A value stream is a set of activities that produce business value for individuals within the company and/or persons outside the company such as customers and business partners.
Every value stream is a subset of the company’s overall value chain. The value chain is the amalgamation of all the processes in the regular operation of the company that serve to convert raw materials supplied to the company, to the finished product or service.
An example of a value stream is the set of tasks that someone in the team takes to respond to an email received from a customer. The input is the received email and the output is the feedback sent to the customer, and desirably business value in the form of customer satisfaction. The individual activities involved in this value stream may include:
- Reading the email
- Comprehending the customer’s concern
- Categorizing the concern into a certain tier (positive vs. neutral vs. negative)
- Replying to the customer using a response from a set of predetermined responses based on the category
- Waiting for a reply from the customer
Conclusion
Optimization can be best achieved when we identify value streams and intentionally modify them in order to maximize the business value (output) produced and reduce the amount of resources (input) consumed in the various steps of these streams.