The value stream is portrayed as an end-to-end set of value-adding operations that create an overall result for a client, stakeholder or end user. In terms of modeling, these value-adding actions are represented by the steps of creating a stream, each of which creates and adds additional elements.
Value Stream Objectives
This method is a component of the business ecosystem and describes how the interested party receives the value of the goods. Unlike many previous attempts to describe the value of stakeholders, flows perceive the perspective of the initiating stakeholder rather than the internal chain of value or process. Based on this, value streams can be cross-linked to give a picture of what and how an organization should do in order to obtain a specific product value.
Components
The schemes to which the article is devoted are cross-cutting ideas about how value is achieved for the external or internal side of the process. The flow of the value creation process begins with the definition of the value proposition provided to interested parties. Stakeholders in a flow can take two forms:
- The requester is the person or organization that initiates and typically participates in the flow.
- A participating party is a person or organization that either provides or facilitates aspects of the value received in the value stream, or which can receive ancillary benefits from it.
In addition, this process consists of stages, which are elements of an iterative price, which are charged to deliver the value in the entire flow, ultimately forming a proposal.
Similar concepts
Building a value stream often involves cross-matching with stakeholders and opportunities. These cross-comparisons allow practitioners to better identify people and organizations to whom (or from which) value is provided. For example, inclusion options associated with each stage of the flow produce results that together contribute to the creation of a value element at this stage.
In addition, many practitioners equate value streams and business opportunities. This makes it easier for individual organizations to understand what the entire company is doing.
Possible confusion
There are many misconceptions about the definition of value stream. They can be divided into 3 types.
- Threads are not processes. Rather, according to supporters of this error, they are not presented in the form of diagrams of technological processes. In fact, it is quite obvious that the stream of value creation is a process in the sense that it is a complex set of actions that lead to the result of the consumer.
- Streams are not related to the concept of lean manufacturing, but are a separate methodology for displaying values. In fact, this is not so, and the binding of this technique to lean production (referred to in the West as Lean) as a process-based practice that seeks to identify unnecessary costs. The value stream represents a higher level of identification of how exactly the stakeholder receives value. It often also includes a schematic representation of the sequence of actions necessary for the design, manufacture, delivery of goods or customer service. Despite the similarity in the name to the stream of building a business, the main goal of the methodology that this article is devoted to is to document, analyze and improve the receipt of information or materials necessary for the production of a product or service for a client.
- It is not designed (and not suitable) for broader architectural purposes, for example, to display critical activities (or stages) that are gradually combined in order to create value for the interested person or cross-compare these stages with opportunities. This statement is also a fallacy.
- Absolutely all kinds of value stream are not internally focused. Some methodologies refer to this technology as providing value to internal interest. While this may be true in a specific context, the goal of most practitioners is to focus on stakeholders outside the organization.
- Value streams are not customer travel cards. Despite the fact that they, like travel maps, perceive external interest, they tend to describe various sets of information. Travel cards tend to describe emotions, intentions, and individual interactions with a customer. Such cards do not have architectural significance. The construction of the value stream, on the contrary, provides a consistent, fundamental view of the entire process of value creation, and therefore plays a huge role from the point of view of business architecture.
Agreed Agencies
This concept is especially important for flexible methodologies, which are often aimed at maximizing the focus on customer or business values. Specific forms of agile methodologies, such as the Scaled Agile Framework, include a value stream as a way of displaying a basic view of the business. This approach encourages a general level of understanding that allows you to interact with multiple disciplines, creating a more consistent and simplified view of the organization.
Stream Mapping
Creating a flow map is a lean management method 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 the moment they reach the client. Flow focuses on areas of the firm that add value to the product or service, while value chains apply to all activities within the company. At Toyota, this method is known as mapping materials and information.
Mapping purpose
The goal is to identify and reduce “waste” in value streams, thereby increasing the efficiency of a given data stream. Waste management is designed to increase productivity by creating more compact operations, which, in turn, facilitate the identification of cost and quality problems.
Practical value
The practical effect of lean manufacturing techniques, including designing and mapping the value stream, is very high, which allows these technologies to be hugely popular around the world. Although these techniques are often associated with manufacturing, they are also used in logistics, the supply chain, services, healthcare, software development, food processing, and administrative and office processes.
Example
You don’t have to go for an example of the value stream, you just need to carefully consider the illustrations for this article. The standard flow form assumes that the stages of adding value will be done in the center of the map, and the stages with no value will be represented by vertical lines at right angles to the center. Thus, the activity becomes easily divided into a stream of values, which is the focus of one type of attention, as well as the stages of “waste”, which are worth paying attention to separately. The idea here is that non-value-adding steps are often prepared or removed prior to the value-adding step and associated with a person or machine / workstation that performs this value-adding step. Therefore, each vertical line is the "history" of a person or workstation, while the horizontal line represents the "history" of the product being created.
Value Stream Mapping is a recognized method used within Six Sigma methodologies.
What is lean manufacturing
Lean manufacturing, often called Lean, is a systematic method of minimizing costs in a production system without sacrificing productivity. It also considers costs incurred due to uneven workloads. If you work from the point of view of a client who consumes a product or service, “value” is any action or process that the client is willing to pay for.
Lean manufacturing allows you to see what adds value, reducing everything else that does not add it. This management philosophy is derived primarily from the Toyota Production System (TPS) and was identified as lean manufacturing only in the 1990s. TPS is known for focusing on reducing Toyota's upfront costs to improve overall customer value, but there are different perspectives on how this is best achieved. The steady growth of Toyota, which has gone from a small company to the world's largest automaker, has focused on exactly how it achieved such success. The answer is simple and concise: thanks to the analysis of the value stream and other lean manufacturing techniques.