What Is Value Stream Mapping: Benefits, Process and Value

Value stream mapping is understanding the process and steps in making a product and working towards improving them. It aims to maximize customer satisfaction while reducing waste.

What Is A Value Stream?

A value stream refers to the series of steps required to produce a product or service. Here’s a simple example of a value stream –

A manages a small soap business. Its typical workflow goes like this-

  • Order is received
  • Order is processed
  • Soaps are made as per order
  • They are packaged
  • They are delivered to the customer

In this process, there are multiple steps. Each step takes some time and is expected to add some value to the product. This is the value stream for A’s business.

soap manufacturing to delivery process

Value stream mapping breaks down the business process into smaller steps to provide information on time, quantity, quality, and other parameters.

In large organizations where the product/service passes through multiple departments and teams before its final delivery, it is vital to have a holistic view of how work flows through entire systems. Value stream mapping gives managers a top-down overview of the processes. This helps them understand the crucial steps in value creation and eliminate redundant ones. A better process with a more efficient flow of information and products can be designed and worked towards.

Benefits of Value Stream Mapping

Value stream mapping gives leadership a structured visual representation of the essential processes and associated data required to comprehend and nimbly implement modifications to improvise the process.

VSM involves diagramming the existing and ideal workflow that moves an item from a raw state to completion. This helps determine where the flow is good or bad, thus aiding managers in identifying waste throughout the whole value stream and working towards improving the flow of materials and information. A work management platform can be helpful in this process.

Let’s see how the value stream mapping helps organizations improve their processes-

  • Efficiency– One of the core benefits of VSM is the increase in the efficiency of processes. It helps flag redundant and wasteful activities, thus reducing time and material wastage.
  • Reduced Costs– An increase in efficiency helps eliminate redundant steps and reduces the wastage of materials and resources, thus saving costs.
  • Customer Satisfaction– VSM improves efficiency and reduces wastage of time, thus implying a shorter lead-time from customer order to completion and delivery of the product. This helps improve customer satisfaction.
  • Better Coordination– Simplified information flow within the value stream helps managers make better decisions and keeps everyone on the same page.

The Process Involved in Value Stream Mapping

Value stream mapping is an exhaustive process requiring you to thoroughly analyze how things are done in the organization. Following are the steps for the same-

  1. Document the Current Process – This involves taking notes of every step from the beginning to the end of the process. This will help identify the current flow.
  2. Identify Value – Identifying value means determining what makes a product/service worthy to the customer.
  3. Segregate the Steps – This step refers to segregating value creation steps based on the value they contribute. They should be examined and analyzed to see how much value they add and if removing the steps will impact overall value.
  4. Define the Ideal Process – After segregating the steps into important and redundant ones, the ideal process should be defined. In this step, you should primarily be concerned about the best process that delivers excellent value, with the elimination of all the waste.
  5. Chalk out an Improvement Plan – By reaching this step, you will have identified the issues in the process and the ideal process. Now it’s time to chalk out the path to reach the process defined in step 4. This means developing ways to improvise the steps to reduce wastage.
  6. Action – The next step is to work on the improvisation plan by deploying the right resources and allocating responsibilities to people.

Conclusion

Value stream mapping and analysis are essential to make organizational processes more efficient and cost-savvy. It can help remove redundancies and facilitate decision-making.

HCL Accelerate is a data-driven value stream management platform that automates the delivery and interpretation of data so businesses can make faster, more strategic decisions and streamline processes. Contact us today to schedule a demo.