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Utilizing Process Value Mapping in Lieu of Value Stream Mapping for Elimination of Waste in Business and Information Processes Abstract:

An ex-Toyota internal consultant has expressed an opinion that companies are achieving only 10% of their potential for process improvement. In the consultant’s words, “most manufacturing seems to be focused on achieving a 35–40 percent productivity gain over three to five years, when they should actually be focusing on a 400 percent improvement.” Many manufacturing companies have exhausted gains that can be derived from the shop floor, and further productivity gain can only be captured by shifting attention to non-production business processes in administration and information flow.

Lean practitioners have used value stream mapping (VSM) as a tool to analyze the entire value stream of a product moving through a manufacturing facility from raw material to the finished state for a long time now with considerable success. VSM allows the entire product flow to be captured in a graphical form to facilitate the application of lean manufacturing principles in a systematic manner. Although VSM aims to analyze and optimize both material and information flow for the product, improving information flow is left out in most VSM analysis as the percentage value-added time is calculated based solely on the material flow in the process. As most business processes are nothing more than information flow or a combination of information and material flow, VSM is therefore not best suited to optimize them.

Another reason that classical VSM works for physical production but not for information flow is the fact that information flow backtracks, jumps around various operations, and at times is intermingled with the physical movement of material. In such cases, information flow is in the critical path for the completion of the entire process, and since VSM does not do any analysis on the combined flow of information and materials, it falls short in assisting to optimize the holistic process.

Considering the above reasons, a modified version of process mapping named process-value- mapping (PVM) has been discussed in this paper for the simultaneous analysis of information and material flow to come up with the percentage value-added time for the entire process. A case study of a loan approval process found in most financial institutions has been utilized to demonstrate the concept.

Introduction:

Value stream mapping (VSM) has long been the preferred tool to analyze the value stream for a manufactured product. VSM allows us to see the entire product flow in a graphical form to facilitate the application of lean manufacturing principles in a systematic manner1.

In VSM, the information and material flow for the value stream are both captured, but most of the analysis is carried out to pinpoint waste in terms of inventory in the system, and not in determining the value-added and non-value added information flows that happen in the process.

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Mehta, M., & Jackson, A. (2007, June), Utilizing Process Value Mapping In Lieu Of Value Stream Mapping For Elimination Of Waste In Business And Information Processes Paper presented at 2007 Annual Conference & Exposition, Honolulu, Hawaii. 10.18260/1-2--1577