A value stream map is the description of all processes and procedures of a company which are needed for the production of goods. Such processes and procedures can add a value to a product or not. If you draw such a map and analyze it, you can find weak points of your business which need business process optimization or you can define new opportunities to get more profits. At the same time, using of a value stream map can help you to calculate expenses and to reduce them.
There are lots of reasons of profit loss at the enterprise: incorrect arrangement of production process, employees who aren’t motivated and interested in effective work, uncoordinated work of departments, low-quality equipment, non-optimal business processes. In order to find and to correct mistakes, you need to analyze the process of production regularly. It is very useful to compare current results with previous ones and to compare them with the results of your competitors. For example, you shouldn’t reduce expenses on maintenance, logistics or raw materials only if you think that they are too high: mindless optimization of business processes can have even more negative consequences for your profits. It is important to pay attention not only on the level of expenses but also on profit losses and to figure out the reasons of them. This can be done thanks to a lean management tool which is called a value stream map.
Creating of a value stream map
Creating of any product, service or a document comes through several stages: from the condition of raw material to an end product, or from an order to a ready document. Due to expenses on labor, material, energy and other sources the value of a product is enlarging form stage to stage.
Making of a team
In order to create a value stream map, a team is gathered (10-12 people). It is desirable to include employees of various specializations into this group: technologists, mechanics, power engineers, economists etc. Very often specialists of other areas offer very creative forms of problem decisions.
Description of the value stream process
If a company works at a loss and doesn’t get a financial profit, the chief manager gathers the team and together they analyze expenses and define that raw material consuming exceeds the standards, expenses on power resources are higher than it’s planned, and transportation expenses are enlarged. In order to solve these problems, a value stream map is created and product movement is studied. It’s important to know how much time is spent on each procedure and what business processes are to be optimized.
Defining of the reasons of financial losses
It’s important to understand that losses aren’t always there, where the highest expenses are. You need to define problem areas of production and optimize business processes where it is really necessary to do.
When you create a value stream map, you need to define your objectives: whether you want to reduce a prime cost of goods or enlarge equipment effectiveness, or you need to reduce time spent on order implementation.