Value Stream Mapping: Knowing Where You Are When You’re There
The modus operandi of a fast-food hamburger joint is to have a burger already prepared and ready to go when or if a customer asks for it. The bad news here, of course, is that without some sense of how long a particular burger may have been in the “finished goods” inventory (i.e., under the red lamps), there is the distinct possibility that your product may be cold and obsolete by the time you receive and consume it.
On the other hand, at some fancy-schmancy gourmet-burger place, where all is custom and only made once the order is in and confirmed, you may have quite a wait between placing your purchase order and taking delivery of the product. In each operation, the inherent pitfalls of inventory management are factors of lead time—with fast food, too much of it, and gourmet not enough.
To bring a product or service to a customer requires not only the material in which to do it, but information that will give a sense of what and when that material will be needed. In short, efficient manufacturing requires that the manufacturer have a good sense of where they fall in the broader supply chain.
To this end, a producer must be able to reduce lead times for orders, while at the same time having a consistent and continuous flow of goods through the plant and to the consumer. This requires that a manufacturer develop a lean environment in which waste is eliminated through material supplies for production arriving just in the nick of time to fulfill an order that has been pulled from the marketplace.
Insofar as the elimination of waste in production enhances not only the bottom-line profit for the producer, but also quality and relevance of the goods produced, it can be said that value has been added to the product. That this concept is important to maximize production efficiencies suggests we should have good, on-going business intelligence as to how to achieve it. In manufacturing, and many other industries, this is best achieved through a process called value stream mapping.
As the title implies, with value stream mapping we chart the flow of materials and information that is needed to bring our product (or service) to the consumer. This chart, or mapping, could include such variables as process steps, usual or anticipated delays, and areas of information flow.
Furthermore, value stream mapping can be engaged for any level or period of the production process. To assess what it make take to bring an idea to the marketplace, the design flow can be charted; that is, the path from product design to product launch. As well, the processes by which goods are actually made for customers can be tracked via a production flow map. In both cases, the the most efficient flow is found through the identification and elimination of waste in the potential system (design and/or production).
Ultimately, any value stream mapping should look to reducing the lead time necessary to undertake production and delivery. This is where knowing your place in the overall supply chain is vital to the complete manufacturing effort. For whether you are a downstream supplier or an upstream vendor, as you eliminate waste in your production system you reduce the overall cost of sales—and add additional value to the items you produce.