Value Stream Definition

Let us define Value Stream

What does value stream mean, and what is value stream mapping? Why use LEAN and Six Sigma for value stream management? Please read it here!

Definition of Value Stream mapping

A value stream is the series of activities (the how) creating a flow of value (realizing the value [product/service] that the customer gets).

'Value' is what the customer gets, like a product or a high-quality service, in a fair period at a fair price.

Value streams provide a proven and effective method to analyze your organization’s business processes, focusing on the flow of value rather than current process boundaries.

Value Stream vs Business Process

While value streams originated in manufacturing, they are now a popular way to visualize and understand business processes. Keep in mind, though, that value streams aren't the same as business processes.

Usually, a value stream incorporates certain parts of these processes, and both business processes and services often serve as helpful starting points for exploring and understanding value streams.

Value streams relate to case management pathways but do not equal them.

To prevent chaos in the planning and implementation of a process, a value stream map is often created, which shows where activities, time, cost, and quality are provided or consumed.

LEAN

In LEAN, value stream mapping is a method for analyzing the current state and designing a future state for the series of events that takes a product or service from its beginning through to the customer.

Six Sigma

In Six Sigma, value mapping is a data-driven approach for eliminating process defects. The goal is to achieve a six-standard-deviation separation between the mean and the nearest specification limit. Six Sigma spans a wide range, from manufacturing to transactional processes and from product development to service delivery.

More and more often, the strengths of LEAN and Six Sigma are combined to achieve great results by eliminating eight types of process waste.

Mapping Value Stream

A value stream map shows how value (like product or service, including all of its attributes) flows through your company or chain of companies from beginning to end.

We can fix quality, time, and price leaks by mapping value stream activities. When business processes align activities, understanding value streams helps optimize value creation and prevent losses of time, money, and quality.

Example of a Value Stream Map

Below is an example of value stream mapping:

Dragon1 software makes it easy to create value stream maps by providing all the basic symbols needed for clear and effective value stream analyses. You can extend the icon set with your own shapes.

Here is a basic introduction into VSM Value Stream Mapping [PDF]

If you have comments or remarks about this Value Stream definition or other terms, please email specs@dragon1.com.