MODULE 125 Lean Thinking / Lean Tools I

Value Stream Mapping

Contents
Section 3.1

Unit Introduction

29

Section 3.2

Unit Objectives

29

Section 3.3

Introduction to Value Stream Mapping

29

Section 3.4

Why VSM

30

Section 3.5

Selecting the Product Family

38

Section 3.6

Mapping the Current State VSM

40

Section 3.7

Developing the Ideal State VSM

49

Section 3.8

Mapping the Future State VSM

49

Section 3.9

Achieving the Future State VSM

57

Section 3.10 Unit Review

58

Section 3.11 SAQs

58

Section 3.12 SAQ Suggested Answers

58

Section 3.13 References

58

27

UNIT 3 Value Stream Mapping

28

MODULE 125 Lean Thinking / Lean Tools I

Value Stream Mapping

Section 3.1
Unit Introduction
This unit provides an introduction to Value Stream Mapping, identifies and explains
the advantages of VSM and outlines the reasons why it plays such an important role
in the implementation of any Lean strategy.
The unit provides an overview of VSM and then takes the student through the various
steps involved in performing VSM. It identifies and explains the necessary steps from
initially identifying the product family through the construction of a Current State
Map, creating an Ideal State, generating a Future State Map and finally developing
an implementation plan to achieve the future state.

Section 3.2
Unit Objectives
When you have successfully completed this unit you will be able to:

Describe why VSM is such an important Lean Tool

Describe and explain the key benefits of VSM

Explain the key steps and requirements for completing Current, Ideal and
Future State Value Stream Maps

Describe and plan a VSM event

Develop a future state VSM implementation plan

Section 3.3
Introduction to Value Stream Mapping (VSM)
Introduction
Defining Value and the Value Stream were introduced and identified as the first 2
principles in Unit 1 of his module. A value stream is essentially the sum of all the steps
that must be performed in the defined sequence to create and deliver value to
the customer.
The complete value stream includes all the steps required to recognise demand and
to plan (information) as well as to process (execute). The value stream includes all
process steps; value-added and non value-added. If there is a product or a process for
a customer, then there is a value stream.
Mapping the Value Stream is a critically important step in any Lean transformation
and when the tool is rigorously applied it provides a powerful and effective link
between Lean strategy and execution.

29

UNIT 3 Value Stream Mapping

Many Lean tools exist to support an organisations lean transformation. However VSM
is particularly important, as it provides a mechanism to identify where waste exists
and to define the shape of the desired Lean value stream, thus facilitating the
deployment of resources and effort into improvements that will have a significant
beneficial impact on the value stream.
Without VSM, lean activities and improvements often fail to focus on the critical
issues and areas needed to deliver overall system improvement, creating islands of
excellence without actually improving the overall value stream. Such efforts will
often improve one small part of the value stream and can improve the flow through
that portion of the stream, but the value flow often comes to a stop in a swamp of
inventory and detours ahead of downstream processes. The end result can often fail
to deliver any overall cost savings, provide no improvement in customer service or
quality and result in limited or no sustainability.
VSM therefore plays a key part in ensuring that improvements impact the whole value
stream rather than deliver isolated, if sometimes dramatic local improvements.

Section 3.4
Why Value Stream Mapping (VSM)
Introduction
VSM is primarily concerned with mapping the movement of information and materials
through the value stream. VSM follows a products production path from beginning
to end, and draws a visual representation of every process in the material &
information flows. Mapping the value stream allows us to look at our business from
a different perspective, or with fresh eyes.
There are a number of specific benefits which result from VSM, these being:

It helps us visualise more than just the process level - lets us see from
door-to-door (and beyond)

It allows us to see the sources of waste

It shows linkage, or lack thereof, between the flow of information and the
flow of material - VSM is the only tool to include critical information flow
and much of lean depends on how information flow is handled

It provides a common language and assists in clearly communicating

future state ideas

It helps target improvement projects on the right opportunities that will

make a real difference to performance and flow

VSM facilitates the selection of appropriate tools as needed to achieve

future state vision

It provides a blueprint for implementation. Would you build a new house

without a blueprint?

It ties together various lean concepts and techniques

30

MODULE 125 Lean Thinking / Lean Tools I

Unit 2 introduced muda and the 7 wastes. VSM will highlight where many of these
wastes exist within the Value stream, including items such as:

Overproduction: producing 6 8 weeks prior to downstream consumption

Defects: defects detected downstream or at customer site

Unnecessary Inventory: producing more than what was ordered

Unnecessary processing: rework

Unnecessary transportation: significant movement of material between

process steps

Waiting: operators waiting

Unnecessary motion: operators walking around area looking for tools,

material, gauges, etc

To keep your customers happy you must offer a good demand response by delivering
their order on time and of good quality, within budget. If you have difficulty working
within the time and cost constraints the customers may bring their business
elsewhere.
To grow and profit in todays ever-demanding marketplace, you need to incorporate
a good work methodology for continuing and improving the system that gives the
customer what they want. Value Stream Mapping (VSM) helps you to understand and
improve your system.
What does the Customer Value?
To remain competitive, you must know where the value lies for your customer. Lean
thinking focuses the system on the customer. The system must provide in the most
efficient manner possible what the end customer is willing to pay for. To build a loyal
and lasting relationship with your customer, every part of the organisation must know
and understand their purpose from the customer's point of view.
- What do you currently do for the customer?
- What should you do for the customer?
VSM helps you to truly evaluate and assess these questions.
You must provide your customer with a good value proposition.
A value proposition offers:
1 Time
2 Quality
3 Cost
VSM is a tool that will enable you to produce an action plan. When implemented
successfully it will result in an improved value proposition.
Can you improve the value proposition you currently offer your customer?
Identifying a Value Stream
Where there is value from your customer's point of view there is a value stream. The
challenge lies in identifying it.

