What is a Value Stream Map?

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It is over 20 years since Jim Womack and Dan Jones introduced Value Stream Maps to us in Lean 5S
Thinking[i] and almost as long since John Shook and Mike Rother taught us how to draw them in
Learning to See[ii]. Therefore, you would think that the need to answer the question posed by the
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title of this blog is long past. Surely everyone knows what is a value stream map? At least you
would expect Lean practitioners and Lean consultants to know? Sadly, I find that is not the case
and I find all sorts of process maps being described as a value stream map. So, in this blog I want LEAN PRINCIPLES
to take you back to basics and describe what is a value stream map.
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Where did Value Stream Maps Come from?
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Like most elements of Lean, Value Stream Maps originated from the Toyota Production System. At
Toyota they were called Material and Information Flow Analysis diagrams (MIFA). Its worth VIEW ALL BLOG
remembering this as some lean consultants will try and tell you that MIFA Diagrams are different
to value stream maps they are not they are two names for the same thing. As I understand it VIDEOS
from my Toyota friends, MIFA diagrams were not required in the Toyota assembly plants, because
assembly lines tend to have built in flow. However, when the Toyota supplier development teams TXM LEAN MINUTE CONTAINING A
started working with suppliers they found a diverse range of processes operating. They needed a PROBLEM WITH AN INTERIM FIX
tool to be able to analyse all these suppliers manufacturing processes and understand how they
connected to Toyotas process. Hence MIFA diagrams were developed to show the suppliers
material and information flow and how that connected to Toyota. This then made it easier to
diagnose and address problems at the supplier that might impact the Toyota assembly plants.

What About the Name Value Stream Maps?

This name was coined by the team at the Lean Enterprise Institute Womack, Jones and Shook. It
communicated the concept that value stream maps measure the creation of value (and waste)
through a business from its suppliers to its customers.
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What are the Elements of a Value Stream Map?

To make your process diagram a value stream map and not just a flow chart or (worse) a vaguely
related collection of coloured post-it notes on a wall, your value stream map MUST have the
following elements:

It must map the product flow from receipt of raw materials at the receiving dock through all
the value adding and non-value adding steps in the business until the goods are ready to
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ship to the customer. You can map beyond that upstream and downstream of your
operation but the dock to dock flow is the minimum.
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It must map the information flow at least from receipt of the customer order to the
preparation of documentation to ship the goods to the customer. Again, you can go further WHAT IS A VALUE STREAM MAP?
than this and start with the quotation and design processes if you wish.
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Product flow is typically shown from left to right across the bottom of the process, although
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the normal way to draw it is to start with the customer (in the top right hand corner of the
map) and work backwards. HOW TO RECRUIT A GREAT
Information flow is usually drawn from right to left, starting from the customer. OPERATIONS MANAGER
The map must include data about what the customer requires in terms of volume, product
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mix, service level expectations and delivery arrangements. GRAND FINALS AND OUR BUSINESSES
It must include data on the individual processes including value added and non-value added
time, cycle time, change over time, uptime performance or other metrics that characterise EFFECTIVELY USING A SKILLS MATRIX
the performance of that process. TO DEVELOP YOUR TEAM
It must highlight the inventory between each step of the process.

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What is a Value Stream Map? Page 2 of 5

It must show how processes connect. What is the nature of the flow of product and
information from one process to the next.
It must show the total lead time for the process and highlight the value added and non-
value added time.

Without all these elements, what you have drawn may look nice and may be useful, but it is not (in
my view) a value stream map.

Example of a Current State Value Stream Map Showing the Key Elements of the Map

The Steps in Creating a Value Stream Map

Creating a value stream map is best completed by a small (usually less than 10 people) cross
functional team that represents the key functions involved in the end-to-end flow. In a
manufacturing flow, a value stream map team would normally involve production, production
planning, purchasing, customer service, sales and supply chain. Other functions such as finance
and engineering can be included depending on your structure and business needs. Value stream
map team members need to have a good understanding of the detail of the process, but also
include individuals with the authority to make changes to the process.

Once you have formed the team, you need to decide what you are mapping. This is often done using
a product family matrix. This is a chart that groups your different products according to the
steps that they flow through. All the products that flow through the same or similar process steps
are grouped together and called a product family. Typically, you will need to complete one value
stream map for each product family. The product family matrix would also include customer data
such as the volume of products or services sold, product mix, order sizes and service requirements
such as lead time. You also need to define the scope of the value stream. This includes where the
value stream will start and finish (usually the minimum is from receiving dock to shipping dock)
and what you will include in the information flow. Information flows can become very complex so
you may choose to exclude financial processes, quoting, QC processes or engineering processes if
you need to. In this case, you would just focus on the information flow required to fulfil orders and
control the flow of product and material through the process.

