Value Stream Design – How to Create it

Value Stream
Value Stream

The Value Stream Design is a powerful tool to capture or sketch your processes and their interactions. Based on that map, you can derive strengths and weaknesses. The Value Stream Design further helps you in guiding you to a lean factory. Use the weaknesses detected, to create a roadmap based on the lean tools to reach better conditions. The Value Stream Design is based on pre-defined symbols you can use, but you do not have to.

Creating a Value Stream Design

The lean toolbox is based on a lean vision. Use the Value Stream Design to create your roadmap and use the lean tools to achieve that goal. Let us learn in this chapter, how we create the Value Stream Design and detect weaknesses of your factory.

The image on the right-hand side shows the symbols of a typical Value Stream Design. Basically, you use pen and paper to draw and sketch your processes and interactions by using the Value Stream Design symbols. They can be found as template attached to the lean toolbox.

Creating a Value Stream Design
What is a Value Stream?

Once you sketched your processes on a paper, you can transfer it via Microsoft Vision or Excel, but more likely using a wall to stick all papers you just sketched. What is a Value Stream? A Value Stream is a chart visualizing the material and information stream. It considers the entire supply chain including suppliers and customers. A Value Stream uses predefined symbols like for Kanban box or supermarkets. It points out all weaknesses of your supply and process chain and focus on your value adding activities.

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When thinking of a factory in western countries, we think of fixed structures, of borders and walls. We think from process step to process step and often miss those steps in-between. However, we try hard to get rid of these borders and think of a green field we can plan with, but we are still stuck on most of these limitations. The old western mindset is still focused on machines and structures. We divide manufacturing processes into manufacturing cells and manufacturing centers. The focus lies on increasing machine output and not on customer demand. That leads to a high level of inventory and safety stock inside and outside the factory. That inventory hides waste all across your processes. However, some of these phrases are prejudices for sure, they fit in a certain way to so many industries in these countries.

Creating a Value Stream Design
The old Mindset

The point is that the “old mindset” has so many limitations we have to get rid of first, before we can start working on a green field.

Creating a Value Stream Design
The Lean Mindset

Let us compare this to a lean mindset. As lean was developed in Japan, the methodology fits very well to their culture and behavior. They focus on processes and their interactions without thinking of borders like the building and walls for example. The lean mindset – process visualization based on green field planning. No borders and barriers at all, focus lies on process interactions. Planning according to a short lead and throughput time. Visual Management based on a low inventory and stock level. In their mindset, visual management means quality management.

As the target is the elimination of all waste, we have to start on the reduction of inventory and safety stock. This will cause some trouble on the shop floor for sure. At least at the beginning, but will unhide waste you have had all the time. By reducing the inventory and buffer, you might cause line stoppages due to a poor line balancing. By revealing this, you are now in the position to deal with that inefficiency and improve your balancing. The same is illustration with the water level of a lake. Once you reduce the water level, you reveal the peaks of all the rocks deep below the surface. The rocks have been there all the time, but you were not able to see them until you reduced the water level. The value stream will help you to determine the right level of buffer to let you see the difference of value and waste on your shop floor far more precisely.

Let us start with a gemba walk in your factory. The gemba walk is a tool used to get a better feeling of a process. You start to watch processes with your eyes and try to identify any waste you have. When doing the gemba walk, take a pen and paper with you all the time to sketch whatever you notice. A powerful tool to do so is the value-and-waste matrix. Divide the paper into value-adding and none value-adding activities as well as into necessary and not necessary activities. Everything you see your operators doing can be clustered into these four clusters. The more necessary and value-adding activities you have, the better it is. The less value-adding and necessary they become, the worse it get. These wastes have to be part of your value stream design you will develop later on based on the impressions you got during your gemba walk. Detect value and waste – go through your factory or your supply chain and capture all you see. Decide for all you see whether it is value-adding or none value-adding, and whether it is necessary or not. Sketch the value-and-waste matrix and sort all items accordingly.

Creating a Value Stream Design
The Value-and-Waste Matrix

The focus of your value-stream design must lie on the necessary value-adding activities. Eliminate all the rest.

Once you combined the gemba walk with the value-and-waste matrix, you have to put your value stream in an order, starting from your first process until it leaves the factory. Try to focus on one particular product to keep the complexity of that value chain short. The curve is based on your processing steps on the x-axis and the value the part has on the y-axis. During transportation and warehousing, the value keeps the same or gets even worse if dust accumulates. Visualize Value and Waste – The value-and-waste curve is defined by the time and the value of a part. Each step is a dedicated processing activity in your factory or supply chain (for example pre-production, drilling, bending, painting). Waiting and transportation will not add value to a part. Point out all waste and reduce the value curve as much as possible. Let us see how the curve looks like.

Without any efforts, we can visualize waste already by pointing out all horizontal lines, or even worse, those lines decreasing the product value like dust and dirt.

Creating a Value Stream Design
The Value-and-Waste Curve

To illustrate the amount of waste, sketch the value curve, which is based on all value-adding activities. That should make clear how much waste your processes have.

The value-and-waste curve is the foundation for your value stream design. Go through the value-and-waste curve and extract all processing steps you have. In the given example, the processing steps are drilling, painting, assembling and packing. Use these four steps as your central elements of your value stream design.

The Value Stream Design – Use the data box to fill in all relevant process information, for example takt time. Make sure to include all interactions between two process steps, including additional storage or handling steps. In the case material is stored on stock or double handled, make sure to put that information on the sheet. Use pre-defined symbols like for Kanban calls, searching material or supermarkets.

Use all related information you get to complete the diagram. You sure need some exercise to get used to it but the more often you have the chance to sketch the value stream design, the better you will get.

Do not forget to mark all the issues you face inside your process and value chain. Use the arrows to establish a roadmap for your plant.

Creating a Value Stream Design
How to create the Value Stream Design?

The lean toolbox will help you with these issues. Visualize Waste – Mark all regions with a high level of waste. Create sub-projects based for each detected region. Use that VSD as a roadmap for all your upcoming lean activities.

Further Reading

Methods of Lean Production – The Lean Toolbox


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