Value Stream Mapping

Create Lean value stream maps to visualize flow, identify waste, and design improvement opportunities. Based on Lean manufacturing principles adapted for knowledge work.

What is a Value Stream?

A value stream is the sequence of activities required to deliver value to a customer, from request to delivery. Value stream mapping (VSM) visualizes this flow to identify:

• Value-adding activities - Steps that directly create customer value
• Waste (Muda) - Steps that consume resources without adding value
• Flow problems - Bottlenecks, delays, and inefficiencies

The 8 Wastes (TIMWOODS)

Waste	Description	Examples in Knowledge Work
Transportation	Moving work between locations	Handoffs between teams, tool switching
Inventory	Unfinished work waiting	Backlog, WIP, queued requests
Motion	Unnecessary movement	Context switching, searching for info
Waiting	Idle time	Approvals, blocked work, dependencies
Overproduction	Making more than needed	Unused features, premature optimization
Overprocessing	Doing more than required	Gold plating, excessive documentation
Defects	Errors requiring rework	Bugs, miscommunication, rework
Skills	Underutilized talent	Manual work that could be automated

Workflow

Phase 1: Define Scope

Step 1: Identify the Value Stream

Question	Answer
What value are we delivering?	[Customer outcome]
Who is the customer?	[Internal/External customer]
Where does the stream start?	[Trigger/Request]
Where does it end?	[Value delivered]

Step 2: Set Boundaries

## Value Stream Definition

**Name:** Customer Order Fulfillment
**Trigger:** Customer places order
**End State:** Customer receives product
**Scope:** Order entry → Shipping (excludes manufacturing)
**Customer:** External retail customer

Phase 2: Current State Map

Step 1: Walk the Process

Observe actual work (gemba walk):

• Follow a real work item through the process
• Document what actually happens, not what should happen
• Note handoffs, delays, and workarounds

Step 2: Document Process Steps

For each step, capture:

Metric	Definition	How to Measure
Process Time (PT)	Active work time	Time actually working
Lead Time (LT)	Total elapsed time	Clock time start to finish
Wait Time (WT)	Time waiting	LT - PT
% Complete & Accurate (%C&A)	First-time quality	% not requiring rework

Step 3: Create Current State Map

## Current State Value Stream

| Step | Owner | PT | LT | %C&A | Inventory | Notes |
|------|-------|-----|-----|------|-----------|-------|
| Order Entry | Sales | 15m | 2h | 85% | 50 orders | Manual entry |
| Credit Check | Finance | 10m | 8h | 95% | 30 orders | Batch processing |
| Inventory Alloc | Warehouse | 5m | 4h | 90% | 20 orders | System lookup |
| Pick & Pack | Warehouse | 30m | 6h | 92% | 40 orders | Manual process |
| Ship | Logistics | 10m | 24h | 98% | 100 orders | Carrier pickup |

**Total Process Time:** 70 minutes
**Total Lead Time:** 44 hours
**Flow Efficiency:** 2.7% (PT / LT)

Phase 3: Analyze Waste

Step 1: Calculate Flow Efficiency

Flow Efficiency = Process Time / Lead Time × 100%

Example: 70 min / 2640 min = 2.7%

Interpretation:

• < 5%: Significant waste (typical for unoptimized processes)
• 5-15%: Moderate efficiency
• 15-25%: Good efficiency

• 25%: Excellent (rare for knowledge work)

Step 2: Identify Waste by Type

## Waste Analysis

### Waiting (45% of lead time)
- Credit check batch processing: 8 hours → could be real-time
- Carrier pickup schedule: 24 hours → could be on-demand

### Inventory (150 orders WIP)
- Orders queue at each step
- No pull system in place

### Defects (15% rework at order entry)
- Manual data entry errors
- Missing required fields

### Overprocessing
- Full credit check for returning customers
- Duplicate data entry across systems

Step 3: Identify Bottlenecks

The constraint (bottleneck) limits the entire system:

## Bottleneck Analysis

**Primary Bottleneck:** Credit Check
- Highest queue (30 orders)
- Batch processing creates 8-hour wait
- Blocks downstream flow

**Secondary Bottleneck:** Pick & Pack
- Manual process
- Variable cycle time

Phase 4: Future State Design

Step 1: Apply Lean Principles

Principle	Current Problem	Future State Solution
Flow	Batch processing	Continuous flow, single-piece
Pull	Push based on forecast	Pull based on demand
Perfection	Accept defects, fix later	Build quality in

Step 2: Design Improvements

## Future State Design

### Eliminate Waiting
- Real-time credit API vs. batch
- On-demand carrier pickup

### Reduce Inventory
- WIP limits at each step
- Pull signals between steps

### Improve Quality
- Validation at order entry
- Auto-populate from CRM

### Automate Motion Waste
- Single system vs. multiple tools
- API integrations

Step 3: Create Future State Map

## Future State Value Stream

| Step | Owner | PT | LT | %C&A | Inventory | Changes |
|------|-------|-----|-----|------|-----------|---------|
| Order Entry | Sales | 10m | 30m | 98% | 10 orders | Validation, auto-fill |
| Credit Check | System | 1m | 5m | 99% | 0 | Real-time API |
| Inventory Alloc | System | 1m | 5m | 99% | 0 | Automated |
| Pick & Pack | Warehouse | 25m | 2h | 96% | 15 orders | Better tooling |
| Ship | Logistics | 10m | 4h | 99% | 20 orders | On-demand pickup |

**Target Process Time:** 47 minutes (33% reduction)
**Target Lead Time:** 6.7 hours (85% reduction)
**Target Flow Efficiency:** 11.7% (4x improvement)

