Integrating Current State and Future State Value Stream Mapping with Discrete Event Simulation: a Lean Distribution Case Study

In response to global recession and increased competition, organizations have tried to become more efficient by decreasing costs and streamlining operations. To achieve this, the philosophy of lean management has gained in popularity. The main obstacle organizations face when implementing lean is deciding which activities to implement lean principals on. A well known lean practice, value stream mapping, is a very effective tool in mapping the current and future state of an organizations lean activities. Limitations in calculating variability information that describe system variations and uncertainty means more powerful analytical tools are needed. Simulation offers a more thorough analysis of a system’s data, including the examination of variability and has the ability to change certain parameters and measure key lean performance indicators. Using a tire distribution company as a case study, this paper has developed a framework that uses discrete event simulation as an integrative layer between current and future value stream mapping. The framework maps current state value and non-value activities in the company and through simulation has highlighted the activities that should be used when developing the future state map. This paper has highlighted simulation as a crucial middle layer in value stream mapping that will generate more accurate future state maps than the more common practices of using random estimates and experience alone. Keywords-Value stream mapping; distribution center; lean management; discrete event simulation