Value Stream Mapping (VSM) is a lean manufacturing concept where you to start with your customers' point of view and create a visual representation of the processes your organization uses to serve its customers. VSM shines a bright light on the top three causes of performance impairment - waste, variability and inflexibility.

1. Cognizant CRM Insights
Value Stream Mapping: Unlocking
What Your Customers Treasure
By Desiree Soldberg
Traditional customer relationship management name implies, involves mapping the processes
(CRM) proceeds from the inside of your that make up the customer value stream. This is
organization out, aiming for the right mix of different from the exercise of creating the
products and services to please customers or traditional process flow diagrams, sometimes
prospects. By contrast, value stream mapping called “swimlane” diagrams in that each process
(VSM), a lean manufacturing concept, requires is examined from the perspective of whether the
that you start with your customers’ point of view customer derives value from it.
–– their needs, constraints and desired outcomes.
From there, you create a visual representation –– By contrast, value stream maps take traditional
a picture, storyboard or map -- of the processes process maps (like the one on the following page)
your organization uses to serve its customers. to the next level. VSM looks at the “three m’s” of
what you deliver to your customer:
Specifically, you begin with what your customers
value and trace back through the organization, 1. Movement: Who initiates the process? Do cus-
gauging how well your offerings and business tomers “pull” or initiate the process, or does
processes align with customer priorities, the organization “push” it to the customer? Is
adjusting where necessary. Regardless of it electronic or paper-based, automated or
industry, at the end of the day, customers value manual? Who are the active parties, and when
the same thing: They want to deliver what their do the handoffs occur? What drives the next
customers expect –– quickly, accurately and cost- step in the process? Where are the customer
effectively. The closer you come to making your touchpoints? How much movement (physical
customers’ priorities your own, the better able and virtual) is involved in getting information
you will be to serve their needs, today and and/or goods from one person to another?
tomorrow. 2. Method of managing the request: For exam-
ple, if a customer makes a service request via
VSM grew up in manufacturing, but it can (and the Web site, what is the method for managing
should) be applied in any industry to help ensure the work? Is some sort of priority assigned to
companies are expending resources in ways that the request? Is it last in, first out? Some other
customers value. At a high level, VSM helps scheme?
organizations identify the factors that are
3. Metrics: Questions here are production- and
holding back performance to target needed
operations-oriented. What is your customer
improvements. Unearthing these factors, as the
service representative’s average workload?
CRM Insights

2. ABC Company — Corporate Sales Process
Current State – November 2009
Customer Start
Your sales process begins here…
Fax Start
Customer
Service Start
Website Start No No
Yes Yes
Yes Yes
Yes
Sales No No
Executive
No
Yes Yes
No No End
And ends here…
A traditional process map illustrates processes, whereas a VSM examines processes from the perspective of whether the customer derives
value from it.
How many customer requests per product to meet customer demand, leading to the
day/hour/etc.? How long does it take on aver- need to warehouse inventory or, worse, piling up
age to resolve customer requests? What are obsolete stock.
your accuracy rates?
Excessive motion is another form of waste. We
The underlying theme of all these questions: worked with a major airline on mapping the value
Does every process add value for the customer? stream of its maintenance organization. When
VSM aligns to customer “moments of truth” –– the maintenance process was
those critical points that make all the difference probed in depth, we VSM shines a bright light
for the customer (the plane landing on time, the discovered there was a lot of on the top three causes of
package arriving overnight as scheduled, the excess physical motion, in this
performance impairment --
produce that is perfectly fresh). The goal is to case, too much moving from
visualize and eliminate waste –– every step (or one side of the plane to the waste, variability and
part of a step) that is not a customer moment of other, which did not add any inflexibility, which you will
truth, focusing on system and process inhibitors, value to the customer. In that seek to eliminate or reduce
and then repeating VSM to continue making same operation, we found that
as much as possible.
improvements. This is how to drive sustainable office personnel were in some
customer value. VSM shines a bright light on the cases sending separate
top three causes of performance impairment -- e-mail messages to different individuals, as
waste, variability and inflexibility, which you will opposed to creating a distribution list and
seek to eliminate or reduce as much as possible. sending the message once, or better yet, posting
it on a SharePoint site to avoid having to send it
at all.
Reducing Waste
The elimination of waste is at the heart of lean By making small but significant changes to both
thinking, so it is no surprise to see waste the maintenance operation and the business
visualization as a prime focus of VSM. Waste offices, the airline gained back precious time. The
comes in a variety of flavors. One is use of rolling carts helped maintenance staff
overproduction -- you’re producing too much become much more efficient at cycling the
CRM Insights 2

