Value Chain

Topics: Supply chain management, Process management, Business process reengineering Pages: 21 (6919 words) Published: October 22, 2011
IJOPM 17,1

The seven value stream mapping tools
Peter Hines and Nick Rich
Lean Enterprise Research Centre, Cardiff Business School, Cardiff, UK Introduction Work carried out in the first Supply Chain Development Programme (SCDP I), together with early work in the second programme (SCDP II), has shown that in order fully to understand the different value streams[1] in which the sponsors operate, it is necessary to map these intercompany and intracompany valueadding processes. These value-adding processes make the final product or service more valuable to the end consumer than otherwise it would have been. The difference between the traditional supply or value chain and the value stream is that the former includes the complete activities of all the companies involved, whereas the latter refers only to the specific parts of the firms that actually add value to the specific product or service under consideration. As such the value stream is a far more focused and contingent view of the valueadding process. At present, however, there is an ill-defined and ill-categorized toolkit with which to understand the value stream, although several workers (e.g. [2-5]) have developed individual tools. In general these authors have viewed their creations as the answer, rather than as a part of the jigsaw. Moreover, these tools derive from functional ghettos and so, on their own, do not fit well with the more crossfunctional toolbox required by today’s best companies. It is the purpose of this paper to construct a typology or total jigsaw to allow for an effective application of sub-sets of the complete suite of tools. The tools themselves can then effectively be applied, singularly or in combination, contingently to the requirements of the individual value stream. Waste removal inside companies The rationale underlying the collection and use of this suite of tools is to help researchers or practitioners to identify waste in individual value streams and, hence, find an appropriate route to removal, or at least reduction, of this waste. The use of such waste removal to drive competitive advantage inside organizations was pioneered by Toyota’s chief engineer, Taiichi Ohno, and The supply-chain development programme (SCDP I and II) is an industry-focused programme of research being carried out by researchers at the Cardiff Business School and the University of Bath. The work is sponsored by 18 major UK-based manufacturing, distribution and service organizations which wish to remain or become world-class in their supply chain management activities. The authors wish to express their thanks to Dr M. Naim of the Logistics Systems Dynamics Group at the University of Wales for his comments on an earlier draft of this paper.


International Journal of Operations & Production Management, Vol. 17 No. 1, 1997, pp. 46-64. © MCB University Press, 0144-3577

sensei Shigeo Shingo[6,7] and is oriented fundamentally to productivity rather The seven value than to quality. The reason for this is that improved productivity leads to leaner stream mapping operations which help to expose further waste and quality problems in the tools system. Thus the systematic attack on waste is also a systematic assault on the factors underlying poor quality and fundamental management problems[8]. In an internal manufacturing context, there are three types of operation that 47 are undertaken according to Monden[9]. These can be categorized into: (1) non-value adding (NVA); (2) necessary but non-value adding (NNVA); and (3) value-adding (VA). The first of these is pure waste and involves unnecessary actions which should be eliminated completely. Examples would include waiting time, stacking intermediate products and double handling. Necessary but non-value adding operations may be wasteful but are necessary under the current operating procedures. Examples would include: walking long distances to pick up parts; unpacking deliveries; and transferring a tool from one...
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