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Motivation: Wasted effort is often hidden in established working practices. Transparency is needed. It has to be clear if the backlog of work is being turned into valuable product in the most efficient way possible, and where any blockages lie.
Structure: A backlog consists of many items which are placed in order. Items are removed from the backlog and progressed through various stations of work, and a stream of accumulating value is thus created. However, the time spent working on an item in each station in the value stream will incur a cost. These costs subtract from the value and are open to inspection.
Applicability: The modeling of a value stream is applicable to all industrial sectors that face competitive or regulatory pressures for greater efficiency.
Consequences: Understanding the value stream highlights occurrences of waste, such as bottlenecks or the introduction of unplanned work. There can be political repercussions associated with waste removal, as the practices that lead to it may be culturally normed. Waste often accumulates around the edges of linked value streams, such as the outputs and inputs between collaborating teams.
Implementation: A team’s value stream is often represented as a Kanban or Scrum board. Bottlenecks and other impediments are thereby made transparent, and the stream can be inspected and adapted by the team. Work In Progress is often limited in order to reduce stock-on-hand and to improve throughput.