Value stream mapping & Business Process Assurance

What is Value stream mapping or VSM?

VSM is a lean-management concept of capturing material and information flow in the business that takes a product or service right from its source or raw material through all the operations that place in transforming it into a finished product or service that can be consumed by the intended customer.

A value stream map represents a core business process that adds value to a material product, which is different from a value chain diagram that shows an overview of all activities within a company.

The purpose of value-stream mapping is to identify and remove or reduce "waste" in value streams, thereby increasing the efficiency of a given value stream. Waste removal is intended to increase productivity by creating leaner operations, which in turn make waste and quality problems easier to identify. On High level, wastes are defined as:

1. Faster-than-necessary pace: creating too much of a good or service that damages production flow, quality, and productivity. Previously referred to as overproduction, and leads to storage and lead-time waste
2. Waiting: any time goods are not being transported or worked on
3. Conveyance: the process by which goods are moved around. Previously referred to as transport, and includes double-handling and excessive movement
4. Processing: an overly complex solution for a simple procedure. Previously referred to as inappropriate processing, and includes unsafe production. This typically leads to poor layout and communication, and unnecessary motion
5. Excess Stock: an overabundance of inventory, which results in greater lead times, increased difficulty in identifying problems, and significant storage costs. Previously referred to as unnecessary inventory
6. Unnecessary motion: ergonomic waste that requires employees to use excess energy such as picking up objects, bending, or stretching. Previously referred to as unnecessary movements, and usually avoidable
7. Correction of mistakes: any cost associated with defects or the resources required to correct them

Post identifying the “wastes” the operations in the business process can be classified as:

1.      Non-value adding operations (NVA): actions that should be eliminated, such as waiting

2.      Necessary but non-value adding (NNVA): actions that are wasteful but necessary under current operating procedures

3.      Value-adding (VA): conversion or processing of raw materials via manual labor

What is Business Process Assurance or BPA?

BPA is a transformation methodology that brings IT application/product close to the Business Process that it is supporting in such a way that it can ensure that not only the business process flow is adhered but also using the IT application/product can improve the throughput. This would result in business meeting or even exceeding the goals or KPIs targeted.

By definition, BPA aligns IT application/product to the Business Process it is supporting. It follows below steps to achieve the same:

1.      Business Goals: understanding the goals and KPIs of the business area in the context of IT application/product

2.      Process Engineering: understanding the business process/es that the IT application/product supports. It covers all process variations, decision making and standard operating procedures that business operations follows

3.      Technology Mapping: overlaying the IT application/product flows on top of business process to put that in context. This identifies the gaps between the two and helps IT application/product to realign itself to address the business needs

4.      Digital Ready: once we understand the alignment with business, all digital concepts like AI/ML, Analytics, RPA, BDD/ATDD, Agile, DevOps can be applied very efficiently to improve IT processes

5.      Outcome Based Testing: testing or quality assurance can focus on outcomes of business process instead of validating mere integration of components of IT application/product. This can cover the compliance requirements also to check actual business readiness of IT application/product

6.      Business Operations: the reporting from QA of IT application/product can highlight the key business metrics providing feedback to both business as well as IT processes to improve their respective throughput

How VSM and BPA can be brought together?

From the basic understanding of BPA, it would be only obvious that VSM can be applied in steps 2, 3 & 4 of BPA to bring out maximum efficiency in both Business Process & IT Process supporting it.

Any engagement applying one methodology can very easily draw higher synergy using the other. Business nowadays are no more different from the IT application/product, so while taking up any VSM activity can look at both business process as well as IT application/product process to identify “wastes”. With very little additional efforts, the IT application/product can be made digital ready. On the other hand, any engagement applying BPA can apply VSM while detailing out process steps, bringing out more efficiency.

The synergy between VSM & BPA seems only natural, it’s rather surprising how we never tried it together.

References

https://en.wikipedia.org/wiki/Value-stream_mapping

https://www.cognizant.com/whitepapers/beyond-qa-business-process-assurance-for-the-digital-age-codex2144.pdf