“A value stream is the end-to-end set of activities that delivers particular results for a given customer (external or internal)”
- James Martin, 1995
Value stream identification is a process of discovering and defining the interconnected value streams that make up a modern organization. It helps us understand where work is done in the context of customer outcomes, where to assess and investigate performance, and how to optimize the delivery of value to customers. Value stream identification is especially important for leaders who want to adopt digital value stream management to improve visibility, collaboration, and governance across value streams.
In this article, we’ll cover some of the principles of value stream identification that can help you get started with value stream thinking, mapping, and strategy.
If you’re interested in learning about the specific examples shaping these principles, check out our other articles in the series:
"As to methods, there may be a million and then some, but principles are few.
Those who grasp principles can successfully select their own methods."
- Harrington Emerson
Every organization is different. Different missions, organizational structures, operating models, and the list goes on. Value Streams give us a useful framework for understanding not only how they work but how they should work. Using a value stream model, we can identify not only what it takes to deliver value, but also everything unnecessary or wasteful. We can recognize the contribution of key capabilities, and see the interdependence of separate workflows.
That sounds great, but it begs the question: “Where are these value streams?”
“Value shall be specified from the standpoint of the customer. A value stream shall be identified for each product or service family – from concept to launch and from order to delivery”
- Mike Rother, 2003
In a modern enterprise comprised of knowledge work and digital activity, where the flow of bits and information is more important than raw materials - the value streams are invisible. We can follow it from inception to realization if we sit with the workers, but today’s value streams of decentralized knowledge work exist primarily in a logical model. Even so, regardless of the challenge of visualizing and defining a value stream network, the juice is well worth the squeeze. In my experience, teams that map their value streams uncover quick wins reducing waste by 20%. Without a model for defining work as value streams; it’s too easy for constraints, dependencies, and waste to remain hidden, micro-optimization and siloed work to run rampant, and customer value to stay detached from individual contributors.
We’re providing principles for identifying value streams to make the implementation journey easier and accelerate your efforts toward high-performance value stream management.
The VSM Implementation Roadmap
To see your organization as a value stream network, you need a clear methodology for ‘seeing’ (defining) the streams. Before you can improve flow, you need to be able to see it and measure it. This guide will help you identify your value streams so that you can start to benefit from less waste, higher performance, and a greater sense of clarity and ownership over the system of value delivery in your organization.
In 1995, James Martin defined a value stream as “the end-to-end set of activities that delivers particular results for a given customer (external or internal)”. In 2023, we’re increasingly focused on digital value streams, and these principles directly address that evolution.
Join us to collaborate in our Consulting Huddle to advance the future of VSM and develop our VSM Implementation Roadmap materials