What is Value Stream Mapping (VSM), Benefits, Process and Value

To understand value stream mapping, we need to first understand what a “value stream” is. Simply put, a value stream is a series of steps that occur to provide the product or service that their customers want or need. In order to provide the product or service that the customers desire, every company has a set of steps that are required. Value stream mapping enables us to better understand what these steps are, where the value is added, where it’s not, and more importantly, how to improve upon the collective process. Value stream mapping (VSM) provides us with a structured visualization of the key steps and corresponding data needed to understand and intelligently make improvements that optimize the entire process, not just one section at the expense of another.

Value stream mapping is defined on iSixSigma.com:

“Value stream mapping is a lean manufacturing or lean enterprise technique used to document, analyze and improve the flow of information or materials required to produce a product or service for a customer.”

The book “Value Stream Mapping”, written by Karen Martin and Mike Osterling, explains, “Value stream maps offer a holistic view of how work flows through entire systems.”

VSM can be a tremendous tool to help determine how to improve delivery chains that require complex processes. If you have a highly complex process, VSM can be used to create a comprehensive view and understanding of the entire process, or it can be as focused as needed on a segment of the process to address specific objectives.

It’s important to note that the start and endpoints of the mapping exercise, known as fenceposts, can differ depending on your goals and objectives. You will also find that a single company may have several different value streams. Value stream maps can be created for every individual product and service for every type of business. However, for the purpose of this discussion and so you can better understand how to apply this in the real world, we will focus on VSM as it relates to feature development for enterprise software solutions utilizing a simplified waterfall methodology. We will refer to software features as the “product” being developed in this process.

Unlike process maps, or flowcharts, that show only the steps involved in the process, a VSM shows significantly more information and uses a very different, more linear format. The VSM enables the team and leadership to see where the actual value is being added in the process, allowing them to improve on the overall efficiency associated with the delivery of a software product or feature request, not just the number of steps.

Using an example of a mortgage company delivering a new application, their process flow chart showed 64 different servers with dozens more actual steps in the application process.  However, this flowchart didn’t show that only a few of those steps actually added value to the application process. This is where VSM has great value. It not only mapped the key process steps but also showed which of those steps actually applied any real value to the mortgage application process. This type of chart can be an invaluable tool to enable quality process improvement discussions with team members and stakeholders. Without it, there’s just no efficient way to convey this information.

Terminology and symbols and what they mean

With so much information packed into a VSM, it’s no surprise that there are terms and features that may need some explanation. However, while we will provide an explanation of some of the standardized VSM features, keep in mind that they may be modified to help achieve specific objectives. As such, each value stream map may have some elements that are unique.

To start, each value stream map typically has three key sections. For example, Figure 1 above shows a simplified VSM for a software development lifecycle. Notice the three main colored sections. The colors were added to highlight the different sections of a VSM. These sections show Information Flow, Product Flow, and a Time Ladder or Lead Time Ladder.

Sections:

Information Flow

This section shows the communication of process-related information and the transmission of data. In this simplified example, the release manager takes in all customer requests and submits only the approved requests into the development queue (Supplier). Depending on the objective or goal of the mapping exercise, information collection and distribution points shown here as SharePoint and Excel can include many levels of detail and many other integrated systems.

Product Flow

This section maps the steps of the development lifecycle from concept to delivery. However, depending on your objectives, this can be refocused on specific sections of the process, making it as granular, or as high level, as needed. It typically shows both the task being performed (blue boxes) and the person or team performing the task in the box immediately below it. Below those boxes, you will notice smaller fields that show key process data. For the sake of simplification in this example, we’ve chosen to show only a couple of data figures. C/T represents “Cycle Time” and S/T represents “Set Up Time.” In practical use, however, VSMs can include any number of data points in this section, highlighting pertinent information. The yellow triangles show the queue of features waiting at each stage of the process. The dotted arrows from one stage to the next are called “Push Arrows”. They show where the product is being pushed from one stage to the next vs. being pulled.

