What is Value Stream Mapping?

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

Introduction

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 are delivering 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 supplier to customer through your organization.

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

A value stream map puts on display 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 the progress of each assignment.

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 to ensure that you will be able to deliver the final product/service.

A clear example of such steps are 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 the rise of Lean in the second half of 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 Mapping

However, it is a common misconception that Toyota invented the practice associated with mapping a workflow in a visual way. In reality, there are records of diagrams showing the flow of materials and information contained in a 1918 book called Installing Efficiency Methods, by Charles E. Knoeppel.

By the 1990’s, 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.

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 the efficiency of work handoffs, which are 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 assignments that your team works on.

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 explain clearly the purpose of value stream mapping as well as 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 that represent 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 a is 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 the quality of your work. 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

Up Next

Step 6

What is the Cost of Delay and How to Optimize Your Process

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