Value Stream & Value Stream Mapping

Value Stream and Value Stream Mapping

Definition of a Value Stream:

By locating the value creating processes next to one another and by processing one unit at a time, work flows smoothly from one step to another and finally to the customer. This chain of value-creating processes is called a value stream.

Value stream is a sequence of to , , and provide a specific good or . Along the value stream , , and which eventually creates value for the customer requiring the item in production.

Lean Manufacturing is all about seeing manufacturing operations as a value stream that flows products to the customer. Some activities add value whilst others just add waste. Value is anything that the customer will pay for whilst waste is anything that adds cost that the customer will not pay for. Examples of waste are overproduction of finished goods, high work in process, excess transport and handling times as well as wasted time while people and goods wait for things to happen. The operation becomes less costly and more responsive to the customer as the company works towards driving waste out of the value stream.

Value stream mappng is a tool used in a Lean manufacturing environment to visualize the value stream of a process, department or organization. Value stream mapping consists of creating a picture of the complete material and information flow from customer request through order fulfillment for an operation. Value Stream Mapping can be done at three levels:

enterprise level (showing customer-supplier relationships as well as distributors),
a door to door level (showing the flow of material and information primarily within a factory, office, or hospital operation),
process level map with a narrower scope and more detail.

What it Depicts

It is intended to identify and then help reduce waste in a whole stream of manufacturing process. This waste does not have to be material waste but can also be less physical, such as a waste of time.

Most people only relate to those individuals and entities (for example a machine) around them; they generally find it very hard to appreciate how they fit into the bigger picture and therefore how they may in turn affect the delivery of a product. Due to this performance is usually gauged locally, only in situ parameters are considered, in essence ignoring any detrimental affects local optimisation may have on the big picture.

Value Stream Mapping helps provide solutions to these problems by visually depicting the current overall situation, mapping out the future situation which we should work at achieving and then finally implementing it.

A Value Stream Map depicts the flow of materials and information from the time the products (be they components or raw materials) enter the factory all the way to the time when the finished product finally leaves. It maps out manufacturing processes including cycle times, down times, in-process inventory, material and information flow paths. Also note that with the inclusion of data-flows this Mapping Process also takes into account the affect of managerial decisions on the more “classical” flow of physical goods.

For example consider the following Value Stream Map:

This map shows the main manufacturing stages, these being SHEAR, PUNCH, FORM, S.WELD and PAINT/BOX, and how they interact with each other and other nodes in the system.

For example the Distributors & Installers submit their order electronically (noted by the zigzagged arrow). Using this information Production Control sends orders and information electronically and via fax (zigzagged and normal arrow) to the Michigan Steel Company. Production Control also issues weekly schedules for each of the above mentioned manufacturing processes. Note that all of these have been flows of information and not materials.

With this information delivered to all concerned the Michigan Steel Company then ships off about 2500 sheets of steel per week to the production plant we are concerned with. Once they arrive they are placed into an inventory (kept to around 4000 sheets). From here they then start moving down the line through the previously mentioned stages of SHEAR, PUNCH, etc.

The parts are transported from stage to stage (depicted by the black and white stripped arrows); note that in this case an inventory of items is maintained between processes. Reasons for this vary from production line to production line but may be due a number of reasons such as logistics or the reliability of certain machines. The parts are then finally moved onto the SHIPPING stage where the items are shipped off to the Distributors & Installers who in turn resubmit their new orders.

Note that the manufacturing stages are adding value to the product whereas the intermediate transport steps are not. The “stepped” line at the bottom is used to highlight this. Note, the times in seconds indicated inside of the depression in the line show the amount of time spent adding value at each stage. The intermediate transport stages do note add any value, hence they have no value adding time. This is indicated by placing the information on the “steps”.

Each process also has an attached information box. What is specified here depends on the plant and map, but they generally cover things like production rates, sub-quality parts made per cycle and the number of machine failures.

In conclusion a Value Stream Map visually depicts manufacturing processes and how they interact with each other (what flows between them). They represent the current entire situation so that one may optimise the present system and come up with a new improved version. This new version is usually born from the old system’s Value Stream Map by tweaking it for optimisation.

It should also be noted that Value Stream Mapping is fundamentally oriented towards productivity and not quality. However a leaner more productive operation helps expose further waste and quality problems (defective products are waste so to reduce waste ...

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Why use a Value Stream Map?

Value stream mapping is a paper and pencil tool that helps you to see and understand the flow of material and information as a product or service makes its way through the value stream. Value stream mapping is typically used in Lean. The goal of Value stream mapping (VSM) is to identify, demonstrate and decrease the unnecessary waste in our system process. Waste is defined as any activity/ies that does not add value to the final product, often used to demonstrate and decreases the amount of ‘waste’ in the manufacturing system. Fifty years ago Taiichi Ohno at Toyota enumerated seven types of waste in value streams/manufacturing system.

