Value Stream Mapping: A Comprehensive Guide to Manufacturing Efficiency

What Is Value Stream Mapping (VSM)?

Value stream mapping is a powerful tool for identifying and eliminating waste across a manufacturing process. By building a comprehensive map of how materials flow through a plant (the "current state"), teams can identify bottlenecks, delays, and other non-value-adding processes that increase cost and lead time.

Most sources of waste flow from other parts of the workflow; for example, excess inventory may increase transportation and waiting. Visualizing the entire product lifecycle — from raw materials to shipping — illuminates the areas that don't add value (i.e., don't directly contribute to customer-defined outcomes). Then you can apply what you learn to make changes that improve business metrics such as cost, speed, and quality.

What Do "Value" and "Waste" Mean in VSM?

Value stream mapping's (VSM's) purpose is to optimize processes to increase value and reduce waste. In value stream mapping, "value" is strictly defined from the customer's perspective. 

• Value is what directly meets customer requirements and what a customer will pay for. 
• Waste is anything that doesn't contribute to value. 

Lean manufacturing defines eight common types of waste, summarized by the acronym DOWNTIME:

• Defects: Making products that are mislabeled, out of tolerance, contaminated, or otherwise don't meet quality standards. 
• Overproduction: Producing more materials than you currently need to fulfill customer demand, potentially due to misforecasting demand, trying to maximize workforce or machine availability, etc.
• Waiting: Causing people or materials to wait idly because the necessary equipment, materials, approvals, or other resources are unavailable.
• Non-utilized human talent: Assigning tasks to the wrong operators, ignoring worker suggestions, or otherwise failing to use your workforce's knowledge, skills, and ideas.
• Transportation: Storing materials and parts far from the production line requires workers to move them whenever they're needed.
• Inventory: Warehousing excess raw materials, work in progress, or finished goods beyond your immediate needs.
• Motion: Requiring workers to move excessively due to factors like poor workstation design, ergonomics, or accessing needed materials.
• Extra processing: Doing more or higher-quality work than the customer needs or pays for.

Key Benefits of Value Stream Mapping

Value stream mapping is a Lean management tool with roots in the Toyota Production System developed in the 1950s. Organizations have used VSM for decades to find systemic issues that create downstream problems.

It's most effective when used to solve problems that involve repeating, physical, flow-based processes. Some value stream mapping examples include:

• Healthcare organization optimizes patient flow to reduce wait times.
• Packaged food maker establishes a “preflight checklist” to ensure all necessary parts and approvals are available. 
• Aerospace company streamlines the cost-estimate approval process to eliminate rework loops and inefficiencies.

VSM Roadblocks To Watch Out For

Conversely, value stream mapping is not useful with processes that don't involve the movement of information, product, or time in a predictable, linear fashion. This includes custom or intangible products, unpredictable demand with highly variable workflows, or mechanical problems.

Even when VSM is the right tool, you may encounter into other problems. Some of the main challenges with VSM include resistance to change, lack of training, and difficulty in documenting processes.

How To Create a Value Stream Map

Try these best practices when planning your next value stream mapping exercise.

1. Define the Scope and Select Your Team

Select a product family to focus on and define the scope of the value stream you want to map. Gather a cross-functional team that includes high-level managers and supervisors from various departments, such as business, product, sales, operations, customer service, and design.

2. Map Your Value Stream's Current State

Document how your value stream works in the real world by tracing it backwards — from the customer back to your suppliers. Physically observe the process and interview employees who perform the tasks. Document how materials and information flow through the map, and define these key metrics:

• Lead Time: Total time from start to customer delivery
• Process Time: Actual hands-on work time
• Value-Added Ratio: Process time / Lead time 
• Takt Time: Available time / Customer demand rate

There are multiple software tools with value stream mapping capabilities including built-in VSM shape libraries. Some of the most popular value stream mapping software includes Microsoft Visio, Lucidchart, and Diagrams.net. 

INCLUDE AN EXAMPLE OF A VALUE MAP GRAPHIC IF POSSIBLE

3. Analyze the Current State

Examine the current-state map to pinpoint bottlenecks, inefficiencies, and opportunities for improvement. Look for areas with delays, excess inventory, or unnecessary steps by asking questions like:

• Where does work in progress accumulate?
• Which steps have the longest wait times?
• Where does information flow break down?

Map each step based on whether it adds value or waste to the value stream:

• Non-value adding (NVA): Bottlenecks or inefficiencies that should be eliminated.
• Necessary but not value adding (NNVA): Things that don't add value but are required by compliance, the customer, or other operating processes.
• Value adding (VA): Things that directly contribute to customer requirements or demands

4. Design the Future State Map

Design an improved process that addresses the issues you identified during the current state analysis. Create a future state map that serves as a blueprint for your ideal process.

Look for opportunities to fix the eight Lean wastes ("DOWNTIME"). For example: 

• Optimize inventory: Maintain optimal inventory levels without overproduction.
• Streamline human and material movement: Eliminate waiting, transporting, or moving people or materials.
• Use first-in, first-out (FIFO) systems: Process materials and information in the order it arrives to reduce delays.

Don't Stop There

VSM is an iterative process that doesn't end after implementing your future state map. Continue to monitor KPIs, then update your value stream maps at least quarterly or anytime there are significant changes in processes, products, or team structures.

The Bottom Line

Value stream mapping has helped manufacturing teams uncover waste and optimize processes for decades. Today it's being shaped by AI and machine learning, which provide the real-time data and analytical depth necessary to improve accuracy and decision-making. Learn more about how Redzone's AI-backed connected workforce software provides all the information and resources needed to implement value stream mapping in your organization by contacting sales today.

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