Unlocking value with Value Stream Management (VSM)

In this section, we’ll briefly introduce the concepts behind VSM, a Lean-oriented practice that stands as a cornerstone in facilitating continuous and highly impactful improvements to enhance customer-centric value deliveries across your organization.

The evolving nature of VSM

A modern-day definition of VSM, as highlighted in a Forbes Innovation article by Flint Brenton, describes it as an Agile business practice aimed at evaluating the worth of software development and delivery endeavors and resources.8 It’s important to recognize that VSM has been a key part of value stream improvement since the early 2000s, originating in non-IT domains. In this book, you will learn how to apply VSM methods and tools to enhance software development and also to optimize any value stream within your organization.

Describing the VSM methodology

The concepts behind modern VSM practices originally evolved to support other domains than software. For example, you can find books on how to apply VSM as a method to assess value stream improvement opportunities in supply chain management, manufacturing, health care, administration and to create Lean office environments.

In Chapter 4, Driving Improvements with Value Stream Management (VSM), we’ll introduce a common set of VSM steps to identify and prioritize your value stream improvement opportunities. These steps are depicted in Figure 1.4:

Figure 1.4 – Nine-step VSM methodology

These nine steps can be applied in any value stream assessment, regardless of the type of business domain, industry, government, or non-profit environment. The VSM process is genuinely universal.

So, whether you are in IT or any other business domain, you can apply these steps. In the next subsection that follows, you will find out where in this book you can learn more about the versatility of VSM.

Unveiling the versatility of VSM

The versatility of VSM extends beyond software development or IT, offering valuable support for enhancing value streams in various organizations. Understanding VSM practices is crucial for assessing high-impact improvement opportunities and aligning IT with broader organizational enhancements.

In Chapter 3, Establishing Lean Flows to Improve Productivity, you’ll explore Lean-oriented production control systems, waste reduction, and constraint management strategies to improve flow across the organization’s value streams. Additionally, Chapter 3 highlights the significance of selecting appropriate metrics within integrated Lean-Agile practices. These insights pave the way for Part 2, Attending to our Value Steams, and specifically to Chapter 4, Driving Improvements with Value Stream Management (VSM), which delves into evaluating value stream improvements and their impact on customers and businesses, equipping you with practical skills for professional growth.

While Chapter 4 provides us with a basic understanding of foundational VSM concepts, there is so much more to learn. For example, in Chapter 6, Navigating Value Stream Optimization, we’ll learn the importance of shifting our mindsets from Projects to Products, and how to harness digital enhancements to support our business transformations. And, in Chapter 7, Connecting the Value Stream Network, we’ll explore their role in optimizing value delivery capabilities within organizations. Through topics like mapping customer journeys and refining operations, Chapter 7 demonstrates how aligning value stream networks enhances overall organizational efficiency and effectiveness.

Now that you understand the breath and scope of VSM, let’s talk about some of its core principles.

Enhancing professional expertise with VSM

Acquiring knowledge about VSM enhances your professional toolkit, encompassing skills such as creating value stream maps, utilizing metrics for value assessments and productivity improvements, and establishing dedicated VSM improvement teams.

VSM is pivotal for identifying inefficiencies and improvement opportunities within organizational value streams. By visually mapping value stream flows, VSM methods and tools help identify bottlenecks and areas misaligned with customer-centric goals. In addition to visualization, key metrics such as cycle time, lead time, throughput, work in progress (WIP), changeover time, and defect rate are essential for prioritizing improvement opportunities.

Finally, forming skilled and impartial VSM teams is crucial for driving continuous enhancements across value streams, and maximizing improvement impact.

These teams serve as change catalysts, guiding organizations toward increased customer-centricity and value delivery. Moreover, they are the key to sustaining organizational transformations.