31

UNIT 3 Value Stream Mapping

A value stream is all the actions (both value added and non-value added) currently
required to bring a product through the main flows essential to produce that product
or service.
By taking a value stream perspective you will examine the entire system from raw
material to customer end product or service fulfillment.
Real-life Example
Stonebridge is a company that specialises in precision machining and welding. It
produces parts for the oceanographic and defence industries. Using lean
manufacturing with VSM, Stonebridge identified waste in their end-to-end system.
Minimising these wastes using VSM led to a number of improvements.

Value Stream at Single Plant Level

VSM aids in efficient production system design based on the end-to-end system flow
of a product family. By drawing a VSM you will follow a product's production path
from beginning to end. Taking a value stream perspective means examining the entire
system from raw material to customer end product or service fulfillment. You will
work to improve the end-to-end system, not just individual processes.
When you start VSM, you will begin by examining one product at single plant level.
Once you are confident with VSM, you can move towards mapping at different levels.
VSM forces you to interact with the workplace, examining and understanding your
demand response. The act of physically going through the process provides a unique
experience in understanding the demand response. It will provide you with an
understanding of what actually occurs in the workplace rather than what you think
may be occurring. Most managers are surprised by the results.
There is no substitute for direct observation.

32

MODULE 125 Lean Thinking / Lean Tools I

Material and Information Flow

To have a good value proposition, information and material flows must work together.
A VSM examines both the information and material flow of a product.
Information flow is the exchange of information received from a customer in relation
to an order e.g. production, or shipping schedule. Material flow is the movement of
physical items through the entire value stream e.g. assembly to shipping.
Material and information flow must be examined in conjunction with one another to
get the most out of your value stream.
VSM makes the complexity of the information flow visible and shows how the
material flow responds to it. Examining the information flow through VSM allows you
to see if you are producing to meet the customer demand (build to order) or building
to schedule. Examples of information flow include production and shipping schedule,
as well as customer and supplier forecasts and orders.
Examining the material flow through VSM helps us to understand the physical
movement of material from receiving, through to production, to the shipment or
delivery of finished goods or services. Examples of material flow are molding to
assembly, assembly to shipping, etc.
The Stages of VSM
Figure 3.1 below shows the steps in creating a Value Stream Map.
To create a VSM you must follow these steps:
1

Select a product family to examine

Draw a current state map and analyse problems in the value stream

Define your Ideal state: where you want to be

Draw a future state map

Create an action plan and implement

Select a Product Family - Identify the

unit of analysis.
Current State Map Gathering data on
your material and information flows on
the work floor.
Define Ideal State - Think about where
you want to go in an ideal situation. i.e.
building the perfect system.
Future State Map - Draw a future state
that uses the principles of flow and pull.
Action Plan - Create an action plan to
implement the future state map you
have created

FIGURE 3.1 The Steps in Creating the Value Stream Map

33

UNIT 3 Value Stream Mapping

The ideal state provides you with your destination. Now you know where you are
starting and where you are going and are ready to take the next step.
Once you have reached your target future state, it now becomes your current state,
from which the next future state VSM should be developed, taking you closer to your
ideal through continuous improvement.
A Value Stream Map provides the following:

A visual tool to show you how value flows to the customer in your
organisation

A 2D representation of your value stream map

A clear summary statement which helps you to communicate a

shared vision

Measurable goals

A continuous Improvement Plan

A system blueprint for how the value proposition can be improved for
the customer

Understanding of how much production time is value and non-value

Leadership Support
Without management's full commitment, VSM will not succeed. You will not gain
the benefits already discussed and as a consequence will waste time, money
and resources.
To support VSM, leadership must ensure that improvements are aligned with the
business strategy and must also lead:

By example

By being knowledgeable

By questioning

By understanding the fundamentals

By supporting

Adaptability of VSM
VSM is a tool that can be applied to all areas of your business administration, I.T,
manufacturing, etc. The principles and goals will always remain the same. You must
improve the value proposition for the end recipient.

34

MODULE 125 Lean Thinking / Lean Tools I

VSM Example

Darchem Insulation Systems

Darchem Insulation Systems produce a range of technical insulation solutions for the
Automotive and Aerospace sectors. The company decided to implement Value Stream
Mapping to improve the flow for one product family. The management at Darchem
had experienced some success in using lean techniques.
They discovered that VSM could be used to get a clearer understanding of what
happened to the product as it passed through the value stream - and where
improvements could be made.
The management team brought together a team to undertake value stream mapping.
The team started by walking the entire process to make sure they understood it.
Instead of starting at goods-in, where materials are delivered, the team started at the
dispatch end of the process. This way they were able to start with the processes that
are linked most directly to the customers' needs.
Darchems first map did not attempt to describe everything on the shop floor. The aim
was to walk the system and find out what really happens - as if a piece of material
were tagged - the aim was to follow the experience of a part as it flowed through the
facility. The team's ability to create a future state depends on going to where the
action is and understanding what really happens.
Within the selected product value stream there were 8 main processes:
1

Partmark

Metal Cutting

Insulation Cutting

Assembly

Spot Weld

Fit Eyelets

Inspect

Dispatch

Darchem decided to record related processes as process categories such as cut and
press for example and assembly instead of recording each process.
The current state map shows more than simply the processes involved.

