Manufacturing Vs. Services - Value Stream Mapping Differences

Value Stream Mapping, very simply put, tries to eliminate Non-Value Adding activities while speeding up Value-Adding Activities. For example, in Manufacturing a Toy, attaching two pieces of the toy together is Value Adding while filling out a Production Floor Log is Non-Value adding. This is from the point of view of the end consumer, a child. The production floor log is value adding to the company but not to the end consumer. The child could not care less whether the log was filled out or not.

This works very well in Manufacturing. However while applying Value Stream Mapping to Services, two other aspects may come into play -1. Internal Financial or Security Controls and 2. Mandatory Legal Steps required. In a services setting - let’s say it’s an Accounts Payable process and the person is approving invoices to be paid. Invariably, companies have limits for who can approve what Invoices. If it is a $100 invoice, it may need only one level of approval, while if it is for $100,000, it may need five levels of approvals. Similarly, only system administrators in a company are allowed to create new user accounts. Security needs may dictate levels of approvals for this activity also. The Fair Credit Act in the U.S may dictate distinct steps to be followed before an overdue account can be turned over to a collection agency. If the person says on the phone that they need to consult an attorney then the company may need to follow up with a legal notice of some kind. If they don’t say that they may need to follow another set of steps legally.

In Manufacturing, many of these mandated non-value adding steps may not be that much of an intrusion into Value Stream Mapping and improvement of those processes. In Services, these activities may not be eliminated completely because the law requires you to do them diligently. You may deploy technology to speed these activities up, even if you cannot eliminate them. Deploying methods such as sending a notice by Email may be legally acceptable, instead of paper snail mail.

Services are somewhat different from Manufacturing, but appropriate adaptation of Value Stream Mapping methods may produce similarly excellent resulsts!

The wise adapt themselves to circumstances, as water moulds itself to the pitcher - Chinese Proverb