Hey everyone, welcome to this lecture, what is a value stream? In the previous lecture, you learned everything about value. In this lecture let's talk about value stream. A value stream is a series of activities that an organization performs such as receive order, design, produce, and deliver products and services. A value stream often starts from a supplier and ends at a customer. wastes are both explicit and hidden along this value stream.

The three main components of a value stream are flow of materials from receipt of supplier material, to delivery of finished goods and services to customers. The transformation of raw materials into finished goods or inputs into outputs the flow of information required to support the flow of material and transformation of goods and services. This concept is visually illustrated via a lean tool called as the Value Stream Map. This map uses simple graphics and icons to illustrate the movement of material information, inventory, Work in Progress operators and so on. value stream mapping is a very powerful tool. It helps uncover hidden wastes within the organization and organization that effectively uses lean thinking and applies lean tools to reduce waste throughout the value stream and offer value to their customers is a lean enterprise organization achieving a lean enterprise requires a change in attitudes, procedures, processes and systems.

It is necessary to view your business process from a bird's eye view almost 40,000 feet above and look at the flow of information, knowledge and material throughout the organization. In any organization there are multiple paths through which products, documents and ideas flow. The process of applying lean thinking to such a path can be divided into the following steps. One, produce a value stream, you will learn how to create a value stream map in the upcoming section to analyze all inventory nodes with an eye toward reduction or elimination inventory tends to increase costs Because storage space may be expensive quality of the raw materials may deteriorate, design changes may be delayed as they work their way through the inventory. money invested in inventory could be used more productively elsewhere. quality problems that are not detected until a later stage in the process will be more expensive to correct if an inventory of defective products has accumulated.

Three, analyze the entire value stream for unneeded steps. These steps are called non value added activities and are those that the customer is not willing to pay for. For determine how the flow is driven, strive to move towards value streams in which production decisions are based on the pool of customers. demand. In a process where pool based flow has reached perfection, a customer order for an item will trigger the production of all the component parts for that item. These components would arrive be assembled and delivered in a time interval that would satisfy the customer.

In many situations, this ideal has not been reached, and the customer order will be filled from finished goods inventory. The order should still however, trigger activities back through the value chain that produce a replacement item in finished goods inventory before it is needed by a customer. Extend the Value Stream Map upstream into suppliers plants, new challenges continue to occur regarding compatibility of communication systems, the flow of information, material, knowledge and money are all potential targets for lean improvement. When beginning the process, take a narrow focus. As the saying goes, don't try to boil the ocean.