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Business is growing more competitive every day. In order to keep up with customer demand and expectations, companies are having to work faster and be more efficient than ever before. Value stream management is an emerging business process intended to gauge the flow of value into business resources and activities as well as the flow of value back into the business.

Value stream mapping helps a business oversee the complete end-to-end activity cycle and measure the success of that activity cycle. In short, value stream mapping helps a business see what works and what doesn’t. This lets a business focus on beneficial initiatives while reducing or limiting less-valuable activities and initiatives.

What is value stream mapping?

Value stream mapping is a tremendously valuable tool for improving a process. It’s well suited for a broad range of industries and processes. A value stream map is a visual depiction of the flow of materials and information that provide the customer with a product or service.

To understand value stream mapping, we need to first understand what a “value stream” is. Simply put, a value stream is a series of steps that occur to provide the product or service that their customers want or need. In order to provide the product or service that the customers desire, every company has a set of steps that are required. Value stream mapping enables us to better understand what these steps are, where the value is added, where it’s not, and more importantly, how to improve upon the collective process.

The value stream map provides us with a structured visual image of the key steps and corresponding data needed to understand and intelligently make improvements that optimize the entire process, not just one section at the expense of another. It also describes the lead time of various operations and can be used as a starting point for analyzing necessary activities and the amount of waste in the value stream.

Value-stream mapping is a useful tool for grasping the current situation and for planning improvements. A current state value-stream map depicts the current situation as is. A future state value-stream map depicts what the value stream should look like after planned improvements have been implemented.

Why is Value Stream Mapping Important?

The purpose of value stream mapping is to find and eliminate waste so you can maximize value. It focuses on the customer experience — what brings value to the customer — and identifies and eliminates time and energy that bring no value to the customer.

The benefits of value stream management include:

• Increased predictability. Understanding the entire value stream helps reduce uncertainty and surprises that lead to missed deadlines.
• Higher customer satisfaction. Responding quickly to customer requests can improve their experience and the company’s reputation.
• Improved productivity. Streamlining operations and reducing roadblocks allows teams to ideate, test, and deliver faster.
• Reduced costs. Identifying unnecessary work and wasted resources saves money and time.
• Better quality. Streamlining operations and processes reduces opportunities for errors and defects and contributes to higher product and service quality.
• Increased end-to-end visibility. Having real-time data available throughout the organization lets people track initiatives and adapt to changing corporate priorities.
• Boosted innovation and morale. Focusing on products that really matter to customers is more satisfying for employees.

Creating a value stream map of the current state of your process helps you focus on areas of waste such as excess inventory, non-value-added time, and multiple operators. It’s not an easy undertaking but making a good value stream map is a great way to help everyone involved understand and see where improvements can be made.

There is a tendency to skip mapping the current state and go directly to the future state map. But if we don’t understand the current process, we can’t really make intelligent decisions about how the future current state might or should look. A lot of companies want to skip the development of the current state map and get right into brainstorming ideas for improvement. We must reduce this impulse.

Skipping the current state map is like building a house without surveying the land or visiting the site. Doing so can lead to a home that can’t be built and an upset homeowner.

How to Create a Value Stream Map

These tips will help you develop accurate value stream maps that you can use to drive continuous improvement.

1. Define a value stream.
    Include all the activities required to bring a product from “raw materials” into the customer’s hands or provide service to a target audience.
2. Base the value stream map process on customer requirements.
    You must understand what the customer values and use that as your starting point. If you don’t, you risk, in the words of my favorite band The Fall, paying “the highest attention to the wrong detail.”
3. Capture the process as it operates now, not how it’s supposed to operate.
    A process that worked well when you had 20 employees may not perform as efficiently now that the business is a 200-person company. Be sure you map the process as it happens now, not the way it used to work—or how you wish it worked!
4. Assign a value stream map manager to lead the mapping effort. 
    Input from team members and stakeholders is important but appoint (or elect) one team member to draw the entire value stream map. This ensures that the manager understands the material and information flows.
5. Walk through the process to ensure that the flow of materials and information is accurate.
    Make sure your map reflects the reality of the process—verifying this by following the process from start to finish can reveal crucial details you might have missed.
6. Focus on one small step at a time.
    Make sure you capture each step accurately. For example, don’t trust the clock on the wall to measure cycle times—use a stopwatch.
7. Identify critical paths and bottlenecks.
    Your map may reveal a number of potential areas for improvement. Which ones will make the biggest difference in meeting customer requirements?
8. Create a future state map from the current state map.
    Your current-state map suggests where to focus your efforts, so you can draft a map that shows how value will flow through an improved process.
9. Limit the improvement plan to achieve the future state to a one-page document, if possible.
    List the actions that need to happen to improve the process. Use simple, clearly-defined steps.
10. To implement the improvement plan quickly, focus on individual areas.
     Take a step-by-step approach to putting your plan in action, then update your future state map as you implement each step.

Value stream mapping has been around for several decades, there is extensive literature on the topic, and it has been applied in a huge range of applications by thousands of practitioners. Despite this, often, I see value stream maps failing to deliver their potential. So here are some simple tips that can help you get the most out of this powerful tool and avoid the common pitfalls.

Tips to Define Your Value Streams

Here are some tips to help you begin the process of establishing your value streams:

1. Value stream mapping is a team sport.

The first step to make your VSM more dynamic is to involve the right people in the mapping process. You need to engage your customers, suppliers, employees, managers, and anyone else who has a stake in the value stream. By involving them, you can gain insights into their needs, expectations, pain points, and opportunities for improvement. You can also foster a culture of collaboration and ownership, where everyone feels responsible for the value stream and its outcomes.

2. Capture the actual process in the actual place.

Describe the process as it operates now, not how it’s supposed to operate. Don’t be shy – visit the workplace when doing a value stream map. Walk through the process to ensure that the flow of materials and information is accurate. You will gain far more knowledge of the process if you witness the events yourself. An incorrect VSM can lead to wrong conclusions being drawn and can waste valuable time of improvement teams.

3. Make your value stream map with pencil and paper.

These days there are lots of value stream mapping software available but for first timers who may not be familiar with the software it’s just one extra thing to learn. Excellent results can be obtained through traditional pencil and paper. This helps your Value Stream Mapping team be familiar with the process and understand the level of detail that will be captured. When drawn in pencil it is easier to make changes. Just remember to stick with basic value stream mapping icons.

4. Continue to optimize your VSM

Embracing the concept of continuous improvement can help you develop value streams that continue to provide long-term benefits to your customers. Review your KPIs and customer feedback regularly to determine whether you’re meeting your primary objectives. Making small changes to optimize your processes, products and services can help you remain competitive, retain your customers and develop breakthrough innovations.

Value stream mapping provides a great way to make changes and improvements to the process without doing so at the expense of other processes. Creating a value stream map of the current state of your process helps you focus on areas of waste such as excess inventory, non-value-added time, and multiple operators. If we don’t understand the current process, we can’t really make intelligent decisions about how the future current state might or should look.

At the end of the day, the goal is to develop a corporate culture that provides the best possible product to meet or exceed customer needs and expectations. This is ultimately done by making continual improvements to the value stream. As our customers’ needs and expectations evolve, so also will our value streams need to change and constantly evolve.