Operational Efficiency Assessment Through Value Stream Mapping in Lean Organizations

Abstract

In a world of globalization and increasing customer expectations, organizations are trying to develop performance, and reduce waste, and costs. Making organizations operate more efficiently operationally has become a strategic imperative in a Lean culture. Lean emphasizes the elimination of non-value-added activities while creating a culture of continuous improvement. Value Stream Mapping (VSM) is one of the most powerful Lean tools that can effectively represent processes from input to delivery to the customer, including waste, and inefficiencies that can be eliminated to create optimal process performance. The research examines the use of VSM to evaluate and improve operational efficiency within a Lean manufacturing organization. It specifically focuses on how VSM can eliminate the seven wastes of Lean: overproduction, waiting, transport, excess inventory, overprocessing, motion, and defects. The researcher prepared a current state VSM using data from direct observations, time studies, and interviews with employees at the site. The researcher examined performance metrics, e.g., cycle time, lead time, takt time, and throughput, using the VSM and established a baseline for the industry. The researcher then prepared a future state- VSM using Lean techniques: pull systems, standardized work, and cellular manufacturing. Results indicated significant improvements of: a 37% reduction in lead time; a process efficiency increase of 29%; and a WIP inventory reduction of 41%. In conclusion, we have established that VSM is a powerful diagnosis tool as well as a strategic VSM enabler of Lean transformation because it promotes leader and cross-functional commitment and provides a format for continuous improvement. Overall, our paper provided both practice and theory on how VSM leads to operational excellence within Lean organizations.