Value Stream Mapping and Analysis: Steps and Tools

Value stream mapping and analysis can potentially transform how your business operates.

In what manner?

Picture yourself as the CEO of a manufacturing company that is facing challenges. Your manufacturing processes are moving sluggishly, expenses are elevated, and clients are becoming increasingly impatient. You need a quick solution.

This is when value stream mapping and analysis become important. This methodology, developed from Toyota’s lean production principles, can assist you in visualizing and improving your manufacturing process. Organizations that have utilized value stream mapping and analysis have noted a decrease in production time by as much as 50%.

That’s just the beginning. According to research from the Lean Enterprise Research Centre, just 5% of tasks in production operations add value. The rest is waste. Recognizing and removing this excess can greatly enhance effectiveness and reduce expenses.

However, what is the mechanism behind its operation? Imagine a thorough blueprint of your manufacturing process, from the initial raw materials to the final product. Every single step, delay, and inventory point is barely open. This visual display enables quick identification of bottlenecks, redundant steps, and opportunities for enhancement.

Value stream mapping and analysis are applicable beyond manufacturing. They have been effectively utilized in healthcare, software development, and office settings.

Are you prepared to revolutionize your business? Let’s explore the process of mapping and analyzing value streams.

Table of Contents:

1. What is Value Stream Mapping (VSM)?
2. What is the Meaning of Value Stream Mapping?
3. Why is Value Stream Mapping and Analysis Important?
4. When to Use Value Stream Mapping?
5. What is the Purpose of Value Stream Analysis?
6. What are the Benefits of a Value Stream Mapping and Analysis?
7. How to Do Value Stream Analysis Steps-by-Step?
8. How to Examine Value Stream Mapping and Analysis through Chart?
9. Wrap Up

First…

What is Value Stream Mapping (VSM)?

Definition: Value Stream Mapping (VSM) is a lean management tool. It visualizes the steps required to deliver a product or service.

VSM identifies value-added and non-value-added activities. It helps streamline processes and eliminate waste. By mapping the current state, teams can identify inefficiencies. Then, design a future state with improved flow.

VSM improves productivity and customer satisfaction. It is widely used in manufacturing, healthcare, and service industries.

What is the Meaning of Value Stream Mapping?

Definition: Value Stream Mapping (VSM) is a lean management tool. It is used to visualize and analyze the flow of materials and information in a production process.

VSM originated from Toyota’s manufacturing system, which pioneered efficient workflows to reduce waste and improve efficiency. By mapping each step in the process, including visual tools like an energy flow chart, VSM helps identify bottlenecks and areas for improvement. By focusing on value-added activities, organizations can streamline operations, optimize resource usage, and enhance productivity.

Why is Value Stream Mapping and Analysis Important?

Value stream mapping and analysis are vital because they transform how businesses operate. Here’s why:

• Identify and eliminate waste: VSM pinpoints inefficiencies and non-value-added activities, enabling teams to remove waste and streamline processes.
• Optimize processes and improve quality: By mapping out every step, VSM helps optimize workflows and enhance the overall quality of products or services.
• Increase customer value and support continuous improvement: VSM ensures processes are aligned with customer needs, increasing value and fostering a culture of continuous improvement.

When to Use Value Stream Mapping?

Value stream mapping is a powerful tool used in various scenarios to enhance business operations. Here are key times to use VSM:

1. Process improvement initiatives: When looking to refine and improve existing processes.
2. New process design: During the design phase of new processes to ensure efficiency from the start.
3. Quality improvement projects: For identifying and addressing quality issues within workflows.
4. Operational bottlenecks: To identify and resolve bottlenecks that hinder productivity.
5. Customer complaints: When addressing customer complaints trace and fix root causes in processes.

What is the Purpose of Value Stream Analysis?

Value stream analysis is essential for any organization aiming to improve its operations. Here are the five main purposes of value stream analysis:

• Identify waste and improve efficiency: It helps identify and eliminate wasteful activities. This, as a result, enhances overall efficiency.
• Enhance quality: VSM examines every step in the process. Consequently, it ensures high-quality outputs.
• Optimize flow and increase customer value: VSM helps to streamline workflows, leading to smoother operations and greater customer satisfaction.
• Facilitate communication: Value stream analysis improves communication across departments, fostering better teamwork and understanding.
• Support continuous improvement and benchmark performance: It promotes ongoing improvements and helps set performance benchmarks to track progress over time.

What are the Benefits of a Value Stream Mapping and Analysis?

Value stream mapping and analysis offer a range of benefits that can transform your business processes. Here are the top five advantages:

• Waste reduction and efficiency: From identifying and eliminating non-value-added activities, value stream mapping helps reduce waste and enhance overall efficiency.
• Improved quality and process flow: It leads to better quality control and smoother process flow by highlighting bottlenecks and areas for improvement.
• Increased customer value: Value stream mapping and analysis focuses on activities that add value from the customer’s perspective. It ensures the end product or service meets their needs and expectations.
• Enhanced visualization and collaboration: It provides a clear visual representation of the entire process, enhancing visual storytelling. This fosters cross-functional collaboration and a shared understanding among team members.
• Data-driven decisions and continuous improvement: Value stream mapping supports data-driven decision-making and encourages a culture of continuous improvement. It helps organizations set performance benchmarks and track progress over time.

How to Do Value Stream Analysis Steps-by-Step?