Overproduction - Making items upstream before anyone wants them or needs them downstream in the production system, hence the product produced is left some time idle.
Defects – Errors in the products, paperwork supporting products, or the delivery performance.
Unnecessary inventory – Products in excess of the amount needed to insure meeting customer needs.
Unnecessary processing – Activities not adding value that could be eliminated, such as a separate inspection step replaced by a self-monitoring machine with auto-stop, or flash-removal after molding eliminated with higher mold tolerances and better mold maintenance.
Unnecessary transportation between work sites – Moving products between facilities that could easily be consolidated without effecting any other factors and processes and creating more wasteful time for other processes.
Waiting – Usually production associates waiting for machines to cycle.
Unnecessary motion in the workplace – Associates moving out of their work space to find materials, tools, work instructions and help is a waste in the fact time is lost during this motion.

A simple example we found is about a humble coca cola metal can. The product with three parts will travel for 319 days through different processes and through 9 facilities owned by 6 companies in four countries to progress from ore in the ground into the hands of the customer. Yet during this long march only three hours of value creating activities were performed and the great majority of the steps – included storing, packing, shipping, unpacking, binning, checking, reworking, and endless movements of information to manage the system’s complexity, none of which increase value at all. Being conscious of all these unnecessary steps, one have to make sure all these are minimized to the least possible in a feasible way. As no one is ready to pay lots of money for the metal cola can, which at the end of the day is not the actual product in demand, but rather the cola in it is.

VSM can thus serve as a starting point to help management, engineers, production associates, schedulers, suppliers and customers recognize waste and identify its causes. As a result, Value Stream Mapping is primarily a communication tool, but it is also used as a strategic planning tool, and a change management tool.

The definition of "value stream" is rather fuzzy. For example:

1) The map does not begin to capture "all specific actions."

2) The definition says "specific product" but the originators apply it to product families with little guidance as to what constitutes a family.

3) "Value Stream" conjures a vision of water running through a series of value-adding activities. But many icons do not depict value adding activities, do not touch the product and do not flow like a stream.

VSM was developed and popularized in the automotive industry. Automotive plants are highly with a narrow family of products for a few customers. VSM works well in these situations.

However, in high variety-low volume factories, VSM is cumbersome and unrealistic. Here we must supplement mapping with and other tools.

Many VSM symbols correspond to specific Toyota techniques such as "Withdrawal Kanban" or "Workcells." This may lead the user to employ these techniques even when they are inappropriate. In addition, there are other solutions that might be more effective in specific cases. These tend to be ignored.

Overcoming the influence of symbology requires broad knowledge, creativity and awareness on the part of users. Rote thinking may lead to the wrong path.

To be effective, a VSM group requires training on symbols and mapping techniques. They also need training on the Lean Manufacturing elements that the symbols represent. This contrasts with Process Mapping which only requires a trained facilitator.

Other mapping techniques are also useful and give different perspectives. is an example. The original system invented by in the early 1900's is still the most useful. The Gilbreth approach is fundamental, highly visual and discriminates between waste and value-added. It is also simple, intuitive and suitable for untrained groups.

Limits of VSM:

Authors and consultants claim unrealistic benefits and applications for VSM. At the same time, customers and managers tend to look for the "silver bullet." This situation sets up unrealistic expectations and diverts attention from important aspects of complex problems.

As with the "miracle garden tools" advertised on television, beware of anything that promises to solve all your problems. It takes more than a claw hammer to build a house. One needs a saw, level, tape measure and many other tools.

Value Stream Mapping is a technical tool that examines the physical system, processes and interconnections. Equally important for Lean Manufacturing success is the people side. Factories are complex that require an integrated approach.

For example, Lean Manufacturing requires high teamwork for motivation, coordination and problem solving. It requires an effective mobilization of the collective intelligence of the organization.

There may also be quality issues that the company could address through Six Sigma or TQM techniques. Five-S can clean up the plant, improve safety and further raise productivity. Value Stream Mapping addresses none of these directly.

This is especially important in manufacturing where many managers have a technical bent and limited awareness of the human issues.

The Benefits of Value Stream Mapping

As previously mentioned, a value stream map illustrates all the processes that occur from the time a customer places an order for a part or product to the time that the customer receives the product. These maps portray the flow of the value stream as well as the wastes in that flow. Hence, drawbacks of such a system can be easily examined and thus action can be taken to eliminate such wastes.

