between process steps John then organizes a review meeting for the team to talk through and analyze their findings The big thing is before moving on to the Future state . The Future state map should aim for a steady state production .compile a future state map . .you and your team must know the process inside out (that's why your Value Stream Mapping!) – check. Ensure that the map takes the following into account. • The retail outlets do not attempt to forecast demand they merely pass data on daily sales – this is then used by Procurement to order raw materials for the production line – the quantity of raw materials is often out of proportion to demand • There are not enough supplier deliveries so Purchasing over order to compensate. check and recheck the process Step 6 . Customer. and Information Flow Your Future state map will normally fall into either a Push situation where goods are produced irrespective of demand or a pull situation where goods are produced specifically to demand patterns.ensuring that there is no surplus materials and maximum productivity. Supplier.this should incorporate: * Aligning Output and demand at each stage * Adequate review of process criticisms from Step 3 has taken place * Deployment of Key Performance Indicators When designing the future state pay close attention to ensure that the process considers the customer requirements. They find that: • The machine shop waste valuable time collating parts into kits that can be machined when parts could be collated into Kits by the stores dept. • They find that only one member of staff undertakes quality tests on completed items – there is a large backlog of items at this point and the staff member is under great pressure to speed up – he admits that due to pressure he often makes mistakes. Key Performance Indicators are an important part of the Future State.Map Future State Taking both the current state map and the critiques that you have obtained from the previous stages .post it notes. and if they are not already in place you should consider what measures are applicable.
There are various options and you should consider your .Scenario Step 6 John’s team maps the future state John sees that the Future State map offers a number of improvements including: • Consignment stock provided by suppliers negates the need to raise multiple purchase orders and own high cost stock • Combine the Assemble and Test phase – re-train the staff so that more can test • Retail stores to provide forecast sales – this data is shared with suppliers to ensure correct stock is held • More deliveries to retail outlets established They utilize a logging system to capture and review the critiques made in step 3. As part of the process they suggest Key Performance Indicators covering Stock Turn. Production cost. Manpower Productivity. Step 7 .Create Action Plan and deploy Taking the Future State map consider an action plan that could be implemented to change the current process to the future state. it could be staged in that elements are introduced sequentially (this works well if there is a series of easy to introduce changes that can leverage immediate benefits. Total Production time.g. This could be done in a number of ways e. Another method is a “Big Bang” approach – for example – the production plant in our scenario could close down on the Friday and all the changes required to implement the future state are implemented over the weekend and the production team start up the new process in it’s entirety on the Monday morning.
John establishes a team which will meet periodically to review the performance and report on issues and risks to the management team. Step 8 .business to get the best method. Scenario step 7 John creates a delineated project plan choosing to tackle the change sequentially – choosing participants from the VSM team he distributes actions and targets against a timeline.Measure benefits After the future state has been deployed after a period of time a review should be undertaken where you check to ensure that the benefits expected have been obtained – review each change made and analyze benefits – Utilize the KPI’s deployed at Step 4 to provide insight Scenario Step 8 Four months after the Future state process was deployed John holds a review meeting where they analyze the KPI’s that were put in place. .
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