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Value Stream Management


Value stream management is a process for planning and linking lean initiatives through systematic data capturing and analysis, whereas, lean is creating more value for customers with less resources expended.

It consists of 9 steps:

  1. Management commitment

  2. Select a value stream

  3. Lean learning

  4. Current value stream mapping

  5. Establish lean metrics

  6. Future value stream mapping

  7. Develop kaizen plans

  8. Implement kaizen plans

  9. Review and close gaps 

Current Value Stream Map Manufacturing Example

VSM is not just a management tool, it is a process for planning improvements which will make your company provide better value for customers with less resources. What is needed for lean company is a process that links strategic plans to daily work. The nine steps followed sequentially is that process. We have learned through experience that a successful lean initiative depends upon four critical behaviors:

True commitment: To become a lean enterprise, is it important to allocate resources for effective planning, implementation, and maintenance? Answer is a resounding yes! Lean results are not realized without commitment from people at all levels. It is not enough to appoint a person to be responsible for lean initiatives and participate in workshop to generate value stream map. You must create a desire to improve which fuels all activities. The guidance and commitment must be sincere. A cross functional team of middle level managers touching the value stream are required to team up to transform a value stream.

Understand Customer Demand: Variation in customer demand can never be a reason for avoiding true lean implementation – its just an excuse. It always takes little more than expected, but you must understand customer demand clearly to fulfill their need.


Depict the Current State Accurately: We must fully understand the current condition in relation to cycle times, process communications, people’s work standards, machine/equipment capacity and process capabilities. Better we grasp the current conditions better we can create a future lean condition. Assumptions and jumping to conclusion must be avoided, which is easier said than done. 

Communicate & Communicate:  Professionals talk about and understand too the importance of driving out fear from people minds to create a “no-blame” work environment. However, in practice, most organizations are far from achieving it. It is very important to make efforts to treat everyone with respect. Good communication is essential for it. Telling people what you are doing and why – and expressing a sincere interest in making sure they understand – goes long way to create an inclusive environment. Visual management & communication is important dimensions of Value Stream Management. The most important issue to handle is "fear of loosing job." So, manpower reduction can never be motivation for value stream improvement. No person will cooperate or participate in improvement program if one understands that consequence of improvement will result in his/her unemployment. However, many modern managers fail to understand this fact.

LEAP Model for Learning
Future Value Stream Map Manufacturing Example
Current Value Stream Map Servive Example
Future Value Map Service Example
Value Stream Map in Process Industry

Short-Term Pains: Transformations to lean may involve short-term pains, testing the level of commitments. These may include:

  1. Efforts to re-orient and educate people

  2. Spent time by managers/supervisors/team leaders to learn and improve the value stream

  3. Learning and innovations for waste reduction

  4. Engaging lean coach till internal expertise is created

  5. Efforts for reorganizing processes and facilities

Pedagogy of Program: To maintain a balance between training and doing, LEAP approach is used. Earlier the AP follows LE, better will be the result. Lack of participation or seemingly disinterested people are the actual alarm to reconsider the approach. The 9 steps, given in the beginning, are with some purpose :


Step 1&2, are designed for management commitment, who put together the core implementation team, and identify value stream targeted for transformation. However, before teams map current state (Step 4), determine lean metrics (Step 5), and plan the future state (Step 6), it must gain knowledge and understanding of lean concepts and that's the purpose of step 3. After some workshops using case studies, participants get back to develop the current and future value streams in detail with facts. Constant coaching and hand holding is very important, as half knowledge is dangerous. The real transformation on ground takes place through steps 7 and 8. "We all know that what is reviewed gets done." Constant review of the process and the results are equally important for sustainable improvement and that is step 9.

Long-term gains:

  1. Lead time reduction from months to week to day

  2. Leaps towards zero defect

  3. Increase in value added ratios

  4. Many fold reduction in total material travel

  5. Vacating space for creating new capacity


Other benefits:

  1. Makes work safer and easier

  2. Promotes cooperation

  3. Shortens feedback loops for quicker improvements

  4. Speeds up learning

  5. Improves process and product quality

  6. Improves process and product reliability

  7. Processes become more predictable

  8. Releasing management bandwidth to deploy strategy

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