Woman behind a stack of books
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 of wasted effort. Toyota is often credited with developing lean production techniques, which successive generations of managers and consultants adapted and added to.
While the implementation and emphasis of Lean techniques may 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, value stream mapping for a paper mill might start with the receipt of raw materials, such as lumber 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 different sections, allowing multiple teams of experts to apply lean techniques simultaneously.
Next, the difference between value and waste must be traced. In its broadest sense, value is adding something to the product that the customer wants or needs. Going back to the trash can example, the value steps are what give the paper the desired dimensions, color, composition, etc. Waste, on the other hand, is any step that doesn’t add value. The most cited forms of waste are the unnecessary movement of products, equipment or employees; maintain a stock of raw materials or products waiting to be processed; manufacture more parts or products than customer demand; process a component more than the customer really needs or expects; quality controls; or subsequent reprocessing of defects.
Now, let’s apply these terms to value stream mapping. A business starts with a process, or part of a process. The paper mill decides to make its pulp section more efficient. 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 value added, waste but mandatory, or waste.
Skilled managers then assess the steps identified as wasteful and ruthlessly remove them from the process. Perhaps the company has too much inventory of pulping chemicals, racking up money that could otherwise be put to better use. Or they realize that mid-pulp quality checks are redundant and unnecessary. The best managers, however, are not satisfied with using value stream maps just to eliminate waste and streamline their processes. These savvy entrepreneurs also use value stream mapping to find ways to increase product value for customers, a surefire way to add value to the company’s revenue stream.