Conducting a value stream analysis is a structured approach to improving business processes. Here are the essential steps to guide you:

1. Select the process to analyze: Start by choosing a specific process that needs improvement. This focus helps streamline the analysis.
2. Form a cross-functional team: Gather a diverse team from different departments. Their varied perspectives will enrich the analysis.
3. Define the scope and objectives: Clearly outline what you aim to achieve and set the boundaries for the analysis. This step ensures everyone is on the same page.
4. Map the current state and collect data: Create a visual representation of the existing process and gather relevant data. This will help you understand the current workflow.
5. Identify value-adding and non-value-adding activities: Distinguish between activities that add value and those that don’t. This identification is crucial for streamlining the process.
6. Analyze and map the future state: Use the insights gained to design an improved process version. This future state map should focus on efficiency and value.
7. Develop and implement an action plan: Create a detailed plan for implementing the changes. After implementation, monitor the results and adjust as needed, fostering continuous improvement.

How to Examine Value Stream Mapping and Analysis through Chart?

Data analysis can be similar to untangling a messy ball of yarn. Numbers alone don’t always tell the full story.

This is where data visualization becomes crucial, especially for value stream mapping and analysis.

However, while powerful, Excel often falls short of creating clear, impactful visuals like Sankey Diagram.

But don’t worry—we have a solution in ChartExpo. This tool is designed to enhance data visualization and storytelling with data. With ChartExpo, you can easily overcome Excel’s limitations and make your data sing, turning raw numbers into compelling narratives.

Let’s learn how to install ChartExpo in Excel.

1. Open your Excel application.
2. Open the worksheet and click the “Insert” menu.
3. You’ll see the “My Apps” option.
4. In the Office Add-ins window, click “Store” and search for ChartExpo on my Apps Store.
5. Click the “Add” button to install ChartExpo in your Excel.

ChartExpo charts are available both in Google Sheets and Microsoft Excel. Please use the following CTAs to install the tool of your choice and create beautiful visualizations with a few clicks in your favorite tool.

Value Stream Analysis Example

Using ChartExpo, as a value stream analysis example, let’s analyze the data below.

Level 1	Level 2	Level 3	Level 4	Value (Mwh)
Electricity Purchase		Electricity Demand		33332
		Electricity Demand	Power	26,036
		Electricity Demand	Light	6,930
		Electricity Demand	Compressed Air	3,579
		Electricity Demand	Cooling	665
		Electricity Demand	UPS	524
		Electricity Demand	Transformer Losses	998
		Electricity Demand	Losses from Power Generation	2,780
Natural Gas Purchase	CHP Plant			26,147
Natural Gas Purchase	Other Heat Generators			8,209
	Other Heat Generators		Hardening Shop	913
	CHP Plant	Electricity Demand		9,816
	CHP Plant	Fuel Demand for Heating/Heat Production		13,551
		Fuel Demand for Heating/Heat Production	Hardening Shop	913

• To get started with ChartExpo, install ChartExpo in Excel.
• Now Click on My Apps from the INSERT menu.

• Choose ChartExpo from My Apps, then click Insert.

• Once it loads, choose the “Sankey Chart” from the charts list.

• Click the “Create Chart From Selection” button after selecting the data from the sheet, as shown.

• ChartExpo will generate the visualization below for you.

• If you want to have the chart’s title, click Edit Chart, as shown in the above image.
• Click the pencil icon next to the Chart Header to change the title.
• It will open the properties dialog. Under the Text section, you can add a heading in Line 1 and enable Show.
• Give the appropriate title of your chart and click the Apply button.

• You can change the Node width to “15” as follows:

• You can disable the “Node Outline” as follows:

• You can disable the percentage value as follows:

• You can add the Postfix as “Mwh” with all values as follows:

• You can disable the “Enable Format” option and add “,” as Separator as follows:

• You can add the color of all nodes and set the node’s direction as follows:

• You can disable the footer level label as follows:

• Click the “Save Changes” button to persist the changes.

• Your final chart will appear below.

Insights

This data shows electricity and natural gas consumption.

Electricity demand: 33,332 MWh.

• Power: 26,036 MWh.
• Lighting and compressed air contribute significantly.

Natural gas:

• CHP plant: 26,147 MWh.
• Other heat generators: 8,209 MWh.
• Includes hardening shop needs.

FAQs

What are the value stream maps during analysis?

Value stream maps during analysis show the flow of materials and information through a process. They identify value-added and non-value-added activities. This helps pinpoint inefficiencies, reduce waste, and improve overall process efficiency and effectiveness.

What are the three main components of VSM?

The three main components of Value Stream Mapping (VSM) are:

1. Current State Map: Visualizes the existing process flow.
2. Future State Map: Designs the optimized process flow.
3. Implementation Plan: Details the steps to achieve the future state.

What are the four steps of value stream mapping?

The four steps of value stream mapping are:

1. Map the current state: Visualize the existing process flow.
2. Identify wastes: Find non-value-adding activities.
3. Design the future state: Create an improved process map.
4. Implement and improve: Execute changes and monitor results.

Wrap Up

Value Stream Mapping (VSM) is a powerful lean-management tool. It visualizes the steps required to deliver a product or service. By creating a visual representation, VSM helps identify inefficiencies.

The main goal of VSM is to distinguish value-added from non-value-added activities. This process highlights areas for improvement. It drives efforts to eliminate waste.

VSM begins with mapping the current state. This step shows the existing process flow. It captures every detail, allowing for a comprehensive analysis.

Next, teams design a future state map. This map represents the optimized process flow. It aims to improve efficiency and quality.

An implementation plan is crucial. It outlines the steps needed to transition from the current to the future state. This plan ensures that improvements are actionable.

VSM enhances communication and fosters continuous improvement. It aligns processes with customer needs. It supports continuous improvement by constantly identifying new areas for enhancement.

Ultimately, VSM aligns processes with customer needs, increasing customer value. It drives productivity, enhances quality, and promotes a culture of continuous improvement. Through VSM, organizations can achieve better operational efficiency and higher customer satisfaction.