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What is Value Stream Mapping?

What is Value Stream Mapping?

Businessman drawing value stream mapping process on a whiteboard

Last Updated October 19, 2023

Value stream mapping serves as an important tool for project teams looking to cut waste and increase efficiency in any type of operation. Teams can use a value stream map to easily identify and address issues that plague processes, including bottlenecks, flow issues, excessive inventory, and personnel needs.

Value stream mapping (VSM) provides a way to visualize an entire process, from the gathering of raw materials to the delivery of a final product to customers. It’s become one of the most useful practical tools Lean Six Sigma offers.

VSM differs from a process map in that it identifies both value-added and non-value-added steps in a system. VSM also typically goes into greater detail, including information on the time taken for each task, the number of employees needed, and the inventory required. 

Tina Agustiady, a Master Black Belt and professor in Villanova University’s Essentials of Lean Six Sigma course, said VSM allows decision-makers to “see the flow of materials and information.”

“It enables everyone to see not only the waste but the sources of the waste. It provides a system-level view of the process from the customer’s perspective,” Agustiady said. “VSM establishes the foundation for improvement activities that yields bottom line results. It allows prioritization of improvement ideas with the highest impact.”

When to Use Value Stream Mapping

Students in the Essentials of Lean Six Sigma course learn to use the methodology to maximize efficiency, producing products and services that better meet customer needs while also getting produced faster and at lower cost.

VSM is critical in achieving that goal. To optimize a process, business leaders must first know every detail about how it currently works. That includes identifying and eliminating work that does not add value to customers.

This is a far larger problem than most people realize. Typically, value-added activities account for only about 5% to 10% of a business’ actual time, according to Agustiady. Non-value added time is almost 50% of total time.

VSM compels businesses to look at their operations from the point of view of what adds value to the customer, not what adds value to people within the operation.

The Eight Wastes of Lean

When detailing how an operation works with VSM, project teams look for anything that falls into one of the eight wastes of Lean. Those wastes are product defects, extra processing, inventory, non-utilized talent, overproduction, transportation, waiting and wasted motion. Examples of typical areas of waste can include the following.

  • Requiring extra levels of unnecessary reviews by managers 
  • Employees who duplicate the effort of other employees
  • Unnecessary spending on unneeded inventory
  • Workers walking a long distance to accomplish their jobs because the right tools are not nearby or readily available
  • Making more products than existing consumer demand requires

Finding waste requires a relentless focus on customers. Project teams must assess every step of a process through the eyes of the customer. That requires knowing what customers want in great detail. This may require taking a formal survey of customers to get feedback.

Steps in the Value Stream Mapping Process

The overarching idea of VSM is creating a visual graphic that depicts the current state of an operation, followed by a VSM that reflects the desired future state of an operation based on customer needs and what a project team finds out about a system’s current state.

The steps for VSM include the following:

Choose Where to Apply Value Stream Mapping

Keep in mind that while VSM provides detail on how a system works, the goal is to identify steps and processes that add value and those that do not. Businesses can apply VSM to one product or a “product family” that all follow similar processing steps.

Create a Team

Create a cross-functional team that includes managers and supervisors that oversee different aspects of the operation, as well as representatives from employees in those areas. The American Society for Quality notes that 10-member teams are ideal. Smaller teams might miss important issues, while larger teams may become difficult to manage.

Gather Data

This step is where managers should use a Gemba Walk, which means visiting where a process occurs and finding out exactly how it’s done, who does it and the equipment used.

Kaizen Meeting

At this stage, or sometimes earlier, a team meets at a three-day Kaizen meeting to draw up the current VSM, create a “future state” VSM and create a preliminary plan to get from the current state to the future one.

Villanova students learn the details of creating a data box for each activity in a process, as well as other information required on a VSM (production requirements, types of information flow, time between activities, etc.). Areas where improvement is needed are typically marked with a symbol such as a burst.

Examples of Value Stream Mapping in Use

A 2019 study from India investigated the application of VSM to an auto-ancillary manufacturing business. They found VSM had a positive impact on Takt time (the amount of time a company has to produce a product to meet consumer demand), process inventory level, and bottleneck time. The changes made through the VSM process also “helped to achieve higher customer satisfaction in terms of increased quality, reduced cost and on time delivery,” according to the study.

That type of positive impact is experienced in every type of industry. A whitepaper on the use of VSM for a lock manufacturing company found that it resulted in a “drastic reduction achieved in production lead time and WIP (work-in-progress) inventory.”

Using VSM allows organizations to make changes quickly based on accurate, current information. It’s one of the most-used Lean Six Sigma tools for the simple reason that, when done correctly, it can help lead to optimized processes that lower costs and satisfy customers.