All businesses set out to deliver profits but unfortunately all businesses attract costs that eat into these profits. Costs can come in various shapes and sizes from wages for staff to inventory costs – minimizing these operating costs are a key activity for most businesses.
While there are a variety of tools and techniques for attacking costs, much can be learned from lean tools that measure the value stream. The value stream is the flow of the product throughout its production attracting value that is of benefit to the end customer.
One such tool is Value Stream Mapping – a technique for mapping the flow of information and material flows through a production process. A well known tool with its foundations in the automotive industry value stream mapping is a simple but effective tool in the analysis of business processes and can be used to capture and assess business issues.
Value stream mapping captures data such as inventory and process times which can be used to determine bottlenecks and areas adding cost. Through producing a current state value stream map these processes can captured and analysed allowing for improvements to be targeted through appropriate improvement programs. Though re-engineering the business process via a future state map business waste and cost can be reduced
Remember that value stream mapping is a process mapping tool and as such on its own cannot save costs in isolation however it is an excellent tool for capturing issues and providing improvement teams sufficient ammunition and a foundation for driving value within the business.