How Value Stream Mapping Improves ERP implementations

January 25, 2021
Chad Swanson

Value Stream Mapping, also known as VSM, is crucial in selecting and successfully implementing any Enterprise System.  A VSM allows businesses to create a detailed visualization of all the steps in the work process, displaying the entire process flow from prospect to cash (including purchase to pay).  Once complete, an organization will understand how they do work today, and by applying Kaizen methodologies, find areas of improvement.  Considering these areas of improvement, the VSM will lead the organization to a future state process map that displays how the organization will operate in the future, highlighting the progress and efficiency gains.

Why Value Stream Mapping is Different from Basic Process Mapping

Value Stream Mapping exercises are different from basic process mapping.  VSMs  includes both material and information flow, focusing on the “value add” steps.  The purpose is to document and then improve from the outside in, from the customer's perspective of what adds value.  Focusing on the process from the customer's perspective limits unnecessary steps and potential delays.    

Benefits of Performing Value Stream Mapping for ERP Projects

By performing a VSM event, teams understand what happens throughout the business in areas they do not usually pay attention to regularly.  Team members typically find ways to help each other, eliminate non-value-added steps, and improve the current processes.  The VSM exercise not only produces a more efficient future state, but it also helps the organization define what makes them successful, aka their secret sauce.  By having the future state in hand with an understanding of what makes them successful, the organization can put together a more meaningful requirements list for use in the system selection process.  It narrows down potential products by eliminating ones that may need substantial customizations to support the future state or cannot take advantage of your secret sauce.

Other Benefits of Value Stream Mapping

  • Reducing or eliminating waste can improve margins and overall profitability.
  • Removing wasteful handoffs between departments improves behavior, culture, communication, and collaboration.

Value Stream Mapping Enables Better Configuration

Once a product is selected, using the future state process will ensure the tool's best configuration and help define any reporting and customization needed. By consistently referencing back to the future state, companies will maintain focus on what matters, what makes them successful, and where the priorities should land during the implementation.  Completing a Value Stream Mapping exercise ensures a more successful ERP implementation.

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