Written by: Nigel Richardson
What is a value stream?
Value streams are a fundamental aspect of identifying waste in a process and mapping your path to improvement.
We have previously discussed the nature of Value Add in a process, as a brief reminder consider this question:
“Would a customer consider the product or service to be worth less if a step were removed?”
We know that for a product / service to be valued by a customer there are many steps to providing them with what they need / how they need it.
The value stream incorporates the entire range of activities:
…that overall provide the end product or service that fulfills the customers’ needs.
Download our free guide to future and current state value stream maps and much more by clicking below:
This is a fundamental question for you to be clear on before you start any form of value stream exercise.
Bite off too much and nothing will happen, bite off too little and your improvements will not tackle the business problems that need to be addressed.
Consider a pharmaceutical example:
It begins with gathering raw material, which is then moved into the primary and component supply.
Once the product has been formed it is then distributed as a finished good.
From here the pharmacy supply chain will ensure all pharmacies have access to the drug. Finally, that drug is then purchased and consumed by the buyer.
The end to end nature of this extended value stream is vast, spanning multiple companies and geographies.
Pursuing end to end improvement at this scale is an initiative involving multiple years of focus, work and stakeholders.
So where is an appropriate start point for your own ‘end to end Value Stream’?
Consider the below taxonomy from a manufacturing / supply chain or services perspective:
When in a manufacturing or supply chain environment I would encourage you to look at end to end being the door to door (inputs received to product out) for the site in question.
For the services industry, your definition of end to end becomes more nuanced.
Discussions on how to scope a level of end to end value stream improvement in my history lead to a lot of discussion on the correct level to choose:
Indeed, if you are able to focus on the end to end journey for a product family or group of customer journeys across a limited number of geographical locations, you are in a good place for your first Value Stream Mapping event.
For more information on how you can ensure your VSM and other improvement efforts are successful, read this blog addressing the importance of continuous improvement teams and culture.
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Nigel Richardson is a continuous improvement expert. His background spans 20 years in business transformation and continuous improvement across retail, pharma, aviation and IT supply chain. He is passionate about supporting organizations to achieve their strategic, transformational and improvement goals, and outperform their peers year after year.
If you’d like to talk more about your strategic challenges, reach out to him on nigel.richardson@i-nexus.com or connect with Nigel on LinkedIn for the latest Strategy Execution insights.