At TXM, we start the mapping process by getting the team together and introducing the concepts
of value stream mapping and then developing the outline of the product flow and information flow
as it operates now. We call this the current state map. At this session, we would then agree what
data we need on the individual processes and the overall flow to complete the current state map.
We would assign individuals the responsibility to gather this data.

We then give the team some time (usually one to two weeks) to gather this data.

When we get the team together again to complete the current state map by adding in the process
data and calculating the overall metrics for the value stream, especially the lead time. If necessary,
it is possible to overlay other metrics on the value stream such as cost, quality and on time in full
delivery performance at each step.

Once you have completed the current state map, the next step is to work out how you can improve
your value stream. This is called the future state map. Creating the future state map involves
several steps and I wont explain them in detail here, but they include:

Calculating the rate of customer demand or takt time.

Determining the finished goods strategy.
Working out if you can eliminate processes or combine multiple processes together in to a
single process with one piece flow.
Where you cannot combine processes working out how they can be connected.
Determining the point that will be the pacemaker for your process.
Determining the pitch or planning interval for your process.
Calculating the overall metrics for your value stream map including the new lead time,
inventory levels and the performance level that needs to be achieved at each process.

As you develop your future state map you will highlight several changes that need to be made to
your process. You will also highlight areas where process performance needs to be improved if you

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are to achieve the future state map goals. These changes and improvements need to be captured.
Aim for a future state that can be implemented in 6-9 months. This means that changes that
involve massive capital investment, major IT changes or new technology that has not been
developed yet, probably need to be left for a future value stream.

A Future State Value Stream Map of the Process Shown Above

Finally. you need to develop an action plan to determine how your future state map will be
implemented. This will include the timing and resourcing of all the improvements and changes you
highlighted in the future state map.

Once you have implemented your future state map, it becomes your new current state map and the
improvement process starts again.

Common Mistakes

I see some common mistakes made in creating value stream maps. These can eliminate many of
the benefits of developing value stream maps. These include:

Not going from dock to dock. The real value of a value stream map is that you map your end
to end flow, cutting across organisational boundaries. This is how your customer experiences
your business. Often, I see attempts to value stream map departments within a business.
However, waste usually sits at the interfaces between departments and optimising one
department can often create waste in other parts of the flow. It might be easier and avoid
corporate politics just to map your own area, but it is probably a waste of time and denies
you the main benefits of value stream mapping.
Failing to define processes correctly. A process starts and stops when the flow stops. This
usually means that information or a decision is required before the flow of value can
continue. As a result, a single process can include many tasks, provided that, once the
sequence of tasks is completed, it can continue without the need for further instruction or
information. For example, an assembly line is usually only one process on a value stream
map even though it might include dozens or hundreds of tasks performed by many people.
This is because once a product starts on the assembly line it will continue all the way
through the line without the need for further information or instruction. Likewise, a relatively
minor single task can be a process if it breaks the flow. For example, a QC check may break
the flow if the product cannot move onwards until QC approval is given.
Mixing up Line Balance Charts and Value Stream Maps: Some people will say they value
stream map a single work cell. For the same reason as I explain in my comments about not
going dock to dock, a map of a single work cell is not a value stream map. More likely it will
be a line balance (yamazumi) chart that is used to balance the work in that work cell and
standard work sheets to define the timing, sequence, content and outcomes of the work in
that work cell.
Using Incorrect Information in the Current State: In the world of IT we say, garbage in
garbage out. The same applies for value stream maps. If you make guesses about what
your process metrics are, what your customer needs are or poorly define your value stream
map boundaries you will end up with a current state map that does not reflect reality or is
incomplete. Then when you go to create your future state, you are likely to come up with
recommendations that cannot be implemented or are not optimal.
Narrowing the Scope Too Much: You want your value stream map to have a significant
impact on your business and therefore I suggest using the product family matrix method
described above to define broad product families. Choose the product family that has the
most impact on your business to map first. It is much easier to adjust the flow of minor
products to fit around your major products than visa-versa. There is a school of thought that
you should choose just one product to map. I think this approach is neither necessary or
effective. Usually a single product is only a small proportion of your total operation. As well,
you are likely to find that the changes you want to make for that product cannot be
implemented because of the impact on other products.

