What Is a Transactional Value Stream Map?

We’ve recently released “phase 1” of a new Business Process Mapping series.  Two additional phases will be added in the coming weeks.  In phase 1 we explore the topic of transactional value stream mapping.  In this article I’d like to review the topic but I’d invite you to check out the first overview video in the series which is free to view.

What is a Value Stream?

A value stream is the set of all steps from a customer request to the fulfillment of that request.

A transactional value stream is a set of business processes that involves adding value through the transfer of information from one subprocess to the next. These are often support processes rather than customer facing ones. Examples include invoicing, creating purchase orders, insurance applications, or processing customer orders.

Although nearly all processes deal with some information, transactional value streams deal primarily with information, unlike manufacturing value streams which deal with materials, or healthcare value streams which are centered on patients.

How are they similar to other Value Stream Maps?

Transactional value stream mapping shares many of the same features and steps when mapping any other process, such as forming a small team, engaging the people who do the work, directly observing the work, and drawing simple material and information flow paths on a piece of paper.

How are they different from other Value Stream Maps?

Unlike value stream maps for processes with a physical product, in transactional value streams there may not be “material and information flow” to map. Instead, it’s “information and information flow.” This simply means that one flow is the information as a product, and the other information represents signals to start work or move to the next step.

What is Involved?

Transactional value stream mapping is very similar to mapping any other process. We need to form a small team, engage the people who do the work, directly observe the work, and draw simple material and information flow paths on a piece of paper. The major steps are, preparation, drawing the Current State Map, drawing the Future State Map, working on priority actions and redrawing the new Current State, and repeating the first four steps.

How to Prepare

In the preparation phase of value stream mapping, there are several key tasks. These include forming a small cross-functional team, communicating with the people in the area, defining the scope of the value stream “from” and “to,” understanding the customer demand, identifying the major process blocks and physically walking through the process.

Mapping a Current State

Once we have a good grasp of the scope, we gather information through observation to understand our current state. The main steps are to observe each process, collect data and fill in data boxes on the map, add work in process inventory to the map, add information flow to complete the current state, and calculate the total lead time through the process.

Mapping a Future State

One we’ve completed a current state map of a transactional value stream, we step back and review it. The main steps are to identify problems, opportunities, and kaizen bursts, draw a future state map, and prioritize actions and get to work. Drawing the future state is based on solving problems found in the current state. It is also based on applying lean thinking principles to redesign the end-to-end process to make it easier, better, and faster.

The future state should be ambitious but achievable. The changes you envision should take no more than three to six months to achieve. Sometimes the future state map may be drawn as the long-term ideal process. If so, it’s essential to break down the action plan into smaller pieces so that we can make step-by-step progress over weeks and months.

Key Points to Keep in Mind

The nature of information processing requires that we pay extra attention to a few things when value stream mapping. Directly observing the process remains essential to gain insight into the process. However, working with information, the process may not be visible, or it may be difficult to understand without asking questions.

People may do the same process in different ways, using different tools or sequences and get similar results. Sometimes this variation is justified due to the nature of the work, other times it is beneficial for people to agree on a best common standard.

Cycle times can be a range rather than a consistent number, due to the need to handle a variety of requests, varying amounts or quality of information or other reasons. WIP inventory is not always viewed as a problem by people in transactional processes because it takes up little or no space or cost. However, it is a sign of imbalances or other hidden problems.

What about Takt Time?

Finally, the topic of takt time is a common concern when people set off to map transactional value streams.  Since there’s not always steady customer demand in transactional processes calculating takt time may look a little different.  In fact, we may need to recalculate takt time within a transactional process.  We walk through this exact scenario in one of our example transactional value stream map examples.

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