Value stream mapping

- What is value? Value is what's important to customers. What's important to customers? Well, it varies. But mostly it's what they appreciate and are willing to pay for. Obviously we need to know what this is, but we also need to know what's involved in delivering this value. The activities, transactions, material and information flows required to deliver this value to the customer. This is called the value stream. Here's one definition of a value stream. A value stream is all the end-to-end process activities, resources, and information used to transform inputs into outputs that are salable to customers. A graphical visual representation of the value stream is called the value stream map. It's a diagram that shows all the steps involved in getting a product or service from supplier to customer. It shows the material and information flows from order to delivery. Now I know this sounds like a process map. Well, basically it is, but with some additional information. Think of a value stream map as a type of high level process map showing the end-to-end process. But then also including customer data, processing data, and information flows pertinent to the value stream. But what if you don't have hot data? Walk the process and observe. Obtain estimates from people directly involved, or get estimates from the collective experience of the project team. The important thing is you get a sense for where value is added and where waste occurs. Here's an example. Most of us have been to a coffee shop or cafe that sells and serves specialty coffee for customers on the go. Whipped cream, caramel drizzle with a sprinkle of cinnamon, anything you want, all in a cup to go. For these customers they value freshly made on the go coffee made to order. What is the customer experience? First we stand in line 'til we get to the order here counter where we place our order and pay. And the cashier will then ask our name. The order is electronically transmitted to a screen at the barista station. The barista makes the ordered coffee. In the meantime we wait while the coffee is made. When it's completed the barista calls out our name and we pick up our order from the pick up order counter. So let's map this by first defining our value stream. In this example what is the value stream? The value stream is the end-to-end process from order to pick up. To map it start at the customer end, walk upstream on the processing path from a customer to supplier and draw a diagram to show every process in the material and information flow. Always start with a customer end and work upstream. Use standard value stream mapping icons. These icons can sometimes be tied to different software programs, but you can sketch it out by hand with pencil and paper. Also, in a project team setting this is often done with Sticky Notes on flip chart paper on the wall. Draw in the following, starting with customer and customer information, delivery transport to customer, major process steps and process data, any backlog or work in process between the processes, supplier and supplier information, transport deliver from supplier, information flow, material flow, timelines showing probable lead time and processing time at the bottom of the diagram. The completed process map of the coffee stand is shown here. At a glance we can see the end-to-end process from order to delivery to customers. Information and material flows are shown, including the process steps and relevant process data, such as processing time, cycle time, and the number of service. In this case, one cashier, one barista, and one helper. Any backlog or work in process inventory in front of each process step are shown. The timeline at the bottom of the map shows the lead time and actual processing times. We can see that the total lead time is 24 minutes, but the actual processing time is only 3.5 minutes. We can definitely improve that lead time. The main benefit of a value stream map is that at a glance we can see the process from end to end, including information and material flow, inventory, and processing data. We can see the delays, bottlenecks, and identify where time is spent or wasted. Now this is different from a detailed process map. A detailed process map contains a granular list of activities, but does not contain all this other specific data on wait times, number of customers, and so on. However, if you find a place in your value stream that requires a detailed look this is the time to create a detailed process map for that particular process block. In the coffee shop example we see there is a 10 minute wait time for Order and Pay and Make Coffee. A detailed process map of these process blocks will help uncover waste and inefficiencies. The value stream map enables a project team to capture the current state of the value stream during the measure phase. During the analyze and improve phases the team can evaluate the value stream for improvement opportunities, brainstorm to improve upon it, and then visualize the future by developing a future state value stream map. I hope you now understand the use of value stream mapping and how to create one.