Infosys-Oracle Blog

Value Stream mapping is a technique that aims to identify all the value adding activities of the process under study, remove the unnecessary activities, and then connect the value adding activities together- as if all these activities were generating value for the customer as smoothly as the flow of a “stream”. For the purpose of this blog, I am assuming value to be any activity in your process for which the customer is willing to pay. For example, if you are taking steel and molding it to make rims, we can assume that your customer is willing to pay for the transformation. However, if the rim has to travel 50 meters within your plant to get to the packaging area, the customer is willing to pay for the packaging material and effort, but not for the cost of transporting the material 50 meters within your plant.

So how is a Value Stream map different from a process drawing or a process map? Usually, in process maps, you identify the material flows and activities within a process. In a value stream, you also show flow of information as well as delays and can additionally put in pertinent data (such as production rate, replenishment frequencies etc.). These details allow you to analyze your business process more holistically than your process charts.

To do a value stream mapping, the best approach is to identify folks who know the best about the process you are going to study- this can include managers, operators, support personnel etc. who are related to the process. You then have these people chart the various activities in the process out on a large sheet of paper. You can either do it in your meeting rooms, or can have people observe the process as it happens and then draw the various activities on the paper. Make sure folks observe not just the flow of material, but also flow of information, delays such as queue times etc.. Having them record the processes as they happen will ensure that they are accurately noting down the delays and deviations involved. Some experts suggest following a convention of keeping only the value adding activities at the center of the chart, and then the non- value adding activities towards the bottom and top of the chart. This allows for a clear demarcation of non- value adding activities from the actual value adding process. Once the process has been diagrammed, folks can put in additional details related to each activity such as the frequency, output rate and other relevant details.

With the above done, you have a visual idea of what is adding value to your process and what is not. Next you brainstorm further to understand the process better and identify the unnecessary activities and ways to remove them. One thing to remember is that, one of the reasons why this has worked so well for automobile companies is that they have a limited product variety being manufactured within a plant (say as compared to say an electronics manufacturer). If you have a large variety of products, then this technique might not give the necessary results, unless these products can be grouped into a relatively smaller number of product families. You will have to determine whether this technique will be of help to your business or whether you should look at other lean techniques available to identify the non- value adding activities.

One of my clients, a large manufacturer of industrial equipments in USA did a value stream mapping exercise of one of its manufacturing plants. They seperated their products into one of a few product families and then identified the value stream for each such family. After analysis, they decided to divide their shop floor into cells with each cell manufacturing one specific product family. So they grouped all the machines necessary to manufacture that product family into a cell. This resulted in having all the necessary machines lined up in a sequence within the cell thereby eliminating unnecessary material handling. Infosys also helped by designing a custom solution that helped determine the value stream of configured assemblies right at order booking thereby designating it to be manufactured at a specific cell.

You can get help from Infosys consultants in both determining your value stream as well as ways to remove your non- value adding activities and implementing it in your ERP.