Generating revenues is the main reason for companies to exist and to do that they need to provide value to their customers, in the form of products or services. Ensuring that business processes focus on value add during the production process is therefore a key step for many businesses. The value stream is a business term that has been around for quite a while and refers to the series of steps that bring about the production and delivery of a product or service to the end customer.
Now no one industry is the same and they’ll all have differing processes and objectives and therefore no one value stream will be identical (although may contain some common steps e.g. manufacture and logistics etc). Also the value stream doesn’t just contain the good bits of a business process and analyzing the value stream is important as it can can highlight areas of waste within the organization. Waste adds unnecessary cost and lead time and provides no value to the customer.
Various methods can be used for reviewing the value stream – one of the most common methods is through business process mapping. There are quite a few different types of process mapping techniques so its important to use a mapping tool that’s appropriate.
<b>Why value stream maps are better than standard flow process charts</b>
Traditional flow process mapping is used to map the series of consecutive steps of a process including the input, process activity and output – this can be in the form of a standard map which does not delineate the process by active participants or a cross functional flow chart which uses swimlanes to highlight boundaries and interfaces between participants within a process.
While this form of process mapping can be very effective at capturing the raw process it can be ineffective at capturing bottlenecks and waste. Also these types of maps do not often utilize data as part of their construction so the reader is unable to quantify the problems highlighted.
Value stream maps are a form of process mapping that is often used in lean manufacturing environments and are traditionally used to map the flow of information and materials through a production process. The key difference between traditional process maps and value stream maps is that value stream maps will include data and information pertaining to the process for example information on takt time, inventory levels and lead times are often included in a value stream map.
Constructing a value stream map usually involves some form of data collection exercise and this is another difference between traditional flow maps and VSM’s. Through utilizing this data and in the unique way in which a value stream map is constructed – an indication of bottlenecks (i.e. large quantities of inventory vs process throughput) – delays – examples of lead-times, over-processing – and general failures within the process can be provided. A fully constructed value stream map can then be utilized to enhance and improve the process by removing areas of waste.
Conducting any process mapping activity can help analyze the value stream within an organization and is a key stepping stone to implementing standardized work however – in order to truly understand and improve the value stream deep interrogation is required and thorough of analysis of not just process steps but also the movement of information and materials are required together with a thorough understanding of performance within the business – only then can an organization take firm steps towards reducing inefficiency and improving the value stream.