- Where there is a customer, there is a value stream. - The value added by an activity is the difference in the price that an economically rational buyer would pay for a work product before, and after, the activity is performed. - The scope of a value stream is the complete loop from customer need to customer satisfaction. - It starts from a triggering business event and reaches until the delivery of client value. - Mapping those value streams can lessen the negative impact of the paradox of scale on a company, the so-called **Ringelmann effect**. - As more people are involved in a task, their average performance decreases, with each participant tending to feel that their own effort is not critical to overall performance. - Large teams necessitate increased collaboration, yet the default effect is that each contributor is doing less. - Therefore, as an organization grows larger, inefficiencies and errors increase, while the effort is reduced. - These costs can be hidden, as economies of scale can outpace the waste from poor coordination. - Yet, these hidden inefficiencies can explain why large and established organizations rapidly lose market share and crumble in the face of more agile competitors. - Identifying and getting clarity on the value streams that make up your company reveals the invisible network of relationships and activities that actually drive your business. - By applying the [principles of Value Stream Mapping](Principles%20of%20Value%20Stream%20Mapping.md), you can improve the outcomes and efficiency of your business. - Co-creating Value Stream Maps with all involved teams over the course of a few hours can reveal issues that allow those teams to get some their time back immediately. - For Value Stream Mapping (VSM) to be effective, the teams needs to be aligned on their objectives and aspirations. - Aim to gather just enough information to identify the critical constraint (Theory of Constraints). - [Optimizing for flow](Improving%20Flow%20Efficiency.md) is contradictory to optimizing for resource utilization. Ensuring everyone is busy is probably generating tons of waste. - Creating a pull-based system of work is an extraordinary feat. - An SLA will consume the maximum time the SLA allows. - Check the 5Rs to [identify value streams ripe for mapping](Identifying%20Streams%20for%20Mapping.md) and beware of the [pitfalls while mapping streams](Pitfalls%20while%20Mapping%20Streams.md). ## The 5 maps 1. [Outcome Map](Outcome%20Map.md) to assemble context and identify value. This process provides clarity and alignment across teams. It prevents us from investing in irrelevant improvements that do not align with business goals. 2. [Current State Map](Current%20State%20Map.md) to identify the constraint in an end-to-end workflow. The map visualizes the current state of a workflow and its performance. It prevents us from optimizing an action that isn't the constraint and therefore would have no impact on the flow of value. 3. [Dependency Map](Dependency%20Map.md) to build clarity on the causal factors limiting the constraint. The process creates an artifact that can be shared with stakeholders. It ensures everyone has an adequate understanding of the constraint. 4. [Future State Map](Future%20State%20Map.md) to jointly design how to improve the flow. Create a collection of valuable changes, experiments and actions. It is a visible, shared target for change. 5. [Flow Roadmap](Flow%20Roadmap.md) to prioritize and plot the improvements. The roadmap creates a plan of work around the minimal steps to achieve the desired outcomes. It ensures we can effectively act on the insights from the mapping exercises. ## The Improvement Kata and VSM The 5 maps correspond to the [Improvement Kata](Coaching%20Kata.md) as follows: 1. Challenge or direction: Outcome Map (desired outcomes to realize in 6+ months) 2. Current condition: Current State Map and Dependency Map (constraints). 3. Target condition: Future State Map (next target state). 4. Experiments: Flow Roadmap (improvement plan). ## References - Book summary: https://danlebrero.com/2024/05/01/flow-enginnering-book-summary/ - Book: https://itrevolution.com/product/flow-engineering/