35

UNIT 3 Value Stream Mapping

It shows:

How stock builds up

How long materials wait between each process

The amount of wasted time

The way information flow controls the system

What did the current state map show to the VSM team?
The team were surprised at the results. The map showed that lead time was 23 days,
whereas the actual time it took to produce one item was only 59 minutes.
This meant that for 22 days and 23 hours the product was not being worked on.
The map also showed:
There was overproduction which caused a bottleneck with some processes being
under utilised waiting for jobs to reach a certain stage in production .... and then
being swamped!
Production was being driven by schedules that were often inaccurate.
The team constructed a future state map to show how they would like things to work
in the value stream. In the future state map they designed a system to allow the
products to flow smoothly and rapidly through the factory. They also introduced
methods to allow the customer requirements to control production.
The company are now in the process of implementing all of these actions within their
product value stream.
They have already gained many benefits:

Reduced inventory on shop floor

Improved delivery performance to their customer

Greatly improved flow of materials

The company are delighted with the improvements made to date and further efforts
are now underway to use Value Stream Mapping in other parts of their business.
Management Reflection

If you are going to adopt lean manufacturing as a way forward

it has to become a normal way of operating . . . a way of life.
Our next step is to pass on some of the skills and experience
we have acquired through Mapping the Value Stream to other
parts of the operating business . . .
. . . We have the aim of eventually cascading knowledge through the
entire enterprise. The mapping shows there are very many more
opportunities for us. The exact way we have done things may not
provide an expedient model for other parts of the business.

36

MODULE 125 Lean Thinking / Lean Tools I

However, the VSM approach is extremely flexible and offers a

graphical representation of the way we really do things.
Alan Sheffield, General Manager
Darchem Insulation Systems, Gloucester, United Kingdom

Conclusion
VSM provides a framework to balance a customer value proposition against your
system's capability. Where there is a value proposition for a customer there is a value
stream. The challenge lies in identifying it and increasing the system capability.
VSM is a systematic approach that allows people to plan how they will implement the
improvements that make it easier to meet your customers' demands.
Value Stream Mapping:

Encourages awareness of the value proposition

Identifies opportunities for improvement in the value stream

Facilitates visualising more than just the single-process level,

i.e. assembly, welding etc

Provides a plan for implementing improvements

By following well-defined steps and using dedicated resources, Value Stream Mapping
(VSM) can get the most from your value stream. VSM is successful as it uses proven
mapping tools. VSM is also a cost effective tool as the resources required can be
located in your current workplace.
It is essential to the success of VSM that the cross functional team works together to
produce the current and future state maps. The team will learn to look on the process
with a common understanding and to achieve agreement on what areas to improve
and why. The whole team must understand how the individual process flows
contribute to the overall value stream.
You must nominate an individual to be responsible for a product family and lead VSM
from door to door. If no one is given responsibility for the value stream map as it
crosses departments, VSM will not be implemented, resulting in waste of time and
resources, and leaving parts of the flow unaccountable and left to chance.
For VSM to succeed your work colleagues must understand that they will benefit from
workplace improvements. Once the VSM project is identified, employees on the work
floor must be informed as to what is happening and how it will benefit them, for
example, there will be less rework.
Set aside time for training. The workplace culture must be changed so that VSM and
Lean become an everyday improvement.
The only equipment required to draw a VSM is pen and paper for mapping and flip
charts and markers for discussion. The map is drawn by hand using a pencil. Erasing
and fine-tuning the map will help you to understand and improve the flow. You may
also find it beneficial to begin mapping on Post-It Notes as you can easily rearrange
them as the group discusses problem areas.

37

UNIT 3 Value Stream Mapping

Do not use a computer to draw a VSM. The time it takes to hand-draw each process
will give you time to fully understand material and information flow.
The timeframe for creating a VSM will vary for each product. For a straightforward
value stream, you should be able to create a VSM within a week. However, the more
complicated context and scale of VSM gets, the longer it will take.
Summary:

Cross functional implementation team

Full manager and team commitment

Pen and Paper approach

A good form of visual communication

Provides for clear and concise communications between management

and shop floor teams

Section 3.5
Selecting the Product Family
The first step is to select the product or product family that is to have its value
stream mapped.

Product Families
Value Stream Mapping (VSM) is a time efficient tool that is best used to examine
Product Families. Mapping at process level (process mapping) for each individual
product would take too long. The first step in the VSM process is selecting a product
family to value stream.
Each value stream map must be concentrated on one product family. A product family
is a group of products that pass through similar processing steps and over common
equipment. Product family analysis is about breaking down the full product range
into groups that can be managed together or share a significant amount of the
value stream.
There are no strict guidelines for grouping product families. The cross functional team
must set and record their own guidelines in defining a product family.
This will give the VSM team guidelines for grouping products into product families.
There is no cut-off point in grouping products. You can only work to what the cross
functional team agrees is the closest match.
A Product Family Matrix is a table that can help you in identifying your product
families. It is a table of products and processes which can help to define your product
families by observing the common processes.
Products that you considered totally different may have similar process steps, (see
Figure 3.2 on the following page). If this is the case, then they can be grouped into
product families, even if they are not related from a marketing viewpoint. The key is
to think in terms of shared processes.

