Value Stream Maps were first formulated by Management Consulting Division of Toyota Motor Corporation, in Japan. These maps were initially titled 'material and information flow-maps'. It notes down the flow of the information and material for a product.
A value stream map is a way of mapping all the processes in a company. It documents all sorts of waste and value-adding processes. It is in the form of a one-page diagram. Its major advantage is that the map projects the waste of resources in all the processes. This could be the waste due to usage of an old technology, overproduction, transportation, processing, inventories, defects and bad work ethics.
While creating a value stream map, it is best to first make a pencil-sketch map. Once you are clear and satisfied with what you have done, you can opt to use the value stream map software to create it.
Choose the Product
If you deal with more than one goods, you will have to choose the product for which you want to analyze the business process. This will help you in choosing the right product or products you need to concentrate on.
The information that you need to feed in the map will need some meticulous observation from your end. Start noting down each and every minute detail that you come across. Make points! Observe the process right from where a consumer begins his query for the product to the after sales services. Don't use the standard or published data but use the actual data from your observations. Make records of the processes that involve information exchange and also material exchange.
Define the Information Flow
Define the flow of information in your company. Register how information travels from the supplier to the company, vice versa and also from the consumer to the company and vice versa. Record the information distribution plan followed in the firm.
Add Data to your Map
Add the data to all the processes from the observations you have made. Include information like the production cycle period, size of the inventory, etc. This will give you a synopsis of how the processes flow.
Use different symbols to make the map. First make a map on paper using a pencil so that you can edit your map easily. Once the structure of your map is ready, you can use the value stream map software and add appropriate symbols and lines to the map. You can use software like Microsoft Professional Visio 2007.
Create a Current State Value Stream Map
After all the observations that you have gone through, it will be very easy for you to register the actual process flow that takes place in your company. Flow from the supplier and the customer should be externalized in the map.
A current state value stream map will indicate the current processes used in a firm, the loopholes and wasted resources.
Analyze Your Current Value Stream Map
Analyze your current state stream map and look for measures that can be taken to distribute information more efficiently. Also chalk down measures in which the production process can derive maximum output and optimal utilization of resources. All the information of the value adding and the wastes should be noted and used in creating the future-state value stream map.
Create a Future State Value Stream Map
A future state of value stream map will map-down the future growth prospects. It will be a plan in which, different ways to avoid wastage will be figured. A future state value map has to be made in a similar way as the current state value stream map. Based on the future state value map a plan of action needs to be made and adhered to.
Make an Action Plan
After analyzing the loopholes, make an action plan to meet the required efficiency level. Jot down the changes needed in the way information or the material is flowing. Inform everyone about the changes and the observations made. Regularly hold meetings to see how the new plan is progressing and discuss the changes needed to be made.
This system stands in opposition to the leadership development theories that are based on organizational behavioral pattern, which do not give importance to the actual business processes followed. A value stream map is a diagnostic tool that will help you diagnose the cause and effect of inefficiency in your work process. It can define and detect problems like leadership problems, time lag between the goods demanded and supplied, etc.
This map can alone not alleviate the inefficiencies, if there is a lack of senior management participation and support. This lean management system needs some skills to be able to practice it and requires participation from the senior managers. All of this will lead to formulating new policies and plans which will boost the development and growth of the organization.