Value Stream Mapping Supply Chain

Value Stream Mapping to Eliminate Waste in the Supply Chain

Value stream mapping is the process of identifying bottlenecks, waste, and value-added steps within a flow of material and information. The value stream map is the appropriately named tool used to present and analyze the information uncovered by looking deeper into an organization’s processes.

Mapping the value-added processes within the supply chain is useful for management because it aligns stakeholders, from multiple departments, on the needs of the customer and the demands of the supplier. It’s also an effective tool for illustrating the overall supply chain for a product to a variety of audiences.

 

Building a Value Stream Map

 

Value Stream Map Parts
“ValueStreamMapParts” By Daniel Penfield is licensed under CC BY-SA 3.0

 

Anatomy of a Value Stream Map

Value stream maps are divided into three distinct sections:

  • Information Flows
    • Found in the top section of a value stream map. The jagged arrows indicate the sharing of information between production control or supply chain departments and the customer or supplier.
  • Material Flows
    • Seen in the middle section of the value stream map is where the team carrying out the mapping activity spends most of its time. This section contains valuable information, including the identification of processes and their total cycle times, uptimes, and overall capacities. Arrows must clearly show the flow of material, and work-in-process inventory is usually denoted by a triangle, depicting the movement of inventory through the supply chain.
  • Lead Time
    • The bottom section is simple and extremely important. It should quickly, and visually, answer the question, “how long does each process take?” The line moves in peaks and valleys. The peaks match the cycle time indicated by the process label in the material flow section and the valleys represent the in-transit time for raw materials, components, or work-in-process inventory.

Mapping the Current State

Building a map first requires the creation of a cross-functional team. This team is tasked with observing all relevant processes that turn purchased components or materials into final products for a customer. This involves a plant walk, employee interviews and, perhaps most importantly, time studies. This portion of the value stream mapping process is the most time consuming, but it’s the most valuable since it requires management teams to physically visit where the work is being done to more thoroughly understand it.

It’s important to note that at this stage in the process it’s easy to move straight into thinking about solutions. Undoubtedly, the team studying the processes will notice a great deal that could be improved upon, but truly effective solutions cannot be achieved without a clear understanding of the problem, and in mapping the current state it’s important to describe only what’s happening, not what should be.

Reviewing the Current State

When all processes have been identified and mapped along with the appropriate time studies, the current state value stream map is complete. Afterword, the cross-functional team should review the current state together, working to identify bottlenecks and wasteful processes.

Bottlenecks are any operations that take a considerable amount of time when compared to similar processes. These could be, for instance, the actual processing of material, the movement of material within a warehouse, or the shipment of raw materials or components to the beginning of the line.

The best way to identify value-added steps is to literally ask the question, “does this process add value for the customer?” Excess quality checks are a common bottleneck that may seem necessary at a high level, but at closer examination don’t add that much value for the customer, and could probably be removed. Just like in the mapping of the current state, it’s easy to jump to solution suggestions in this stage, but by focusing on simply identifying bottlenecks and wasteful processes, the team can work towards a more efficient solution.

Developing an Ideal State

Ideal states are wish lists based in reality. Developing an ideal state value stream map is the final step in the value stream mapping activity. The ideal or future state value stream includes all steps deemed as value-adding and excludes those processes the team sees as non-value-added. Desired cycle times and in-transit lead time reductions should be shown as well.

With the ideal state mapped out, the team can begin brainstorming solutions to reach that state, adjusting expectations along the way. Value stream mapping is a lot like prototyping for a theoretical process and requires significant planning before any solutions are implemented. It’s not enough to eliminate a process for the purpose of saving time – a company must know why eliminating the process saves time, and how.

 

A Tool, Not a Solution

Value stream mapping and the map it produces are tools for management teams to explore a leaner supply chain. If the cross-functional teams engaging in the activity exit the process with a deeper knowledge of the company’s processes, but no plan to act on the knowledge acquired, then the entire plan is moot.

The value stream map doesn’t tell an organization how to eliminate wasteful processes or balance lines, but it does tell organizations where opportunities lie to do so. The value stream map promotes designing quality into processes instead of adding it in at the end (in the form of excess quality checks), and it identifies core processes that add value to the finished product. Engaging in a value stream process and resisting the urge to throw solutions at problems not fully identified helps organizations promote a better, faster and more cost-effective supply chain.

-Justin