Value Stream Mapping Technique
Need of value stream mapping
Business as they grow, expand in different directions and functions to fulfill consumer needs. While they grow, many unnecessary pieces get build, there is duplication of effort, processes become inefficient and systems become older and rigid.
All this challenges the business growth over a period of time as any change within the business becomes expensive and time consuming. This is percolated across different levels, from strategic to operational to execution level.
What is Value Stream Mapping?
Value stream mapping is an interesting and insightful technique.
The purpose of value stream mapping is to identify and remove or reduce “waste” in value streams, thereby increasing the efficiency of a given value stream. Waste removal is intended to increase productivity by creating leaner operations which in turn make waste and quality problems easier to identify. Its a lean technique.
Why is it needed?
Value stream mapping is needed to get a clear understanding of how value flows through the various functions of an organization. Armed with this knowledge, organizations can begin to optimize their activities and processes on a macro-level, and make changes that have a serious impact on overall productivity and value delivered. In this way, value stream mapping can help organizations create the blueprint for their lean transformation.
How and when to use it in the transformation journey?
Value stream mapping can be applied at all levels from enterprise level to the small components in the workflow. It can also be used in all phases of software development lifecycle or any phase in design thinking.
In the transformation journey this can be applied after when the workflows are created and now we are creating the product board or backlog. Before you proceed to do that, you already have all the current workflows defined. Lets consider this as the current state.
Selection of a use case
- In the current state there could be multiple products, offerings to the customer.
- You should first identify one of the product among the product family to create value stream mapping. This product could be the most profitable or less risky to experiment etc.
In this technique, you define the value from the consumer’s perspective. The value that product/service provided to the customer.
Lets consider an online retail platform as a service.
Pull all team members who are part of this product and also experts who can contribute to this exercise.
- You should then bind the context of the transaction to limit the scope in which the product is used and the parties involved in the end to end transaction. Customer ordering a book on it as the example.
- Within this bounds, map the process step by step beginning from the customer to the book (inventory) provider. These are high level steps (and not too detailed task level breakup) which start from customer request to it’s fulfillment.
In essence, determine the set of all actions required to get a product/service to the customer.
- Next step is crucial, which is add key information flow into the map that we have drawn. Information details could be how the customers order product, frequency and method. This starts with the customer request information, how this information flows within the different components and is translated and interpreted at every layer until it reaches to supplier. This depicts how and what information flows through the systems to drive the outcome/value for the customer.
- You need to collate the performance data. This is various performance characteristics stats of each step.
- Time to complete operation.
- Machine/resource utilization.
- Wait time.
- Number of requests processes at a time.
- Failure rate.
- External failures/delay.
Analyze Processed Data & Decide Act
- Then create a time series from this which includes all the steps.
- Once the time series is chalked out & combined with the databox then analysis can be done on the improvement areas. It could be long delays, poor quality of piece of software resulting in errors, or over-provisioned/under-provisioned resources etc.
- Team then creates an ideal state by envisioning the best process. This could be improvement in a single step or it could be spread across different levels/pieces.
- This ideal state is shared with various stakeholders to take the opinion and approval.
Kanban systems could be utilized to remove the need for planning and scheduling as well as many other ideas that could be considered.
This process can be applied to different domains and sub-domains to gain optimization. Its an unending cyclic process. In case of transformation, as a first step this is helpful to create the high level ‘to be’ version from the current state. This then can be further applied other levels.