What is Value ?

What is Value
Stream ?

A capability provided to a
customer
- of the highest quality
- at the right time
- at an appropriate price,

A Value Stream includes all

elements (both value added
and non-value added) that
occur to a given product
from its inception through
delivery to the customer.

As defined by the customer, Value

is what the customer is wiling to pay
for.

Value Added vs Non Value

Added
Not all activities add
value to the product .
Only those which adds
utility
to
the
product/service
from
customers perspective
are value added (VA)
activities.
Non
value
added
activities (NVA) are to
be
eliminated,
simplified, reduced or
integrated.

VSM & the Lean Process

Value
Stream
Mapping
is
the
maiden
step
towards adoption
of
the
Lean
Process.
VSM is a tool to
identify the waste
and suggest steps
to move to the
future /lean state
from the current

What is VSM ?
Value Stream Mapping (VSM) is a hands
on process to create a graphical
representation of the process, material &
information flows within a value stream.
Special type of flow chart that uses
symbols known as The language of Lean
to depict and improve the flow of inventory
& information.
Toyota refers to this process as Material &
Information Flow Mapping

What is Value Stream Analysis ?

It is a planning tool to optimize results of eliminating
waste. The steps include :
Select the product/service.
Identify the current state VSM which describes the
process as it is today
Apply Lean Techniques to reduce the wastes.
Create future state VSM which describes the ideal state
based on Lean Principles.

Purpose of VSM
Provide optimum value to the customer through a
complete Value creation. Process with minimum
waste in :
- Design (concept to customer)
- Build (Order to delivery)
- Sustain (in use through life cycle to service)
Provide the means to see the material, process
and information flows.
Support
the
prioritization
of
continuous
improvement activities of value stream
Provide the basis for facility layout.

Process Mapping
The map lists every step that is involved in the
delivery of the product or services.
Process mapping involves developing a simple
visual picture, or map, of a process.
Tracks workflow and provides information on
resource allocation.

Why to map the process ?

Process maps bring clarity to the
process.
Allows to start the process of
thinking about improvements.

Process Mapping vs. VSM

Process Mapping
Only shows the
sequence of activities
in the process.
No indication of time
or delay between
processes.
No identification of
value added or non
value added

VSM
Shows the flow of
materials and
information in a
process.
Indicates lead time
and cycle time for
each process.
Also identifies each
step as value adding
or Non value adding.

Lean management The 5 Lean

Principles
Define Value Specify value from the customer perspective .
Map Value Stream- Identify the value stream for each
product or service and challenge all of the non value adding
steps (wastes) currently necessary to create and deliver this
product or service. Add nothing than value.
Create Flow Make the product or service creation and
delivery process flow through the remaining value added
steps.
Establish Pull Introduce pull between all process steps
where continuous flow is possible.
Pursuit Perfection - Manage toward perfection so that the
no of steps and the amount of time and information needed to
create and deliver this product is optimized.

VSM The 7 wastes

Waste elimination is one of the most effective ways
to increase the profitability of the business.
Processes either add value or waste to the
production of a good or service. The seven wastes
originated in Japan where they are known as
muda.
7 wastes waiting, inventory, motion, overprocessing,
transportation,
over-production,
defects.
VSM focusses primarily on waste elimination due to
inventory, waiting, over-processing and overproduction.

Value Stream Mapping Example

Elapsed time from order to delivery : 30 days

Value added time : 1 hr, 25 minutes

VSM Def & Benefits

It is a business planning tool.

It is a tool to manage the change process.
It forms the basis of a transformation plan.
It is a communication & socializing tool.
It provides a common language to talk about the processes.
It shows the linkage between material flow and the
information flow.
It is a powerful tool in identifying waste, so it can be
reduced or eliminated, contributing to improved customer
satisfaction.
It helps us see and focus on flow with a vision of an ideal or
improved state.
Enabling broad participation in shaping future state.

3 types of VSM
Full Value Stream Map
- A good or service is requested by and delivered to
an external Customer.
Support Value Stream Map
- Sometimes called value enabling value stream
- Examples include annual budgeting process ;
recruiting, hiring and on boarding process; and
performance review process.
Value Stream Management
- In general a part of a Full Value Stream, eg
product design, new product introduction, and service
delivery.

