It is quite well known that VSM or Value Stream Mapping is one thing which can do wonders to a business organization by bringing in maximum efficiency through minimum of efforts & resources. But many people & companies struggle or are just plainly confused about which is the right way to apply VSM - whether it should be applied team wise, or project wise, or department wise, or in the whole organization. Applying VSM on individual basis will result in increase in efficiency & quality in area where its applied but the value created will be lost in subsequent processes or work areas where VSM has not been applied.
For example, In a company, finished product in a company are delivered to the customers after 3 weeks, with 2 weeks taken by Production cycle & 1 week by Transportation. VSM applied in production process may result in production cycle finishing in just 7 days while earlier it took over 15 days. But the finished product will be waiting for transportation in warehouse & will be delivered as done previously because VSM had not been applied in the Transportation department. Thus will erode all the benefits as the customer will get the finished product after 3 weeks, as done earlier.
To expand it further, VSM applied on individual basis may result in the work area where its applied rapidly finishing its work & providing output to the next in line. But what about the next phase where the output is going. The most likely scenario will be that there will be a pile up of pending wok or WIP for the next work area. There will be overproduction in the first work area & WIP pile up for the second work area. The first team will stop production to enable the second team to clear WIP. Hence, Waiting will occur for the first team. Meanwhile, the second team will be forced to work extra to finish the WIP. And most likely, it will result in generation of defects. It will also increase the stress levels of both workers resulting in increased absenteeism from work & maintenance cost & break-down of machinery. This will create havoc with the planned production schedules & sales forecasts. Delay in production will lead to increasing complaints & dissatisfaction from dealers & customers allowing the competition to step in to exploit the situation. The company will loose both customers & lose reputation also for unreliability in quality & meeting delivery schedules. Along the way, some other waste may also take place, further worsening the situation.
Hence, the most logical way to apply VSM in a company is to apply in whole organization so that all teams, departments & work areas work in tandem just like a symphony orchestra gives magical music when all the musicians play in rhythm, in a co-ordinated manner. Any bad note of music will stand out & will ruin the whole performance - any obstruction will create NVA & stop the flow of value defeating the whole effort, time & investment.