Value Stream definition and classification

When we look at value streams, there are various interpretations and classifications, not all of which are consistent. Here is how I find it most useful to classify them. First, I would define Value Streams as the sequence of steps to continuously create value, by accomplishing something. The important points here are:

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a. Creating Value: Given we are discussing value streams, our goal is to generate value for a client, whether internal or external.
b. Continuously: I envision value streams as permanent conduits for the flow of activities that, as mentioned earlier, generate value
c. Accomplishing Something: The nature of what you achieve dictates the type of value stream you are engaging with.

All value streams originate from a (internal or external) customer need and end by satisfying it.

Three kinds of Value Streams

I would divide them into development, operational, and support value streams, following Alan Ward’s model in Lean Product and Process Development

  1. Development Value Streams. These include all the activities running from recognizing an opportunity to manufacturing launch. On top of that, Development Value Streams create Operational Value Streams.
  2. Operational Value Streams. According to Ward, the operational value stream is about transforming the raw material, or the idea, into an existing product or service. It encompasses the process of transforming raw materials into finished products delivered to customers. It ensures the production of high-quality products when customers need them
  3. Support Value Streams. Other value streams that support the delivery of value. Include HR and Finance Activities, Sales, etc

Operational Value Streams

Operational value streams can be further divided into two distinct categories, depending on whether we view them from an outside-in or inside-out perspective: (a) Customer Value Streams and (b) Operations Value Streams.

  1. Customer Value Stream. Originated by the customer, with an outside-in perspective from the customer’s point of view. Customer value streams represent the series of actions taken by customers and their associates to derive value. This includes using the product/service, obtaining support for the product/service, and the processes involved in acquiring, configuring, or setting up the product/service.
  2. Operations Value Stream: that’s an inside-out perspective from the system to the custom. This refers to the workflows within the necessary infrastructures for selling and deploying the product.