Value Stream Management (VSM) is a new strategic and operational approach used for capturing, analysis, planning, and implementation of data with the objective of improving the end product or service. This lean management strategy originated for the Toyota Production system where it has been used for the documentation, analysis, and improvement of the flow of information and the raw materials required to produce a product or service. Schreiner et al. (2009) assert that it is a firms ability to coordinate the process in a continuous flow gives it an added competitive advantage over other competitor companies. Every production process comprises of data which can depict the core cross functions and operations of the business. VSM can then be implemented on the firms core cross functions and processes with the aim of achieving an ideal lean enterprise. Ideal, in this case, means that there is total value creation with minimum waste in the process.
Mike Rother states that The competitive advantage of an organization lies heavily on the ability of the organization to create a fitting and smart solutions. VSM plays this critical role by identifying and defining the problems or the performance gaps which should be closed in a production process. Such is achieved by establishing necessary evidence across the manufacturing process. Since this is a sequential process of engaging improvement initiatives, it demands that the process maintains stability, visual management as well as possessing the ability to offer a quick response to interruptions in the production process. Shrouf et al. (2014) assert that to optimize an operation process, it is imperative to make decisions at machine level to understand all the machine-related time usage to implement the least expensive production schedule. As such, it is important to acknowledge that time is a vital factor in determining the productivity level of a process.
Moreover, VSM can be described as a visualization tool that can be used to provide optimum to the customer. Such can be achieved if the production process creates total value to the client with minimum wastage in the design, build and the maintenance of the production process. Patroncinio (2015) established the interdependence between the manufacturing process and the business process of a firm. Using VSM allows a company to identify the weakness and the potential improvement activities which can be made to the system to optimize production. VSM also gives a view of the production cycle including a view of the process raw materials and the final product from the process. This means that scrutiny is also placed on the external supplier and the external supplier of a firm.
The VSM can also expose the issues relating to expertise and the roles assigned to individuals in an organizational setting. According to Patrocinio (2015), the primary objective of Value Stream Management is identifying processes which do not add value to the production process. From that assertion, we deduce that all the production processes should be implemented with a clear plan linking all the improvement efforts thus yielding optimum value while incurring reduced costs in the production process. Value Stream Management consists of value stream mapping, value stream analysis, and value stream design. This process is illustrated in the diagram below.
1.1.1 Value Stream mapping.
According to Rahani and Al-Ashraf (2012), is one of the vital tools for identifying opportunities for diverse lean practices. Value Stream Mapping was developed within the Toyota Production System by Rotheer and Shook (1999). The process was used to map every step of the production flow inside the production plant, from the delivery of the necessary raw materials and parts for production to the final dispatch of the product to the customer. Value Stream Mapping is used as a visual tool for analyzing both value addition and non-value addition to a process, and through that, it becomes possible to see all the hidden wastes and the source of the wastes. The current state map of the production process is developed and every step is analyzed to identify the potential sources of inefficiency and poor lean practices in the production process.
The next step is the development of a future state map which is a lean process flow in which all the root causes of waste in the production process are eliminated through process improvements. Singh et al. (2011) provide a deeper insight of the application of value stream mapping in various industrial setups. Value stream mapping is different from the conventional ways recording process data because it captures every data at every individual production phase. The station cycle time, up time, set-up time or the change over time are important time factors which are recorded in an ideal lean process. Raw material utilization, human resource requirement, data flow, and the work in process inventory carries tremendous importance in Value Stream Mapping where the lean process manager aims at establishing the strengths and the weaknesses of the production process.
According to Braglia et al. (2006), to develop a lean process means the identification and optimization of the critical production paths. Every production path has possible constraints which derail the establishment of a lean production process and optimization means the elimination of the constraints. After optimizing the production process, the next step would be the identification of another critical path to optimize. These steps are usually carried out iteratively until the whole production process optimum has been reached through continuous reduction of constraints in the production process until the desired value is achieved. All along the production process, it is important to integrate all the production tools and focus on eliminating possible sources of waste and develop products which meet the desires of the consumer in a better way. That would mean that every production process incorporates the customers specifications and ultimately creating the customers value and accomplishing all the specifications in the production process.
