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What is Value Stream Management (VSM) in Agile?

Posted by Adrian M.

Article Rating // 1738 Views // 0 Additional Answers & Comments

Categories: Agile Methods


What are Value Streams

Before we dive into Value Stream Management, let’s first take a look at what a value stream is.  Applied to organizations or groups whose goal is to deliver a product or service, the value stream refers to the totality of processes and activities required to bring value (the product or the service) to fruition from inception all the way to the customer.  The value stream starts with the customer’s needs in mind and ends with bringing value to that customer.

What is Value Stream Management

Consider, for a second, two competing organizations whose goal is to bring the same value to the same set or type of customers.  Both organizations have their own value streams to achieve this goal.  Are these two value streams exactly the same?  Are the processes, activities, procedures, and mindsets used within each company’s value stream identical?  Probably not. The two value streams are most likely different and unique to each company.  

The goal of each organization is to maximize the value they provide their customers while minimizing their cost.  To this end, most organizations focus on continuous improvement of their value streams.

The practices or sets of techniques used by organizations to increase the flow of value, through their value streams, to their customers is called Value Stream Management (VSM).

Even simple or small organizations find themselves with multiple value streams and, in order to be as effective as possible, they must clearly define how to break down their organization into value streams and clearly define each of their value streams.  This is the practice of Value Stream Management.

What are the Benefits of Value Stream Management

Value Stream Management helps organizations to purposefully put the customer at the center of what they do.  In order to increase value to its stakeholders, companies must focus on maximizing value to their customers.  A robust value stream management practice will help increase value by:

  • Measuring the efficiency of its processes
  • Eliminating waste from the processes
  • Avoid scenarios which could interrupt a value stream
  • Enabling more accurate value delivery estimates
  • Providing ability to make data-driven investment decisions

Ways to Support and Improve Value Stream Management

Not all organizations achieve the same maturity executing value stream mapping.  What differentiates the best from the rest are a number of important aspects:

  • Value stream mapping - the practice of analyzing and clearing documenting (mapping) the processes and activities within each value stream.  A better understanding of the “as-is” of each value stream enables the improvement of those value streams.
  • Value stream management platforms - by employing specialized VSM software, companies can more effectively and easily manage the performance of their value streams.



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