Value Stream Mapping is a tool for pivoting

“Pivot” has become a buzzword in business, referring to a shift in strategy or a significant change made in product, service or business model as a result of experiment.

When a solution or an assumption does not lead to or deliver the expected outcome, a significant change may be required to adjust to the reality instead of sticking too long with the flawed parameters.

Pivoting suggests a change of direction and this is the intent with Value Stream Mapping (VSM): pivoting from vertical to horizontal.

VSM reveals the physical and information flows across an organization (horizontally) end to end, which is “pivoting” from the traditional point of view which is vertical, divisional or departmental way of considering organizations and responsibilities.

By pivoting, VSM reveals all the waste created by local optimizations and required adjustments at interfaces, e.g. duplicate inventories, buffers, different batch sizes or different rules and policies, etc.

VSM is a tool for pivoting or shifting the point of view, the way we look at value creation with the customer waiting at the end of the value stream.

Together with the improvement potentials revealed, Value Stream Map enables pivoting: changing the process, the product or the business model in some extend.


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What is VSM good for?

Value Stream Mapping (VSM) is one of the most popular tool of the Lean toolbox, frequently associated with finding improvement opportunities. Yet VSM is more than a kind of treasure map.

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Enabling “helicopter view”

Drawing a VSM is like getting aboard a chopper and take off to watch the perimeter or process from some distance and height. I like the helicopter metaphor because we can hover over the Value Stream Map at will, focus on a particular zone, fly over the whole, fly back again and so on.
Taking some distance and height let analysts consider a zone, a part of the process or series of  operations in their global context. Even so VSM is schematic, interactions with up and downstream operations as well as information exchange are more visible than on shop floor.
Conversely, VSM doesn’t show the details and cannot replace investigations in situ.

Physical and information flows

VSM is most probably the sole tool allowing the simultaneous view of physical and information flows as well as their interactions.
VSM can reveal the hidden complexity and abundance of IT systems, softwares and applications, files and databases, often duplicate, redundant and with multiple input points.
Many wastes clutter information flow, more difficult to make out than those of the physical flow. Something the Value Stream Map shows.

Share the findings

VSM is an excellent mean to share the assessment findings with stakeholders.  I could verify it on numerous occasions; operators know well their work post and its immediate surrounding but have little knowledge about what is happening up and downstream. Support departments, especially administrative staff, know very few about operations while ops guys ask themselves what good the administrative staff do.
When working together on a VSM, even only partially, and later during debriefing ,’ all stakeholders share the same ‘picture’ of the actual state, understand  dynamic interactions  and interdependencies between the different links of the whole chain

I could witness people cooling down after understanding why their colleagues kept demanding something bothering. The VSM just made clear why this was important to someone else in the stream. From then on, not only would the irritation disappear, but the angry people change to pro actively help their colleagues, easing the later operations.

Common language

VSM uses symbols (pictograms) and terms which become a common language  between stakeholders. Concepts like flow, Lead Time, Work in Progress or wastes   are understood , even by those remote from shop floor.

When a workgroup is made of several participant without a common tongue – something common in big international corporations with multiple subsidiaries in the whole world, or to consultants assigned to such a subsidiary – thanks to VSM visual symbols, working together with this common language is possible.

Sell one’s ideas

Presenting and debriefing a diagnostic’s results is backed up by a VSM. Together with the future state map, called Value Stream Design (VSD), action plan showing how to get from actual state (VSM) to future state (VSD) it help selling the ideas for a change crafted by the workgroup.

Those receiving the debriefing and proposition, VSM/VSD provide a convenient and useful support to make the whole tangible, concrete.

It happened frequently that our debriefing after assessment was only a standing storytelling in front of a VSM. The whole story is depicted there and it is easy to take the audience in the imaginary helicopter and hover above the process.

A Value Stream Map is therefore a great communication tool.

Revealing wastes

Looking at a process from some distance helps reveal wastes that are not noticeable without zooming out. Duplicate inventories or operations in different locations for instance.
A spaghetti  diagram – natural companion of a VSM – drawn in the same time as the VSM is also an excellent tool / way to reveal wastes like unnecessary transportations, time lost in lengthy walks and motions, routes within the facility, even ‘crowded highways’, etc.

Without VSM’s ability to “zoom out” and consider the process in its whole, most of these wastes would remain hidden.

Decide and coordinate actions

Working together and considering the actual state from some distance greatly helps to take good decisions and coordinate actions which will benefit to the whole instead of trying to optimize locally. This latter way is potentially counterproductive, as interactions and interdependencies do not lead the sum of local optima to a global optimum..

Prevent static figures fooling you

Compared to data / dashboards / KPIs analysis, VSM is more qualitative but depicts the dynamic behavior or a system. Dashboards and reporting are far more static and partial; showing a “frozen picture” of past situations and do not show the dynamics and interdependencies of resources.

VSM is nevertheless completed with figures, indications of actual performance levels or potentials at the moment of mapping. They are benchmarks, either for challenging the actual results or measure progress.