Value Stream Mapping not only analyze the flow of material but it also keeps track of information flows which indicate and control production process in a firm. The set of collected data is analyzed to draw the relationship between the production process and the outcome. From here, it is possible to link the product planning and the demand forecast. The data collected at this point gives a clear indication of how the production scheduling and flow should be managed to make the production process to be ideal. Despite the vast benefits which are obtained from the using Value Stream Mapping, the approach suffers from two main drawbacks. First, it is a paper-and pencil-based technique, so the accuracy level is low. Secondly, this approach has complications which cannot be addressed through the standard approach method.
1.1.2 Value stream analysis.
Once a production process has been mapped, each step of the process will be evaluated to verify if the process is adding value, or if it is a form of waste creation. By using the Value Stream Analysis, all the production processes are analyzed in their current state. This will give a clear replication of the status of the production process at the time of analysis. Value stream analysis separates the activities that give rise to the creation of value in a product or service. Through the process, the waste materials are taken account of to determine if the entire process is adding value as required or if the process creates little value addition. In some instances, attempts aimed at improving the efficiency of a production process might lead to the creation of more waste materials.
We labeled this new way lean production because it does more and more with less and less. These are the words of James Womack after carrying out an analysis of an ideal lean production process. In his analysis, James Womack asserts that to double labor productivity in the system, it is important to convert a production system into a continuously flowing production process. It is also important to harness the production process by aligning technical workers and the raw materials to be continuous thus leading to high productivity while reducing inventories of the production process. Moyano (2012) asserts that it is important when carrying out the analysis of the project to consider other factors which come into play in lean production. Apart from internal aspects which come into play at the shop floor level, there is a considerable impact that geographical factors play in the lean production process.
The value stream analysis in general consists of several steps as can be seen in the illustration below.
When carrying out analysis, it is imperative to divide the operations of an organization into separate sets of activities which lead to the addition of value to the product or service. Adding value in every production process potentially gives a competitive advantage to a firm. According to Urbancova (2013), in a highly competitive environment, the primary goal of an organization is to beat off competition and gain new customers in the market. This achieved by ensuring by establishing the current state of the production process. Doing that makes it possible to establish the potential sources of wastage in the production process. The firms managers can then develop an ideal future state drawing which envisions a lean process. After the development of the future design plan, the next phase would be developing a work plan that will gradually lead to the desired improvements in the production process (Belokar et al. 2012).
1.1.3 Value stream design
Value stream designing is gaining importance as the fundamental approach used to optimize production in a firm. A systematic approach gives a detailed presentation of the manufacturing process thus highlighting the gaps that to be filled in the manufacturing process. Erlach (2013) asserts that an ideal production process is seen from the way that every product is processed individually to meet the specific needs of the consumer. Erlach (2013) further argue that labor division and mechanization should not be viewed to be expensive. Rather, these factors help in the achievement of other production goals. Perhaps this should give a better understanding of the how the ideal value stream design should be.
One of the major factors to consider in a value stream design ensuring that the quality of resources is in conformation with the customers specifications in the design. Other design guidelines only provide for the material flow, control of the production flow, and advance planning of the process which is considered to be a simplified manufacturing process. However, with the adoption of lean practices, the systematic design allows for the conception and approval of the customers specific needs in the product. The graphic representation of the production process indicates that effects the said solutions and components can have on the entire production process in relation to the guidelines recommended.
The primary goals of a value stream design of the avoidance of waste in the manufacturing process. Miller et al. (2010) assert that the principle of lean manufacturing is to aid the firm in eliminating waste in the production process thus helping the company to meet the recurrent and ever increasing demands of consumers. Waste management is achieved through using discrete simulations of the manufacturing process consequently optimizing the overall outcome of the entire process. Apart from helping the firm meet the ever growing demand, waste elimination and reduction aids the firm to impact the environment positively.
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