Everything You Need to Know About Value Streams
What is our biggest expectation when we buy a product or service?
Best value for our money, right?
We want our product to generate the maximum value for us for the longest period possible, so we get the most out of the money we spend. This same thought applies to organizations as well.
What are value streams?
When a client buys a product or service from you, he or she wants to get a continuous flow of value. So, you’ll have to come up with solutions that meet this expectation. Such a stream or a series of solutions that offer this continuous value is called a value stream.
In most cases, a value stream begins with an event like a customer purchase and continues on to customer satisfaction, software deployment or any other end result. The steps that fall between the beginning and the end are created by you to achieve your goal with optimal resources.
In this sense, a value stream includes people, processes and systems that help an organization to achieve a specific goal, though this goal may be ongoing for a given period of time.
For example, let’s say, a customer purchases a product from you. He may have questions regarding your product and may require good customer support. So, the value that he expects from your product is good service and this continues through the life of the product. How you provide this continuous service is what constitutes your value stream.
James Womack and Dan Jones, in their book “Lean Thinking,” have defined a value stream as a set of actions needed to perform three critical aspects of a business, namely,
- Design or problem solving
- Processing or information management
- Delivery or physical service
Overall, identifying the different processes for value streams is called value stream mapping. It’s a roadmap that is created before the beginning of any lean program to map information and materials through the process.
How is it different from Six Sigma?
Often, value streams are confused with Six Sigma because they seem similar. But in reality, they are very different.
A value stream mapping differs from Six Sigma in four ways.
- Value streams collect a wider range of information than a typical map for Six Sigma
- Value streams are used at a much broader level
- It is most helpful to identify future projects and kaizen events rather than just focusing on what’s at hand.
- Value streams tend to be at a much higher level, typically above 5, when compared to Six Sigma process maps.
Thus, value streams consider not just the activity of the product, but also the management and information systems that are a part of this activity. So, it helps you to make better decisions and reduce the cycle time for production. Due to these reasons, value streams are used as a Lean tool.
What are the benefits of Value Streams?
Value streams bring a lot to the table for any organization. Here’s a look at some of them.
- It’s easy to understand, so the learning curve tends to be fairly short.
- It gives an idea of the processes from beginning to end.
- It helps to identify problems fast and earlier in the life-cycle. This is an important benefit as it prevents any undue delays during delivery
- Helps to make the optimal use of resources by identifying wastages and leaks
- It’s fairly inexpensive, so the organization doesn’t have to budget for it separately.
- Value streams are helpful for different sectors such as manufacturing, services, healthcare, and so on.
- It is cross-functional, cross-organizational and cross-geographical. Whether you’re in Sacramento or New York, it will work for you.
These multitude of benefits have made it a compelling choice for organizations, and many of them have even started embracing it in a big way.
Creating value streams may not be easy, especially if you’ve never implemented Six Sigma or any other Lean tool. Regardless of whether you have prior experience in this area or not, it’s best to take the help of professionals like Alpen Technology Group to make the most of this tool.