Value Stream Mapping
Ganesh Botcha, Ajoy Chatterjee
17 Aug ‘15
Agenda
#
Topic
Speaker
Minutes
1
What is Value
Ganesh B
2
2
What is Value Stream
Ganesh B
3
3
Value Stream Mapping
Ganesh B
5
4
Purpose
Ganesh B
5
5
Measurements
Ganesh B
5
6
SDLC Process
Ganesh B
5
7
Little’s Law and Visualization
Ajoy C
5
8
Waste and sub-optimization
Ajoy C
4
9
VSM Metrics
Ajoy C
4
10 VSM Event and Participants
Ajoy C
3
11 How does VSM Look Like
Ajoy C
3
12 Guiding Principle
Ajoy C
2
13 Considerations for Future State
Ajoy C
4
14 Q&A
10
"There is only one boss: the customer. And he can
fire everybody in the company, from the chairman
on down, simply by spending his money
somewhere else."
Samuel M. Walton
Wal-Mart Stores, Inc.
Chairman & Chief Executive Officer
What is Value?
“Value” is something that the customer would be willing to pay for.
“Value” varies from customer to customer.

Examples of Value

Features/Specifications

Availability when needed/Timely Delivery

Price/Cost

Customer Service/Support

Politeness

Relationship
OR
Use “Value” as your starting point
Align business to customer demands
Photo Source: Wikimedia Commons
What is Value Stream?


Value Stream is the set of all actions performed to bring a Product or Service into
the hands of customer along which the information or material flows.
Some of the Value Streams

Portfolio Management


Projects and Programs Management


Requirements, Design, Development, Testing, Deployment processes
Operations Support Management


Initiation, planning, execution, monitoring and control and closure processes
Software Development Life Cycle


Identifying, prioritizing, authorizing business cases, governance and compliance to achieve
strategic business objectives
Production Support, Upgrades, Incident Management, etc.,
Service Management

Catalog, SLAs, Capability, Availability Management, etc.,
Value Stream Mapping (VSM)

Value stream mapping visually maps the flow of
materials and information through all processes until
the Product or Service reaches the Customer.
It is a tool that helps us to visually see and understand the
flow of material and information as a product or service
makes its way through the value stream. The steps are laid
out from left to right and top to bottom, with specific shapes
used to denote the process components.
 Identifies Value and Waste
 Used to analyze the current state and design the future state
 At Toyota, it is known as "material and information flow
mapping"

