Value Stream Mapping (VSM) is a visual diagram that displays the flow of value created through different processes throughout lean production cycles. Also known as material and information flow mapping, its main purpose is to reduce waste while simultaneously increasing value for the customer.
Flowchart coordinates multiple steps of product development
Tool for lean production during multiple handoffs
Tracks materials (artifacts) and information in creating customer value
AKA material and information flow mapping
Value Stream Mapping is a tool within lean methodology, first developed within the Toyota Production System (TPS) credited to Japanese engineer Shigeo Shingo. Known also by the names “value chain” and “information stream/flow” mapping, this type of flowchart is used to visually account for the handoffs between departments in the production of a product or service.
Perhaps most importantly, VSM is associated with lean manufacturing because it aims to reduce waste. Waste can be literal material components, or unnecessary wait times or uneven supply chain planning, for example.
VSM is used in both lean and the modern Six Sigma toolkits as a method for eliminating informational and material waste.
There’s no exact right or wrong situation in which to use a VSM. The best example of a time when a VSM would be useful is when management needs to see the flow of materials as they move through different stages of production.
A Value Stream Map is most helpful when continuous improvements are made at the system level of production. Because there are so many different actors involved – assembly line workers, drivers, distributors, etc. – many sub-processes occur simultaneously and must be managed to ensure balance across lean production.
Because there are usually so many visual elements that represent various processes, it’s standard in value stream mapping to use recognizable icons, or symbols. While there is some variation, there are usually standard symbols used, to eliminate confusion. See some examples of symbols in the image below:
Value Stream Mapping is extensively used in manufacturing, when units must be tracked throughout production to the final customer destination. It is also common in the fields of software development, logistics, and healthcare. There are two types of VSM:
This type of mapping is pretty straightforward: it shows the flow of value throughout production as it currently exists.
This second type of mapping shows the added value within production flow after process improvements have been made. This type of VSM is a projection, so it is a hypothetical outcome – more of a goalpost than a reality.
Some people like to include a 3rd type: Ideal State VSM. For ease of understanding, we’ve combined both Ideal and Future states, since they both reference hypotheticals. However, it may be helpful to distinguish between them in the scenario where you are analyzing a future plan against a hypothetical ideal scenario in that future.
If you’re curious about extensively using value stream mapping, you should get to know the seven tools commonly associated with the analysis.
This kind of mapping is derived from business process re-engineering (BPR), a management methodology from the 1990s that is used to track process flow and identify waste. Its purpose is to fundamentally challenge assumptions about internal management processes.
A supply chain response matrix is a diagram that identifies bottlenecks in inventory. In this diagram, lead time is measured along the x axis and inventory along the y axis.
The production variety funnel is a VSM tool that looks outwards to other industries in search of successful solutions to similar problems.
Forrester effect mapping is a line graph that tracks the compounded effects of demand-driven production against supply chain disruption. The flatter the two lines, which have peaks and valleys as demand fluctuates, the more “lean” the system is. This is because the flatter lines indicate that production isn’t wildly over-reacting to supply chain changes.
Quality filter mapping measures quality, including the stages at which defects could occur throughout production. Quality failures are measured in a ratio of parts per million.
Much like its name implies, decision point analysis is a VSM tool that identifies key points at which business leaders have the ability to make effective push vs pull manufacturing decisions.
This last tool, physical structure mapping, is a big bird’s eye view of not just a single business, but of the industrial supply chain as a whole.