38

MODULE 125 Lean Thinking / Lean Tools I

To create a product family matrix:

1

Draw a table

Divide the vertical axis into rows representing products

List the top level processes on the horizontal axis

Place a mark in a process box if that part of the process is used in

creating the product

Look for common process steps that apply to several products

FIGURE 3.2 A Product Family Matrix

Next, you must select the product family to work with. A product family can be
selected for a variety of reasons. There is no hard and fast rule for selecting a product
family for VSM.
Once the product families are defined, the cross-functional team can select the
product family to value stream map that will most benefit the company.
Summary
Selecting a Product to Value Stream Map:

Identify Products

Identify Processes

39

UNIT 3 Value Stream Mapping

Draw Product Family Matrix

Compare Process Similarities

Select Product to VSM

Section 3.6
Mapping the Current State (VSM)
Introduction
By collecting data and drawing a Current State (CS) VSM, you can show how the
system is currently operating.
Collecting and analysing data from the information and material flow will aid you in
improving the value proposition you offer the customer. A current state map starts
by drawing the material flow and then by drawing the information flow.
A current state map is drawn using a set of icons on a single sheet of A3 paper, and
can be done initially as a brown paper exercise for larger value streams. Common
icons used of VSM are shown below in Figure 3.3.

FIGURE 3.3 Icons for Value Stream Mapping

Mapping the Material (Physical) Flow

The customer is your main concern. Mapping always starts by drawing the customer
symbol and recording customer order details. The customer is represented as a
factory/outside source icon. It is typically drawn in the top right corner. Underneath
the factory icon the customer order details are recorded, including demand quantities,
delivery frequencies, delivery quantities, etc.
Your current system will have a number of processes that need to be recorded. A
process box is used to show an area of continuous flow. When the continuous flow

40

MODULE 125 Lean Thinking / Lean Tools I

stops, another process starts. In examining the processes that are linked, you should
start with the one closest to the customer and work backwards. Material flow should
drawn from right to left at the bottom half of the map in order of processing steps,
not according to the physical layout of the plant.
Each process has attributes (data and information) that should be recorded. Process
information is recorded in the process box. The information that you choose to record
will vary according to each process.
Process data is recorded in a data box. The data box is drawn directly under the
process box. The data box will record the metrics associated with the process area.
It is important to collect process data to enhance your knowledge of the material
flow. It allows you to see how the process responds to the customer requirements.
Direct observation will allow you to see and understand the result in the context
of how you saw it being obtained. You should use actual observed information
where possible, and not data stored in files as file information is often inaccurate or
out of date.
Examples of Process Data:

Cycle Time
The most important piece of process data to collect. Cycle time is the time
that elapses between one part coming off the process to the next part
coming off.

Changeover Time
The time it takes to switch from producing one good product type to
another good product type.

Uptime
Available machine working time when a machine is fully functional
and available.

First Past Yield

Primary measure of defects. Counts percentage of times work is done
right first time. If it is not done right first time, you end up with rework
or scrap.

Cost
E.g. labour, scrap. This needs to be done with care as it is only the
processing steps that are costed and not inventory.

Batch Size
Unit of product or commodity that is processed in one go.

Value Stream mapping icons are explained further in Appendix A of Learning to See, by Mike Rother & John
Shook (see reading list).

41

UNIT 3 Value Stream Mapping

The current state map must also record the Inventory which exists between each
process. Inventory is the quantity of work units/parts observed in the system between
the end of one process and the start of the next.
Inventory is symbolised by a (warning) triangle with an I in it.
Transportation details from the supplier and to the customer are also part of the
material flow, and therefore must be recorded. A truck icon is drawn to show the
transportation of either incoming raw materials or outgoing finished products. The
frequency of delivery should also be recorded on the current state map.
The supplier is typically drawn, using an outside source icon, in the top left corner.
Supplier data and the amount of inventory received should be recorded.
By recording the material flow you can tell if you are working to a pull or push system.
Pull
Producing only to customer demand i.e. the process in the sequence closest to
the customer takes the material flow from the process before it.
Push
Batches of material are moved to the next process without demand e.g.
palettes of material are sitting in front of a process. A black and white striped
arrow is used to identify push.
Mapping the Information Flow
The material flow cannot operate on its own. Without information from the customer
and production scheduling, the material flow will lose its meaning. Information flow
always starts when the customer transfers an order to your company.
The next step in VSM is to map the information flow. Information flow is drawn from
right to left, top to bottom and dominates the top half of the map. Arrows are used
to show how the information is transferred. Each arrow represents one piece of
information. Information transferred manually, e.g. telephone, letter, is represented by
a straight line. Information transferred electronically, e.g. e-mail, fax, is represented
by a jagged arrow.
Production control is a conduit for information. It provides the scheduling
information. It takes the customer's order (input) and transfers it to an output for
suppliers and production. The current state map must show how information is
transmitted from production control. Arrows are used to show that the production
control centre dictates what is produced by each process. The frequency of the
schedule is included in the process control box e.g. Materials Requirements
Planning (MRP).
Assessing the Non-value Activities
Once the information and material flow are drawn on the Current State VSM, you
need to assess the amount of wasted time in your process. A time line will help you
assess this. The time line is an indented line. It is drawn at the bottom of the page,
under the map. The time line summarises the current condition of your value stream
and compares the inventory/queue time and the process times. The difference
between the two is the amount of time spent on waste in the production process.

