Sept. 27 2006 12:00 PM

In the March issue of Parcel Shipping & Distribution, we addressed the 5S+1 process and how implementing that process would lay the groundwork for the other lean tools. The next step in the process is to identify opportunities for improvement through value stream mapping (VSM). The value stream is all the actions, both value-added and non-value-added, required to bring a product from concept to launch and from order to delivery. The value stream map is a physical diagram of every step involved in the process. Hence, VSM requires you to follow a products production path from supplier to customer and draw a visual representation of every process in the material and information flow. As you continue to draw the maps, you will learn to see your shop floor in the way that supports lean thinking. It is important to note that the maps are just a technique to draw awareness to opportunities, identify waste and locate its source in the process flow. The actual implementation of value-added flow activities is where you will see your improvements. Typically, a VSM Kaizen project will take between three and five days. To begin, we will look at the three elements of VSM: current state, future state

and implementation.


Current State

The first area you will want to observe and map is the current state, or where you are today. Before you start to map the area, make sure that you take a quick walk around the area to get a sense of the flow and sequence of the processes there. This will help you to understand the whole when you go back and get the information for each state. Another good tactic is to draw the map by hand, using a pencil and paper. This way, by doing it yourself, you can make changes and gain a complete understanding of the material and information flows. When drawing the current state map, you will identify wastes in the process such as defects, overproduction, waiting, transportation, motion, inventory, excessive processing and under-utilization of employees. These are the wastes that need to be reduced or eliminated to achieve greater productivity and quality.


When completing the current state map, you will also want to identify if each process is a value-added activity or a non-value-added activity. A value-added activity is one that the customer judges to be of value. There are three questions that you need to ask to determine if the activity adds value for the customer:


Does the task physically change the item?

Is the customer willing to pay extra for it?

Is the task done right the first time?


If you answered yes to all of these questions, then chances are it is a value-added activity. A non-valued activity, on the other hand, is one that uses time, resources or space but does not add value in the eyes of the customer. Some examples of functions that are non-value-added are inventory control and quality control. The customers do not care nor will they pay extra to make certain your operation keeps its inventory accurate or that you double and triple check orders before shipping to ensure accuracy. Rather, that is simply something they expect any business to do; they will not pay extra for such services.


Now that you have identified value-added and non-value-added activities, you are ready to collect the data for your current state map. Whether you are a manufacturing facility or a distribution facility, you will want to measure the following process data.


Cycle Time (C/T) how often a part or product is completed by a process. This is timed through observation and includes · the operating time plus the time it takes to load and unload.

Change Over Time (C/O) the process of switching from the production of one product or part to another in a machine or series of linked machines.

Work in Process (WIP) the amount of work that is in the process.

Work time this will be broken down into shifts based on the length of those shifts subtracting breaks.

Number of operators the number of operators for a given machine or machines. For example, one person may work two machines, so it is important to note such information.

Scrap rate this is calculated as a percentage of parts or products that do not meet specific quality specs.

Lead time the time it takes one piece to move all the way through a process from start to finish.

Takt time the available production time divided by customer demand for a defined time a shift, a day or a week.

Value-added as well as non-value-added activities.

Value-added percentage your total value-added activities divided by your

total lead time.


Now that you have the process data, there are some rules for making sure you record it accurately. First, pretend you are the item going through the process. This will keep you focused on what you need to measure. Record every step the item makes and the time it takes. Record WIP at each step, as well as any WIP queues. Note the time when the item waits, moves or is being worked on (include any setup, downloads, etc.). Document the frequency of the activity and who is responsible for the task as well as the quality and machine downtime. Lastly, always time the task never assume you know how long it takes.


Once you have mapped out the current state, look for areas of waste and identify them. These will be the areas to reduce and eliminate, which will in turn reduce your cycle times, lead times and WIP queues. Create a timeline to determine how much time in the cycle is used in value-added activities and non-value activities. Once you obtain this information, you can then determine the total value-added percentage.


Future State

After mapping your current state, you will need to map your future state (where you want to be). The purpose of this mapping is to identify sources of waste and eliminate them by implementing a future state value stream that can become a reality in a short period of time. The idea of the future state is to create a continuous flow or pull system of the parts or product, where each process gets as close as possible to producing only what the next step of the operation needs, when it needs it. The main focus of improvement is the customer; what can you do to better your company in the eyes of the customer? Any improvements must be directly correlated to the customers assessment of value. Your future state map will be the sum of the changes you made to your current state map after you reduced or eliminated the waste and the non-value-added activities. You will need to go out and collect the same data for your future state map as you did for your current state map. Given the changes that were made, you should see improved timings. Your future state map should have fewer processes and fewer wait queues, so the map should be smaller compared to your current state map. Make sure that your future state map answers the following questions:


Are you creating cellular flow?

Is there new material flow?

Is there new information flow?

Are there fewer wait times?

Are you meeting Takt time?

Are your metrics improved (i.e. quality,


Do you now have balanced machine and

operator times?

Are you utilizing a pull system?


Implementation Plan

The final aspect of VSM is developing an implementations plan (how to get to where you want to be). This plan should be clearly defined with each action item detailed. Identify the roles and responsibilities of each team member; each member should get at least one implementation step to complete. A target date for completion needs to be set for each step, and the due date is then agreed upon with the person responsible for that item. There should be a team leader assigned to make sure the implementation plan is being completed on time. If due dates need to be changed, then this needs to be communicated so the team is aware of the adjusted date(s). Typically, you want all action items completed in three to six months. If team members can have them completed sooner, then this is optimal. When implementing, be sure to focus on the areas that affect the

customer the most.


The value stream mapping process should give you an idea where to look for areas in your facility that can be mapped and areas of waste that can be eliminated. This map provides the view to see the waste, continuous flow and pull system opportunities. Remember, mapping your facility is an excellent first step, but it is only an effective tool if you then implement the changes to realize your new and improved future state.


Richard Kay is a Manager of Lean and Continuous Improvement for J&L Industrial Supply. He has over 15 years of experience in  manufacturing and distribution. He can be reached at