Time Ladder

The Time Ladder provides a somewhat simplistic visual representation of the value stream timeline. The upper portion of the time ladder represents the average amount of time that a feature spends in the queue or waiting at each stage or gate in the process. The lower portion of the time ladder shows the average amount of time that each feature was actively being worked on, or more specifically when value is actually being added to the feature/product during that specific stage.

Terms:

Cycle time (C/T)

Is the frequency of units/features produced or the average time between the completed production of one unit/feature to the completed production of the next. Using our scenario of feature development for an enterprise software solution, the cycle time is the average amount of time it takes from the completion/deployment of one feature request to the completion/deployment of the next.

Setup Time (S/T)

Is the amount of time needed to prepare for a given step. For application to software development, depending on the step, this can indicate the amount of time needed to understand what specifically is being requested or the time needed to configure, spin up, or allocate a test environment.

Uptime (%)

Gives you an idea of the percentage of the total time that the processes or systems are actually active. For our scenario, this can show system uptime or employee availability time.

Lead Time

Is the measurement of the average amount of time needed for one feature request to make it through the entire development cycle concept to delivery, or from the beginning to ending fence post.

Takt Time

Is a term that is commonly used with value stream mapping. It refers to the rate at which you need to produce your products in order to meet customer demand. Figure 2 shows an example of how takt time is calculated and applied.

Kaizen Burst

(Also known as Kaizen Blitz) refers to a burst of team activity (3-5 days) that is focused on resolving specific challenges. Where the purpose of the mapping activity is to identify and plan, the purpose of a Kaizen burst is to achieve the actual resolution. It can be used to address issues that are not getting resolved as quickly as originally planned. One example would be to address a high volume of items in a work queue, to reduce it to a more manageable level, or any number of other issues. Its purpose is to focus a team’s energy and resources on a particular problem, process, or activity in an effort to quickly remove the barrier, waste or implement a solution. Kaizen burst activities can be an important component of performance management to address barriers and create solutions as you move from one level of value stream performance to the next.

History of Value Stream Mapping?

Value stream mapping has been growing in popularity in recent years and is still considered by many to be a relatively new tool in the effort to improve business efficiency. Despite still having that relatively new feeling, it has been around for quite a while and has seen a number of refinements.

Value stream mapping can be traced back to more than 30 years ago, to the visual mapping technique used at the Toyota Motor Corporation. It was then known as the “material and information flow”. It came about as the company’s focus shifted to gain a better understanding of the material and information flow throughout their organization. The popularity of this mapping technique grew as American companies observed and studied the efficiency and consistency of Toyotas’ operations.

The term “value stream” was first used in a book called “The Machine that Changed the World” (1990) written by James Womack, Daniel Jones, and Daniel Roos. It was then further popularized by another book, “Lean Thinking,” (1996) which was also authored by James Womack and Daniel Jones. These books essentially launched the Lean movement. They defined the value stream as “the sequence of activities an organization undertakes to deliver on a customer request.”

As the Lean movement took off, so did this mapping technique that Toyota had developed. It has continued to evolve to become what we now know as value stream mapping, which is much more applicable and useful for businesses and value streams of all types.

What is Value Stream Management?

As a founding member of the Value Stream Management Consortium, Plutora is committed to helping businesses to deliver more value to their customers. Tools like Plutora are designed to track and report on data of all types, including the data used in the value stream maps. These tools are ideal for providing dashboards, reports, and analytics that track the performance of the entire mapped process in nearly real time. They provide amazing transparency and clarity of current state throughout the entire lifecycle. They also enable the user to drill down into the data to identify and address problem areas.

Whatever tool you end up using for your current state tracking of metrics, you will need to make sure it’s readily available to those teams and team members along the entire process, so that it continues to provide that holistic perspective for every team that is part of the value stream.

At the end of the day, the goal is to develop a corporate culture that provides the best possible product to meet or exceed customer needs and expectations. This is ultimately done by making continual improvements to the value stream. As our customers’ needs and expectations evolve, so also will our value streams need to change and constantly evolve.

Learn more about value stream management by reading our comprehensive guide featuring key essentials, core challenges, and tips from the experts; or learn more about how Plutora can help improve your value stream.