How to Identify Value Streams in SAFe?

Value Streams are the organizational support of a SAFe implementation and thus are incredibly significant to the victory of this journey. If you get the idea right, your company will kick-start its successful transformation journey. So, start by identifying your major Value Streams in your business or company and use this data to aim your initial improvements. At the same time, you learn and develop the method that will work with your team and business. 

Whether in the service or manufacturing industry, identifying how you bring value to your customers will set up your Value Streams. 

But before moving ahead, let's first understand the definition of a Value Stream. It's a procedure that crafts what your clients are willing to pay for.

In every single Value Stream, there are many actions needed to create this service or value. There are specific actions that produce very little or no value in these actions, which are called waste. These waste actions don't generate any value, although there are some waste actions that you cannot ignore because of the latest technology, quality, and safety reasons. Decreasing these waste actions has a considerable impact as it will have a drastic effect on your company's bottom line. Also, it would help if you kept in mind that a Value Stream can include external and internal suppliers.

Here the question arises: Why do you require spending a lot of time comprehending your Value Stream? Well, it's vital, mainly for two reasons- one, it allows you to gather products by the procedures that create them. Second, understanding the Value Stream enables you to concentrate on a set of connected systems and stop interruptions in your analysis.

Steps to identify Value Streams 

Now, it's time to talk about how to identify Value Streams. Here are some proven steps to follow - 

1. Collect your products

The product collection is a straightforward procedure depending on the machine, process, and services. You may require creating a matrix that cross-references the procedure steps, or you can also call them manufacturing steps with every product line.

All those products using similar procedures (or having a higher ratio of the exact process steps) belong in the matching Value Stream.  

Although these products may have dissimilar customers or reach distinct end users, the process steps define the Value Stream, not the customers.

2. Pick a single product family

Once you collect your products, the next step is to pick one product family to concentrate on because you will need to start applying Lean principles. This choice is based on your business conditions and which parts of your organization require improvement. Some common factors you can think of are -

• Highest service/product volume depending on sales values
• Highest service/product volume in units
• Service/product with the highest defect rates or errors
• Service/product with the maximum customer-related problems 
• Service/product that needs the most administration time

3. Arrange the Initial Walk-Through

Once you pick the dedicated product family, you will want to visit the office or factory where the processes are done to observe how these products are made.

After making the initial walkthrough, start with your client and work back to the front via every process. When you walk through, pay attention to how client orders are processed, the activities on the shop floor, the method of upstream transmission, material supply, and how all those products reach the final step in the procedure to the client.

After an initial walkthrough, you will be able to identify and gain a basic understanding related to the Value Stream and how they work.

In another step, you will need to make a current state VSM (Value Stream mapping) to provide you with a comprehensive idea about your Value Stream.

4. Consider your capabilities Vs your end products

There are plenty of ways to create value in a company. Some results provide value straight to the client through a service or a core product, whereas some back the internal procedures that make that value delivery feasible.

There are two types of Value Streams that represent and support this paradigm

• Development Value Streams
• Operational Value Streams

Let us describe the difference between development and operational Value Streams in detail.

At a higher stage, operational Value Streams go straight to the product, showing the value offered to their clients. In big companies, identifying Operational Value Streams is not a minor activity. it demands an understanding of the companies broader purpose plus a clear understanding of how particular parts of the value flow to the client.

Development Value Streams are assets, applications, and systems that help run Operational Value Streams properly and deliver value. Since these are dissimilar from the functional Value Streams, companies should consider the value and trigger.

The solution enables and supports better operation in the Operational Value Streams, and per se, the value is amended or new features in the solution.

So, when you identify your Value Streams, it's crucial to think about both these types.

5. Discover areas of determining a demand 

By considering both the Operational and Development Value Streams, you will need to perform some historical analysis of where has your company observed constant demand? In other words, you will need to understand what kind of value you have created previously by spending money.

This information should draw a clear image of your best Operational Value Streams. Historical information can also aid resource distribution (lining up the right staff to the right job). Value Streams aren't only theoretical. Instead, they are also active constructs to arrange work. That implies that they need money and people, similar to conventional projects. But unlike conventional projects, Value Streams are lined up to the project-centric deliverables vs the flow of value. That makes it pretty simple to recognize and solve waste and roadblocks in your operations and sponsor various steps of the procedure correctly, based on results and requirements.

6. Using a Value Stream funnel is a clever step

As soon as you recognize a Value Stream in your company, you will need to cross-check its authority with the "funnel test". Determine whether your suggested Value Stream can be measured and mapped as a funnel. A Value Stream funnel presents how the future end-users would shift from one stage to another via a company's Value Stream toward getting a service or product and beyond. It makes sure that your Value Stream steps do cause the development of the customer value.

7. Map objectives-and-key results to your Value Stream funnel. 

Objectives and key results or OKRs are the results of your Value Stream, and OKRs show the shared undertaking of both the Development Value Streams and the Operational Value Stream that back them. The Value Stream funnel is very helpful to align and solidify around the OKRs by ensuring that everyone during the Value Stream is concentrated on the results at the base of the shared funnel.

The method increases the outcomes of every step of the procedure to aid team members to monitor everything.

8. Use ARTs to align employees to Value Streams

Value Streams give away to arrange work around client value. ARTs or Agile Release Trains are like digital companies that perform the exact thing for people. ARTs provide a system for creating and managing the cross-functional teams required in the Value Streams, parallel to current organizational hierarchies because companies realign how work is performed and funded. ARTs support people to Value Streams for building or delivering the services and products to the Value Stream. According to the Value Stream size, they may not or may have a personal relationship with Value Streams. But they always cater to form "teams of teams" stably and continually for supporting the goals and Value Streams.

The Procedure of Value Stream Mapping 

Now, you are all set for documenting your process onto a VSM. When you successfully identify the Value Streams, you can now start the work of mapping the Value Stream. By implementing their Value Stream on the value-added time, the office, plant floor, you will be able to make a visual map. According to the gathered data, the current state map enables you to check future sectors for improvement. Keep in mind that the objective of a VSM is to create a common idea and recognize activities that fail to add any value to the final product. By reducing these activities, commonly known as waste activities, you will receive a quicker throughput, reduced inventory and increased level of quality. These improvements begin with the examination of the Value Stream, and for doing that, you need first to recognize or identify this stream.

Conclusion 

Since Value Streams can appear esoteric initially, they become further tangible because you consider the value that your company offers and the steps needed to do the same. The best tip is, to begin with, a single Value Stream and develop from there.

Value Streams not just establish your company for massive success; they also behave like a potent reminder of why your company is crucial to its clients.