Value Stream Optimization: Creating A More Efficient Workflow

Value Stream Optimization: Creating A More Efficient Workflow

Value Stream Optimization (VSO) is a methodology used to analyze and improve the flow of value through an organization. It can be used to identify and eliminate waste in any process, from manufacturing to software development.

 

The goal of VSO is to help organizations achieve their desired outcomes more efficiently and effectively. This article will explain what VSO is, how it works, and why it is an important tool for organizations looking to improve their performance.

Common Value Stream Optimization Challenges

There are many challenges that can prevent organizations from achieving their desired outcomes. VSO can help organizations overcome these challenges and improve their performance. This section will discuss some common VSO challenges and how VSO can help organizations overcome them.

 

Poor quality software

You can only achieve success and reach your goals with optimization when the software you’re using allows for it. If a piece of software doesn’t test compliance or ensure function consistently, then it won’t be able to provide value no matter how much effort you put into the process. When inferior software exists, it creates problems for both internal employees and customers–ultimately leading to the failure of value stream optimization.

Organizational silos

 

Even though DevOps seeks to remove silos in order to have a transparent and efficient flow of information, silos are still inevitable to some degree. Rather than trying to completely get rid of them, organizations are now focusing on integration to make sure the quality of software delivery is high. In order to achieve this, teams need to work together closely and communicate often. This enables DevOps principles to be met more easily and information to flow more smoothly.

Concerns about security

In some industries, security concerns can prevent organizations from sharing information freely. For example, in the healthcare industry, patient privacy laws can prevent information from being shared between departments. Moreover, the potential for data breaches is a major concern for many organizations. As a result, some organizations are hesitant to embrace DevOps and value stream optimization because of these security concerns.

Lack of a big picture view

Failing to understand the bigger picture can often lead to challenges when implementing value streams in a company. Even though agile methodology is common in IT, other departments in the company may have difficulty understanding and accepting it. This is because value stream mapping involves documentation and analysis of the flow of information and data through multiple stakeholders, which can be complex. Furthermore, different departments often have conflicting goals and objectives, making it difficult to optimize the value stream.

Best Practices for VSO

Even though challenges are inevitable, there are ways to eliminate waste and optimize the value stream. There are 8 different types of waste when it comes to software delivery, according to lean process management:

 

  • Transport: determining what data is unnecessary to transfer.

  • Inventory: storing completed features in an inventory for later use.

  • Motion: ensuring information can be moved via physical and digital means.

  • Waiting: being patient for a specific role, permission, build, test result, or deployment.

  • Overproduction: creating features or flows that are likely to be used.

  • Over Processing: carrying out additional tests for software validation than necessary.

  • Defects: errors and bugs that could’ve been identified earlier.

  • Skills: inadequate use of a certain role or roles.

 

In order to optimize the value stream, it’s important to identify and eliminate these types of waste. Once you have identified the sources of waste, you can begin to re-evaluate your value stream and make changes accordingly. Here are some tips for doing so:

 

  1. Define the objectives and goals of value stream optimization upfront: What does your organization hope to achieve by implementing VSO? Is it to improve customer satisfaction or reduce cycle time? By having a clear understanding of the objectives, you can ensure that everyone is on the same page and working towards the same goal.

  2. Understand the current state of the value stream: In order to optimize the value stream, you need to understand how it currently works. This means mapping out the flow of information and data from start to finish. Once you have a clear understanding of the current state, you can begin to make changes and improve upon it.

  3. Analyze and eliminate sources of waste: Once you have mapped out the value stream, you can begin to identify and analyze sources of waste. Once you have identified the sources of waste, you can begin to make changes and improve upon it.

  4. Implement changes and monitor results: After you have made changes to the value stream, it’s important to monitor the results. This will help you ensure that the changes are having the desired effect and help you make further improvements.

 

Key metrics that should be monitored include:

 

  • Cycle Time (CT) – Time needed to complete a certain phase.

  • Valued Added CT – Time needed to add real value.

  • Non-Value Added CT – Time that is classified as waste.

  • First Time Right (FTR) – Ratio of times a certain phase succeeds during the first step.

 

As an organization, your goal is to minimize cycle time and increase first time right. For example, if you’re trying to reduce the cycle time of your testing phase, you would want to increase the number of times tests are successful at the first step.

VSO Case Study: Prime 2-day Shipping

Amazon is a company that is always looking for ways to optimize their value stream. One way they did this was by introducing Prime 2-day shipping. In order to offer this service, Amazon had to make changes to their value stream. Some of the changes they made included:

 

  1. Introducing new methods of transportation: In order to meet the 2-day shipping deadline, Amazon had to introduce new methods of transportation. This included partnering with companies like UPS and FedEx.

  2. Building new warehouses: In order to have products closer to customers, Amazon had to build new warehouses. This allowed them to get products to customers faster, and reduced the number of steps in their order fulfillment process.

  3. Optimizing their supply chain: In order to further optimize their value stream, Amazon had to optimize their supply chain. This included making changes to the way they sourced and managed inventory.

  4. Automating their processes: In order to further improve their efficiency, Amazon had to automate their processes. This included introducing new technologies like robotics and machine learning.

 

As a result of these changes, Amazon’s cycle time decreased and their first time right increased. This allowed them to offer Prime 2-day shipping to their customers while maximizing profits and minimizing waste.

 

Value stream optimization is a powerful tool that can help organizations improve their efficiency and effectiveness. By understanding the current state of the value stream, analyzing sources of waste, and implementing changes, organizations can make significant improvements to their operations. At Agileseventeen, we are experts in value stream optimization and agile methodology. Contact us today to learn more about how we can help you optimize your value stream: talkagile@agileseventeen.com

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