#99: Value Streams and Value Stream Mappings

In this episode, I introduce Value Streams and Value Stream Mapping.

Value Streams and Value Stream Mapping, I believe, are exceptionally useful tools to help us understand what we're doing, how we are doing it, and where we can find sources for improvement.

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Published: Wed, 08 Sep 2021 16:34:22 GMT


Hello and welcome back to The Better ROI from Software Development podcast.

In this episode, I want to talk about Value Streams and Value Stream Mapping.

Value Streams and Value Stream Mapping, I believe, are exceptionally useful tools to help us understand how to improve processes - whether that be at a small level in terms of a small activity or at a much wider, much higher organisational level. These tools are useful for us to understand what we're doing, how we are doing it, and where we can find sources for improvement.

So let's start by defining a Value Streams; Wikipedia describes a Value Stream as:.

"A value stream is the set of actions that take place to add value to a customer from the initial request through realization of value by the customer. The value stream begins with the initial concept, moves through various stages of development and on through delivery and support. A value stream always begins and ends with a customer.

Value streams are artifacts within business architecture that allow a business to specify the value proposition derived by an external (e.g., customer) or internal stakeholder from an organization. A value stream depicts the stakeholders initiating and involved in the value stream, the stages that create specific value items, and the value proposition derived from the value stream. The value stream is depicted as an end-to-end collection of value-adding activities that create an overall result for a customer, stakeholder, or end-user."

Wikipedia also goes on to say:.

"Value streams are a component of the business ecosystem that describe how a stakeholder – often a customer – receives value from an organization. As opposed to many previous attempts at describing stakeholder value, value streams take the perspective of the initiating or triggering stakeholder rather than an internal value chain or process perspective. From this outside-in view, value streams can be cross-mapped to enabling business capabilities that describe what and how, respectively, an organization must do to deliver value to the stakeholder."

Wikipedia then describes Value Stream Mapping as:.

"Value-stream mapping is a lean-management method for analyzing the current state and designing a future state for the series of events that take a product or service from the beginning of the specific process until it reaches the customer. A value stream map is a visual tool that displays all critical steps in a specific process and easily quantifies the time and volume taken at each stage."

Wikipedia then goes on to describe the purpose of Value Stream Mapping as:.

"The purpose of value-stream mapping is to identify and remove or reduce "waste" in value streams, thereby increasing the efficiency of a given value stream. Waste removal is intended to increase productivity by creating leaner operations which in turn make waste and quality problems easier to identify"

Value Streams and Value Stream Mappings are very closely aligned to Lean thinking, which are introduced in Episode seven. And as I introduce in Episode seven, one of the most important things we can think about when we think about our process in terms of Lean is the importance of removing waste. Waste is one of the major factors we have in lost productivity of our processes and our organisations.

So let's take an example of a Value Stream and then the Value Stream Mapping that goes round it. Let's assume that we create teapots.

Our role is to:.

  • Receive clay in from a supplier
  • Mould that clay into a teapot
  • Decorate the teapot
  • Fire the teapot in a kiln
  • Package the teapot.
  • And then dispatched to our customer.

Our Value Stream is the activity of taking raw components, in this case clay, and making it into a sellable item and passing it to the customer.

Our Value Stream Mapping shows us in a diagram all those steps - from initiation, the customer ordering that, to the customer receiving their teapot.

If you're going to see this drawn out, you'd see this as one box per activity.

Starting at the left, you'd start with a box with "receive clay". You then have another box following on saying "mould the clay". Your next box will be "decorate the teapot". Your next block will be "fire the teapot". And the final box, maybe "package the teapot".

Then between those boxes, we would put arrows. And the important thing we need to then start looking at is what is happening between those activities. So between those boxes, what is happening in those gaps where we've put the arrows?

We will be waiting for the clay to arrive from the supplier. We will wait before the clay can be moulded, maybe be held in inventory. There may be a delay between the moulding and it being decorated. Again, there may be a delay between it being decorated and being fired because we're waiting for a kiln to become available. And finally, we may be waiting before it can be packaged. And ultimately there may be then a further way in the sending to the customer.

We then start looking at how much time is spent on each of those activities.

