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.