Value stream mapping and value stream management are complementary concepts based on Lean principles, aimed at improving operational efficiency while minimizing risk and waste throughout the entire end-to-end value chain.

Value Stream Management and Value Stream Mapping

A complementary approach to delivering greater value through software

View the eBook • Value Stream Management and Value Stream Mapping
Value stream mapping example exercise
Value stream mapping example exercise

This article explores the principles behind these two practices and the value they each bring to an organization.

What Is a Value Stream?

To fully comprehend value stream mapping and value stream management, we must first have a solid understanding of what a value stream is.

Simply put, a value stream is the set of actions it takes to turn a customer request into a completed project, product, or service.

Most organizations have several value streams, many of which may share processes, systems, and tools to deliver value.

The goal of organizations is to create more value for their customers. Products, processes, or services that don’t add value to the customer are considered waste.

What Is Value Stream Mapping?

Value stream mapping is a Lean management tool that helps organizations identify and visualize the steps needed to bring a product or service from concept to delivery. By effectively implementing value stream mapping, companies can optimize the flow of value and create a more efficient, predictable, and agile system.

Value stream mapping exercises often map two states—the current state and the desired future state.

The Purpose of Value Stream Mapping

Organizations might be driven to conduct a value stream mapping exercise for several reasons. Yet, exercises involving material and information flow mapping serve two primary objectives:

  1. Identify how value flows through an organization

    Value stream mapping identifies the resources, processes, and systems involved in delivering a product or service from start to finish. It can help answer some pertinent questions, such as:

    • What combination of systems, processes, and resources does it take to satisfy a customer need?
    • Where do our value streams intersect?
    • Are there opportunities to streamline our processes to satisfy our customer needs more easily?
  2. Optimize how value flows through an organization

    Once the value streams have been identified, the secondary purpose is to provide organizations with the information needed to improve them. The idea that an organization should function as a unified, coordinated system, working toward a common goal, is one of the fundamental principles of Lean.

    By creating a value stream map of the current state, organizations can make adjustments to it and arrive at a future state value stream map that meets their desired objectives.

The History of Value Stream Mapping: Lean Manufacturing & Knowledge Work

Toyota engineers first developed value stream mapping in the 20th century. They realized that improving handoff times during manufacturing led to process improvements, increased productivity, and reduced waste.

These handoffs were easy to visualize because they were physical interactions. They exposed bottlenecks and made identifying waste easier. If a problem occurred, they could stop the production line, solve the problem, and then restart the production flow.

This approach successfully increased productivity, improved collaboration between team members, and reduced waste in manufacturing.

Value stream mapping has also gained momentum in knowledge work such as software development because it encourages systems thinking and increases efficiency. Although handoffs in knowledge work are not physically visible like bottlenecks on a car assembly line, they create the same effects: inefficiencies, decreased productivity, overwhelmed teams, and lower quality work.

How to Create a Value Stream Map

When creating a value stream map, it makes sense to start with a single value stream where opportunities for improvement, such as lead time, have been identified. From there, a Kanban board is designed to visualize the workflow and make it easy to identify bottlenecks and opportunities.

You can represent the map on a whiteboard or by using software. Designing a value stream map involves the following steps:

  1. Map your process to reflect your current state as closely as possible. Identify all the steps required to bring the product or service from conception to delivery.
  2. Map your process to reflect a future state (i.e., where the organization wants to go)
  3. Design your visual board to capture the right metrics for improvement.
  4. Analyze the value stream map to identify areas of waste. Develop a plan to eliminate or reduce these issues for an optimized future state value stream.

Creating a value stream map provides an opportunity for collaboration between teams and disciplines. It’s important to remember that value stream mapping is an iterative process that teams strive to improve over time. Perfection is not the goal; incremental, repeatable improvement is.

Benefits of Value Stream Mapping

Just as in manufacturing, knowledge work organizations can boost their bottom line by using value stream mapping to reduce waste. Other benefits of implementing value stream mapping include:

  • Creating a culture of systems thinking and continuous improvement where team members prioritize their activities based on the needs and capacity of the team
  • Improving communication by replacing status updates with higher-level discussions that support vital business efforts
  • Providing employees with better ways to collaborate, resulting in higher job satisfaction and productivity

These benefits are also realized when applying value stream management. However, the two techniques differ when it comes to certain applications.

What Is Value Stream Management?

Value stream management is another Lean business technique that focuses on increasing the flow of business value from customer request to customer delivery. Its systematic approach to measuring and improving flow helps organizations shorten cycle times, increase throughput, enhance product quality, and optimize for business targets.

