A value stream represents all the things we do to create value for the customer. This involves far more than the manufacturing processes.
Different kinds of value streams
1. Order fulfillment value streams
2. New product development value streams
3. In some cases, specific departments – e.g. New customer development may form value streams on their own.
Why do we focus on value streams?
We focus on value streams simply because this is where the money is made
Value is created by the combined efforts of people in different departments.
Value stream is where the value is and also where the waste is – which we want to eliminate
A lot of time is in a way wasted when improvement is made to one department or process but giving little overall impact to the business
Why manage by value streams?
Focus – who is responsible for everything to do with this family of products? How do we make more money there?
Accountability – the value stream team becomes responsible for the value stream performance measures
Simplicity – from complex organization chart hundreds of cost centers and thousands of transactions – to a simple few value streams management
Drive for continuous improvement
Problems & issues
New organization structure
How to allocate people
People in more than one value stream
Value stream size
No. of value streams
People who are not in any of the value streams
Competition between value streams
Size of the value stream
How to identify a value stream?
Staple yourself to an order
Prepare the current state map
Identify the people in the value stream
Reorganize your organization chart to suit
Identify performance measures for the value stream
Create visuals for all information required for the value stream
Create a value stream continuous improvement team
Do value stream costing
Value stream costing
For value stream costing to work effectively…..
Reporting is done by value streams and not by departments
People in the company are assigned to value streams with little or no overlap
Few shared services departments and few monuments
Production processes must be reasonably under control with low variability supported with through tracking of the measures, inventory under reasonable control and relatively low
Roles & responsibilities of value stream leaders
1. To drive continuous improvement (CI) in value stream
2. Creation of standards
3. Meeting the set targets
4. Training of employees
5. Control of RM, FG inventories
6. Control wastage of material at the gemba (real place)
7. Control/ reduce rejection or rework
8. Ensure good team work among value stream employees
9. Lead the team for the continuous change
10. Manage all the value stream related costs
11. Study and take corrective actions on customer complaints
12. Improve morale and motivation through implementation of suggestions schemes
13. Reduce absenteeism
14. Decide responsibilities within the value stream for all tasks, in order to bring about total investment
15. Everyday hold 5 minute standing meeting among key people in value stream
16. Take corrective actions on deviations
17. Ensure safe place to work
18. Ensure good housekeeping (five s)
19. Highlight critical issues of value stream to the management
20. Analyze key issues affecting the equipments and take corrective actions