The value stream

5 core principles

Time for the second of the 5 core principles: the value stream

The value stream starts with the suppliers and ends with the customer. Is consist of all activities which are necessary to deliver your product or service. There are two flows in the value stream:

  • the material flow (the product of service)
  • the information flow (planning en information)
The value stream runs from customer to supplier

The value stream is bigger than your company

Why is the customer in the value stream?

You start your map with the customer. When you start with the customer in mind it is easier to see value and waste in each step of the value stream. You want to answer these questions when it comes to the customer:

  • How often do they want to buy a product or service?
  • Does the customer order in bulk or piece by piece?
  • How many products or services does the customer want?
  • Does the product or service meet the customers expectations?

Why are your suppliers included?

The suppliers are necessary to produce value for your customers. You will want to know a couple of things about your suppliers:

  • How often do your suppliers deliver?
  • How do we plan the delivery?
  • What is the quality of the delivery?
  • Are your suppliers reliable in the timing of their delivery?
Defining the product family

Determining your productfamily

You now know where your value stream begins and ends. But you also need to decide which products are being produced by this value stream. The best way to do this is by determining your product family. To do this you map your products on your teams, systems, machines and process steps. If the products line up you can put them in the same value stream. If there are too many differences it is better to consider those products as a separate value stream.

Current state vsm

Measuring the value stream

In the next blog and in the course I will get into measuring the value stream in more detail. For now it is important to know that in each of the process boxes you will start to look for value, flow, pull and perfection. In order to prove that any of those features are present you will need to measure lead time, cycle time, defect rates and inventories. And that is just the start.

It is important to keep the unit of time you are measuring in as small as possible.  So if it is possible and sensible to measure in seconds please do so. this  way you will always know where flow is being transformed in waiting or any of the other wastes.

What’s next?

You need a value stream to deliver value to your customers. To find our where we can improve it is important to map the value stream. I will show you how to do that next time. You can also follow my course on value stream mapping.


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