Finance:Value stream mapping

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Value-stream mapping usually employs standard symbols to represent items and processes, therefore knowledge of these symbols is essential to correctly interpret the production system problems.

Value-stream mapping is a lean-management method for analyzing the current state and designing a future state for the series of events that take a product or service from its beginning through to the customer with reduced lean wastes as compared to current map. A value stream focuses on areas of a firm that add value to a product or service, whereas a value chain refers to all of the activities within a company. At Toyota, it is known as "material- and information-flow mapping".[1]

Purpose of value stream mapping

The purpose of value stream mapping is to identify and remove or reduce "waste" in value streams, thereby increasing the efficiency of a given value stream. Waste removal is intended to increase productivity by creating leaner operations which in turn make waste and quality problems easier to identify.[2]

Identifying waste

Types of waste

Daniel T. Jones (1995) identifies seven commonly accepted types of waste. These terms are updated from the Toyota production system (TPS)'s original nomenclature:[3]

  1. Faster-than-necessary pace: creating too much of a good or service that damages production flow, quality, and productivity. Previously referred to as overproduction, and leads to storage and lead time waste.
  2. Waiting: any time goods are not being transported or worked on.
  3. Conveyance: the process by which goods are moved around. Previously referred to as transport, and includes double-handling and excessive movement.
  4. Processing: an overly complex solution for a simple procedure. Previously referred to as inappropriate processing, and includes unsafe production. This typically leads to poor layout and communication, and unnecessary motion.
  5. Excess Stock: an overabundance of inventory which results in greater lead times, increased difficulty identifying problems, and significant storage costs. Previously referred to as unnecessary inventory.
  6. Unnecessary motion: ergonomic waste that requires employees to use excess energy such as picking up objects, bending, or stretching. Previously referred to as unnecessary movements, and usually avoidable.
  7. Correction of mistakes: any cost associated with defects or the resources required to correct them.

Waste removal operations

Monden (1994) identifies three types of operations:[4]

  1. Non-value adding operations (NVA): actions that should be eliminated, such as waiting.
  2. Necessary but non-value adding (NNVA): actions that are wasteful but necessary under current operating procedures[3]
  3. Value-adding (VA): conversion of processing of raw materials via manual labor.[3]

Using the method

Applications

Value Stream Maps are usually drawn using a set of standard symbols, some of which can be seen here.
A paper value stream map.

Value-stream mapping has supporting methods that are often used in Lean environments to analyze and design flows at the system level (across multiple processes).

Although value-stream mapping is often associated with manufacturing, it is also used in logistics, supply chain, service related industries, healthcare,[5][6] software development,[7][8] product development,[9] and administrative and office processes.[10]

In a build-to-the-standard form, Shigeo Shingo[11] suggests that the value-adding steps be drawn across the centre of the map and the non–value-adding steps be represented in vertical lines at right angles to the value stream. Thus, the activities become easily separated into the value stream, which is the focus of one type of attention, and the 'waste' steps, another type. He calls the value stream the process and the non-value streams the operations. The thinking here is that the non–value-adding steps are often preparatory or tidying up to the value-adding step and are closely associated with the person or machine/workstation that executes that value-adding step. Therefore, each vertical line is the 'story' of a person or workstation whilst the horizontal line represents the 'story' of the product being created.

Value stream mapping is a recognised method used as part of Six Sigma methodologies.[12]

In software engineering

The success of Lean in manufacturing and production has led to an interest in its adoption in software development. However, it was noted that the current literature on adoption of Lean in software development had a disconnect between the high-level principles and the concrete practices related to lean and agile software development. The literature also had a limited focus on wastes that were literally mapped from the categories identified for manufacturing.[13] This was ignoring the transformation that lean thinking has itself undergone and moved away from the focus on "removal of waste" to "creating and delivering value".[14] The use of value stream mapping as suggested by the pioneer authors of the field Womack and Jones[15] was identified as the missing link in the current literature on lean in software development.

Value-stream mapping analyzes both material (artifact) and information flow.[16] The following two resources exemplify the use of VSM in the context of software process improvement in industrial settings:

  • "Artifact analysis": analysis of software artifacts like requirements, use case, change request or defect report through the development process[17]
  • "Information flow analysis": analysis of information flows in the development process[18]

Associated analysis methods

Hines and Rich (1997) defined seven value stream mapping tools[19] they are:

  1. Process activity mapping: the initial step of constructing a map which consists of a study of process flows, waste identification, and business process re-engineering.
  2. Supply chain response matrix: identifying critical bottlenecks for processes in a simple diagram.
  3. Production variety funnel: helps draw connections to other industries that may have solutions to existing problems.
  4. Quality filter mapping: locates product and service defects in the supply chain.
  5. Decision point analysis: determines inflection points for push-and-pull demand in the supply chain.[20]
  6. Physical structure mapping: combined model that overviews supply chain from an industry level.[3]

