What Is a Value Stream?
A value stream is the set of activities that deliver value to a user or customer. Consider for example the user of an online e-commerce platform such as Amazon. The user accesses the platform to find a product, and once found, purchases the product, which is then delivered eventually to them. The value stream consists of the online system that enables the customer to find a suitable product, complete a purchase, and then the logistical activities associated with fulfilling the order to get the product from a warehouse to the customer.
Actually delivering value to the customer
But what about the development of the product that is sold on the e-commerce platform? That is a different value stream—a product development value stream. A very simple view of that is shown below.
The above development value stream is over-simplified because it combines many things into “Design” and glosses over feedback from outcomes, but we are keeping it simple to make another point.
The point we want to make it that if one were to draw the interaction between a product development value stream and a customer-facing value stream, they would intersect. The product development value stream creates the systems that are used by the customer-facing value stream.
In the above figure, you can see that Product A is actually an internal product: it is the Fulfillment System that is used by the customer-facing value stream. It is internal because customers do not use it directly, but it is used to fulfill customers’ orders.
Some internal products are used in more than one customer-facing product or service. When that is the case, the internal product acts as a reusable component of other products.
Value Stream Mapping
One can document one’s value streams into a “value stream map”. The reason for doing that is usually not to fully document every activity; rather, the purpose is usually diagnostic: to identify problem areas.
As such, value stream maps are usually best not done to completion. The details are not the point: the point is to create a visual that can be discussed, to discover bottlenecks, delays, unintentional local optimizations, and sources of downstream problems. The diagram helps people to discuss the flow and, through dialog, achieve insights.
The insights tend to be about immediate causes, and root causes. Both are important. Immediate causes usually need a short-term fix. Root causes take more effort to address, and are usually remedied by a longer-term fix.
A More Realistic Development Value Stream
The diagram we showed above of a development value stream was intentionally simplistic. Here is a fuller value stream.
A development value stream
This is also simplistic, but at least it shows all the major activity categories and types of feedback loops that should be present. A real development stream would be much more complex, so this diagram is best viewed as a model that provides a vocabulary for talking about development value streams. It has activity bubbles for product strategy, product design, development, and internal full-product testing and evaluation. It also has feedback loops for handling results from actual users.