Value Stream Management, Mapping & Agile: The High-Performance Compliment

by The Scrum Inc. Team | March 11, 2022 | Blog

Are you:

• Disappointing customers because your delivery time is so slow?
• Accumulating excess inventory due to poor projections or workflow production? 
• Not seeing the profit margins you expect due to unforeseen expenses and costs that creep into the production process?

Then utilizing a value stream map will be of benefit. According to the State of Value Stream Management 2021 Report published by the Value Stream Consortium:

“Half of organizations need to implement value stream management platforms within two years to maintain their competitive advantage”

and

Information technology, a 4.07 trillion dollar industry, is expected to utilize VSM to deliver value for customers.”

It is predicted that 70% of organizations in 2022 will use Value Stream Management to improve flow. [Value Stream Management: The New Prescription For Better ROI (forbes.com)]

As discussions surrounding value streams become more and more pertinent to the organization’s optimization strategy, putting the customer needs at the forefront becomes more visible as a pathway to marketplace acceleration.

Organizations that shift from a project-focused model to a product-focused model find themselves in alignment with the ultimate success factor: customer value delivery.

 

But what exactly is Value Stream Mapping and how does it compare to Value Stream Management?

Are they the same? How do they differ?

Value Stream Mapping is: “a lean-management method for analyzing the current state and designing a future state for the series of events that take a product or service from its beginning through to the customer with reduced lean wastes as compared to current map.” Wikipedia

Typically visually represented by a flow chart that documents every step in the process of product delivery.

  

[Image Source: Wikipedia]

It’s a workplace efficiency tool designed to identify bottlenecks, eliminate waste, and speed up delivery with continuous improvement of the process.

In contrast, “Value Stream Management is a combination of people, process and technology that maps, optimizes, visualizes, measures, and governs business value flow through heterogeneous software delivery pipelines from idea through development and into production.” [Condo et al: The Forrester Wave™: Value Stream Management Solutions]

To put it simply, Value Stream Mapping visually represents process flow while Value Stream Management takes the insights and metrics from this exercise to optimize and improve its outcomes.

 

This sounds great, but why is Value Stream Management important?

Value Stream Management is important because identifying waste is one thing. And a great first step to be sure. But much more value can be delivered if waste is not only identified and cleaned up but also used to drill down on optimization procedures that can both speed up delivery and improve quality. 

To do that, metrics must be tracked and increments of continuous improvement experiments must be regularly deployed and inspected.

Companies cannot rest on existing performance leads. A lead in today’s marketplace can easily be rendered obsolete with a single technology improvement. And these improvements are constantly being innovated. The speed with which technology accelerates is exciting but also overwhelming.

The only way for companies to gain or maintain a competitive advantage is to improve their ability to be transparent, inspect and adapt: the pillars of Scrum. Those companies who have a system for responding to change will be the ones that weather and triumph in the turbulent waters of the current business climate.

Scrum Inc. Transformation Consultant, Kirk Gould understands the intense pressure of being an executive responsible for numerous value streams. He offers:

“There's a lot of fear built into being an executive. There's a lot of competition to get where they are, and when they're rewarded for a certain thing, they behave in that way. 

 

Company analysts in New York City have this phrase called ‘employee to profit ratio.’

 

What's the quickest way to improve that? Get rid of employees.

 

But that doesn't make the company better. That's an outcome. All of a sudden they've made the measurement the goal. And so we need to teach them about metrics and what their metrics are actually doing. And what behaviors it’s actually incentivizing."

 

Some of the benefits of value stream mapping include:

• Identifying bottlenecks in the system that slow down delivery
• Making silos visible to spot points of weakness and/or vulnerabilities in the system
• Making waste visible so that it can be eliminated
• Giving visibility to the entire process; a holistic, big-picture view of all contributing elements
• Serving as a platform for feedback from relevant stakeholders

By visually identifying the current state of your process, you can easily and subsequently identify where the gaps are in your process and proceed to close those holes. If it doesn’t add value to the customer, then it may be considered waste (further inspection is needed). But if it ultimately is waste, it needs to be eliminated.

One of the most beneficial things about Agile Value Stream Management is that it helps individuals get a full picture and understanding beyond their own perspective. This helps to foster a collaborative environment and buy-in from all levels of the organization. In turn, employee happiness is increased, team focus is enhanced and productivity is increased as well.

Kirk Gould, Scrum Inc. Transformation Consultant, uses storytelling to illustrate its impact:

“Okay, I laid out my value stream. Now, what do I do? Well, now we have to optimize it. 

 

Well, I've got all this delay, how do I get rid of the delay? 

 

Oh, I've got all these quality issues, how do I get rid of those? 

 

I've got all these stumbling blocks. Nobody's in charge of the whole thing; they're only in charge of the different silos.

 

Well, I have this story I tell. I used to live on a farm and you know there are silos on a farm sometimes. Do you know what you have to wear when you walk between the silos? You have to wear boots. There's a reason you have to wear boots because it's not easy to get from one silo to another. So there are physical reasons that we have silos, but we've got to connect those things. That’s what a value stream does. It connects the different silos together.

 

Because the customers only care about things that flow this way horizontally through the company. They don't care about the vertical things like the money, the authority, the power, the promotions, or the organization. They don't care. They just care ‘did I get my order from Amazon?’ Did I get my thing? That's all they care about. So Value Streams help the flow. They help the visibility from the customer’s point of view.”

The type of companies that benefit from value stream management extends well beyond the world of DevOps. Value stream management in manufacturing; value stream management in healthcare; and value stream management in government are just a few of the industries that have taken to this method of process improvement. 

What’s important to highlight are the opportunities that reside in utilizing value stream mapping for an organization. Not only does it align teams, but again it gives an organization a competitive advantage in its ability to respond to market changes quickly. Without a clear visualization of your process and what delivers value to your customers, you can waste a lot of time and money on things that won’t affect the bottom line. No one has that kind of time to waste.

 

Some of the disadvantages of Value Stream Mapping

1. Doesn’t account for waste produced by people 
2. Can be time & resource intensive
3. Provides a snapshot in time

 

Value Stream Mapping and Agile

“Process efficiency is extremely important for high performance. Now, when you extend that idea out to the whole time between when you have an idea and you’re shipping a product, getting the process efficiency of that whole chain of events is what we call value stream analysis. We need to analyze the steps that go into creating the value and make sure that the clock time is as short as possible to increase the process efficiency which, in my view, is the most important metric in Scrum.” — Dr. Jeff Sutherland, Co-creator of Scrum

 

"One thing that really ties in well is that we escalate our impediments up to a level where someone can fix them. In Lean, it's the system that holds you back, not the personnel. The system usually is stupid, so if you can fix the stupid system it's not a barrier.

 

And the people can start to achieve their potential. And you start to accelerate” — Kirk Gould, Scrum Inc. Transformation Consultant

In conclusion: Value Stream Management is a powerful tool in the Agilist’s arsenal that has the potential to unleash a wave of opportunities for optimization, collaboration, and acceleration. All an organization has to do is be brave enough to take a sliver of time to slow down so that they can speed up.