The goal of a value stream map is to see the value in each step from the beginning of a process to the end. Value stream mapping (VSM) identifies the most value-added steps in a process and weeds out the non-value-added steps. VSM uses a flowchart methodology to visually "map out" a process. Cross-functional team members from finance, IT, logistics and planning should be included in all mapping sessions.
Uses and Context
VSM was pioneered in the 1980s by Toyota's chief engineer, Taiichi Ohno, and sensei Shigeo Shingo. It was created more as a tool for productivity than for quality. Toyota found the most common waste steps to be overproduction, waiting, transport, inappropriate processing, unnecessary inventory, unnecessary motion and defects. The article "The seven value stream mapping tools" in the "International Journal of Operations & Production Management" discusses the use of seven VSM tools. They are process activity mapping, supply chain response matrix, production variety funnel, quality filter mapping, demand amplification mapping, decision point analysis and physical structure mapping. They all use the same basic flowchart methodology.
VSM as a Tool
The VSM method is a tool used to help visualize production systems. It is a common starting point for project managers, engineers, schedulers, suppliers and management to facilitate communication and learning while helping leadership to manage change. It also helps to identify steps in a process that are non-value added. Another term for non-value added is waste. Waste is any activity that is not adding value to the end product or service.
An effective value stream map must illustrate the flow of goods from raw material through finished product. Create a current (present) state map of information flow and a desired (future) state. Use industry benchmarks and management input to create a desired state, and then conduct a gap analysis. A gap analysis identifies the gaps (holes) between the current and desired state. Compare industry performance metrics like cycle times, down times, in-process inventory, data flow and material movement.