Value Stream Mapping

Value Stream Mapping (VSM) is a tool which is used for analyzing the material flow, information flow
necessary in delivering a product to the customer.

It allows you to create a detailed visualization of all steps in your work process. It is a representation of
the flow of goods from the supplier to the customer throughout your organization.

A value stream map displays all the important steps of your work process necessary to deliver value
from start to finish. It allows you to visualize every task that your team works on and provides single
glance status reports about each assignment's progress.

1
NEED
To view the entirety of a process flow from start to
finish and create a plan to optimize efforts in getting
the company to its desired outcomes.

To show you where you can improve your process by

visualizing both its value-adding and wasteful steps.

To help align the company’s resources to streamline

informational or manufacturing processes within a
specified timeframe.
2
Major Sections in Value Stream Mapping

start and end points of the

Time Line product, process description,
material movements, operators
details for drawing value stream.

Information or informational flow between

VSM Communication flow all the materials involved

time needed for product to

Material flow move through production
process
 Procedure
01. Document current process

02. Identify/list every step in process

03. Define Current VSM

04. Define what perfect process looks like

05. Define future VSM

06. Identify major initiatives to reduce/eliminate waste

07. Assign tasks and responsibilities

 E-Retailer - Shenzhen, China

Problem Entered North American market through Amazon platform but it faced challenges like low
sales growth, long delivery times, low customer satisfaction

• Total lead time = 14.5 days

• Lead time after = 11 days
placing an order

• Response time is 76% of the total

time product is in the
e-retailer supply chain process

Fig. The current VSM of the phone case supply chain in the e-retailer

Source: Qin, Y. and Liu, H., 2022. Application of Value Stream Mapping in E-Commerce: A Case Study on an Amazon Retailer. Sustainability, 14(2), p.713.
 Scoring Method for
Root cause
Logistics Model Future stream mapping
analysis
Selection

• Total lead time

Prime = 16 days
Non Prime = 20 days

• Lead time after placing an order

Prime = 2 days
Non Prime = 6 days

• Response time reduced from 11

days to 2 or 6 days depending on
membership status.

Fig. The future VSM with FBA

model applied for the e-retailer

Result Improved customer satisfaction and growth in sales. NVA added activities were better organized