This is one of those concepts that you have probably heard of, but perhaps without a clear context or definition associated with it. Therefore, we are going to discuss the value stream in marketing strategy to try to highlight its importance.
A value stream is made up of all the steps or processes that an organization goes through when it sets out to deliver a product or service to the customer. As a process, it should describe all the activities an organization performs to create value for customers and other stakeholders.
This includes all activities performed to develop, market, sell, deliver and support the product outside of product creation, such as manufacturing. Therefore, if a customer never hears about a product or cannot receive it, it will never create value for them.
The value stream of a product provides an opportunity for companies to identify inefficiencies, redundancies, bottlenecks and other obstacles in their processes. Therefore, mapping, analyzing and improving the value stream leads to greater customer satisfaction. That means greater loyalty, reduced costs and increased profitability, without sacrificing value creation.
What was the origin of the value stream concept?
It was created in the manufacturing industry, specifically at Toyota, in the 1950s. The tool was developed in their Operations Management Consulting Division for selective use with suppliers. The main basis was material and information flows.
Later, Jim Womack and Dan Jones introduced the “Value Stream” concept and in their book Lean Thinking determined how to put it into practice. For his part, Mike Rother had become interested in Toyota’s material and information flow map, where he met Jim and Dan.
Mike was the lead author of the book Learning to See (1998), in collaboration with Dan and Jim, where they introduced the terms “Value Stream” and “Value Stream Mapping”.
The idea was to maximize customer value and minimize waste, which resulted in higher levels of efficiency and profitability. While identifying waste tends to be easier in a manufacturing environment because it is visible, non-manufacturing organizations often have huge amounts of costly waste that is not visible to the naked eye.
Continuous improvement, new products, changes in the competitive environment, the environment, or simply customer whims create uncertainty. Therefore, the flow of value is always a variable depending on all these factors.
Photo credit: KG
