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What Is Value Stream Mapping? Definition and Details.

Value stream mapping is among the most important practices of Lean. Learn more about it and check out how to implement VSM with Kanban.

The balance between supply and demand is in a constant state of flux. However, it won’t be far from the truth to say that supply has been steadily growing in many industries faster than the demand.

As the market is getting more saturated by the day, customers are becoming increasingly pretentious and difficult to convince that you will provide the value they are looking for.

Thankfully, Lean has a way to get you ahead of the competition by visualizing and enhancing the value stream you deliver to your customers.

What is Value Stream Mapping (VSM)?

The Value stream mapping process allows you to create a detailed visualization of all steps in your work process. It is a representation of the flow of goods from the supplier to the customer through your organization.

For example, the value a software company delivers to its customers is software solutions and all features inside.

A value stream map displays all the important steps of your work process necessary to deliver value from start to finish. It allows you to visualize every task that your team works on and provides single glance status reports about each assignment's progress.

It is important to clarify that, according to Lean, value is everything that the customer would pay for. However, when it comes to mapping a value stream, there are steps that may not bring direct value to your customer but help ensure that you will be able to deliver the final product/service.

A clear example of such steps is the quality inspections that are an irreplaceable step in every production process. Your customer is not paying you to do these checks, but if you deliver a final product that doesn’t meet their quality standard or expectations, they will be less willing to buy from you ever again.

What is the Purpose of Value Stream Mapping?

The primary purpose of creating a value stream map is to show you the places where you can improve your process by visualizing both its value-adding and wasteful steps.

You just have to put on display every important step of your workflow and evaluate how it brings value to your customer. This allows you to analyze your process in-depth and provides you with hints where you should make changes to improve the way you work.

History of Value Stream Mapping

Value stream mapping became a popular practice with Lean's rise in the second half of the 20th century. It was one of the foundations that made the Toyota Production System a manufacturing sensation, although, by that time, the term VSM was not present.

Toyota Value Stream MappingHowever, it is a common misconception that Toyota invented the practice associated with visually mapping a workflow. There are records of diagrams showing the flow of materials and information in a 1918 book called Installing Efficiency Methods by Charles E. Knoeppel.

By the 1990s, the value stream mapping process became part of the lives of many western managers. Its popularity started to outgrow manufacturing and eventually spread into knowledge work industries such as software development, IT operations, marketing, and many others.

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How to Do Value Stream Mapping in Knowledge Work

Value stream mapping is gaining popularity in knowledge work because it allows teams that work in a siloed environment to visualize their work and collaborate better.

Even individual contributors can have a bird’s eye overview of how the team’s work is progressing.

As a result, teams can increase work handoffs' efficiency, which is a major culprit for accumulating wait time in your system. Waiting is one of the 7 wastes of Lean, and therefore it should be everyone’s priority to minimize it.

Mapping your process can help you visualize where handoffs occur, so you can also discover where the bottlenecks (queues) of your process are and come up with a way to minimize their damage to your team’s productivity.

How to Map Your Value Stream with Kanban

Kanban is probably one of the most reliable value stream mapping tools. Especially if you want to visualize a knowledge work process. It is simple to understand and allows you to make changes easily.

Value stream mapping with Kanban

To map your process with Kanban, you need just two elements – a Kanban board and cards for all your team assignments.

If you are new to workflow visualization, it is better to start small, preferably with a single team or department. Be sure to select the most convenient way to map your Kanban workflow. You should choose either a physical board or a Kanban software solution.

Afterward, gather the team and clearly explain the purpose of value stream mapping and what you expect to achieve by implementing it.

Then, bound your process together. By default, a Kanban board comes with 3 work item states:

  1. To Do
  2. In Progress
  3. Done

Your focus should be on breaking down In Progress into multiple columns representing the most important value stream steps of your workflow. For example, a software development process usually contains the following steps:

  • Tech Design
  • Coding
  • Testing
  • Code Review

You can add as many columns to your Kanban board as needed. More precise mapping will logically give you a more comprehensive view and, therefore, more indications where you can improve your performance.

Detailed Kanban Value Stream Mapping

Put special attention to queue stages of your process where work handovers occur.

When you’ve got a bound process, be sure to select a range of performance metrics to monitor. A simple set of workflow key performance indicators is:

  • Lead time vs. cycle time of your assignments
  • Throughput of your system
  • Amount of work in progress

You should always aim to keep lead time and cycle time close to one another. Even if you are super-efficient at processing work, but you’ve got a long backlog that results in customers waiting for too long to receive their order, it won’t matter.

When it comes to throughput, you need to keep it as high as possible without sacrificing the quality of the value you deliver to the customer.

Work in progress is a key indicator in Lean and Kanban in particular because the more you have, the more wait time you will accumulate. Be sure to regulate the number of assignments your team can have in progress simultaneously and adjust them according to your workflow data.

Inspect these KPIs often and aim for more frequent delivery to your customers without forsaking your work quality. Don’t be afraid to experiment with adding/removing process steps and advancing your workflow.

In Summary

In Lean, Value stream mapping is a tool of significant importance for achieving continuous improvement of the way you work. The main benefits of value stream mapping are:

  • It allows you to visualize and bound your process.
  • It helps you optimize the way you deliver value to your customers.
  • It helps you identify the process steps with the greatest significance.

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