Value stream mapping or value stream management is becoming a hot topic, especially in IT. But IT is not the only industry that can benefit from VSM. It’s a methodology that can be applied to any business.
In fact, studies of the application of VSM to the hotel industry began to appear as early as 2012. Many Asian and European travel businesses have already saved millions of dollars thanks to this approach. If you’re ready to transform your business with value stream management, this is your introduction to the topic.
What is value stream mapping?Value stream management, value stream mapping, or VSM for short are complementary terms that refer to a business process known as visualization technique rooted in lean thinking. This view of business processes shifts the perspective from micro-improvements to trying to change the business operation on the macro level.
The roots of this technique go back to Toyota’s revolutionary management back in the 1990s. The Japanese executives were faced with the challenge of retaining the productivity of the car plant during a time of unstable orders. Having to provide value to a constantly fluctuating audience is something every travel business owner can relate to.
The methodology Toyota’s CEOs adopted is known as The Toyota Way, an approach that strives for Kaizen, continuous improvement. For a business, Kaizen means understanding what needs to be done for a customer to get their service in the least amount of time. This requires maximizing the actions that bring value and minimizing the actions that don’t.
Here’s where the term “value stream” comes from. It’s the stream of actions that transform a customer request into a product or service, from the customer’s request being passed to a manager to the customer finally getting the product or service they requested.
The term itself was coined in the 1990’s book by James Womack and Daniel Jones The Machine that Changed the World. For a long time, it was just a part of the lean thinking methodology. In 2014’s book Value Stream Mapping by Karen Martin and Mike Osterling, value stream got the attention it deserved. This is the book we recommend you buy if you want an in-depth view of the subject.
But first, let’s look at why VSM is a great choice for the travel industry.
Why apply value stream mapping to travel businessHow can a methodology designed to optimize the work of a car plant work for a travel business? Well, VSM is already being implemented in the IT industry to tie software production and DevOps together and provide more value to the customer. Many travel businesses are using it as well, especially in supply chain management.
The thing is, even though it was designed for car manufacturing, the basic concepts of value stream management work for any business. Here’s why.
Designed for variable demandIf there’s one thing every travel business owner can relate to is the variations in demand that are sometimes hard to forecast. Value stream management is designed to keep the quality of your goods and services steady and your clients happy.
Focus on the customerVSM changes the perspective of business planning to how fast the company can transform a customer request into a service. This includes not only the processes that add value directly but those that support value as well.
Basically, it’s a strategic way to focus on the customer experience. Since 80 percent of companies expect to compete based on CX, value stream management is a great tool to use to stay relevant in the modern market.
A strategic viewMapping your business processes through the lens of value streams means you’re not focused on micro-improvements. You develop a holistic view of your business and see what structural changes are needed to create more value for the customers.
Cross-department mappingValue stream mapping helps you understand how the process of creating value is distributed across all departments. This will allow you to see the problems that arise as the product or service changes departments and help you improve that process.
Travel shifts to digitalFrom booking flights and hotel rooms to looking for the best places to see on a trip, the travel industry is fully immersed in the digital world. And VSM is one of the best ways to deliver and support digital services.
Onboarding made easyWhile this was not the original intention of VSM, having a value flowchart to show to new employees makes onboarding that much easier. They don’t only learn what they need to do, they understand where they fit into the grand scheme of things.
With 94 percent of Millennials wanting to work for a cause, not just for the money, this understanding may mean higher employee retention.
Kaizen attitudeOne of the most important aspects of value stream mapping is the mindset you need to develop. Kaizen is the philosophy of constant improvement, and that’s something any business owner should want to adopt.
How to apply value stream management to the travel industryValue stream mapping is not just a business process flowchart. It’s an approach that requires you to change your attitude towards the mapping process and to get the most precise data you can. It all starts with the following step.
Set goals and strategiesVSM is all about a strategic view of your business. The first thing you should do is develop a strategy for your travel business and a set of clearly identified goals. Without this, you won’t be able to know what problems need solving.
Hoping you already have that, let’s move to the next step.
Gather the dataThis step is arguably the most important of all. It’s not hard to draw a value stream map on a whiteboard, but it wouldn’t be effective at all if the data you base it on is incorrect.
Since you want to solve one problem at a time, it would be better to focus on the value stream that is the most popular or the most profitable for your company. Run a service quantity analysis to learn what services should you analyze first.
