According to MicroFocus, “Value streams are everything in the software delivery lifecycle (SDLC) from idea to production needed to deliver software products or services to customers.” This can include product development, business analysis, testing, and everything else to complete a project and deliver it to its customers. This post covers what VSM is, why companies use it, how to implement VSM, and more.
Value Stream Overview
The six steps in a value stream are concept-to-bill, meaning that all development for any idea goes through these steps. The first step is idea generation, where you determine whether an idea should move forward in terms of development. The second step is capturing customer value analysis, which details what your product will do for customers and why they’ll use it. Finally, you need to know what your project will provide in concept-to-bill structure by clearly outlining its scope.
Value Stream Analysis
The first step in any process improvement initiative should be Value Stream Analysis. Every single process for every single business should be analyzed for efficiency, starting with small teams or departments before expanding to larger groups. This helps determine where losses are occurring, both from a financial standpoint and time management perspective. When complete, each individual can receive an evaluation of their job’s effectiveness based on how much time they take away from other processes within your company by way of delays or rework.
Value stream management deals with the systematic optimization of business processes for any product or service. For example, a value stream management platform improves business practices to make products, services, or information more easily accessible, faster, and at a lower cost.
Value Stream Mapping
The Value Stream Mapping technique helps identify where problems lie within a process. It’s more useful in conjunction with other Lean Manufacturing techniques like 5S or Kanban to bring about change. Its simplest form requires individuals to think critically about every step toward accomplishing a task, diagramming each step on sticky notes and arranging them on a board or wall.
Lead Time Reduction
An improvement strategy that focuses on reducing lead time (time between when a product/service is ordered to when it’s delivered) and often involves pre-planning. Though many companies view lead time as an essential metric, eliminating waste in your processes can reduce lead time without increasing costs. For example, suppose you want to facilitate order processing times from 2 weeks to 1 week. In that case, you may achieve that goal by reworking your current process rather than hiring additional employees.
Using a value stream management platform, you can make your overall process flow easily visible to everyone in your organization. This provides a helpful overview of what work still needs doing, who is doing it, and how well their processes are working. Managers can use that data to operate each value stream better and identify any problems that need fixing. Additionally, you’ll have a streamlined overview of where bottlenecks are occurring so you can focus resources on speeding up those specific processes.
Value stream management has been getting a lot of attention in recent years, and for a good reason. VSM helps businesses with everything from improving customer satisfaction to assisting them to reduce costs.