42

MODULE 125 Lean Thinking / Lean Tools I

The time line represents two levels of your current state:

Inventory Lead Time
This is plotted on the top level of the time line.
Inventory Lead Time =
Amount of Inventory /Equivalent customer Daily Demand
Add all inventory lead times to get the total inventory lead time.
Processing Time
This is the cycle time observed in the workplace for each process in the value stream,
expressed in the appropriate time unit.
You can compare the time spent on value and non-value added activities by
subtracting the processing time from the total inventory lead time. 2
Conclusion
The current state map is now complete. You have recorded all information and data
on the material and information flow and inventory, and you have drawn a time line.
You can show how the work floor is currently operating and will be able to recognise
areas where there is no continuous flow and non-value adding actions. A current
state map provides a starting point to realise future improvements.
Summary
What is a Current State Map?

Draw Customer symbol and include data

Draw material flow in order of processing steps

Record location and quantity of inventory

Detail and map information flow

Time and record the cycle time for each process

Show PUSH or PULL movements

Draw Time Line

Create a Current State Map using a Worked Example

Using the case study material, you are going to construct a current state map for The
HomeTech Company. By following the case study data and drawing the HomeTech
current state map, you will be able to assess the difference in product lead time and
processing times for the CCTV camera product family.
HomeTech's cross functional team have agreed to create a current state map for their
CCTV camera product family. As this is HomeTech's first attempt at value streaming,
they have agreed to map at single plant level. HomeTech have explained the benefits
of Value Stream Mapping (VSM) to their co-workers and have gone on to the work
floor with stopwatches and pen and paper.

The Current State mapping process is also explored in a worked example in Part II of Learning to See, by Rother
& Shook (pages 16-33).

43

UNIT 3 Value Stream Mapping

As a member of the HomeTech cross functional team, you have been nominated to
draw the current state map as the team discusses the data.
Your customer, Modern Estates Ltd, requires a total of 18,000 CCTV cameras (12,600
indoor, 5,400 outdoor) per month. The cameras must be delivered in packs of 10 on a
daily basis.
The VSM team recorded that the CCTV Camera product family travelled through 7
different processes, starting with injection moulding and ending with dispatch.
The processes are:

Injection Moulding

PCB Assembly

PCB Test

Sub Assembly

Final Assembly

Test

Dispatch

The VSM team also recorded the data for each process. The data for the Injection
Moulding process is:

Cycle time (C/T) 10 seconds

Changeover time (C/O) 55 minutes

Uptime 90%

Operators 1

While recording the data, the team have also recorded the inventory that accumulates
between each process.
The accumulated inventory between Injection Moulding and PCB assembly is:

1 batch of Indoor cameras

1 batch of Outdoor cameras

Batch size is 4000

44

MODULE 125 Lean Thinking / Lean Tools I

Process and inventory data for the remaining process steps are shown in the
table below: (Note: That inventory data is for inventory found AFTER the identified process step.)
PROCESSING DA TA
Processes

Cycle

Changeover

Time

Time

10 Sec

PCB Assay

15 Sec

PCB Test

INVENTORY DATA

Operators

Uptime

Indoor

Outdoor

Batch

55 mins

1 Op

90%

1 Batch

1 Batch

4,000

30 mins

1 Op

90%

2 Batches

1 Batch

1,000

25 Sec

1 Op

95%

1 Batch

1 Batch

1,000

Sub Assay

50 Sec

2 Ops

100%

4 Batches

2 Batches

500

Final Assay

25 Sec

1 Op

100%

1 Batch

2 Batches

500

Test

70 Sec

3 Ops

100%

250 Packs

150 Packs

10

Dispatch

30 Sec

1 Op

100%

Injection
Moulding

5 mins

225 Sec / 3.75 Min

You now have the all the necessary data to map the material flow on the Current
State Map.

See picture of Material Flow VSM from Lean tools training

VSM Module 3 Topic 2 -132-06 on the following page.

You must now record the information flow.

HomeTech Company gets a delivery from their suppliers, Pronto Components, once a
week by truck.
Production control is the central receiver and provider of information. It receives
customer order information. This is delivered by e-mail as a 60-day forecast. In turn,
production control delivers an order to its supplier, Pronto Components. HomeTech
sends a 30, 60, 90 day forecast electronically to the Materials Requirements Planning
(MRP) system through e-mail. It also raises a purchase order (P.O.) and sends it
electronically to Pronto Components.
The HomeTech Company uses an MRP system. This generates a daily schedule, the
details of which are printed and given to the head operator at each individual process.
However, the dispatch process receives its daily schedule directly from Production
Control.
At HomeTech Company, the team have realised that each of the processes is
producing to a schedule, so the transfer of work in progress from one process to the
next is controlled by the production scheduler and not the customer demand. They
have determined that they have a push system working between each process.
Now that HomeTech have the system (material and information flow) details for the
CCTV camera product family, they can use the data to assess the amount of waste
time in the process. To do this, a time line must be drawn.

