Value Stream Mapping (VSM) – All things you should know

The ultimate aim of value stream mapping (VSM) is to save money or reduce production cost. To save money, we need to initially identify which all things or activities are consuming money without delivering any value to the customer. I think you all know what is a value, its anything which customer is willing to pay for.

So, anything which do not add value to the customer, we call it as non value adding (NVA) activities. This distinguishing and identification of value adding (VA) and non value adding activities can be done by value stream mapping (VSM).

And this NVA activities will be eliminated or reduced through the implementation of action plans which are created in value stream mapping (VSM).

Purpose of VSM

As I said in the above paragraph, purpose of value stream mapping is to identify and distinguish value adding activities and non value adding activities, so as to reduce or eliminate non value adding activities and hence to reduce the production cost. In other words, it will highlight the hidden wastes in a process.

It can also used for knowing how the material and information flow in a process, which can be later used for improving it.

How to save money through VSM

After properly doing value stream mapping we will be able to identify NVA activities. If we eliminate or reduce this NVA activities the productivity will increase, which will in turn saves money.

How to do Value Stream Mapping

Following steps can be followed for doing a VSM

1. Identify the process where value stream mapping is required

Most of the initiative for doing a vsm project will be a customer requirement. This will helps the customer to understand how efficient your process are and what all are the actions you are going to take for improving it.

VSM projects can also be identified for reducing the cost of production, as a requirement from the management, as competition tightens.

In my opinion all process requires VSM, but to be selected on priority basis, assembly line or process which consume highest money can be placed on the top of priority list. And we need to pick one by one after completing the projects on top of the list.

2. Collect required data

Following data is to be collected for doing value stream mapping ;

• Cycle time – its the time taken to complete a process (eg: assembly, drilling, inspection, packing, etc.). This can be calculated by Direct stopwatch time study.
• Changeover time – its the time between the moment when the last product of a product category exits the process and the moment when the first good product of the next product category exists the process. Its assumed that during the changeover time, some work is going on to change the set up, that means there is no idle time.
• Up time – Available time excluding downtime.
• Material flow – collect the data regarding how material flows between supplier and production floor, between work stations in production floor, and production floor and customer. Also collects how frequently material moves and lot size.
• Information flow – collect the data regarding how the information flows between customer and production control, production control and supplier, production control and production floor and between work stations in production floor. Also collects how frequently information flows.
• Collect average no of inventory before and after each process.
• Collect yield percentage of each process.

3. Draw the current state map

Following needs to be calculated before drawing current state map ;

Production Lead time calculation

Production lead time is the total time from starting to the end of the process. More clearly its the time a product spends in the production area such as, raw material storage area, movement time, processing, WIP storage area, FG storage area, etc.

Production lead time can be calculated by adding total cycle time and total waiting time. Waiting time can be calculated by multiplying average no of inventory before a particular process and cycle time of that particular process, and add all the waiting times.

Example for production lead time calculation

Suppose manufacturing of a product requires process A, B, C and D. And its cycle times are 40 seconds, 30 seconds, 20 seconds and 45 seconds. And average no of inventory before each process are 100 nos, 10 nos. 0 nos, 12 nos respectively. Also average inventory after process D waiting for the shipment is 50 nos.

In next step calculate total waiting time. This can be done by as follows.

(100 x 40) + (10 x 30) + (0 x 20) + (12 x 45) =

4000 + 300 + 0 + 540 = 4840 seconds.

Note : If the process are not running since there is no schedule or production plan, that time gap also need to added to the above value.

For calculating waiting after process D and before shipping, please follow following steps.

Calculation of shipping cycle time : Suppose 150 nos is shipped at a time and frequency of shipping is once in a day,

cycle time of shipping = (24 x 60 x 60) / 150 = 86400/150 =576 seconds

Waiting time after process D for shipping = 576 x 50 = 28800 seconds

So, total lead time will be = 4840 +28800 + 40 + 30 + 20 +45

= 33775 seconds or 9.38 hours

Value added time calculation

For calculating value added time add the cycle time of Process A, B, C and D.

= 40 + 30 + 20 + 45

= 135 seconds or 0.0375 hours

Do not add shipping cycle time because it do not make any changes to the product, except change in the location.

Value added ratio calculation

Divide value added time by production lead time

= 0.0375/9.38

= 0.00399

Ok now we can move to the elements of Value Stream Map…

The following elements altogether constitutes a value stream map.

