Value Network Mapping

In my previous blog I explained how Little’s Law can be used to make a business Lean. Little’s Law is given by Work in Progress = Throughput X Flow Time. The goal of LEAN is to reduce the Flow Time and WIP in a business and increase the Throughput to drive growth.

But how can we reduce the Flow Time? The first step to reduce the Flow Time is to understand the Value Network by mapping it. Most Lean Practitioners are familiar with Value Stream Mapping (VSM). But VSM has some inherent limitations and to overcome these I use a more generic network of activities and buffers which could be perhaps called as Value Network Map.

Here’s the map of a small value network. The rectangles are activities and the triangles are buffers. I believe value networks provide a superior way to model the flow of value more accurately than by a traditional value stream map, especially in complex transactional processes. Those of you who are aware of the networks and graphs would recognise this value network as a type of a PetriNet.

The following are the advantages of using this approach over the regular Value Stream Mapping (VSM). 

• Accurately model AND/ OR splits and joins
• Handle product/ service variety with ease
• Model the effect of rework loops
• Create cascaded super networks (useful to model large supply chains)
• Perform Flow Time / WIP Arithmetic
• Handle shared resources and various queuing policies,
• Especially by running discrete event simulations on the model

[[Disclaimer: The views expressed in this blog are my own and do not necessarily reflect the views/ position of my past, current and future employers. ]]