Purpose of VSM
Purpose of value stream mapping is to identify the Waste (lead time/wait time,
duplicates, non value added, and improper sequence of activities) in the current
state so that they can later be improved or eliminated in future.
Current State
Future State
VSM Measurements
Taktzeit
or Meter
Takt Time
Available Production Time / Number of
Units the Customers need (Demand)
Also,
Process Time
Cycle Time and
Lead Time are
not the same.
• Rate at which the
organization needs to
produce in order to meet
its customers’ demands
Cycle Time
• Time it takes to complete
an activity or process
Lead Time
• Time elapsed from work is
made available until it’s
completed and passed on
to next person or
department in the chain
SDLC Example
2 weeks
4 weeks
Business Requirements
1 week
Acceptance Test
UA Test Cases
1 week
1 week
2 weeks
2 weeks
3 weeks
System Requirements
System Test
System Test Cases
2 weeks
1 week
2 weeks
3 weeks
Component Design
3 weeks
Integration Test
Integration Test Cases
2 weeks
1 week
4 weeks
2 weeks
2 weeks
Program Specs
Unit Test
Unit Test Cases
1 week
12 weeks
1 week
Code
Cycle Time = 42 weeks, Wait Time = 10 weeks
Lead Time = 42 weeks + 10 weeks = 52 weeks
Deep Dive into Business Requirements Process
Business Requirements Process
Types of Requirements
2 Days
Identify Stakeholders
1 Day
● Business Requirements Why the
product is needed and its benefits
for both customers and the
business
1 Day
Schedule Meetings
4 Days
Elicit Requirements
1 Day
2 Days
3 Days
Document BRD
1 Day
Review Requirements
2 Days
1 Day
Baseline Requirements
2 Days
● User Functional Requirements
The tasks or business processes a
user will be able to perform with
this product
● Non-Functional Requirements,
Quality attributes such as
Reliability, Performance,
Availability, Maintainability, etc.,
Cycle Time = 12 Days, Wait Time = 8 Days
Lead Time = 12 Days + 8 Days = 20 Days (4 weeks)
Deep Dive into Suppliers, Inputs, Process Steps, Outputs, Customers, Responsible Roles,
How long it takes for the Responsible persons to perform their activities (Cycle Time),
How long those persons wait before starting their activity, Reasons for waiting (Wait
Time), Lead Time, etc., and identify the improvements needed for future state.
Little’s Law
In a stable system,
L=λW
L – Average number of customers in the store
λ – average customer arrival rate
W – average time a customer stays in the store
Example,
In a stable system, i.e. arrival rate and
departure rate being same, if 20
customers arrive per hour and stays for
15 min on an average, we should find 5
customers at any given time
Little’s Law makes the basis of queue management in Lean process
WIP = T L
WIP – average number of items/ activities/ process in progress or Work in Progress
T – average departure rate, i.e. Throughput or inverse of Cycle Time
L – average time an item/ activity/ process spends in the system or Lead Time
Visualizing the Chain
×
Mura
×
Muda
Type 2
Type 1
×
Muri
√
Kaizen
√
Kata
√
Poka-yoke
Lead Time
Process n
Process
n-1
Process
n +1
Work Made
Available
Work Passed
to Next Step
Process Time
Lead Time = ∑ Process Time + ∑ Essential non-value added Time + ∑ Unnecessary
non-value added Time + ∑ Waste/ Delay
Types of Waste
Sub-Optimization
“Sub-optimization is when everyone is for himself.
Optimization is when everyone is working to help
the company"
Edwards Deming
Management Consultant and Author
Example: Chundan Vallam
• Similarity, not difference focused approach
• Collaboration
• Optimization of the Value Stream will
increase performance of the system. Suboptimization may lead to wastage
VSM Metrics
 Activity Ratio = ∑ Process Time / ∑ Lead Time
 1 – Activity Ratio = Idle Ratio
 % Complete and Accurate (%C&A)
 Percentage of input in a process that is deemed usable as-is by
the resources doing the work
 Measured by the immediate downstream customer or process
owner
 Similar to first pass yield in manufacturing (=Output/Input)
 Rolled First Pass Yield (RFPY) = ∑ (%C&A)n
 Freed Capacity = Current State FTE – Future State FTE
VSM Event
Who should participate Value Stream Mapping?
Define Product
Family
Leaders and Process stakeholders up in the chain
who can authorize an innovative change on
current state
Document
Current State
Design Future
State
How long usually is a VSM event?
Usually 3 days
Create
Implementation
Plan
What is the future state definition?
The state, 3-6 months down the line
Implement
3 days
It is always a team activity. The team obtains
current state metrics from the Gemba
Repeat
Is it not a Team Activity?
VSM Roles
Strategic
Who
Executive
Leadership
What
• What are the wastes and nonvalue added spends?
• What change has to happen?
How
Value Stream
Mapping
Tactical
Middle
Management
Workforce
• How changes can be
executed?
Projects, Kaizen
How does it look like?
Some of the Symbols used in VSM
What is not a Value Stream Map
 A VSM must have timelines, i.e. at least lead time and process time. If it does
not have timelines, it is not a VSM
 A map without any metric is not a VSM
 If the map diagram has swim-lanes, it is not a VSM
 A VSM is not an ‘Optimum Process Flow’ diagram
 A VSM is not a Kanban board
 A VSM does not comprise of Kaizen. It may be means to implement future state
of a VSM
VSM Guiding Principles
Define the value from
end customer’s
standpoint
VALUE
VALUE
STREAM
PERFECTION
As you manage
toward perfection
So the customer can
pull
Identify the value
stream for each
product family
PULL
FLOW
Make the product
flow
Considerations for Future State Map

















Eliminate steps/ handoffs
Combine steps
Create parallel paths
Alter sequence
Alter timing
Implement pull systems
Optimize batches
Improve quality
Reduce manual error monitoring/ automate
Create an organized workplace
Make handshaking seamless
Eliminate motion and transportation
Standardize work
Reduce/ Eliminate unnecessary NVA immediately
Co-locate functions
Create cells of cross-functional staffs
Balance work to meet Takt time
References
Bibliography:
 Learning to See by Mike Rother and John Shook, Lean Enterprise Institute, 2003
 Value Stream Mapping by Karen Martin and Mike Osterling, McGraw-Hill, 2013
 Lean Thinking by Jim Womack and Daniel Jones, Simon and Schuster, 2013
Others:
 Value Streams as Release Trains in SAFe
http://www.scaledagileframework.com/value-streams/
 How and why to create Value Stream Maps for software engineering projects
http://www.ibm.com/developerworks/rational/library/10/howandwhytocreatevaluestream
mapsforswengineerprojects/
 Using Value Stream Maps in Information Technology
http://it.toolbox.com/blogs/integrate-my-jde/using-value-stream-maps-in-informationtechnology-49414
 Improving the Value of the IT Service Delivery Process
http://www.isixsigma.com/industries/software-it/improving-value-it-service-deliveryprocess/
 Best Practices for Using Value Stream Mapping as a Continuous Improvement Tool
http://www.industryweek.com/value-stream-mapping%20
 Value Stream Mapping
https://en.wikipedia.org/wiki/Value_stream_mapping
Questions?