45

UNIT 3 Value Stream Mapping

FIGURE 3.4 Material Flow VSM

46

MODULE 125 Lean Thinking / Lean Tools I

Next, the HomeTech team must record the process cycle times and the equivalent
inventory lead times on the time line. The cycle time is recorded on the lower part of
the time line.
The equivalent number of days inventory can be calculated from the data already
obtained.
For example to calculate the inventory lead time equivalent of inventory between
injection moulding and PCB assembly . . .
Customer demand is 18,000 units per month. The inventory is 1 batch of indoor
and 1 batch of outdoor cameras. Batch size is 4000. There are 5 working days
in each week and 4 weeks in each month.
Customer demand = 18,000 units per month = 900 per day.
Inventory = 1 batch of indoor & 1 batch of outdoor cameras.
Batch size = 4000
Thus two batches = 8000 units of inventory (cameras).
Inventory Lead Time = 8000/900 = 8.8 days of inventory
We now have all the necessary information to complete the Current State Map and
to compare the current inventory lead time to the total processing time.

See picture of full CS VSM on the following page from Lean tools training
VSM Module 3 Topic 2 -132-13

The HomeTech VSM team are surprised by the big difference in production lead time
versus production cycle time. They believe there are a lot of opportunities to
investigate where there are value added and non-value added actions.
From this they realise that a lot of production time is spent on activities that are nonvalue add for the customer. They will have to change this to remain competitive.
Drawing and analysing the current state map has provided a starting point for
HomeTech to move towards future improvements.

47

UNIT 3 Value Stream Mapping

FIGURE 3.5 CS VSM

48

MODULE 125 Lean Thinking / Lean Tools I

Section 3.7
Developing the Ideal State VSM
Before beginning to create the future state VSM it is useful to understand what your
longer-term aims are. This is achieved by imagining how your ideal value stream
would operate and envisioning what key performance measures your organisation
hopes to achieve such as lead time, delivery performance, quality levels, etc. This will
provide the organisation with context and purpose to develop a new system and
change the culture.
In the ideal state:

Single product/service would move in a continuous flow from raw

materials to the final customer with no delays, queuing or rework.

Every process would make only what their next customer wants and would
be able to deliver the product when they want it.

Real processes seldom reach the ideal state. However, the ideal state will provide you
with a picture to help create and implement a future state.
A future state map bridges the gulf between the current and ideal states. It provides
attainable goals in the near term, progressing your workflow in manageable steps,
incorporating the realities of technical limits, budgets and time.

Section 3.8
Mapping the Future State VSM
Introduction
By analysing your current state map and identifying any problems which occur in your
current value stream, you can identify areas where improvements must take place.
The next improved state is known as a future state. By developing a future state map
and working towards it, you will be improving the value proposition you offer your
customer.
The future state map is a creative process. How you challenge yourself and meet the
challenge is up to you and your team. You are basing innovation on Lean principles.
It is unlikely that any two people would create a future state map in the same way.
Discussion and common agreement between your Value Stream Mapping (VSM) team
is essential to the success of your future state map implementation.

49

UNIT 3 Value Stream Mapping

Analysing your Current State

Analysing your current state map will help you to identify the opportunities to design
a value stream to better serve your customers. As you develop your future state
concepts, you must be able to answer the following questions in roughly this order.

Based on your answers, mark the future state ideas directly on your current state map
in red pencil and change it before you reach a version you are happy with. Once you
have worked out your future state thoughts in this way, you can begin to draw a
future state map.
As the VSM team analyses the current state map, you will see areas that can be
improved. For the value stream to meet customer demand, each problem on the
current state map must be resolved. Flow and Pull must be improved. The VSM team
must set a goal that will be reproduced on the future state map. Additional icons are
used when constructing a future state VSM. These icons are shown below (see Figure
3.6 on the following page) and represent Lean alternatives to the push type icons
normally included in Current State Maps.3

FIGURE 3.6 Pull Icons

50

MODULE 125 Lean Thinking / Lean Tools I

LEAN Guidelines for Future State VSM

Takt Time 4
Your goal is to have your value stream driven by customer orders. As the customer is
your main concern and is the reason you are doing value stream mapping, you must
look at the issues relating to customer demand. By focusing on customer demand you
are trying to improve the value proposition you offer your customer. First you must
understand your customers' needs. What do they want and when do they want it?
The design of the future state map is based on the desire to meet your customer
requirements. To meet customer requirements you must get your value stream to
produce to takt time. Takt time is the first step towards meeting customer demand. It
helps us to produce what the customer wants ON TIME. The purpose of takt time is
to precisely match production with demand.
Takt Time is calculated using the following formula:
Takt time

Effective work time per shift

Customer requirements per shift

The period for which takt time is calculated can be weekly, monthly, quarterly, etc,
depending on variation in customer requirements. The calculated takt time is written
under the customer icon on the future state map.
Continuous Flow
Through your future state map, you are planning to implement continuous flow, or
single piece flow. This means that each individual piece of work keeps moving i.e.
being continuously worked on with no queues and waiting.
It will not always be possible to go directly to single piece flow. In this case you should
aim for the smallest possible batch sizes. This will provide flexibility to meet customer
needs and to maximise continuous flow in your value stream.
The process box is used to represent continuous flow. In your future state map, each
process box should describe an area of flow e.g. two or more process boxes could be
combined into one process box.
It is not always possible to establish continuous flow straight away in your value
stream. As you implement your future state map, you will need to ensure that
customer demand is always met and production works to pull rather than to a
schedule (push). Therefore as a precaution you may need to have a limited amount
of buffer stock (a finished goods or other supermarket) to help you meet customer
needs. You decide the amount of inventory to keep there, e.g. one day's worth. You
may need to experiment with levels as you implement your future state. Your goal is
to keep this stock to a minimum. Remember inventory is waste and you are working
to remove it!
By creating and implementing a future state map you can examine how operators and
machines can be better utilised. Updated process data is recorded in a data box for
that process. You may need to provide training for operators to be flexible in the
processes they can perform. You might also need to examine how machines can be
better maintained and used. Kaizen bursts can be used to indicate, on the future state
map, where projects need to be undertaken to develop staff skills, to improve machine
reliability and availability, etc.
3
4

