Tip Sheet: Value Stream Mapping

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1 Tip Sheet: Value Stream Mapping A successful project relies heavily on a clear understanding of real problems. Value stream mapping is a technique used to visualise what actually happens to a product in a supply chain, which can often be very different from what people perceive happens. Mapping a product chain will inform you which activities add value, and those that do not and are therefore wasteful. Working to eliminate these wastes in the chain will reduce input costs, optimise processes, increase competitiveness and, importantly, raise customer satisfaction. Steps for value stream mapping The main steps in value stream mapping are: 1. Select a product value stream to focus on; 2. Be clear about what is value and what is waste; 3. Walk through the chain, documenting the main steps the product goes through & gather data; 4. Repeat, this time adding more detail; 5. Produce a current state map a map of what is actually happening; 6. Identify the areas of waste, or wasteful activity; 7. Investigate improvement opportunities to eliminate this waste; and 8. Produce a future ideal state map to inform the next steps in the project. 1. Select a product value stream A value stream map must be manageable in scope. You should choose a single product (or a group of closely related products) and focus on this. It may be a product that you suspect is not performing well, or it may be a high value or volume product where improvements will result in bigger savings. It could also be a product that is most typical of all products and hence the findings can be rolled out across many lines. Before you start, decide also on the system boundaries of the map. If your business deals with fast-moving, perishable goods with little production involved, consider a whole chain approach which will highlight areas of poor communication. A complex product such as a ready-meal may need to be, for example, limited to factory in-gate to point of distribution. 2. Customer value Before starting a mapping exercise, it is useful to be clear on what adds value and Tip Sheet: Value Stream Mapping 1

2 what is waste. This is done by looking at things from a customer value perspective: ask: is this activity something that our customer would be willing to pay for? If it isn t, it is waste. 3. Walk the chain Value stream mapping does not need to be complicated. If you are just starting out with the technique, valuable opportunities can be spotted from a simple map. Firstly, walk the supply chain of the chosen product, starting at the end nearest the customer and working upstream. Detail the main processes and activities the product goes through. Use post-its, or photos, to arrange the activities on a wall, for example. Some companies find they have done a similar exercise when doing a process flow diagram for HACCP. 1 The next step is to gather data relating to stages in the chain you have mapped. Use all available sources of data this may include MRP 2 systems, supplier data, customer complaint data, service provider data, QC spread sheets. Comprehensive and robust data is vital for a project. If there are any data gaps, these should be flagged up; if you feel they are significant, then taking steps to fill them can become an action point. Below is a simple map with top level data added. Figure 1 Example of map with top level data added 4. Adding detail Walk the chain again, this time adding details such as: The exact nature of the activity The time taken for each activity The time taken between steps The flow of information that is given or received at any point The points of interface with external suppliers Any inventory/wait times 1 HACCP = Hazard Analysis and Critical Control Point 2 MRP = Manufacturing resource planning Tip Sheet: Value Stream Mapping 2

3 Figure 2 Example deep dive map Information processing Information flow Hotspot Physical flow Look at your map and decide which areas warrant further investigation the deep dive process. For example, if your distribution losses are very low, then it is better to focus effort on areas where losses are higher. This process will take time, with much erasing and moving of symbols on the map. It is good to involve people who actually work in each area, as they are most familiar with where product goes. Equally, it can be useful to have a fresh pair of eyes to sense-check the map. It is important to get the map as close to what is actually happening as possible do not focus on how it is supposed to work, or how it used to work, or how it might work tomorrow. 5. Current state map A more comprehensive map can be produced using hand-drawn boxes and arrows, or using flow chart software, where Lean language and symbols illustrate the steps of production. This is now your current state map. Figures 2-3 Hand-drawn current state map (left) and flow chart current state map (right) Tip Sheet: Value Stream Mapping 3

4 6. Identify waste Look at the map and highlight any areas that are not adding value from a customer perspective. This may be in the form of: Overproduction Making a product before demand for it is known. Inventory Finished goods waiting for despatch; raw materials awaiting use; part finished goods waiting for processing. Some inventory is needed to meet on time in full availability for the customer and this they would be prepared to pay for. Look rather for excess inventory. Transport Moving product more, or further than, you need to; not using the shortest route for bringing in materials or packaging or information. Motion Moving people or equipment further than necessary to perform the task. Defects The steps involved generating, reworking, disposing of, or re-inspecting defects. Overuse of natural resources Using more energy or water, or emitting more carbon, than needed. 7. Look for improvements It should now be obvious what is VA (value-added) and what is NVA (non-value added, or waste). Bottlenecks, time delays, and delays in transmitting orders will be easy to spot on the map. Some people like to identify a third category VE (valueenabling) where an activity does not add direct value but is necessary to the process e.g. transport. The aim of VE steps is to minimise them in the longer term, if unable to eliminate now. Redraw the map eliminating, as much as possible, all the wasteful steps. This will entail lots of brainstorming, swapping sticky notes about, erasing and redrawing. 8. Produce an ideal state map The aim is to arrange the steps so that waste is taken out and the supply chain flow is smoothed out. Note that you may not know how you can get to this ideal state at this stage this will come later in a project but it is rather about creating a vision, Tip Sheet: Value Stream Mapping 4

5 or a goal to work towards. Teams can then develop an improvement plan to make the future state a reality. Further guidance There are many different approaches to value stream mapping, depending on the level of detail desired, or type of product which is in focus. This guide is intended to provide enough information to enable an organisation to undertake a basic mapping exercise. More detailed guidance can be found at: WRAP s Business Resource Efficiency Hub: Tip Sheet: Value Stream Mapping 5

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