The collective curiosity of the team at the Toyota Production System in the mid-20th century led to the formulation of a completely new system of tackling business and production management. Known back then as ‘Material and Information Flow’, Value Stream Mapping came to be the pivotal point in business management history. It took the world by storm, and everyone began exploring the potential the new technique had.
What is Value Stream Mapping?
Value Stream Mapping (VSM) is the process of creating a condensed visual representation of the flow of material or informational assets from the point of conception, through production and utilization, ending at delivery. Used primarily in the logistics and supply chain sectors, it helps an organization identify aspects of operational workflow that are
a) Necessary and value-adding
b) Not necessary but value-adding
c) Not value-adding/ Redundant
Progress and Evolution
Industrialists realized that material flow was not isolated from the interactions that occurred in the workplace. There was a complex web of communication that drastically influenced the actions and outcomes that occurred on a daily basis. It was observed, that despite the presence of operational plans and protocols, workers often strayed away from those. Ultimately, managers wished to identify not only what was happening, but also why it was being done and how it affected the overall functioning of the business.
As businesses began exploring value stream maps and utilizing them to optimize their business processes, the need for simplification and change became visible. The introduction of the ‘Lean Business Model’ contributed a great deal to the need for businesses to continuously evaluate performance and evolve.
However, this posed certain challenges. As it is apparent, a business does not have a linear process. There are multiple people, locations, events, products, and intellectual assets to be considered. Collecting all the information required and representing it logically became strenuous. Oftentimes, valuable information would be missed, as the preliminary preparation had been inadequate.
Value Stream Mapping Technology
After having built VSMs manually in Microsoft Excel for the larger half of the century, the labors involved in putting together a VSM provided the perfect opportunity for a technological solution. The digital revolution that was brewing gave way for a value stream mapping solution to take birth.
Value stream mapping technology automates the creation of a visual map and its analysis, based on input from the user. While certain aspects of VSM formation are still manual, many aspects have been automated. The maps are designed using preset symbols that represent certain kinds of information.
Features of VSM Technology
- Data Collection and Preparation – Collecting operational information is often the most labor-intensive task in the creation of a value stream map. Accumulating details about all the various components of the map, recording them correctly, and ensuring that all entries are up to a certain quality standard can be time-intensive and arduous.
- Real-time Workflow Representation – Present-day technology allows the collection of real-time data. This means that details regarding a task are collected as they happen. Hence, delays and bottlenecks become easier to identify.
- Preset Templates & Easy Editing – VSM tools come with a bundle of preset templates that are designed to cater to all sorts of organizations. They also have easy editing tools that allow users to manipulate the template as required. Users can also continue editing and adding new data to the template over time, and the map changes accordingly.
Apart from these features, most VSM technology also has features such as Interactive Analysis, Prediction and Suggestions, and Visual Diagrams or Chart Makers. These features allow organizations to understand their processes, identify “wasteful practices” and optimize operations.
Types of Value Stream Mapping Tools
These VSM tools depend on human input of data. They provide templates, drawing surfaces, and editing tools, but data collection and recording is completely manual.
These VSM tools also provide templates, drawing surfaces, and editing tools. However, some of the data is collected automatically through integration and interaction with other technological solutions used by an organization.
Collaboration with process mining tools, IoT solutions as well as the computer systems, warehouse management technology, and data management systems of the organization fills in the gaps left by the user. This results in more impactful value stream maps and increased improvement in the long run.
Parts of a Value Stream Map
This part of the VSM records the interactions between employees/departments with physical and technological assets. The way they interact with each other, how handoffs happen, where there are blocks and delays, and whether or not the information is being exchanged correctly are some of the aspects that are recorded in the Information Flow section of a value stream map. Information origin and distribution are also recorded.
This part of a VSM records product-related data – from creation to execution to delivery. To simplify, let us consider an example.
A shipping company receives an order for X number of products. To ensure that delivery is punctual, they need to maintain tabs on when the items are received from suppliers, when they arrive at a warehouse, when they are packed, and what the delivery status is. All of these points are then recorded in the VSM to analyze optimization opportunities.
Some elements of the product flow are – Cycle Time, Setup Time, Uptime, Lead Time, Takt Time, and Push Arrows.
This part of the VSM is a simple visual representation of the time taken for various stages of the product/operation lifecycle. It records the average time required to complete a stage, the active working time, and the amount of time it takes for preparation/ execution.
Value Stream Mapping, like many other business management solutions, is an effective way to unleash the full potential of an organization. While originally used to identify the movement of tangible assets in a production center, VSM is now being used in the IT, software development, and knowledge sectors as well. The applications of VSM are reaching various industries that include the administrative, service provision, manufacturing, and supply-chain sectors and helping organizations to streamline their workflows.