Conclusion

All these advantages and benefits of Value Stream Mapping endorse the place and importance of this tool in the continuous improvement or operational excellence toolbox.
It is probably no surprise for those having experienced Value Stream Mapping, but did they notice all of the advantages?


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Future of Lean and additive manufacturing

In a previous post titled “How much non-added value additive manufacturing can take out of actual processes?” my prospective thinking was all about technological disruptions and the impact on companies.

The same question is valid for the future of Lean. If as I assume much of the non-added value can be taken out of actual processes by additive manufacturing, what will be left for lean practitioners to work on?

Whole processes could be reduced to 3D printers or equivalent*, taking out lots of costs and non-value added. But what may be really shocking in near future could be to reconsider what we assumed being added-value in traditional manufacturing, e.g. cutting away material by lathing, milling, etc.

*3D printers stand here for a generic expression for additive manufacturing techniques and machines. 3D printers are already well-known from the public, therefore it makes it easier at present time to refer to additive manufacturing as 3D printing.

These processes transformed raw material in something of higher value, but at expense of a lot of energy, capital and material, like shavings, for example.

With the new perspective of additive manufacturing techniques, raw material will be used in just necessary quantity, most of the energy will really be used to “add” value and almost all of the manufacturing cycle time will be added value time.

Even the non-added value that cannot be suppressed – a former colleague of mine positively calls it “value enabling” – like all the fragmentation of the process between different techniques/machines, hand-offs, transfer, wip, etc. may simply disappear or at least seriously shrink.

Value Streams will become shorter and efficient, some Value Stream Maps limited to the order input and 3D printer!

While today about 2% of the lead time is usually added value, in near future it could soar up to 80% or more!

Future of Lean, Lean in the future, what is your point of view?

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VSM Pitfall: unnecessary process

Value Stream Mapping (VSM) is probably the main analysis tool and the most used in the lean toolbox. Easy to understand and handle, VSM is the starting point of improvement workshops and kaizen events. It helps focusing on wastes and improvement potentials in any process.

The ease of use and popularity of VSM make them flourish on shop floor. What seems good news for continuous improvement at first glance may not be all that positive.

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Remember: while improvement opportunities are literally infinite in any environment, resources are always limited: time, availability, means…

Therefore, before rushing into Value Stream Mapping, it is necessary to focus on chosen areas and topics in order to make meaningful improvements and avoid wasting limited resources.

The worst waste would be to Value Stream Map a useless process, which would mean Map, analyze and improve a process that should be eliminated in first place.

This happens more frequently than one would think.


Countermeasures to problems and the 3% devious

Many existing processes in an organization are countermeasures and responses to problems. These problems were eventually solved once, but the process is still in place.

Should one therefore seek to optimize it or can wouldn’t it make sense to eliminate it altogether?

In the absence of statistical data on the occurrence of the problem, which is the most common case, the answer is tricky. Moreover, advocates of the process will argue that it is precisely because the process is in place no problem reappeared.

If these problems still show up in a low occurrence, are the costs of maintaining a process to prevent, resolve or dampen them consistent regarding the effects of these problems?

If not, all things being equal, isn’t it better to eliminate this process and support the relative lower cost of infrequent problems?

Finally, if the recurrence of problems is frequent, the process does not work and the right question is less about optimizing it than to invest in eradicating the problem.

An order of magnitude, probably more symbolic than real, is the management of 3%, a term due to Gordon Forward, former CEO of Chaparral Steel, which means the countermeasures in place are there for 3% of employees with deviant behavior, which penalizes 97 % of those keeping to the rules.

If a process exists because of 3% of the employees, it hides a management problem.

Should one therefore seek to improve such process?

Would it not be better, before drawing a single VSM line, to question if not simply eliminate this process?


Lack of coordination and strategic alignment

The second case is that of companies / organizations / corporations which do not coordinate lean initiatives, let shop floor / operations take local initiatives.

People in these lower levels reason and act according to their perceptions, they do not have the necessary global view nor the “zoom-out” to embrace the situation as a whole and see the uselessness of the process. They lack a kind of VSM of VSMs.

I remember at least two cases, industrial groups whose central lean offices asked the subsidiaries to run pilot improvement workshops on a process of their choice. Each workshop was required to start with a Value Stream Map.

In both cases, central lean offices had no strategy nor global plan. By default, they launched local bottom-up initiatives and assumed the people involved to get self convinced by the power and usefulness (read necessity) of a Lean transformation.

The potential problem with this approach is the risk to encourage enthusiastic launches but later put local initiatives on hold, possibly discard the improvements and order to redo on an other process, for the sake of alignment to strategic objectives or global coordination.

One can imagine all the frustration and loss of confidence of local actors if this should happen. They worked on improvements, accepted to change the way to achieve their tasks and possibly saw real improvements before a remote authority orders to stop and redo something else.

Not only all  resources used in pilot workshops would have been wasted – even so it can be called investment in training – but the credibility and sustainability of such approach would surely be impaired. It certainly will be difficult to motivate again these people for another workshop.

