Value Stream Mapping: The Path to Logistics Savings Part 1

Lean Guiding Principles, Oil and Gas
August 12, 2015

Value-Stream-Mapping-BlogImagine saving millions of dollars each year just by taking a 50,000-foot view of your business from order creation to order delivery. Would it be worth exploring?

Nine out of ten logistics executives don’t know because they’ve never explored the use of Value Stream Mapping (VSM).

What they’re missing out on are potential returns of up to 10 times the investment of pulling together key resources to discuss their business in a way that they probably have not even considered. It can be as simple as direct observation of the flows of information and materials as they currently take place, putting that into a visual format, and then collectively designing a future state with improved performance with an outlined transformation plan (owners and dates of identified actions) to achieve it.

This two-part blog explores the four key phases of how VSM serves as a tool to visually represent all elements (both value add and non-value add) of an operating system that are required to transform information and material into customer-desired outputs. VSM has uses in several industries. Ryder has used it in particular to help Oil and Gas clients improve their business by helping reduce overall and supply chain cost, lower lead times, and improve service.
The VSM process encompasses four key phases: Assess and Plan, Go-No-Go, Execute and Follow-Up. The first two phases are:

Assess and Plan (typically 3-8 weeks duration depending on complexity). The VSM facilitator starts the process by understanding the customer industry-specific issues or opportunities and ensuring all parties understand the scope and benefit in the value stream mapping effort – and the commitment needed for success. The plan requires identification of the value stream leader or decision maker, drafting the standard A3 document that outlines the focus, formulating the team, determining key metrics, developing engagement strategy, gathering baseline data and conducting a discovery day to get an initial understanding of the value stream.

Go-No-Go (meeting with business owners/decision makers). After the assessment and planning phases are complete, a decision has to be made whether to move forward with the event. Does the team and organizational leaders believe sufficient opportunity exists to deliver significant value through the VSM engagement? Assuming so, the next steps are to…

Execute the Event and Follow Up. Both will be examined in depth in the next blog, as will the importance of leadership’s commitment to making the changes identified by the VSM team. As will be pointed out, Value Steam Mapping is only effective when it has the commitment both of the leaders and the people implementing it.

Authored by Will Johnson

Will Johnson is Senior Director, LEAN Supply Chain Solutions with Ryder Integrated Logistics. Will is a Master Black Belt and leads a team at Ryder focused on providing lean solutions to Ryder’s customers and internal departments.

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