Value Stream

For those that are paying attention you will have figured out that I am going through the list of five core things that make up the Lean principles. Last time I talked briefly about Value and this blog is about the Value Stream.

So we defined value as that recognised by your customer. The Value Stream is simply the process or the string of steps in which that value is added in your company. Actually a value stream stretches all the way back through your suppliers and all the way forward to your customers’ customers. It is the end-to-end process that “does the work”.

Why do we need to study it? Well, because it is normally full of waste. The biggest culprits in service Value Streams are waiting and rework. Waiting in batches between steps and rework due to error, bad or lack of data. In fact between 40% and 80% of a process in a service arena can be waste.

The simplest way to study the value stream is to draw it. Put the steps on a big piece of paper and add the time it takes to complete each step. Remember to include all the waiting and rework steps. Then take each step and ask, “Would my customer be willing to pay for this step?” I.e. is it a value step. Add up the time for the value steps and compare that with the total end-to-end time. The proportion of value adding time in the Value Stream might be a bit of a shock. So sit down, have a cup of tea, and next time I will tell you a bit about Flow.



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