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How much non-added value additive manufacturing can take out of actual processes?

It is a well-known fact: the sequence of all activities required to bring a product to a customer is called a value stream and despite the name, value does not flow smoothly nor swiftly along streamlined processes. Value streams are cluttered with non-added value processes, tasks and steps, so-called wastes.

Traditional manufacturing processes aren’t very efficient especially when several different techniques are required e.g. cutting, lathing, milling, drilling, welding, deburring, assembling, painting, etc.

All these machines require energy and floor space. The more complex the process, the more energy and space is required.

This remains true even if the process is partly subcontracted, which adds more transportation and management costs, maybe additional quality controls.

In such processes there are many hands-off and transportations between machines and work posts, the different operation require different skills, thus a staff of qualified workers.

Production is launched in batches in order to have some economies of scale but with carryover costs and all the trouble related to WIP and inventories.

Of course lead time is dependent on the number of operations and the process’ efficiency. Measured in time ratio, the added-value time to total Lead time ratio is often around 2% (poor efficiency) and around 10% (?) at best.

Customers pay for all this as until recently there was no alternative. Yet a tremendous change will affect some industries / businesses with additive manufacturing.

With these new techniques, when relevant and possible, the part or product is created in a single process by adding (“3D printing”) material one thin layer after another.

So how much non-added value additive manufacturing can take out of actual processes?

Well, considering the examples given above, I’d say a lot of handling, storing, energy, floor space, capital frozen in inventories and WIP, manpower costs, a large share of overhead, capital for different machines, lot of floor space and related costs (heating, cooling, light, locker rooms and other “social” rooms).

For the industries and businesses that will be threatened by the rise of these new manufacturing techniques, the disruption can be tsunami-like. Think of all the barriers to entry suddenly disappearing for new challengers and the irony of established companies, if caught unprepared, being suddenly locked-out from their own markets!

Some companies may not be able to switch quickly from traditional to additive manufacturing. It will probably take them some time to get the new know-how, find a suitable business model and get rid of assets that became a burden; machines, buildings and… some of the workforce. If additive manufacturing techniques supersedes traditional ones, companies that couldn’t manage the turnaround will be pushed out of their markets.

For customers it should be good news: cost and lead time should drop significantly while customization makes a giant leap.

Sad for those who will lose.

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You may also be interested in reading more posts about the factory of the future, like How disruptive 3D printing can be or Will 3D printing revitalize strategic analysis?


Value Stream Mapping

A value stream is the sequence of all activities required to bring value to customers. The name value stream infers the value flows to customers along streamlined processes, which is an ideal seldom seen in reality. In reality value streams are cluttered with non-added value processes, tasks and steps.

Nevertheless such value streams deliver value, they could deliver it more efficiently with less expenses and efforts.

That’s where Value Stream Mapping comes in. Value Stream Mapping, VSM in short, is a value stream description method for analyzing its current state.

The first outcome of a VSM is a “process” or value stream map made with “standard” symbols, in order to give a synthetic overview of the whole process.

A VSM displays physical and information flows on the same map. Therefore an alternate name is “Material and Information Flow mapping” or MIFA for “Material and Information Flow Analysis”.

The map displays the current state and is only description. It needs to be analyzed in order to understand what hinders the smooth, continuous and swift flowing of value towards the customer.

Hindrances come as flaws in the process, loops for rework, too many inventories, sub optimized bottlenecks, quality issues, constraints, policies, inappropriate rules and many more.

Once the VSM analyzed and the improvement points defined, it is time to draw the ideal future state, known as Value Stream Design (VSD).

The way to close the gap between VSM and VSD is to carry out the action plan.

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Value, value-added, value stream

Value is usually defined, at least in Lean-thinking context, as “something the customer is ready to pay for”, which leaves to customers the entire freedom to choose what makes value to them.

It can be something worth a lot of money because made of precious material, something desirable like an item that gives his owner pride or show his/her status or more basically something useful, or any combination of the three.

Value is not only limited to tangible things, services can bring value as well. Some customers will see value in the services provided by a personal shopper, in advice given by a counselor, etc.

Value-added is an improvement, enhancement or transformation that gives something a greater value. A plain log of wood can have a (trading) value per se but gets higher value if transformed into boards, shovel handles or chair legs.

In services, value-added can be having an MD analyzing your exams’ results and prescribing a remedy. Without the physician’s know-how, the exams’ results are of relatively low value for the man on the street.

A value stream is the sequence of all activities required to bring value to customer. This may include designing, manufacturing, shipment, installation, etc. A value stream can deliver services as well.

A value stream may be strictly internal to a company or may include external suppliers, thus the “supply chain”.

The name value stream infers the value flows to customers along streamlined processes, which is an ideal seldom seen in reality. Value streams are cluttered with non-added value processes, tasks and steps, so-called wastes.

Nevertheless such value streams deliver value. They could deliver it more efficiently with less expenses and efforts. This is the aim of Lean.

You may also like to read Why this lean obsession about waste?

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