Value Stream Mapping for the Digital Age

May 31, 2018

vsm-digital-age

I recently read through McKinsey’s recent study, “Making it in America: Revitalizing US Manufacturing.” A lot of the challenges facing US Manufacturers are similar to the challenges facing our country:

  • rapid technology change and the resulting change in laborer skill sets and experiences
  • the need for capital investment which has to be preceded by an awareness of the need (and the appropriate places to invest)
  • a focus on future capabilities rather than trying to revive past capabilities and approaches

All of these things are more or less apparent in our region, and leaders need to consider the best approach for their organizations to move in this direction.

However, I couldn’t help but be reminded of a similar “crisis” a little over 30 years ago, that prompted W. E. Deming to write his seminal book “Out of the Crisis.”  Ostensibly, the challenge facing that era was product quality, but the change that was needed then is, frankly, the same change that is needed now: the ability to lead the entire manufacturing enterprise as a single system. In order to do that, you have to be able to view the manufacturing enterprise (or any enterprise) as a single system. 

Or to quote Deming:

“The transformation can only be accomplished by man, not by hardware (computers, gadgets, automation, new machinery). A company cannot buy its way into quality.”

...or a trained workforce. Or a short cycle time. Or an adaptive business model.

Which leads me to Value Stream Mapping (VSM). 

What is Value Stream Mapping? 

VSM is the tool that Lean practitioners have been using to visualize— and quantify the efficiency of— their system. It’s not the only tool that you can use, and I would always argue that the most important thing you can do is use any tool at all to get it on paper (virtual or otherwise). Until you take the time and exercise the discipline to create your process/system flows in some way, you don’t really know what they are (current state) or what they could become. That said, VSM is a tool that has been used with success by a lot of companies; a quick Google search for “getting started with Value Stream Mapping” will yield a lot of results.  

But while VSM has always included information flows, thought leaders in this space have already started thinking about how to augment it so that it harmonizes seamlessly with Industry 4.0 initiatives (i.e. “smart manufacturing,” “internet of things,” “machine learning,” robotics and all the other “digital transformation” initiatives).

Bosch (the Software Innovation company) has shared several articles on their blog about their experiences combining Industry 4.0 and Lean Production approaches. The Boston Consulting Group has an enlightening infographic (and a good blog article) on the integrated approach to these initiatives.

 A research study at Siemens Healthcare resulted in proposed updates to VSM symbols and figures that they called Smart Value Stream Mapping. According to the study:

“The vision [for Industry 4.0] includes high levels of digitization, integration, and automation of information and material flows for a factory and beyond its borders including suppliers and customers. VSM… can enable more transparent decisions and improvements for production systems.”   

Some of the additions recommended by this study includes characterization of your integration rates, your automation rates and your digitization rates and a new metric, the “Digital Manufacturing proportion;” a very valuable addition to the process. 

The focus on data flow at the elemental level and the levels of data and automation maturity also needs to reach a new level. This should include process control type metrics on data availability, data quality and other governance issues. Clearly any automation based on bad data will result in bad decisions. Like product quality, data quality can’t be inspected in—  it has to be built in to the process.

The tools and guides to complete data mapping activities are also readily available, usually falling under a Business Analyst role. The issue with data mapping is that many companies make the mistake of assuming that the software vendors for the various process-based systems (MRP, ERP, CRM, MPS, MES, S&OP and all the other acronyms) have done the data mapping as part of solution design.

As a veteran of many system implementations, let me tell you they have not. And you won’t be able to understand whether their “solution” is a solution unless you roll your sleeves up and understand it for your business.

Selene Crosby

Six Sigma Expert

Ms. Crosby has 20 years of experience developing, implementing and improving successful business processes and projects in both technical and non-technical environments. Her areas of expertise include process improvement methodologies, process mapping, business process automation, analysis, project management, audit and internal controls processes, technical writing and training design. She is a Certified Analytics Professional (CAP), holds a Six Sigma black belt, Lean Bronze certification and an Innovation Engineering black belt. Ms. Crosby has been the Program Manager for Analytics Transformation at Andeavor Corporation (formerly Tesoro), worked in the Process Engineering Section at Southwest Research Institute (SwRI) as part of the Texas Manufacturing Assistance Center (TMAC) program, assisting small to mid-sized manufacturers in becoming competitive in an increasingly global economy by becoming aware of and implementing process improvement and business strategies. Ms. Crosby held a variety of roles at Procter & Gamble in Cincinnati OH from September 1998 to June 2012 and attained internal P&G certifications including Continuous Improvement, Business Process Transformation and High Impact Training. .
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