See also Appendix A of Learning to See, by Rother & Shook

Takt time will be dealt with in greater detail in Unit 5 - Section 5.3

51

UNIT 3 Value Stream Mapping

When designing your future state map, you will recognise lines which can be balanced
by better utilising the operators. Line balancing is the process by which you evenly
distribute the work element within a value stream in order to achieve a smoother flow
and meet takt time and demands.
Kanban/Pull
How will each process know how much to make? Between each process there will
need to be a signalling system or kanban. The signal tells people when to produce
goods. The signal could be a card system, empty container or markings on the floor.
When the kanban is empty, you must refill it. A production kanban triggers the
production of parts. A withdrawal kanban instructs the operator to refill it when it
is empty. You will need to show the type of kanban on your future state map.
Initially, continuous flow will not be possible in all areas of the value stream. To
overcome this you must introduce a supermarket pull system. This will control
production between the processes that cannot be tied together in continuous flow. A
supermarket is positioned between the two processes. When a unit is required it is
taken from the supermarket. A withdrawal triggers the movement kanban cards from
the supermarket to the supplier process, informing that the unit must be replenished.
Implementing a future state will take time. Therefore, a finished goods supermarket
is used. It stores a set level of goods and replenishes them as required.
A finished goods supermarket allows you to:

Meet customer demand immediately

Create flow

Pull based on real time customer demand

You will also need to consider how your suppliers respond to your needs.
Is it possible to create a KANBAN system for your suppliers so that they can deliver
only what you need, when you want it and in the quantities you need?
Suppliers can still have a forecast of your needs but regular deliveries can be
controlled through pull systems.
Scheduling to Your Pacemaker Process
By using supermarket pull systems, you will need to schedule only one point in your
door-to-door system. This point is called the pacemaker process and sets the pace for
all other processes. The pacemaker should be located as close to to the point of
shipment to your customer and is usually set at the production process that is
controlled by the outside customer order i.e. the process closest to the customer.
With the orders arriving to the pacemaker in a levelled format, the next stage is to
ensure that the orders are released to the pacemaker in an even manner. This ensures
there is an even spread of work throughout the day. This is achieved through a
Heijunka box (load-levelling box) that is used to space the orders out. Kanbans are
placed into the Heijunka box in the desired mix sequence by product type. The
produce is spaced out to a certain pitch that allows for the completion of the
customer order to the required Takt.
Levelling Production
To meet continuous flow you must level production. Levelling production means
evenly distributing over a shift or a day the work required to fulfil customer demand.
For example, instead of assembling all type A products in the morning and all type B

52

MODULE 125 Lean Thinking / Lean Tools I

products in the afternoon, assembly would alternate between smaller batches of A &
B. If you do not level production some cells will fall behind in production or will be
waiting for work.
Drawing a Future State Map
Once you have analysed your current state map by using the key questions for future
state design and recognising the areas that need improvement, you can start to draw
a future state map.
A future state map is drawn using paper and pencil as with the current state map. It
uses the same format and layout as the current state map, i.e. information flow is at
the top and material flow is at the bottom of the map.
Create a Future State Map using a Worked Example
Using the HomeTech case study material, you are going to construct a future state
map for CCTV Camera product family value stream. As a member of the value stream
mapping (VSM) team, you will analyse the current state map and draw a future state
map.
NOTE:
It is unlikely that any two people would create a future state map in the same way.
There are no definite correct answers in this topic, issues are resolved through team
discussion.

To draw a successful future state map, the VSM team must first analyse their current
state map.
Examine the HomeTech current state map to identify and highlight the areas of
waste for:

Overproduction

Inventory

Waiting

Movement

Defects

There is waste of:

Overproduction

Everywhere there is inventory

Inventory

Everywhere there is inventory

Waiting

Movement

Defects

Injection moulding has 90% uptime, therefore there is

10% downtime and this means waiting
Moving between departments from PCB assembly to
PCB test
HomeTech has not included First Past Yield (or rework) in
the current state map

53

UNIT 3 Value Stream Mapping

Analysing the current state map had forced the VSM team to recognise the various
areas of waste that occur in their system. They can now begin to draw a future state
map, where they can create a system to reach continuous flow. The customer,
production control and supplier date remained the same as in the current state map.
To create a future state that is implemented successfully, the VSM team must know
their customers' needs. First they must calculate the takt time.
The HomeTech production time is 8 hour shifts with two 15 minute breaks.
They work 20 days per month.
The customer requirements per shift are 18000 units per month.
The takt time must first be calculated in seconds and recorded on the future
state map.
Takt Time

Next, the team needed to determine where they could work towards continuous flow,
utilising the current factory layout.
The team agreed that they could change the layout of the process areas and introduce
flow in:

Injection Mould

PCB Assembly, Test

Sub-Assembly, Final assembly and Test

Dispatch

Seven processes have now been reduced to four.