Value stream management shines a light on all the activities that take place to deliver a software product across four key stages—ideate, create, release, and operate. It allows you to identify where processes are slow, constrained, or blocked in a way that diminishes value.

With that level of insight, you can begin addressing the constraints or problems you observe to achieve better business outcomes.

It’s important to note that focus on flow is the main differentiator of value stream management from value stream mapping, which focuses on reducing waste. More about their differences will be discussed later in this article.

Benefits of Value Stream Management

Value stream management complements value stream mapping, providing similar benefits, as well as additional ones, including:

  • Allowing for end-to-end optimization of value delivery
  • Providing a bird’s-eye view of the entire software delivery lifecycle at every stage
  • Incorporating intelligent process data, including Flow Metrics, to quantify improvement.

How are Value Stream Mapping and Value Stream Management Related?

It’s easy to see how the two concepts can be complementary to one another. While mapping allows you to identify and visualize waste in a value stream, value stream management uses this visualization to increase the flow of business value. The two techniques share the same overall benefits to the organization. Both approaches:

  • Look at delivering value from a whole systems perspective
  • Help people see how work flows to determine how well the process is working
  • Uncover waste
  • Inform decisions about what changes should be made to reduce waste

Differences Between Value Stream Mapping and Value Stream Management

Value stream mapping and value stream management are two related concepts that are often used in the context of lean manufacturing and process improvement. While they share some similarities, there are also important differences between the two.

  • Focus: The main focus of value stream mapping is to visualize the value streams to identify and eliminate waste. With value stream management, the focus is on using the visualized map to optimize business value.
  • Timeframe: Value stream mapping is done by bringing different teams together. As such, it requires time for preparation and execution and usually takes place over two to five days. With value stream management, the practice is continuous and not bound by time constraints.
  • Flow: In value steam mapping, the flow of information is linear, following the value stream path. In value stream management, the flow is end-to-end and not necessarily linear or sequential.
  • Starting Point: Value stream mapping starts on the business side of the value stream, while value stream management’s starting point can be anywhere.
  • Work Items: Value stream maps represent work created between teams. Whereas in value stream management, the work is defined as any flow item that has value, as determined by the business objectives of the organization.
Differences between value stream mapping and value stream management
Value Stream Mapping Value Stream Management
Focus Reducing waste Optimization of business value
Timeframe Typically six month lead time for a 2 to 5 day event Continuous
Flow Linear, sequential Non-linear, end-to-end network
Starting Point Front end, business side Anywhere, business or production
Work Items Work (widgets) created between teams Business-related flow items; feature (business value), defects (quality), risk (compliance, security, vulnerabilities), tech debt (impediments to future delivery)

When to Use Value Stream Mapping vs. Value Stream Management

The two techniques go hand in hand, so it’s not a matter of using one vs. the other. However, since value stream management uses information from the value stream map, it makes sense to create the map first and incorporate it as a part of your ongoing value stream management practice.

Value stream mapping should be done when:

  • You can get all teams together for a few days to create the value stream map
  • You don’t yet have the funds or leadership buy-in for business transformation

Value stream management should be done when:

  • You have integration between tools that capture real-time metrics in your value stream
  • Your goal is to enable product-oriented teams to reduce costs and anti-patterns associated with project-centric teams

Value stream mapping examples, like the one undertaken by Toyota, are commonplace even in software development settings. In Toyota’s case, teams across various disciplines gathered for a few days to identify all the deliverables needed to bring the product to market. Because the different functional teams involved in delivery were in the same room, looking at the same visual, it created a common understanding of the issues faced.

The conversation changed from finger-pointing and blame to practical process improvements that benefited all teams and the business at large, resulting in reduced waste and improved production quality for the car maker.

Value stream management can be used in almost any organization looking to improve the delivery of value to their customers. In a typical software example, a company could use value stream management to analyze the value stream for its flagship app.

Mapping every step of the delivery process might identify several manual tasks that could be automated or some complex processes that could be combined or simplified to increase the flow of work through the stream.

Stakeholders would then identify solutions for each of these inefficiencies to create a future-state value stream optimized for their software delivery and increase value for their customers.

Optimize by Using the Right Tools

An essential part of managing a value stream is to make it visible for everyone to see. Value stream mapping is a great first step to achieving this. Value Stream Management, assisted by tools built specifically for the practice, helps organizations streamline and accelerate value delivery.

Organizations can start small, identify what works and experiment with rolling out the benefits across the value stream up to the business level. The solution to seeing and managing the value stream is embedded in the tools: the platforms and applications software delivery practitioners use to provide value to customers daily.