VSMs do not only depict a product’s activity, but also that which involves information systems and management. So we can say that all products can be viewed from a systems perspective. This is a major asset; as such analysis helps reduce cycle time. This is due to the fact that one can acquire insight into the decision making flow and, in addition, to the process flow. As a result, such information aids in identifying sources of waste and therefore, later, waste can be eliminated.

VSMs show an understanding and connection between information flow and material flow. No other lean manufacturing tool does this. They also help to speed up processes after studying such maps as it helps to identify where the long lead times are established from when the value added time is comparably short.

Such maps are influenced by the Kaizen philosophy. This is a Japanese philosophy that focuses on continuous improvement through all aspects of life. These maps show a vision of an ideal flow or at least of an improved flow. Activities are prioritised and thus future state maps are drawn to implement this ideal state.

Value stream maps were seen to be highly advantageous when compared to process mapping, where process mapping refers to the activities involved in defining exactly what a business entity does. The following are a few comparisons:

VSM gather and display a larger variety of information than a standard process map
It is likely to be at a higher level (5-10 boxes) than many process maps
It is likely to be used at a wider range – i.e. from receiving of raw material to delivery of finished goods
It tends to be used to recognize where to focus future projects, subprojects and/or kaizen events.

How to develop a Value Stream Map

A basic outline of the value stream mapping process:

The First step to beginning the process of value stream mapping is to identify the product family that is most important, so that value stream mapping can begin there. Once the product to focus on has been determined, a value stream map showing the current (as opposed to ideal) state is made. After this step is completed, changes are made to this state map to improve the flow of work, eliminate needless inventory and reduce waiting time between processes.

Standard symbols used in Value Stream Mapping (this list shows only some of the most common symbols)

Process Symbols:

o Customer/Supplier: Represents the supplies when placed in the upper-left of the map (the usual starting point for material flow), or the customer when placed on the top right (the usual end point for material flow)

n Dedicated Process: Represents a process through which material flows (usually one box represents an entire department with a continuous internal fixed flow path, so as to avoid cumbersome mapping of every single processing step).

m Shared Process: A process that is shared by other value stream families

N Data box: Placed under icons that require significant information for analysing the system. Underneath supplier icons, the typical information placed includes the frequency of shipping during any shift, material handling information, transfer batch size and demand quantity per second. When placed underneath a manufacturing process icon, typical information items (and their abbreviations) include: C/T (cycle time) – time that elapses between one part coming off the process and the next part coming off the process; C/O (changeover time) – time taken to switch from making one product on the process to another product; uptime – percentage of time the machine is available for processing.

Material Symbols:

s Inventory: Indicates inventory between two processes; may also represent storage for raw materials or finished goods

qw Shipments: Represents movement of raw materials from suppliers to the receiving docks of the factory, or movement of finished goods from the shipping docks of the factory to the customers

I Push Arrow: Represents “pushing” of material from one process to another. Pushing is when a process produces something regardless of whether or not it is needed downstream

] Inventory “Supermarket”: A small inventory is available where downstream customers choose what they need. The upstream workcenter replenishes stock as it is used up. Used when continuous flow is impractical; it reduces overproduction and limits total inventory.

K FIFO Line: First-in-first-out inventory; this icon is used for a system that limits output.

[ Safety Stock: An inventory that protects against problems such as downtime, system failures or sudden fluctuations in customer orders. This is temporary storage (not permanent).

* External shipment: Shipments from suppliers or to customers, using external transport. This particular symbol depicts a van and therefore it refers to road transport; other symbols exist that represent rail, sea or air transport, namely (, ), and & respectively.

Information Symbols:

p Production Control: Represents production scheduling centre or control department

er Manual information flow: Information transferred by memos, reports or conversation

ty Electronic information transfer: Information transferred electronically eg. over the internet

x Production Kanban: Triggers the production of a pre-defined number of parts. A Kanban is a signalling system used to trigger action

c Withdrawal Kanban: Instructs a device or person to withdraw parts from the supermarket and transfer them to the receiving process

b Signal Kanban: Used when inventory levels in the supermarket between two processes drops to a pre-defined minimum point; it signals a changeover and production of a pre-determined batch size of the part noted in the Kanban

l Kanban Post: A location where Kanban signals reside for pickup; often used to exchange withdrawal and production Kanban

i Sequenced Pull: Represents a pull system that instructs a process to produce a predetermined type and quantity of product (normally one unit), without using a supermarket

j Load Levelling: A tool to batch kanbans in order to level the production volume and constituency over a period of time. Levelling means “adjusting a production schedule to meet unexpected changes in customer demand”.

