Value Stream Mapping Made Easy

August 26, 2019By Industry Intuition, Views

By Dave Wendland, CommunityVoice for Forbes Agency Council, as appeared on July 25, 2019

Value stream mapping (VSM) is a business management tool that documents the steps needed to take a project from inception to customer delivery. Often associated with Lean Six Sigma practices, the tool helps users take a fresh look at established processes. As with other similar examination methods, such an approach can help you better understand the flow of information and document a procedure from start to finish, and it quite often leads to process improvement. For most, the result is an eye-opening exercise that reveals wasted time, duplicated effort and unnecessary spending.

Our company recently undertook a VSM process to examine client quote preparation. We began with a shared goal of determining where bottlenecks were occurring and how we could speed up the process from initial quote request to contract. To say it was an arduous task would be understating the impact it had across the organization.

During the deployment of this VSM, we took five key steps. We had a neutral project manager lead the process so that it could be clearly documented and objectively captured. We also employed consistency in delineating the various roles and project milestones.

Step One: Interview Key Stakeholders

Encourage honest dialogue during this step. Misstating realities of the current situation or speaking in generalities can significantly skew the results and reduce the likelihood of gains in operational efficiencies or reduction in costs. For some, this may be the first time they verbalize their true involvement in a process or think through the detailed steps (this is especially true of those who have performed the task for a long period of time and for whom it’s become second nature).

Step Two: Create A Flowchart Of All The Steps In The Process

Creating a visual of all the steps can help you accomplish two important things: First, it allows you to see the entire process and understand the complexity that may exist. Second, it allows you to color-code, as we did, which can help you identify individuals, teams or duplicative steps.

As you consider the handoff from one step to the next, setting expectations for the amount of time expended in the process itself and wait times between steps is critical. In our case, we documented the steps as increments of business days. Each situation is unique, but this certainly worked for our purposes.

Step Four: Estimate Associated Costs

Depending on the level of detail desired, it’s important to assign costs to the various steps across the value stream. In our case, we created a median hourly rate that we used to estimate the costs associated with our quoting process. This can be an eye-opening step for most, and it will help you quickly identify and pinpoint where costs are exceeding anticipated budgets.

Step Five: Identify Areas Or Procedures To Eliminate/Refine

This final step is the one that can create the most collaborative exchange of ideas about process improvement. Not only will key stakeholders identify areas to eliminate or refine because of the costs estimated in step four, but all involved can quickly see the financial impact.

Having a well-defined value stream map can ensure that everyone understands their responsibility and that the tools and means to deliver and measure an end product are available. Being able to measure outcomes can change behavior — regardless of how long a process may have been in place. What was our outcome? Amazingly, we went from taking 10-14 business days to produce a preliminary quote for a customer to four days. Everyone — including the customers — wins as a result.