Value Stream Mapping: Definition and Benefits

1. What is a Value Stream?
2. What is shown in a Value Stream and why is a Value Stream Analysis done?
3. How to do a Value Stream Analysis?
4. What tools are suitable for Value-Stream-Mapping?

The processes in agencies are characterized by major uncertainties regarding content (client change requests) and time aspects (brought in the morning, made in the evening). It is a basic rule in the knowledge economy - to which the creative scene also belongs - that people make the business and services or results cannot be produced "in stock". Many perspectives influence the performance of an agency: client employees in the companies, client consultants and creatives in the agency and many other people have an influence on the processes and structures.

Therefore, it is all the more important that you have clear and transparent as well as goal-oriented structures and processes in the agency. What you really need in your agency is more room for creativity and efficient and effective project execution.

With Value Stream Mapping, you can better represent individual processes and/or projects in the agency to discover weaknesses and identify potential for creativity and profitability. Our guest author Benno Heider takes you deeper into the topic and shows how to properly implement Value Stream Mapping.

What is a Value Stream?

Value Stream Analysis originated in the industry with production and manufacturing. It is a useful advancement of TQM philosophy. With his agency experience from almost 30 years as a manager, agency owner and consultant, Benno has made this philosophy useful for the agency industry.

In order to obtain comprehensible results in a Value Stream, you must visualize and clearly describe the individual steps in a project. These visual representations are used with clear key figures and performance parameters for comparison. The result is the realization of which process steps in the respective project in your agency need to be eliminated, secured or analyzed in more detail in the future.

In plain language: How can more room for creativity (customer benefit) be created in your agency and how can the profitability of the project (agency benefit) be increased?

What is shown in a Value Stream and why is a Value Stream Analysis done?

In order to evaluate the quality of your agency processes, it is shown which individual steps add value and which do not. Adding value means that the agency product for your client really gains value through the respective process step. Through higher result quality, or through less effort in the implementation of the ideas.

What are the benefits of Value Stream Mapping?

In order to assess the quality of your agency processes, it is shown which individual steps add value and which do not. Adding value means that the agency product for the client gains value through the respective process step. For example, through more room for creativity.

How to do a Value Stream Analysis?

Phase 1: How does the agency handle individual processes?

In the first phase you as the boss really need to get detailed insights into the structure and process organization of your agency. At this point, project management, responsibilities, and where and how data and information are created, must be put to the test. In addition, it must be analyzed how they are internally documented and passed on.

To do this, you need to put together a VSM team in your agency. Usually, the VSM process is started with a defined process, such as the programming of a new website or the creation of an extensive catalog for agency clients. Thus, it becomes clear which employees should work together in the VSM team to carry out the Value Stream Analysis. It is recommended to have three to six employees - depending on the scope of the respective process. The team members should know the considered process very well and have experience with the compilation of a Value Stream Analysis.

In this phase it is documented which possibilities of wastage dominate in the respective process:

• Bad, unclear briefing of the clients
• Incorrect internal order (briefing)
• Working in a wrong direction
• Your clients do not provide necessary documents in time
• Your clients do not decide quickly enough
• Content waiting times (in the agency and/or at the client's)
• Unclear arrangements (internally and externally of the agency)
• Unclear responsibilities (internally and externally of the agency)
• Waiting with the billing of the project

The content documents the following points:

• What processes are there?
• Who is the client and what role does he/she play?
• What are the specific customer requirements?
• Which functions, features or results in the process are value-adding from the customer's point of view(!)?
• Are there any wastes in the process?
• What or which steps in the process could be unnecessary?
• What should be changed, improved or eliminated?
• Where in the processes are there opportunities for optimization?

With the following steps you can perform a value stream analysis:

2. Identify and describe process steps

In phase 2, your agency's VSM Team goes through the selected process in detail step by step and describes the individual process steps and activities that are carried out in the agency. Ideally, this is done online using MIRO whiteboard or similar. The sequences and activities definitely need to be shown and explained in detail. The VSM team determines what is conceived, conceptualized, and made in what logical order. The team determines where there are waiting times and idle periods, which information and data are used or passed on.

3. Collect data and figures on the individual process steps

In phase 3, your agency's VSM team collects data and figures relating to the individual process steps that are important or helpful for a process evaluation, for problem analysis and for identifying potential for improvement. The VSM team pays attention to the following key figures:

• Processing Times
• Waiting Times
• Set-up Times
• Resources
• Size of Project Steps
• Number of Employees Deployed
• Available Work Hours
• Resources Used
• Freelancer Employment
• Error or Scrap Rate
• Reworks

This data is analyzed by the VSM team through observation, measurement or evaluation of discussions and data analyses.