Phase 5: Implementation Roadmap

Step 1: Prioritize Improvements

Improvement	Impact	Effort	Priority
Real-time credit API	High (8h → 5m)	Medium	1
Order entry validation	Medium (15% → 2% errors)	Low	2
On-demand carrier	High (24h → 4h)	High	3
Automated inventory	Medium	Medium	4

Step 2: Define Kaizen Events

Focused improvement workshops:

## Kaizen Event: Credit Check Automation

**Scope:** Eliminate credit check batch processing
**Target:** 8 hours → 5 minutes lead time
**Team:** Finance, IT, Process Owner
**Duration:** 1 week intensive
**Deliverables:**
- API integration specification
- Process redesign
- Training materials

Output Formats

Narrative Summary

## Value Stream Analysis Summary

**Value Stream:** [Name]
**Date:** [ISO date]
**Analyst:** value-stream-analyst

### Current State Metrics
- **Process Time:** X minutes
- **Lead Time:** Y hours
- **Flow Efficiency:** Z%
- **Primary Bottleneck:** [Step]

### Top Waste Categories
1. **Waiting (X% of LT):** [Description]
2. **Inventory (X orders WIP):** [Description]
3. **[Other waste]:** [Description]

### Future State Targets
- **Lead Time Reduction:** X%
- **Flow Efficiency Target:** Y%
- **Quality Target:** Z% first-time right

### Recommended Actions
1. [High priority improvement]
2. [Medium priority improvement]
3. [Lower priority improvement]

Structured Data (YAML)

value_stream:
  name: "Customer Order Fulfillment"
  version: "1.0"
  date: "{ISO-8601-date}"
  analyst: "value-stream-analyst"

  boundaries:
    trigger: "Customer places order"
    end_state: "Customer receives product"
    customer: "External retail customer"

  current_state:
    total_process_time_minutes: 70
    total_lead_time_hours: 44
    flow_efficiency_percent: 2.7
    wip_total: 240

    steps:
      - name: "Order Entry"
        owner: "Sales"
        process_time_minutes: 15
        lead_time_hours: 2
        complete_accurate_percent: 85
        inventory: 50
        waste_types:
          - type: defects
            description: "Manual entry errors"
          - type: motion
            description: "Multiple system entry"

      - name: "Credit Check"
        owner: "Finance"
        process_time_minutes: 10
        lead_time_hours: 8
        complete_accurate_percent: 95
        inventory: 30
        is_bottleneck: true
        waste_types:
          - type: waiting
            description: "Batch processing"

  waste_analysis:
    - type: waiting
      percent_of_lead_time: 45
      root_causes:
        - "Batch processing"
        - "Scheduled pickups"

    - type: inventory
      total_wip: 240
      root_causes:
        - "No WIP limits"
        - "Push system"

  future_state:
    target_process_time_minutes: 47
    target_lead_time_hours: 6.7
    target_flow_efficiency_percent: 11.7

    improvements:
      - name: "Real-time credit API"
        waste_eliminated: waiting
        impact: high
        effort: medium
        lead_time_reduction_hours: 7.9

  roadmap:
    - phase: 1
      improvements: ["Real-time credit API", "Order validation"]
      duration_weeks: 4

    - phase: 2
      improvements: ["On-demand carrier", "Inventory automation"]
      duration_weeks: 8

Mermaid Diagrams

Current State Flow:

flowchart LR
    subgraph Current State
        A[Order Entry<br/>PT: 15m | LT: 2h<br/>WIP: 50] --> B[Credit Check<br/>PT: 10m | LT: 8h<br/>WIP: 30]
        B --> C[Inventory<br/>PT: 5m | LT: 4h<br/>WIP: 20]
        C --> D[Pick & Pack<br/>PT: 30m | LT: 6h<br/>WIP: 40]
        D --> E[Ship<br/>PT: 10m | LT: 24h<br/>WIP: 100]
    end

    style B fill:#ff9999

Future State Flow:

flowchart LR
    subgraph Future State
        A[Order Entry<br/>PT: 10m | LT: 30m<br/>WIP: 10] --> B[Credit<br/>API: 1m<br/>WIP: 0]
        B --> C[Inventory<br/>Auto: 1m<br/>WIP: 0]
        C --> D[Pick & Pack<br/>PT: 25m | LT: 2h<br/>WIP: 15]
        D --> E[Ship<br/>PT: 10m | LT: 4h<br/>WIP: 20]
    end

    style B fill:#99ff99
    style C fill:#99ff99

When to Use

Scenario	Use Value Stream Mapping?
Process improvement	Yes - identify waste
New system design	Yes - design for flow
Cost reduction	Yes - find inefficiencies
Lead time complaints	Yes - find bottlenecks
Quality problems	Partial - with root cause analysis
Greenfield project	Maybe - limited current state

Integration

Upstream (Discovery)

• process-modeling - Understand current process
• capability-mapping - Link to business capabilities
• stakeholder-analysis - Identify process owners

Downstream

• Requirements - Improvement requirements
• Systems design - Automation opportunities
• Project planning - Kaizen event planning

Related Skills

• journey-mapping - Customer experience perspective
• capability-mapping - Capability view of value delivery
• root-cause-analysis - Investigate bottleneck causes
• prioritization - Prioritize improvement initiatives
• process-modeling - Detailed BPMN process diagrams
• estimation - Estimate improvement effort
• benchmarking - Current vs target comparison

Version History

• v1.0.0 (2025-12-26): Initial release