Eliminate waste by Value Stream Mapping

As a production manager, you have probably noticed as I, that production is only as good as its weakest link. Improving areas other than the weakest link is sub-optimization, and will not improve production output. What I have experienced, is that Value Stream Mapping can be a useful tool to help you identify the weakest link and improve your production and supply chain as a whole.



Do you generate value or waste?

A value stream map in a manufacturing environment shows all the steps needed, from the raw material flow at the beginning of the production process to the completion of the end product and its shipment to the customer.

All steps are plotted on the map to visualize the actual process. The map includes both value-adding activities and waste. The aim is naturally to eliminate the waste as much as possible, while still considering the process as a whole to ensure that no sub-optimization occurs.

When you do value stream mapping, the first phase is to plot what the current state looks like. The raw material supplier is at the start of the process and the customer at the end. Between these points, the company’s own process steps need to be defined. Throughout the process, you will find work in progress and inventories, which are important to identify and document. Information flows are also plotted on the map, showing how information flows both internally and externally to and from suppliers and customers. As a result, you will have a map that clearly illustrates what the process currently looks like, with supporting data (cycle times, changeover times, inventory levels, etc.) related to each step describing the very nature and performance of your production process.

Find your way to an efficient supply chain

In the second phase you start to plan for an ideal or Future-State map where the goal is to eliminate as much waste as possible. In the Current-State map there might be several findings of waste e.g. large amounts of inventory, processes producing at their own schedule or long lead times compared to processing time. Start with checking whether all the process steps can deliver to meet customer demand. Next you could check where continuous flow can be implemented, and where, in the process, a WIP inventory with a pull system may be needed. You also need to decide which step in the process should be scheduled (the pacemaker process), which sets the pace for the rest of the production. Finally, list the process improvements needed to ensure that the value stream flows in line with your planned future state.

Current production facilities or product designs might restrict waste reduction possibilities in the short term. Therefore it is important that you identify the waste reductions that are possible with the current setup, and those that might need more time to implement due to significant investments or other major changes. This will clarify the needed effort over both the short and long terms.

When your Future-State map is ready, it is time to plan how it will be achieved. This stage is crucial since the whole value stream mapping exercise is of course worthless if the improvements are not realized in practice. Implementation of the future state should be split into actionable steps, persons responsible should be assigned for each action, and schedules should be agreed and committed to. To ensure that things get done, set up a PMO!

Klas Holmberg is Senior Associate at the KPMG Global Strategy Group (GSG) with experience in operations management with clients in e.g. transportation, food & beverages and process industries.