Should a Company Manage by Value Stream?
First of all a Value Stream is a way of looking at your company’s ability to deliver, from start to finish, a product or service. For instance, let’s say that you are manufacturing and selling a stapler. An example Value Stream for a stapler could start with a customer, let’s say the customer is a large office products retailer, executing an order for staplers. The company made then go through a customer evaluation process that determines the speed of delivery and cost per stapler. These are examples of the first stage of a Value Stream.
After these first steps the business may be verifying the credit of the customer then producing an order for materials. Subsequently, the stapler goes through production, is packaged and then shipped. Next, the customer is billed and the money is received.
The Value Stream gives you a view of every step of value added in the process of satisfying a customer’s need for a stapler. The Value Stream is used internally to give the business insight into the business system used to deliver the product, give the business insight into waste or steps that do not add customer value and give the business a “profound knowledge” of their business processes.
Now we get to the central question of whether a company should manage by Value Stream? At this point it gets down to authority and responsibility. Lean Business believes that it is a fallacy to manage a process or system that you don’t have authority over. In the example of the stapler management of the Value Stream may have little authority over the material ordering process as the ordering process may be the same for many products the business sells. As a manager this may not be a very big concern and we agree with that. However, the manufacturing process may manufacture many different products and if the manufacturing schedule is not under the authority of the stapler Value Stream manager then what is the point of managing by Value Stream?