Elements of a Value Stream Map

There are mainly three sections in the map,

• Information flow
• Material flow
• Time ladder

Each of these sections consists of some important elements. They are;

Information flow

This section consists of following elements;

• Customer
• Supplier
• Mode of information flow (Electronic or manual)

Material flow

This section consists of following elements;

• Process box
• Data box
• Inventory
• Pushing of material
• Pulling of material
• Mode of shipment
• Mode of supplier brings material
• FIFO
• Super market
• Kanban
• Withdrawal

Time ladder

This section consists of following elements;

• Process cycle time
• Inventory waiting time
• Production lead time
• Total value added time
• Value added ratio

These elements are represented by icons in the map. You can refer the commonly used value stream mapping icons by clicking this link. This link will take you to the website https://www.lucidchart.com/. I found this information about value stream mapping icons informative.

The elements listed above may be required in current state map or future state map (explained at the end of this article), according to presence of things that each element represents, in the real world.

Ok now we are ready draw the current state value stream map. Use the data we collected, factors we calculated and required icons which represents a particular elements to draw a current state value stream map. After drawing the current state map it should represent the real world, because this current state map is used for improvement analysis and for identifying kaizen bursts.

You can refer an example of value stream map in this Wikipedia page.

4. Identify Kaizen bursts

Kaizen bursts are improvement projects.

After creation of current state map, arrange a discussion with representatives of all departments which are related to these process, for identifying improvements from the current state.

Following can be improved from current state;

• Inventory can be reduced – Very low value added ratio is the indication of the high inventory.
• Uptime can be increased – Very low uptime indicate a scope of improvement
• Changeover time can be reduced – Changeover time should be a low as possible
• Improve information flow
• Yield – yield is the percentage of good products produced

How inventory can be reduced

1. Super market and Kanban System

Inventory can be reduced by introducing pull system for materials instead of push system. This can be done by introducing supermarket concept with the help of kanban.

Requirement should come from shipping. Define a inventory level in the supermarket of shipping area. When products are consumed from that supermarket a kanban card should move from that supermarket to the supermarket of preceding process communicating to start the production of what and at which quantity. This type of communication should go back up to the purchase of rawmaterials.

By implementing this, products will be produced at right time at right quantity. This will drastically reduce inventory and hence the production lead time.

2. Line balancing

Unbalanced assembly line will results in unwanted waiting in the line and those will results in the inventory pile up.

How to do line balancing is explained very well in this article. Please click this link for going to the article on line balancing.

3. FIFO System

Introduction of FIFO system will control the ageing of the inventory.

How to increase Uptime

Uptime is opposite to downtime. So if we eliminate or reduce breakdown, uptime will increase. Autonomous maintenance helps to reduce downtime.

How to reduce change over time

Changeover time can be reduced using the method, SMED (Single minute exchange of dies).

How to improve information flow

Information flow in the production floor can be improved by introduction of Kanban system.

Information flow can also be improved by scheduling the production only for pacemaker process. Pacemaker process is a process where production scheduling is done, and the production requirement to the upstream process move through kanban cards.

This production scheduling can be done through Heijunka, for further improvement.

Also in the information flow section, if the information is passed through hard copy, there is a scope for improvement by converting it in to digital mode.

How to improve yield

As I mentioned earlier yield is the percentage of good products produced. If the yield is very low that means our process is producing so many scraps. This situation can be eliminated by finding the root cause, why lead to scraps. One of the popular tool for finding the root cause of a problem is why why analysis. Why Why analysis is explained in this article clearly, please click here for knowing more about why why analysis.

Kaizen burst symbol

After discussion we will be able to identify areas of improvement, in the current state map. We can mark these areas with kaizen burst symbol which is a icon showing an explosion. This will help to identify the improvement areas easily.

5. List down kaizen bursts

List down the identified kaizen bursts in another format and clearly describe the project and its goals. We can link this format to current state map, by giving a kaizen burst number.

7. Action plan for kaizen bursts.

Create a detailed action plan for kaizen burst project. The action plan should include time line and responsibility.

6. Create Future state map

Now draw the future state value stream map, incorporating the expected improvement when we implement the identified kaizen burst projects. This will be a goal for the improvement. You may also need to include new icons for representing the improvements we discussed.

Once we implement the kaizen burst project, redraw the future state map with real results. And analyse the result. If it is not ok, review the kaizen bursts and its action plan.

If the result is ok, close the value stream mapping project and celebrate.

Please note that you will not save money when you create an action plan. You need to implement those action plans.😉

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