If you have a more urgent problem to solve, use the number of complaints the service receives as the discriminating variable of SQ analysis.
Once you’ve chosen the service to map, start gathering data. You need to know how much time it takes for the customer to get their service. To do that, your team must study what actions are required to create value and transfer it. Here’s what you may need to accomplish that:
- Interview customers who had complaints about the quality
- Study the documentation
- Interview the heads of departments
- Interview regular workers to learn about micro-level difficulties
- Measure the time it takes to complete each action
Define the “fence posts”There are no strict rules as to where the value creation process starts or begins. It may start with the customer booking a guide and end at them leaving a review on Google My Business. It may only cover the walking tour itself.
The scope of your map only depends on what you want to improve.
Draw the mapNow that you know everything about the process, it’s time to create a value stream map. There are three main components: information flow, work flow, and the summary timeline. Here’s how a map like this would look according to the authors of the original Value Stream Mapping book.
Source: Martin, K. & Osterling, M. (2014). Value Stream MappingThe key here is mapping the process of value creation, since it may not be as you envision it. It’s the only way you can improve it later.
Time should be your main focus here. Process time (PT) is the amount of time it takes to perform the needed action. Lead time (LT) is the amount of time that passes from the time the task is received to the task being transferred to the next stage. Often, it’s LT that can be shortened significantly with proper management or tools.
Here are the main VSM symbols you should use for visualization of the process as presented by Andrea Bonaccorsi et al.
guided tours business, the main value is delivering a story about the place you’re at and answering related questions. Booking tickets and chatting with the customers can be value-supporting processes.
Look for valueHere’s the main premise of value stream management. You have to find actions that don’t add any value and eliminate them from the value stream. That’s the Kaizen moment you’re looking for.
Each action on the list may add value, support value, or not add to the value at all. If the latter is the case, that activity is a waste and should be removed.
It’s that simple because this process can be applied to any business. An editing and proofreading company ProEssayWriter was having severe setbacks in the sales department because of duplicate entries from both employees and the website. Processing these duplicates was a waste.
Changing the website and introducing a unified database that managers could check with solved that problem and freed the employees to do more valuable work.
That’s something you could apply to your business as well. Here are the other common problems in the travel industry:
- Shortage of personnel during peak times
- Rude personnel
- Maintenance jobs being skipped
- Items out of stock
- Excessive bureaucracy
- Work being sent out in batches that are hard to process
- Poorly planned transportation schedules
- Excessive waiting time
Domantas Gudeliauskas from HostingWiki points out that hosting-related problems are among the top factors benefitting these kinds of value stream interruptions. Improving your website to adhere to Google Page Speed guidelines or changing your hosting may be the transformative solution you need.
Transform the processSolutions to structural problems have to be structural themselves. For instance, if your problem is having enormous queues at the checkout register, you have two ways of dealing with that. Either have more workers come in for the peak hour or introduce an e-ticket queue. Both decisions create a standard of waiting time and improve customer experience.
Here’s an example from real life. London’s Apex Hotels was having trouble managing the laundry. Dirty laundry was piling up too quickly, moving it and checking the stock notice took too much time, and the laundry van was blocking the entrance.
After value stream mapping, the company switched to using crates instead of smaller laundry bags. This allowed the company to save the time it took to pack and move the dirty laundry. Apex Hotels also made the delivery time later to avoid disturbing guests. This allowed for savings of over $40,000 a year.
Plan, Do, Study, AdjustConstantly seeking improvement is at the core of lean methodology and VSM. This means making changes to the value stream map is not enough to excel. You must monitor how your changes impact the value stream and adjust your subsequent plan accordingly.
Adopt this mindset, and your businesses will not stop growing.
Wrapping upEven if you don’t fall for the whole Toyota philosophy thing, value stream management can be a very effective tool for finding unproductive actions and eliminating them. You can apply it to your travel business in so many ways from allowing Google or Facebook sign-in on your website to streamlining customer requests to altering your booking workflow to save time.
It’s not an approach that will solve all your problems, though. It’s completely within the Kaizen philosophy to use multiple methods to achieve improvement. Complement VSM with user story mapping to see your business process from yet another angle.
Connie is a chief content writer, guest contributor and enthusiastic blogger who helps B2B companies reach their audiences more effectively. With an emphasis on organic traffic and conversion, she takes big ideas and turns them into highly practical content that keeps readers hooked.
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