Steps for Developing a VSM

Develop a Charter
Establish a team
Document Current State
Analyze Current State
Design Future State
Create Transformation Plan

VSM Develop a Charter

The charter serves as a planning, communication,
alignment, and consensus building tool.
Key elements of a VSM charter include :
Scope Value Stream - Specific conditions Demand
Rate Trigger First Step & Last step Boundaries &
Limitations Improvement Time Frame -
Current State Issues & Business Needs
Measurable Target Conditions
Benefits to External Customers & Benefits to Business
Accountable Parties
Logistics

VSM Define Product/Service Family

A product or service family is a
group of products or services that
pass through similar processing steps
in the value stream, as thus can be
analyzed using the same value
stream map.

VSM Establish the Team

VSM teams must include leaders who can influence and
authorize change along the value stream to be improved.
Executive Sponsor An individual to oversee the whole
matter.
Value Stream Champion/Owner An individual to
oversees a significant part of the event and is accountable
for performance of the entire stream.
Logistics Co-ordinator An individual responsible for
maintaining supplies & fulfilling requirements of the team
Attendees & Team Members- Participants for daily
briefing sessions to ensure common understanding of the
current state.

VSM Document Current

State
Depict the Customer requirements !!!
- Follow the flow of the product from
shipping to the raw material stage.
- Draw the processing steps used to
process, move and store the product
- Input the process and inventory data
- Draw the information flow
- Draw a timeline depicting the lead and
processing time

VSM Time Metrics

Definitions
Changeover Time (CO)
The time it takes to changeover (to reset or change equipment) from
one part to another(Change Over Matrix).
Queue Time (QT)
The time between sub-processes that the part gets shuffled around or
sits around waiting for someone to work on it.
Up Time (UT)
The ratio of the actual available production time of a process to the
available working time. Expressed as a percentage, uptime is calculated
by dividing actual available production time by the available working
time.
Working Time (WT)
To calculate Working time deduct breaks, meetings, beginning of shift
set up, end of clean up, planned maintenance, and other planned non
working time. Do not deduct unplanned downtime or changeovers.

VSM- Common Findings

Common Non Value Added activities and
improvement oppurtunities include :

VSM Focus of Future State

During the future State Development Activity, the team
shifts from Fact finding(current state) to the discovery,
innovation and creativity phase (future state).
At the macro level, there are 3 considerations to address
when designing the future state for a value stream
map :
Determining the work that adds value and should be
done.
Making the right work flow.
Managing the work to achieve continuously improved
performance (time, cost, quality, safety)

VSM Adding Work Effort

Improving an organizations value stream may sometimes mean
adding new process steps or activities to the existing value stream.
VSM improvements almost always require a holistic approach and
often requires experienced personnel.
Some of the measures which can be implemented include :
- Lean Standard Work Combining Human movement & elements
of a job in the most effective sequence.
- Planned Cycle Time the required production rate to satisfy
customer demand allowing for scrap, rework, downtime, changeovers & other inefficiencies.
- 5S Visual Workplace - reduction of waste(mainly defects
motion, waiting & transportation) results in lower costs.
- Kanban system - lead to an improved process flow, reduced
scheduling activities and can result in significant inventory reduction.

VSM- Managing the work

The future state design & development should
focus on the stabilization and sustainability of the
implemented changes and improvements.
Continuous performance review and improvements
need to be imbedded into the management of the
value stream.
Every value stream needs atleast 3 to 5 relevant ,
accurate and precise Key Performance Indicators
(KPIs) that are tracked on a regular basis.
Common indicators include Time, Cost, Quality,
Safety, and Satisfaction/Morale.

VSM Transformation Plan

Execution
Final approval of Transformation Plan within one
week of final briefing session
Executive sponsor and Value Stream
Champion/Owner lead the socializing of the future
State Map & Transformation Plan.
Value Stream Champion/Owner
- drives overall implementation & change initiative,
- support work teams working on realizing the
future state map,
- troubleshoots roadblocks & obstacles, and
- runs scheduled review meetings.

References
http://www.slideshare.net/fadler/
op-ex-vsmtrainingmodule?qid=38b63
f74-244e-4c9b-9d1c-7b2103308f26&v
=default&b=&from_search=4
http://www.slideshare.net/KarenMarti
nGroup/value-stream-mapping-casestudies?qid=38b63f74-244e-4c9b9d1c7b2103308f26&v=default&b=&from
_search=7