4. Visualize the process

When the team thinks they have collected all relevant data and information about the targeted process, a process image is created on a (online) whiteboard. Together, the VSM team visualizes the process using VSM symbols and designations. You can find these symbols in the appendix.

How should the VSM team proceed when building the VSM diagram:

1. Normally, you start with the symbol for the customers (top right); with this, the team makes visible what is important and therefore also value adding for the customers.

2. Then the team members enter the individual process steps and activities.

3. In addition, you supplement in this value stream the places where brainstorms, workshops or meetings produce meaningful and purposeful results. If freelancers or suppliers are also involved, the image is supplemented by a connection to the supplier (freelancer).

4. At the end of the process, when the process result is available, a connection to the customer is entered.

5. After that, all activities for planning and control of the individual process steps (consultation/strategy, textual and creative creation and implementation/programming) are supplemented with data.

6. Then you draw in which information flows (obligation to fetch and bring) and which IT systems of your agency are used for this.

7. At the end, the VSM team should provide the VSM presentation with a timeline, so that it is visible how long the individual process steps take and which resources are needed and (!) consumed. These processing times for the individual process steps are summed up at the end and shown in the overall process

8. When all information is represented in the VSM diagram, the diagram is complete and the process image for your agency can be evaluated.

5. Evaluate process and process data

Value Stream Analysis means that the agency process is closely analyzed to determine where weaknesses exist and where there are potential improvements for customers and for your agency. The VSM team must evaluate each step:

• Creating value: Does this process step contribute to the fact that the agency client (customer benefit) gets added value?
• Appropriate: The process step should be state of the art, so that a qualitatively good result is achieved and the process is economical for your agency (agency benefit).
• Flexible: The process step should be flexible to accommodate ad-hoc requirements.
• Available: Can the process step be carried out when needed - or are there high freelancer bookings because full-time employees of your agency are fully engaged.
• Flowing: Intermediate products and individual results should pass through the process without interruption, the process must not stall or be interrupted; there must be no waiting times due to lack of material or information.
• Demand-oriented: Ideally, the process will run independently; interventions by customer consultants should be minimal; only the process start and one to two intermediate steps are triggered by the customer's order.
• Supply of information: Are all involved in the process well equipped with information they need? Because the bring principle applies.
• Lead Time: The lead time should fit the expectations of the customer; there must be no delay and no late delivery. If yes, how does the delay occur in your agency?
• Processing time: If necessary, individual process steps can be improved so that the processing times are meaningfully reduced.
• Wait Time: If there are high waiting times, the process is badly planned and controlled; possibly the capacities are not balanced or there are unplanned failures of employees in consulting, creation and/or implementation.
• Down time: If process steps or resources fail and are not available, the causes should be analyzed and eliminated.
• Time for rework: Intermediate results must not have defects; if rework is necessary, the causes must be found and eliminated. Poor performance by freelancers must also be immediately corrected by them; no use of internal resources if freelancers make mistakes. Attention: high risk of loss!!!

Your agency's VSM team must discuss where there is waste, delay, scrap or rework in the agency process and what the causes are.

The team marks in the Value Stream Diagram the steps or areas where problems, weak points or potential for improvement can be seen.

6. Improve process

With the Value Stream Analysis from Step 5, your agency's VSM team identifies the weak points and potential for improvement for the process and for the individual process steps and activities. Accordingly, the team should ensure that the process is improved immediately. To do this, the target state is described as the optimum for the process. From this, measures are derived that are necessary to move from the actual process to the target process in your agency.

The VSM team develops a detailed decision template for you and possibly for the colleagues. In this decision template, the Value Stream Diagram for the existing process (actual process) is first presented. The identified weak points and potentials for improvement are then described therein. It is also described in detail how the improved process should run in your agency (target process).

What tools are suitable for Value-Stream-Mapping?

There are a few good tools on the market for developing and presenting Value Stream Mappings in agencies. Since the symbols are standardized, all products are more or less equal in their representation of customers, suppliers, etc. The order of this list does not reflect a rating. Likewise, the list is probably incomplete.

• Lucidchart: Lucidchart is a simple app for representing one (or more) Value streams. The tool comes from the industry, but is so flexible that it suits for agencies. You can use the tool free of charge in the simple version.

• Vistable: The software is rather a planning software for designing the processes in the industry (manufacturing). Therefore, it is not so suitable for knowledge companies.

• iFakt VSM: iFakt VSM is an app from the industry for describing Value Stream Analyses. The tool is chargeable.

• Bpanda: The software offers an app for describing processes. Bpanda is also suitable for Value Stream Analyses but is only available for a fee.

• Edrawsoft: Edrawsoft is also an app for describing Value Stream Analyses. The use of the tool is also associated with costs.

Take a look at our favorites in the Projektmanagement-category at OMR Reviews for a complete overview.