Value Stream: Definition, Mapping Rules with Examples, Types, Goals, Objectives and Stream Construction Analysis

2024 Author: Miguel Ramacey | [email protected]. Last modified: 2023-12-17 06:11

A value stream is depicted as an end-to-end set of value-adding activities that create a common result for a customer, stakeholder, or end user. In modeling terms, these value-adding activities are represented by flow creation steps, each of which creates and adds additional elements.

Value stream goals

This method is a component of the business ecosystem and describes how a stakeholder gets the value of a product. Unlike many previous attempts to describe stakeholder value, flows take the perspective of the initiating stakeholder, rather than the internal value chain or process. From this, value streams can be cross-matched to provide a picture of what an organization needs to do and how to achieve a certain product value.

Components

The schemes covered in this article are end-to-end views of how value is achieved for the external or internal side of the process. The value creation process flow begins with the definition of a value proposition delivered to stakeholders. Stakeholders in the stream can take two forms:

• A requester is a person or organization that initiates and usually participates in a flow.
• A stakeholder is a person or organization that either provides or facilitates aspects of the value generated in the value stream, or that can derive ancillary benefits from it.

In addition, this process consists of stages, which are elements of an iterative price that are charged to deliver value throughout the flow, eventually forming an offer.

Similar concepts

Building a value stream often involves cross-matching with stakeholders and opportunities. These cross-matchings allow practitioners to better identify the people and organizations to (or from) that value is being provided. For example, the inclusion opportunities associated with each step in a flow produce results that collectively contribute to the creation of an element of value in that step.

In addition, many practitioners equate value streams with businessopportunities. This makes it easier for individual organizations to understand what the whole company is doing.

Possible confusion

There are many misconceptions about the definition of a value stream. They can be divided into 3 types.

• Threads are not processes. Rather, according to the supporters of this misconception, they are not presented in the form of process diagrams. In fact, it is quite clear that a value stream is a process in the sense that it is a complex set of activities that lead to a customer outcome.
• Flows are not related to the concept of lean, but are a separate value mapping methodology. In fact, this is not the case, and linking this methodology to lean manufacturing (called Lean in the West) as a process-based practice that aims to identify unnecessary costs. The value stream is a higher level of discovery of how a stakeholder obtains value. It often also includes a schematic representation of the sequence of activities required to design, manufacture, deliver a product, or serve a customer. Despite the similarity in name to the business building flow, the main goal of the methodology that this article is devoted to is to document, analyze and improve the acquisition of information or materials necessary to produce a product or service for a client.
• It is not designed (and not suitable) for morebroad architectural goals, for example, to depict critical activities (or milestones) that are progressively combined to create value for a stakeholder, or to cross-match these milestones with opportunities. This statement is also a fallacy.

• Absolutely all types of value stream are not internally focused. Some methodologies refer to this technology as providing intrinsic value. While this may be true in certain contexts, the goal of most practitioners is to focus on stakeholders outside the organization.
• Value streams are not customer journey maps. Although they, like travel maps, take on external interest, they tend to describe different sets of information. Journey cards typically seek to describe emotions, intentions, and individual interactions with a client. Such maps have no architectural significance. Building a value stream, in contrast, provides a coherent, foundational view of the entire value creation process, and therefore plays a huge role in terms of business architecture.

Harmonization of agile methodologies

This concept is especially important for agile methodologies, which often aim to focus as much as possible on customer or business value. Specific forms of agile methodologies,such as the Scaled Agile Framework, include a value stream as a way to represent a basic view of the business. This approach encourages a shared level of understanding that allows interaction across multiple disciplines, creating a more coherent and simplified view of the organization.

Flow Mapping

Creating a flow map is a lean management technique for analyzing the current and future state of a series of events that are directly related to a product or service from the very beginning until they reach the customer. Flow focuses on areas of the firm that add value to a product or service, while value chains refer to all activities within a company. At Toyota, this method is known as material and information mapping.

Mapping purpose

The goal is to identify and reduce "waste" in value streams, thereby increasing the efficiency of this data stream. Waste disposal is designed to increase productivity by creating leaner operations, which in turn make it easier to identify cost and quality issues.

Practical value

The practical effect of lean manufacturing techniques, including value stream design and mapping, is very high, which allows these technologies to be very popular all over the world. Although these techniques are often associated with production, they are also used inlogistics, supply chain, service industries, he althcare, software development, food processing, and administrative and office processes.

Example

You don't have to go far for an example of a value stream, you just have to carefully consider the illustrations for this article. The standard flow shape assumes that value-adding milestones will be placed in the center of the map, and missing-value milestones will be represented by vertical lines at right angles to the center. In this way, the activity becomes easily divided into a value stream, which is the focus of one type of attention, as well as stages of "waste", which should be paid attention to separately. The thought here is that non-value-adding steps are often set up or taken away before the value-adding step and associated with the person or machine/workstation that performs that value-adding step. Therefore, each vertical line represents the "story" of a person or workstation, while the horizontal line represents the "story" of the product being created.

Value stream matching is a recognized technique used within Six Sigma methodologies.

What is Lean

Lean manufacturing, often referred to as Lean, is a systematic method of minimizing costs in a manufacturing system without compromising productivity. It also takes into account the costs created by the uneven workforce.loads. When working from the perspective of a customer who is consuming a product or service, "value" is any activity or process that the customer is willing to pay for.

Lean allows you to see what adds value while reducing everything else that doesn't. This management philosophy is derived primarily from the Toyota Production System (TPS) and only identified as Lean in the 1990s. TPS is known for focusing on reducing Toyota's upfront costs to improve overall customer value, but there are differing perspectives on how this is best achieved. Toyota's steady growth from a small company to the world's largest automaker has focused attention on exactly how it has been so successful. The answer is simple and concise: thanks to value stream analysis and other lean manufacturing techniques.