Value Stream Mapping Introduction

What is Value Stream Mapping?

Value stream mapping (VSM) allows you to visualize the steps and related information in order to identify value added, non-value added, and waste in your process. By mapping your process, identifying lead times, processing times, and wait times, you will have quantified what you may have already believed, or discover areas of improvement that you may not have been aware of. Once non-value added steps and wastes are identified, a plan can be created and set in place to reduce or eliminate them completely. Remember, the bottom line is to reduce your lead time, so you can increase your throughput. Increasing your throughput allows you to perform more work with the same amount of resources. The more you focus on increasing your throughput, not only does your revenue increase, but so does your profit margin. VSM can reduce the total time from quoting to job completion, but it can also be used to reduce each step in your process. 

The Effects of VSM

The chart below shows an example of the results of increasing your throughput with VSM. In this example, we are suggesting that the labour of two employees is $500 (wages, benefits, etc) for the day, and the materials used to clean each roof is $200. We are also using $1,200 as our average price the customer will pay to wash their roof (these numbers are not necessarily factual, but they will make the point). With a $900 cost to wash 2 roofs, we will have $1,500 profit (or 63%). After 2 rounds of VSM however, we have managed to increase our capacity to 4 roofs. You still have the same $500 labour cost, and have added an extra $400 in materials cost ($200 per house), but our margin is now $3,500 (73%)!

Value Added, Non-value Added, and Waste

All processes inherently consist of three classifications of steps: Value added (VA), non-value added (NVA), and waste. Your goal as a business owner or process owner, is to eliminate waste and reduce the non-value added steps as much as possible. 

Value added steps are anything your customer is willing to pay for. Simply put, if you are in the service industry, your customer is willing to pay for that service, but nothing else. If you are an exterior cleaning company and your customer wants their roof washed, they will pay for the washing of their roof. As the company providing this service, your goal is to complete the value added steps of this service as quickly and efficiently as possible while adhering to the standards you have promised. 

Non-Value Added steps consist of anything that does not add value to the end customer, but are necessary to complete the service. These typically consist of preparation to complete a job, or regulations/laws that apply to your service. For example, if you must obtain a permit to perform work, or if you set up personal protective equipment/safety equipment. These actions are not adding value to the end product, but a required in order to complete the job. While you can’t eliminate these steps, you can certainly look at how these tasks are performed and work on reducing the impact on your overall lead time. 

Wastes are anything in the process that is not necessary nor is the customer willing to pay for. The 7 wastes include:

• Defects - Any time your services provide results that do not match what was  promised to the customer.
• Rework - Any work service that has to be redone due to incorrect execution of the original work.
• Waiting - Time between processing when no value is being added to your service (i.e. sending an email and awaiting a response). 
• Transportation - The excess movement of materials and equipment
• Motion - The excess movement of an operator or field technician (think reducing your steps).
• Inventory - Having more inventory than is required to perform the services you provide in a given time frame.
• Over Processing - When your services or information are excessively processed past the point of what is required to complete the job that the customer has agreed to pay for (the value from their perspective and your time/money cost associated with fulfilling those terms). 

How Do You Create a Value Stream Map?

While there can be some detailed intricacies to VSM, the ultimate goal is to clearly identify the area you would like to improve, define the improvements, set a plan, and execute. Here are the steps you should follow:

1. Identify the process that you would like to improve: Include key stakeholders and their roles and responsibilities within the mapping project.
2. Define the improvement objective and scope of the process: Clearly explain why optimizing this process is necessary so your team is all on the same page. Defining the scope of the project will help to prevent scope creep which can cause a project to grow and include unnecessary aspects of other processes. 
3. Map the current state of your process: Document the process as it is carried out today.  Make sure to include who performs each task and how long it takes to complete.
4. Identify the wastes and potential improvements: Taking a critical look at each step, note any non-value added activities (WASTES). Think of ideas that could reduce/eliminate these wastes.
5. Map the future state of the process: Document the process as you believe it would look after the teams improvement ideas are implemented. Include the the time to complete each step in this new improved process to quantify the project.
6. Create your implementation plan using the PDCA Cycle: Create the implementation plan, enact the improvements, check the results and act accordingly. 

Value Stream Map Example

For the sake of this example, we will keep the icons, symbols, and technical jargon to a minimum to emphasize the framework for a VSM and what it can show you. The map consists of boxes representing each step. Those steps will show the Cycle Time (C.T., the time to complete the step from start to finish), and Change Over Time (C.O., if you have time to change over from one type of work to another requiring equipment and material changes). Below the steps, you will notice a line with a recessed portion. This line shows all non-value added tome above it, and all value added time in the recessed portion(s). In this instance, we can see that there is a 1 hour of value added time in the whole process. Don't get discouraged, this is very normal. Soon, you will see why there is a 2 hour cycle time to wash a roof, but only 1 hour of that time is value added.

This basic value stream map shows the field technicians day. As you can see, the day starts with preparing to perform a washing service and ends with driving back to the shop. Currently, this company can wash 2 roofs in one 8 hour shift so the Drive to Site through to Site Cleanup is repeated twice per shift. After mapping, the technician along with their team of improvement members, will look at each step to identify any non-value added or waste, and develop a solution plan to reduce or eliminate these shortcomings.

The Team’s Findings

After taking notes with a critical eye, the team noticed some waste in their process.

What Does This Information Mean to You?

After carefully looking at each step in the process, the team came up with several opportunities for improvement. 

Changing the parking location in proximity to the shop, altering travel routes and departure times, adjusting onsite procedures, and overlapping processes where applicable, could save the team over 4 hours throughout the course of a day if washing 2 roofs. With the steps between driving to site and cleaning up the site potentially being reduced by almost 2 hours, the team finds themselves with enough capacity to wash 1 to 2 more roofs in the same shift. 

Although this example is constructed of theoretical times and issues, you can certainly agree with the common wastes noted and some of the times associated with them. Eliminating even the smallest wastes in every process step has a ripple effect on the downstream processes and ultimately compound to create very significant improvements in capacity which directly contribute to your bottom line.

What’s Next?

The best course of action for you as a business owner or somebody who wants to improve their processing time, is to get out in the field and document everything. Follow the process with a notepad and pen and or a camera and make note of what you see. Review the notes with your team to collaborate on the areas you all see as potential opportunities for improvement. Make sure that if you have written procedures, your team is comparing the notes/improvement ideas against them to make the necessary changes. Follow the process of Plan, Do, Check, Act when implementing an improvement. 

Plan - Develop a plan for implementation.

Do - Implement the plan.

Check - After the plan has been implemented and utilized several times, review the results.

Act - If your review uncovers the need for adjustments, make these changes and start the PDCA cycle again.