G Go See: Gathering information visually

F Verbal Information: Represents verbal (or personal) information flow

General Symbols:

h Kaizen Burst: Highlights improvement needs and plans Kaizen workshops that are critical to achieving the future state map of the value stream. Kaizen means “improvement”.

u Operator: This icon depicts an operator as seen from above; it is used to indicate the number of operators required to process the VSM family at a particular location

ZBZXVZ Timeline: Shows value added times and non-value added times. Used to calculate Lead time and Total cycle time.

Creating the current state value stream map:

Note: This sequence is illustrated step-by-step on the website and presentation; what follows is a summary of the main steps involved:

The first step to creating the current state VSM is to calculate the takt time for the product. Takt time is defined as the maximum time the production process is allowed to take whilst still meeting the production demand.

Takt time (minutes of work per unit) = net available time to work (minutes per day) ÷ Demand (units per day)

The next step is to draw the customer on the top right-hand side of the map, and fill in details such as monthly or daily demand, as well as takt time. The entire production process is then drawn on the map, in a back-to-front sequence i.e. going from customer to supplier (on the map, this corresponds to going from right to left). At this stage, the main emphasis is mapping the material flow between processes. Data such as cycle time, defect rates, changeover times and number of operators required etc. are all added to the data boxes at this point.

Once all the process and data boxes have been drawn, inventory icons are added between steps, showing the number of items in the inventory at that point of the production process. The wait time between processes is also added.

The information flow is then drawn in. Typically, the production control box will make use of MRP (Material Requirements planning, a production planning and inventory control system used to manage the manufacturing process). In most production systems, several manual information (straight) lines come out of the MRP box and feed each process step box. During this stage, information flow from customers and to suppliers is also drawn.

The final step is to add in the timeline. The shape of the timeline (with horizontal lines at two different levels) helps to differentiate between value adding and non-value adding steps. The sum of all the time taken in each value-adding step is calculated and written next to the timeline. The sum of all non-value adding and inventory steps is called the Production Lead Time (PLT). The Process Cycle Efficiency (PCE) may finally be calculated from the timeline using the following formula:

PCE = (total of value-add time ÷ PLT) × 100.

It is important to note here that lead time is normally measured in days, but value-adding time or cycle time is normally measured in seconds or minutes. In order to calculate the PCE, each quantity must be in seconds. To convert days of lead time into hours of lead time, one multiplies by the number of hours per day that work is actually carried out (rather than multiplying by 24 hours). For example, if operators work an 8-hour shift with a half-hour break every day, then one must multiply by 7.5 hours. To convert these hours into minutes, one simply multiplies by 3600. Therefore the full equation can be represented as:

The following shows an example of a complete value stream map (a 7.5 hour length of shift was assumed):

Moving towards the future state:

The changes made to the current state are meant to:

Improve the flow of work
Eliminate needless inventory
Reduce waiting time between processes
Reduce or eliminate muda (waste)

The VSM facilitates the improvement process by allowing the production process to be seen at-a-glance, thus making it easier to identify inefficiencies and areas with potential for improvement.

How Value Stream Mapping fits into the whole philosophy of Lean Manufacturing

The basic definition for Lean Manufacturing is “more value for less work”. It is a standard process management philosophy taken mostly from the Toyota Production System (TPS) and is well-known for its reduction on the original Toyota seven wastes in order to improve overall customer value. The Lean philosophy focuses on increasing efficiency whilst decreasing waste and uses already observed methods to balance out what matters. It concentrates on acquiring a better attempt at a previous goal of earlier efficient efforts. This follows the Kaizen philosophy. Thus as waste is eliminated, quality is improved, while production time and cost are reduced.

VSM evaluates a product from the very minute it thought of to the time it is in the customer’s hands. It includes information that needs to flow to various departments as the product moves through the process. Placing all the processes on paper enables one to see where the waste is, for example, more movement of the product than necessary. It’s important to help eliminate the non-value added time and it also helps evaluate where the long lead times come from, when the value added time is very short.

Furthermore, ‘Lean’ focuses on the removal of waste by improving production time and thus resulting in improved quality and cost reduction. Moreover, VSM identifies and eliminates that waste.

VSM is an important tool for lean manufacturing as it allows one to see the flow of the value stream and thus allows one to identify opportunities for reducing waste within the flow whilst improving quality. This has already been mentioned a number of times, but it is essential for such a system as its concepts fit so well with lean and so is important to stress such a point.

When drawing a VSM, one has to jot down the value adding steps, the delays and all the data required to deliver such a product (or service). Consequently, when observing the map, it is easier to visualise and reach an understanding on how materials and information flow in the value stream in order to undertake changes to satisfy the lean manufacturing philosophy. Once these flows are comprehended, they will be used as a guide-line to set up the future state map with prioritised activities in order to achieve a future state vision.

Value stream mapping is an important tool to aid in the performance of all lean manufacturing activities.

Value Stream Mapping is implemented in