3. aircraft. A five-minute improvement meant that Controlling Variability
the planes are now ready for their next takeoffs
Variability includes anything that deviates from a
much more quickly –– a clear win for passengers
standard operating procedure, generating an
with no sacrifice in safety. And learning to deal
unstable result. It is much easier to control
with e-mail more efficiently meant more time for
variability in some industries than others. In any
office staff to turn their attention to more
case, VSM will flag variability. In the airline
important pursuits.
industry, flight arrival times are highly variable,
often due to circumstances beyond the airline’s
A classic example of waste is manually re-
control. The airline must spend an inordinate
entering customer information from one system
amount of resources fine-tuning processes so it
to another, such as an ERP system and a CRM
can maximize its chances for meeting the
system. Entering this data
customer need to arrive on time.
A classic example of twice is not only a waste of
time, but it can also introduce
waste is manually errors, which is definitely Here, the point of the VSM is to identify and
characterize the variability. If you can control it,
re-entering customer against customer interests.
you should change it. When you can’t control the
information from one From the customer’s point of variability, you need to build in enough slack so
system to another, such view, it is far better to enter the that the end result to the customer will not be
customer information once and
as an ERP system and a let it propagate through all the variable. In many industries, it makes sense to
create “standard work” in order to reduce
CRM system. systems (easier said than
variability.
done). In our experience, value
stream maps are often a visual representation of
waste in action –– your indication of processes Identifying Inflexibility
that need to be reengineered. Henry Ford’s early vehicles, which “came in any
color so long as it’s black” are an archetype of
The waste of human intellect is often overlooked inflexibility. That degree of rigidity is a throw-back
but no less significant. Our engagement with a to a simpler time and would never fly now. The
large company in the high-tech space is a case in fact is, customers today have unique needs. Your
point. We uncovered many innovations just by systems and processes must be flexible enough
asking employees for their thoughts on how to support each customer’s requirements, many
things could be improved (no one had ever of which will conflict with each other. One
directly inquired their opinions). If you’re not customer might want to be invoiced on pink
listening to your own employees and soliciting paper in a certain format, whereas another
their ideas for continuous improvement, you’re customer needs it on yellow paper and in another
missing out on an opportunity to leverage their format. The third customer does not care. Your
collective intellect. back-end and CRM systems need to allow you to
modify the output based on what your customer
However, there will always be an element of waste wants, automatically.
in a process. Most businesses build in a little slack
to meet a customer deadline, If your value stream map shows that you can
If your value stream map something that is always meet customer needs only if you intervene
important to the customer. We manually, this is a sign of inflexibility (and added
shows that you can meet worked with a cargo company
cost and cycle time). At the very least, your
customer needs only if you that has internal service level systems should be able to meet the requirements
intervene manually, this is commitments that are earlier of your largest customers automatically. VSM will
a sign of inflexibility (and than the commitment made to point out, often in tortured detail, the instances
the customer. This way, if there where your system is inflexible. Without question,
added cost and cycle time). is a delay in the process, the
it can take a lot of time and money to reengineer
company can get ahead of it systems to become more flexible (or implement
before the customer is affected. This aspect of new ones altogether). But once you understand
“waste” is, therefore, necessary for the company what your customers truly value, you will know if
to meet its customer expectations in transporting such an investment is justified.
14 million pounds of mail per year.
3 CRM Insights

4. The VSM exercise is not an end in itself; rather, it understand that, you can take action to
is one important tool in the arsenal used in reengineer processes from their point of view.
becoming a customer-centric company. Often, And those actions will drive customer
VSM is the first time a company focuses so satisfaction, a better customer experience and
intently on its customers and their needs. Value new products that more closely match customer
stream mapping will put you in touch with how needs –– of all which yield competitive advantage.
your customers perceive value. Once you
About the Author
Desiree Solberg is a Cognizant business and technology consultant with over 10 years’ experience
implementing business process solutions at both mid-size and Fortune 500 companies across multiple
industries. She has special expertise in the areas of lean, Six Sigma and project management. Desiree
can be reached at Desiree.Solberg@cognizant.com.
About Cognizant
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