VSM (Value stream management)

## What is value stream management?

Goals and objectives of value stream management: - Increase the efficiency of manufacturing processes; - Reducing the development cycle time; - Improving quality by reducing the number of defects; - Increasing customer satisfaction; - Rational use of resources. Understanding the fundamentals of the value stream helps companies optimize its constituent elements. The focus shifts to avoiding losses and increasing competitiveness. ### Value Stream in Software Development VSM in software development involves a whole range of aspects that together form a holistic process. Let's consider the basic principles of **value creation flow construction:** 1. Implementing Collaborative Principles. The teams that work on the project realization should be in contact at all stages of development. 2. Continuous improvement. Achieved by timely evaluation of each flow stage. 3. Feedback from users. It is important to take into account the opinion of customers, actively monitor comments, providing timely adjustment of activities. You should not forget about a competent approach to data visualization. To analyze the flow, you need to use certain tools. Let's consider an example of a value creation flow in software development. Formation begins with requirements gathering, after which the team starts designing the architecture. This is followed by coding, testing, delivery, and deployment processes. The final phase focuses on getting feedback from users. ### How are enterprise agility and value stream interrelated? **Enterprise** agility is the ability to adapt quickly to changes in customer requirements or market changes in general. The value creation stream plays a key role in this adaptation. Thus, companies that are able to quickly detect problem areas and turn on collection mode, correcting deficiencies, become more agile. Let's look at examples of linkage: - Implementing changes based on user feedback - as a response to comments and suggestions; - Improving processes to respond rapidly to dynamic market needs; - Application of analytical tools for predictive activities in terms of upcoming changes. Example: the active use of Agile approaches in software development enables teams to respond to changes in a timely manner. This ensures that innovative features, product improvements are introduced as soon as possible. ## What is Value Stream Mapping? **Value Stream Mapping (VSM)** is a visual tool that allows teams to analyze current processes, identifying areas for improvement. VSM visualizes how a product flows through all stages of production. Emphasis is placed on the time taken to realize each stage and the resulting in-kind/financial costs. Let us outline the goals and objectives of VSM: - Identification of defects and problems in the process; - Identification of losses; - Creation of a basis for corrective activities; - Improve overall productivity, product quality. ### What is the difference between value stream mapping and value stream management? Although value stream mapping and value stream management are related, they are two processes that are fundamentally different. Let's take a look at the main differences: **Purpose:** - **Mapping:** analyzing the current state. - **Management:** process optimization. **Visualization:** - **Mapping:** creating a visual representation. - **Management:** implementing changes to improve flow. **Process:** - **Mapping:** focus on data collection. - **Management:** focus on results. **Time Frame:** - **Mapping:** one-time activity. - **Management:** an ongoing process. It is not difficult to conclude: managing the value stream involves analysis in conjunction with action. The latter are aimed at supporting sustainable development. ## Why is Value Stream Management so important? Value Stream Management affects business performance to a significant extent. You should not take this statement as a current fashion trend. It is a vital strategy to achieve competitive advantage. Consider why it is important: - Reducing product development costs; - Minimizing time to fix bugs; - Increased customer loyalty, which is directly related to product quality. A simple example: companies that have successfully implemented VSM reduce the time to market for the final product. Thanks to this approach, we can safely declare the growth of customer satisfaction. ## Benefits of Value Stream Management (VSM) Based on all of the above, let's look at the benefits of implementing VSM. - Increased efficiency: for example, timely elimination of losses leads to tangible cost reductions. - Quality improvement: careful control at all stages contributes to the quality of the final product. - Speed of development: reacting to changes in a timely manner, without delays, is key to successful delivery of value. - Providing the customer with a good user experience: the faster and better the products, the higher the level of satisfaction. In summary, we can talk about results visible in real time: real-time results: an adaptive, flexible system is formed that is always ready for change. ### Possible disadvantages of VSM Let's talk about the downsides. Like any approach, VSM has some disadvantages - you should study them in more detail to take them into account. - The need to train employees on new processes, principles. - Time costs for the implementation of the process - especially the initial stages, when innovations can be perceived especially acutely. - Resistance to change follows from the previous point: there is always a category of employees who find it difficult to accept new methods. As the main probable disadvantage, it is worth highlighting errors in analytical approach. It is important to realize that wrong conclusions can lead to wrong decisions. ## Value stream metrics to measure goals and progress Effective value stream management requires the use of various metrics. The latter include: - Cycle time from start to completion of the process. - Product quality: the number of defects per unit of product. - Development speed: the number of tasks completed in a specified hi. - Evaluation of end-user satisfaction. The rational use of human and material resources also serves as an indicator. ### Flow metrics Flow metrics show the dynamics of changes in processes, thus helping in decision making. Let's study them in more detail: **Lead Time: the** time period from the start of development to product delivery. **Cycle Time**: time spent on the realization of individual stages. **Throughput: the **number of tasks completed within a specified time period. **WIP (Work In Progress): **total number of tasks in**progress **. **Defect Rate: the **percentage of detected errors in the final product. ### DORA metrics DORA (DevOps Research and Assessment) offers metrics that capture the basic aspects of software development, operation. These include: - Deployment Frequency: how often products are updated/deployed. - Recovery time: the speed at which the team handles incidents. - Percentage of changes causing failures: how often deployments cause errors. - Deployment time: the time period required to implement new features. ### Objectives and Key Results (OKR) **OKR** is a goal management system that allows organizations to formulate ambitious goals, subsequently measuring their achievement. Let's highlight the main aspects: - Clarity of focus: understanding of priorities in each team member at all levels. - Measurability: allows monitoring of results. - Transparency: all team members have access to shared information. The main focus shifts to flexibility. For example, OKRs can be changed at each iteration - without being tied to other outcomes. ## How VSM improves the delivery of value to the end user Managing the value creation flow directly impacts the delivery of value to the end user. Let's look at examples of these improvements: - Accelerating the release time of the end product: quick adaptation to market changes. - Improving product quality: so, regular feedback helps to raise the standard. - Reduction in defects, thanks to continuous improvement of development processes. Emphasis is placed on a better understanding of customer needs. An elaborate feedback system improves compliance with customer expectations.