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Brainstorming to Develop the Future State: On the face of it this seems like a good way to
go. Ask round the table, get everyone to write up ideas or mind map your way to a future
state. The problem with this is that it is usually a recipe for more of the same. Participants
will most likely push the agendas they have always pushed and the ideas will be constrained
by the current state of knowledge. It is a good idea to get the team to highlight obvious
improvements when the current state is complete. However, creating a true future state is a
structured, step by step process as I describe above. Following those steps will take your
team outside its comfort zone, help to neutralise political agendas and most likely lead to an
outcome that is much better than anyone in the team expected.

How to Learn More

There are many books on value stream mapping. My recommendation is the best place to start is
with Learning to Seeiiby John Shook. This is a very clear, step by step guide to creating a value
stream map. If you are a manufacturer, then I highly recommend that you buy the other books in
the series including Creating Continuous Flow[iii], Creating Level Pull[iv] and Making
Materials Flow[v]. With these four books you really have the tools to create an excellent future
state for your business.

If you are in an office environment, I highly recommend The Complete Lean Enterprise: Value
Stream Mapping for Office and Services[vi]. Again, like Learning to See, this is a very practical,
step by step guide to mapping office processes.

If you want something more in-depth for more complex value streams, try Creating Mixed Model
Value Streams: Practical Lean Techniques for Building to Demand[vii] by Kevin Duggan.

Finally, for an overview of how value stream mapping fits in to the context of your supply chain or
small and medium sized business, I cannot help but recommend my own books, Grow Your
Factory, Grow your Profits[viii] and On Time In Full[ix]. Both books provide you insights and
case studies about value stream mapping as well as recommendations for further reading.

Do you Need a Consultant or External Facilitator?

In theory, you dont. Value stream mapping is a relatively simple technique and the books I have
mentioned I have suggested explain it well. However, there are several benefits of getting outside
help. Firstly, value stream maps inevitably cut across multiple organisational boundaries. Achieving
change across functions can be very hard if you belong to one of those functions. A good external
consultant is independent of any function within your business and can challenge leaders in every
part of your business to make change and contribute to the future state. Developing the future
state can be challenging, having someone around who has done it before can help your team to be
bolder and deliver much greater benefits for your business. At the same time the books tend to
offer a limited range of solutions for the future state, whereas a good Lean consultant may have
seen dozens of futures states and be able to bring innovative solutions from outside your industry
that enable you to make a step change improvement. That said, unfortunately not all Lean
experts really understand value stream mapping. Therefore, armed with this blog and my
recommended reading, make sure that you do challenge them and ensure that they really
understand what is a value stream map!

CONTACT US TO LEARN MORE ABOUT VALUE STREAM MAPPING

Learn about the TXM Approach to Value Stream Mapping in this Video

Learn How to Overcome the Stumbling Blocks of Value Stream Mapping

Video on the Benefits of Displaying your Value Stream Map in the Workplace

How to Identify the Key Value Streams in Your Business

REFERENCES

[i] Womack, J. P. and Jones. D.T. 2003. Lean Thinking. Free Press.

[ii] Rother, M. and Shook, J. 2003. Learning to See: Value-stream mapping to create value and eliminate
muda. Brookline, MA: Lean Enterprise Institute.

[iii] Rother, M. and Harris, R. Creating Continuous Flow: An Action Guide for Manager, Engineers and
Production Associates. Brookline, MA: Lean Enterprise Institute, 2001.

[iv] Smalley, Art, Creating Level Pull. Brookline, MA: Lean Enterprise Institute, 2004.

[v] Harris, R., Harris, C. and Wilson, E. 2003. Making Materials Flow: a lean material-handling guide for
operations, production-control, and engineering professionals. Cambridge, MA., Lean Enterprise Institute.

[vi] Keyte, B. and Locher, D. The Complete Lean Enterprise: Value Stream Mapping for Office and Services,
Second Edition. New York, Productivity Press, 2016.

[vii] Duggan, K. J. 2002. Creating Mixed Model Value Streams: Practical Lean Techniques for Building to
Demand, New York, Productivity Press.

[viii] McLean, T. Grow Your Factory, Grow Your Profits: Lean for Small and Medium Sized Manufacturing
Enterprises. New York, Productivity Press, 2014.

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[ix] McLean, T. On Time In Full: Achieving Perfect Delivery with Lean Thinking in Purchasing, Supply Chain
and Production Planning. New York, Productivity Press, 2017.

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