What is VSM

Make your Business work for your Customers by Value Stream Mapping

There have been books written on Value Stream Mapping, and you may even have read some of them, or tried to. However, there is a theory that if you can’t explain something in one page, you don’t really understand it, so let’s see if we understand Value Stream Mapping, or to give it the essential Three Letter Acronym, VSM.

VSM is driven by the Customer perspective of the value of the goods or services you deliver. Not your perspective, and not your definition of value, your Customers.

When we start a VSM exercise with an Organization, we start with Why. The Why we are after is Why the Company exists, Why the employees get out of bed in the morning. Please note that this Why is not to make a profit or earn a salary. They are the consequences, not the Why.

Once you are clear on the Why, and only when you are clear, you can start a VSM exercise. A VSM exercise will usually commence by defining the scope of the problem and while the scope will always cover multiple processes, it will not be open ended. For example, if a restaurant were to look at delivering value to it’s Customers it might start with procurement of basic food items and end with the payment of a bill by the recipient of the meal, but it will not usually extend to growing the crops or rearing the animals, nor to how the Customer earns the money to pay the bill.

Now that the scope of the VSM is defined, what next? The second stage is to define what is being done now. This involves asking the people doing the job, exactly what they are doing now and why they are doing it. This usually involves going to where they are doing the job. This stage is often the most difficult, for two reasons; The first reason is that the inclination of senior people taking part in a VSM is to immediately intervene in how a task is being done, while the second reason is that senior people are often very surprised that what they thought was happening is not what is really being done, and it is hard to supress that surprise.

Once a map of what is being done now is drawn up, and yes, this does involve post-it notes, then the next stage is to stand aside and draw up a map of what way things can be done, with wait times removed, with bureaucratic restrictions redrawn, and with the Customer perspective in mind at all times. The fourth, and final stage, is to draw up a plan. How to get from where you actually are now, to where you ultimately want to be.

There are a few ‘gotchas’ when looking at Value Steam Mapping:

• It needs to involve people Senior enough in a company that they have the Authority to make changes across the Company. This means C Suite must be directly involved.
• It needs to be accepted that while a final vision will arise after stage 3, getting there will involve many phases and each phase will require a Plan, Do, Check, Act cycle.
• This is not an exercise that is aimed at reducing headcount, but it is an exercise that is aimed at getting more from the existing staff.

So essentially what a VSM is, is a method of determining how to improve delivery of value to your Customers, the consequence of which will be happier, and more, Customers, and this will result in a more profitable, more valuable company where people will be proud to work.