There are two types of activities here. There are the value adding things that add value to what the customer is receiving, such as receiving the clay, moulding the clay, decorating the teapot, firing and packaging. These are the activities that are adding value.

The activities between - the waiting for the clay to arrive, the waiting for the clay to be moulded, all those potential places between value adding activities - are potential non-value adding activities.

These "between" activities, these non-value added, may be a source of waste.

So let's walk this example through. Let's say in our fictitious teapot factory, I've done the analysis and I've worked how much time all of these stages are taking. Let me walk you through the process - from the initiation of the process and us requesting Clay from our supplier, we have to wait a day for it to be delivered.

When it arrives, it takes two hours to receive that clay.

Because we're then waiting on somebody to do something with that clay it could be waiting in inventory, say, for example, another 3 days.

When it comes to moulding the clay, that's maybe a one hour activity.

It then, once we have the moulded teapot, then has to wait for someone to be available to decorate it - so that takes a day to wait for someone to be available.

The decorating of the teapot only takes one hour.

It then has to wait for availability in the kiln to be fired. Let's say that's one day.

We then fire the teapot, maybe that's 10 hours.

We then have to wait for availability for it to be packaged. Maybe that sits in, again, in inventory for one day.

And then we can package the teapot, that takes maybe 10 minutes.

If we add those numbers up, we're looking at our value added being 14 hours and 10 minutes. Whereas our non-value added, all those waiting between those activities, comes out at seven days. That's just over half a day of a value added verses seven days of non-value added - and at this point, it's not even reached the customer yet.

And this is where that Value Stream Mapping, that visual representation of our Value Stream, is good at highlighting potential sources of waste.

As we've gone through this example, I've talked about a lot of places where it's having to wait between activities - waiting is a clear sign of waste.

We've got too much work in progress in the system, which is a sign of waste and inappropriate for productivity.

It also may show us an issue with inventory - have we got too much clay there in the starting point? Have we ordered too much clay? Are we waiting too long on the clay or are we waiting too little for the clay? Is the clay arriving immediately being used, showing that we may be under resourced in the amount of clay we have, or are we going to just right again?

That Value Stream Mapping can be used to examine a process and ask the question: is there waste here? Are we doing the best that we can?

The Value Stream mapping can be then used to show two states; current state, which is obviously what you're using to provide a level of analysis, and then a future state based on any proposed improvements.

By having these two versions of the Value Stream, you can see what you expect to achieve through any proposed improvements.

Value Streams and Value Stream Mapping are traditionally associated with manufacturing, but it's finding its way into almost any other application - anything that can be expressed as a Value Stream.

Its certainly found its way into software development. Into product development as well. Both are processes looking to reduce waste and make efficiencies and productivity out of the processes that they're using - to enable better flow through the system.

I've even heard of Value Streams and Value Stream Mapping being used in non-product producing processes, such as new starter on-boarding for HR, such as marketing initiatives - anything where you could potentially assign a value to the outcome of that Value Stream could be Value Streamed and Value Stream Mapped.

In this episode, I've given you an introduction to Value Streams and Value Stream Mapping.

They're a useful tool for aligning businesses to meaningful outcomes.

Organisations have had a tendency to do process by rote, by ceremony, convention, ritual. How many processes do you have in your organisation, that the business is working through because: "that's how we've always done it", or "they did this before I started", "this is how it's always been".

Value Streams and Value Stream Mapping offer a different way to view and question those processes. The act of going through a Value Stream and actually asking is there even value in doing this in the first place could be a useful exercise.

And then to use Value Stream Mapping to then look at all the steps and understand the process and look at potential areas for waste and thus improvement. Again, a great way of looking at existing processes, existing ways of working, with a fresh set of eyes.

And as I said in the intro to this, I believe that this approach can be applied at the micro level - at maybe a small process steps within your organisation, say, for example, your development process, how you handle software through request, through to delivery.

Or a much higher level and actually base many of your organisational core processes, in terms of what your organisation does, through this mechanism.

And ultimately, to improve the flow through your organisation - and thus productivity.

Thank you for taking the time to listen to this podcast. I look forward to speaking to you again next week.