What is Value Stream Mapping?

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Value stream mapping is a technique used to identify and eliminate unnecessary steps in a company’s flow of information and materials. The ultimate goal of the technique is to make the company “lean”, that is, free from wasted effort. Toyota is often credited with developing lean production techniques, which were adapted and added to by successive generations of managers and consultants.

While the implementation and emphasis of lean techniques can vary widely, value stream mapping remains a key and recognizable element across companies, industries, and even countries. To understand value stream mapping, it is important to first understand some relevant terms. When we talk about process, we mean every step that occurs in the supply chain up to the point where the customer receives the finished product. For example, mapping the value stream for a paper mill might start with the receipt of raw materials, such as wood and chemicals, and end with the shipment of finished and packaged paper products. Note that lean techniques such as value stream mapping can be applied to any segment of the larger process. Most of the time, companies divide their processes into distinct sections, allowing multiple teams of experts to apply lean techniques simultaneously.

Next, the difference must be drawn between value and waste. In its broadest sense, value is adding to the product something that the customer wants or needs. Returning to the paper mill example, the value steps are those that give the paper the desired dimensions, color, composition, etc. Waste, on the other hand, is any steps that do not add value. The most cited forms of waste are the unnecessary movement of product, equipment or employees; keep a stock of raw materials or products waiting to be worked on; manufacture more parts or products than customer demand; process one more component than the customer actually needs or expects; quality checks; or the subsequent reprocessing of defects.

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Now, let’s apply these terms to the value stream mapping. A company starts with a process, or part of a process. The paper mill decides to make its pulping section leaner. The most experienced workers and managers in this section will meet and determine where the pulping process begins and ends. They will identify each intermediate step, presenting it in the form of a flowchart or process map. Once they have an accurate map of the process, it’s time to map the value stream. Each step of the map is analyzed and labeled as added value, waste but mandatory or waste.

Then skilled managers assess the steps identified as wasteful and ruthlessly eliminate them from the process. Perhaps the company is holding too much stock of pulping chemicals, accumulating money that could otherwise be put to better use. Or they realize that quality checks done mid-pulp are redundant and unnecessary. The best managers, however, are not satisfied with using value stream mapping just to eliminate waste and streamline their processes. These savvy entrepreneurs also use value stream mapping to find ways to increase product value to customers, a sure-fire practice to add value to the company’s revenue stream.

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