30 Jul
2018

An Introduction to VSM - Value Stream Mapping

VSM is a simple yet incredibly effective way to produce business value. Learn the basics here and how it integrates with IIOT.

Continuous Improvement
An Introduction to VSM - Value Stream Mapping

Often associated with Lean Manufacturing, Continuous Improvement and the Kaizen system, VSM, or Value Stream Mapping is a valuable tool of continuous improvement. So simple it can be done with just a pen and paper, a value stream map often appears as a one-page flowchart listing every single process back from the customer to the raw material. While mainly for manufacturing, the archetypal nature of VSM has also led to its adoption in industries ranging from healthcare to software development.

The purpose of VSM is to identify and establish costs for every step taken to provide value to a customer. Here, value is defined as anything a customer directly purchases, be it a product, a service, or a product-as-service. Anything not directly contributing to value is deemed waste, and should be eliminated. In this manner of thinking even quality checks and maintenance constitute waste as they are adjacent to the actual delivery of value to the customer. While this strict type of analysis may seem overly strict and simplistic, it creates a valuable picture of how all parts of a company interact and in what capacity to better determine where improvements to efficiency can be made.

 

One of the benefits of focusing intensely on costs and benefits is that previously unexplored pathways might be revealed in how to better streamline production. For instance, defining quality control and maintenance as waste might inspire a company to integrate an Industrial Internet of Things (IIoT) system in their plant. Using IIoT, a manufacturer could use sensors and real-time feedback to automate processes and vastly reduce cost. Failure to define these processes as wasteful could result in a company ignoring major pain that could be alleviated with new, advanced systems.  

 

While other systems like Six Sigma do use process maps, VSM goes further with concepts to create a birds-eye view of the organization. It displays a larger depth and breadth of processes compared to other process maps, often including between five and ten boxes. It also includes the underlying information and management systems that support manufacturing, a huge part of production that is often ignored in mapping. Additionally, VSM zooms farther back in scale, including both the receiving of raw materials and the delivering of finished goods in the supply chain. This highlights both additional value points, and places where undo cost can be corrected. The insights gleaned from Value Stream Mapping are intended for use in planning future projects, processes, and continuous improvement initiatives, so by necessity they end up being more advanced than the average production map.

 

VSM is becoming extremely important as manufacturing and especially food and beverage manufacturing becomes more and more competitive in a global market. With low-cost, high-volume sales, being able to take a discerning look at where a company is winning and loosing and act on those insights is absolutely necessary, and VSM is a powerful planning tool. Whether for Continuous Improvement initiatives or supply chain appraisal, there are few more complete tools for managing a company on every level.

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