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Value Stream


The value stream is referred to the series of steps and tasks that add vale to raw materials and work in progress to produce finish goods which the customer is willing to pay for. It is sometimes used interchangeably with supply chain, although the term supply chain in reality incorporates third party stakeholders which in some cases may not form part of the value stream. The value stream is usually the focus of a value stream mapping exercise, where the value stream is mapped out and every single step is identified and labelled as value adding, non value adding or waiting time where materials are stopped and not in motion or being worked on.

The objective of a value stream mapping exercise is to identify the proportion of the total lead time for a good or service that is actually value adding for the customer and how to decrease the amount of time spent on non-value adding activities by re-engineering the productive process and supply chain in order to cut out non value adding and wasteful activities without increasing the number of quality defects.

The concept of an efficient and well managed value stream is an important component of a lean operation and a top focus area in lean manufacturing as this can deliver a competitive advantage as well as create barriers to entry for potential new entrants in some industries.

Focus areas of an efficient Value stream

-Transport and logistics of raw materials and finished goods to and from plant or process tasks

-Wip and inventory management

-Cycle times and takt times

-Machinery efficiency, scrap rate and OEE

-Process bottlenecks

These are general value stream areas or characteristics within the operations of a business which could potentially provide opportunities for lead time and cost improvements as well as a reduction of wasted resources.


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