Value Stream Mapping

Industrial Management Consulting
Industrial Management Consulting

What is value stream mapping?

Value stream mapping is a lean-management method for analyzing the current state and designing a future state for the series of events that take a product or service from its beginning through to the customer. At Toyota, it is known as “material and information flow mapping”.[1] It can be applied to nearly any value chain.


VSM wordbook

  • Value Adding (VA): any activity that your external customers value, and would be willing to pay for.
  • Necessary Non-Value Adding (N NVA): any activity that is necessary but does not add value, for example any necessary support processes, legal regulatory requirements, etc.
  • Unnessary Non-Value Adding (U NVA): any activity that is unnessary, a.k.a. waste.

VSM metrics

In order of importance.

  • Value Time (VT)
    • The time spent on adding value. This is actually performing the work.
  • Process Time (PT)
    • A.k.a. touch time, work time, cycle time.
    • The time it takes to actually perform the work, if a person is able to work on it fully and focus on it fully.
    • Include task-specific doing, talking, thinking, etc.
  • Lead Time (LT)
    • A.k.a. throughput time, turnaround time, elapsed time.
    • The elapsed time from when the input to a step is available, until the step is compeleted i.e. the work is sent along to the next step.
    • Include Process Time, not just the waiting time.
  • Percentage Activity (%A)
    • Calculate (PT / LT) * 100
  • Input Percentage Complete & Accurate (%C&A)
    • The percentage of inputs that are fully usable, i.e. that are complete and that are accurate, as measured by the person receiving the inputs.
    • Similar to “first pass yield” in manufacturing.
  • Rolled first pass yield (RFPY)
    • A.k.a. %Clean, %C&A for stream
    • Calculate %C&A * %C&A * %C&A …
    • The percent of value stream output that goes through the process cleanly, i.e. without any need for rework.
  • Number of Handoffs (#HO)
  • Number of IT Systems (#IT)
  • Freed capacity

Types of waste

  • Overproduction
  • Inventory
  • Waiting
  • Over-processing
  • Errors
  • Motion (people)
  • Transportation (material, data, etc.)
  • Underutilized people

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