Over the next three weeks, we will be discussing Value Stream Mapping - what it is, why it is important, and how to get started. Organizations that are looking for ways to improve their ability to add more value to their customers will benefit the most from utilizing this tool.
Definition
Value Stream Mapping (VSM) is an important tool available to organizations that has many useful purposes. The value stream is all the actions that it takes to make a product or service. This includes the flows (both value and non-value added) that are required to take a product or service from inputs/raw materials to an entity sellable and shipped to the customer.
The VSM process enables an organization to create a detailed visualization of the flow of a product or service from supplier to the customer as it flows through your organization. While this seems like a basic concept, VSM encompases all aspects of an operation. Going through this exercise will allow you to take a deep dive look into the door-to-door processes at a high level, thus giving you insight to the entire process not just individual parts.
Material and Information Flow
Many people misunderstand this process to be primarily about how materials flow through the organization, but that is only part of the process. The VSM process also allows an organization to see the information flow that tells each process what and how many to produce. This is the one of the unique aspects of the VSM: it brings together material and information flow so the entire system is known and how both can be improved.
Not Only for Manufacturing
Although VSM has been primarily utilized in manufacturing, it is gaining popularity in knowledge work or white collar environments. Over the past couple of years, RCI has worked closely with a large surgical group in the Southeast region of the United States. One of the first exercises we walked the leaders of the group through was a VSM and the result was astonishing. By going through this process, the senior leadership was able to uncover several key areas of waste that was leading to substantial profit loss.
As we will see in later posts, the VSM tool is useful for any organization that desires to decrease waste and increase margin. Whether you work in healthcare, banking, or manufacturing, if you would like to visualize the flow of materials/services and information throughout your organization, the VSM tool is a cost-effective and value-add activity to lead your organization through.
If you would like more information about Value Stream Mapping or RCI, please contact us at spackett@thinkrci.com or 423.521.5876.