See also

References

  1. ↑ Rother, Mike; Shook, John (1999). Learning to See: value-stream mapping to create value and eliminate muda. Brookline, Massachusetts: Lean Enterprise Institute. ISBN 0-9667843-0-8. 
  2. ↑ Depository, Book. "34 for Quality : John Bicheno : 9780951382943" (in en). https://www.bookdepository.com/34-for-Quality-John-Bicheno/9780951382943. 
  3. ↑ 3.0 3.1 3.2 3.3 Hines, Peter; Rich, Nick (1997-01-01). The seven value stream mapping tools. 17. https://www.researchgate.net/publication/235309659_The_seven_value_stream_mapping_tools. 
  4. ↑ (in en) Toyota Production System - An Integrated Approach to Just-In-Time | Y. Monden | Springer. https://www.springer.com/gb/book/9781461597162. 
  5. ↑ Graban, Mark (2011). Lean Hospitals: Improving Quality, Patient Safety, and Employee Engagement. Boca Raton, Florida: CRC Press. ISBN 9781439870433. http://www.crcpress.com/product/isbn/9781439870433. 
  6. ↑ Graban, Mark; Swartz, Joseph (2011). Healthcare Kaizen: Engaging Front-Line Staff in Sustainable Continuous Improvements. Boca Raton, Florida: CRC Press. ISBN 9781439872963. http://www.crcpress.com/product/isbn/9781439872963. 
  7. ↑ Plenert, Gerhard (2011). Lean Management Principles for Information Technology. Boca Raton, Florida: CRC Press. ISBN 9781420078602. http://www.crcpress.com/product/isbn/9781420078602. 
  8. ↑ Bell, Steven; Orzen, Michael. Lean IT: Enabling and Sustaining Your Lean Transformation. Boca Raton, Florida: CRC Press. ISBN 9781439817568. http://www.crcpress.com/product/isbn/9781439817568. 
  9. ↑ Mascitelli, Ronald (2011). Mastering lean product development: a practical, event-driven process for maximizing speed, profits and quality. Northridge, California: Technology Perspectives. ISBN 9780966269741. 
  10. ↑ Keyte, Beau; Locher, Drew (2004). The Complete Lean Enterprise: Value Stream Mapping for Administrative and Office Processes. New York: Productivity Press. ISBN 9781563273018. http://www.crcpress.com/product/isbn/9781563273018. 
  11. ↑ Shingo, Shigeo (1985). A Revolution in Manufacturing: The SMED System. Stamford, Connecticut: Productivity Press. pp. 5. ISBN 0915299097. http://www.crcpress.com/product/isbn/9780915299034. 
  12. ↑ "Value Stream Mapping" Article Source: http://www.isixsigma.com/index.php?option=com_k2&view=itemlist&layout=category&task=category&id=90&Itemid=222#
  13. ↑ Ali N.B., Operationalization of lean thinking through value stream mapping with simulation and FLOW [dissertation]. Karlskrona: Department of Software Engineering, Blekinge Institute of Technology; 2015.
  14. ↑ Hines P, Holweg M, Rich N. Learning to evolve: A review of contemporary lean thinking. International Journal of Operations & Production Management. 2004;24(10):994-1011.
  15. ↑ Womack JP, Jones DT. Lean thinking: banish waste and create wealth in your corporation. Rev. and updat [] ed. London: Free Press Business; 2003.
  16. ↑ Rother, Mike, and John Shook. Learning to see: value stream mapping to add value and eliminate muda. Lean Enterprise Institute, 2003.
  17. ↑ Ali NB, Petersen K, Breno Bernard Nicolau de França. Evaluation of simulation-assisted value stream mapping for software product development: Two industrial cases. Information and Software Technology. 2015;68:45.
  18. ↑ Ali NB, Petersen K, Schneider K. FLOW-assisted value stream mapping in the early phases of large-scale software development. Journal of Systems and Software. 2016;111:213-27.
  19. ↑ Rich, Nick; Esain, Ann; Bateman, Nicola (1997). Lean Evolution: Lessons from the Workplace. Cambridge University Press. 
  20. ↑ Hoekstra, Sjoerd; Romme, Jac (1992) (in en). Integral Logistic Structures: Developing Customer-oriented Goods Flow. Industrial Press Inc.. ISBN 9780831130374. https://books.google.com/books/about/Integral_Logistic_Structures.html?id=DQQoB4T2kGEC. 

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