By identifying all the steps and time required to move a typical product from raw materials to finished goods, the authors show that nearly 90 percent of the actions and 99.99 percent of the time required for the value chain’s Current State create no value. In addition, the mapping method clearly shows demand amplification of orders as they travel up the value stream, steadily growing quality problems, and steadily deteriorating shipping performance at every point up stream from the customer.
The mapping methodology takes managers step-by-step through an improvement process that converts the traditional value stream of isolated operations into an ideal future-state value stream in which value flows from raw materials to customer in just 6 percent of the time previously needed. The dramatically improved value stream also eliminates unnecessary transport links, inventories, and handoffs, the key drivers of hidden connectivity costs.
Applying the method to a realistic example, the authors show how four firms sharing a value stream can create a win-win-win-win-win future in which everyone, including the end consumer, can be better off.