By combining PCB assembly and test, it is estimated that the:

Cycle time of 15 seconds can be achieved for both assembly and test

The changeover time can be reduced to 0

The uptime can be increased to 100%

Only 0.5 operators are required.

54

MODULE 125 Lean Thinking / Lean Tools I

At PCB assembly & test, you want to highlight that work must be done to decrease
the test cycle time to under 15 seconds and the changeover time to 0%. Using kaizen
lightning bursts indicate the required changes on your future state map.
The future VSM has been improved over the current VSM but it is still a Push system.
To ensure that they can meet the customer requirements while implementing the
future state map, the VSM team has agreed to place a supermarket of indoor and
outdoor cameras between PCB assembly & Test process and Assembly and Test.
Initially, the batch size will be 1 day.
The team decides to introduce a kanban system to replace the daily schedule to each
process. Each process will have a batch kanban with pull activated from the preceding
process. The withdrawal will be activated from the process which precedes it assembly & test. Initially the batch size will be 1 day.
Customer demand, which comes from the daily call off, is the trigger to pull product
through the plant. This eliminates the need to schedule to each process. As all the
processes are working to a kanban system, the daily call off is sent only to Dispatch.
The team are now ready to complete the future state map for indoor and outdoor
CCTV cameras.
The estimated processing times for the four processes are:

Injection mould: 10 seconds

PCB assembly & test: 15 seconds

Assembly & test: 100 seconds

Dispatch: 30 seconds

Next the team must calculate the total inventory lead time.
Inventory waits for:

3 days after delivery from the supplier before it reaches the first process

1 day between Injection Mould process and PCB Assembly & Test

1 day between PCB Assembly & Test process and Assembly & Test process

2 days between Assembly & Test process and Dispatch

Include this information on the time line and calculate the total inventory lead time.

See picture of Material Flow VSM from Lean tools training

VSM Module 4 Topic 2 - 142-12 on the following page

You have successfully created a future state map for HomeTech. Both the total lead
time and total processing time have been drastically reduced from the current state
map times.5
5

The Future State mapping process is also explored in a worked example in Part IV of Learning to See, by Rother
& Shook (pages 58-81).

55

UNIT 3 Value Stream Mapping

FIGURE 3.7 Material Flow VSM

The following website contains another example - from Boeing - of how the VSM
process can be used to identify and drive significant value stream improvements:
http://www.boeing.com/news/frontiers/archive/2005/november/i_ca1.html

56

MODULE 125 Lean Thinking / Lean Tools I

Summary
Future state designs incorporate process steps that:
Add value - minimize or eliminate non value-added steps
Are available - not constrained by downtime or capacity.
Are capable - can reliably repeat the process.
And are linked by:
Flow - with little or no queue, regulated by takt time.
Pull - produce at the pull of the downstream process step.
Level demand - minimal variation in information.

Section 3.9
Achieving the Future State VSM
Introduction
Understanding your customer requirements through the seven wastes will help you to
design your future state. Once you have decided on the best tools to implement the
future state map, an action plan must be developed.
The action plan is an essential part of value stream mapping. It will define the
project(s) that will help you to go from your current state to your future state.
Without an implementation action plan value stream mapping will not succeed.
Creating an Action Plan
When the future state map is complete, the time line will show the new processing
time. Compare this to the time line on your current state map, and you will see that
your system can operate in a much more effective manner with less non-value added
activities.
To implement your future state map, you will require an action plan. An action plan
will highlight what projects which need to be undertaken to help you get from your
current state to your future state. The action plan should show who will undertake
these projects and when.
Action plans should be reviewed at regular intervals to monitor progress and to ensure
that the necessary actions are being completed. Reviews provide a good opportunity
to highlight issues and obstacles which might delay or prevent completion of the
planned actions should they not be addressed. Reviews also provide an opportunity
for management team involvement in and support of the improvement process.
You can use the future state action plan to communicate with other staff to show
what has to be achieved. The future state map and action plan provide a valuable
visual tool. VSMs should be posted in a prominent place in the operational area so
that all team members know and understand the future action plan.
Conclusion
When you have implemented your future state map, remember that you will need to
continuously improve. This will mean that when you are happy that your future state
implementation has brought improvements, you should analyse this as your new
current state. In turn, you will find other areas to work on, thereby continuously
improving as you work towards your ideal state.

57

UNIT 3 Value Stream Mapping

Section 3.10
Unit Review
In this unit you will have learnt why VSM is such an important Lean tool. You will be
aware of its value in linking specific Lean implementation activities to the strategic
framework within which they are taking place.
The unit identified many of the benefits of VSM as a means of seeing waste and
planning improvements to the Value Stream.
The various steps from initially identifying product families right through to planning
the implementation of the future state are covered in some depth and provide the
student with a working template for the completion of the VSM process.

Section 3.11
SAQs
1

Construct a Current State Value Stream Map for TWI using the data set
provided in Learning to See (pages 35 -38).

Construct a possible Future State Map for this Value Stream

Section 3.12
SAQ Suggested Answers
Answers contained in Learning to See:
1

Appendix B

Appendix C

Section 3.13
References
RECOMMENDED READING

Mike Rother & John Shook, Learning to See, The Lean Enterprise Institute, Brookline,
Massachusetts, 2003.

FURTHER READING

James P Womak & Daniel T Jones, Lean Thinking, Free Press, London & New York,
2003.

58