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SPaMCAST 543 features our essay on value chains.  In this essay, we tackle the mixed up world of Value Chains, Values Streams and Process Maps. This isn’t a vocabulary test but mixing the words up can cause a mess. Let’s solve the problem.

As a reminder – I am doing a workshop on value chains at QAI Quest 2019 (May 13 – 19 in Chicago). Do you need a discount?  Register at www.qaiQuest2019 using the code Speaker10. Let me know and we will do a hangout with Jeremy and myself!

In the SPAMCAST 543, Gene Hughson’s returns with a new entry in his Form Follows Function column. Gene and I are beginning what turned out to be a three column set on solution architects. Today we begin by discussing just what the heck is a solution architect is and does! (more…)

Seeds grow flowers!

Taking a very binary view of why people expend the effort to create value chain, value streams, and/or process maps, there are two reasons for mapping. The first is to generate a cost advantage by increasing efficiency. The second is to generate product differentiation. Each reason requires information about customers, how raw materials are transformed, and how the product is delivered.  The analysis and decision based on the maps are very different. Seed questions are a useful gathering data in a repeatable manner. Here are some sample mapping seed questions: (more…)

You have to see the data to use the data!

Value chains, value streams, and process maps require data and knowledge to create.  Regardless of the level of granularity none of these maps magically leap onto a sheet of paper in a final consumable state. Getting the data requires planning and …work. (more…)

I recently presented a workshop on value chain mapping to the NE Ohio Scrum Users Group (note for those who say user groups are passe – this is one of seven heavily attend users group that I attend in multiple cities). Preparing for the workshop and then based on the reaction of the attendees, it became very apparent that three terms are often conflated or confused. The three concepts are value chain, value stream, and process map.  Each concept is a reflection of different level of analysis each are necessary to develop a solid understanding of how a piece of work is transformed into a shippable product and identifying the customer you are trying to serve. (more…)

 

Value is in the eye of the beholder.

When deciding which piece of work gets included in a product’s portfolio value is touted as the most important arbiter of priority.   Value is so important that the first of the twelve principles in the Agile Manifesto includes the concept of value.

“Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.”  

Clearly, the value is a core tenant in the Agile community.  But . . . the word has definition issues, does not have a single accepted unit of measure, and can relate to lots of different attributes; therefore, it can generate LOTS of different opinions.  In Value: Looking for Value in All of the Right Places, we provided a number of questions to prime the pump when mining for value.  The essay is a starting point, not an ending point.  Because there are many potentially different aspects contributing to value we need to recognize that sometimes the value is driven by perspective. (more…)

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There are those who believe that implementing a capability team is as easy as identifying a group of people, putting them together, and then doing a few team building exercises. Instant team! In the simplest terms possible – they are wrong.  There are four complicating factors that have to be addressed. (more…)

It is all about perspective

It is all about perspective

Developing a Value Chain Map can provide substantial value. It is a profile of how raw materials are transformed into a product and delivered to the organization’s customers. The structured process used to develop the map helps to identify bottlenecks that can be removed to increase efficiency, or at least areas for further investigation. Unfortunately developing a Value Chain Map represents an investment of time and effort and problems can occur on the path to development. I generally see three basic problem areas.

  • Approaching Value Chain Mapping as a single pass effort
    • Developing a Value Chain Map is generally done as an iterative process, much like peeling an onion.  While this might sound like a style issue, I have found that a more complete map is generated if the person or team developing the map gets through the entire process once and then goes back to debate and fill in the gaps. It is easy to get bogged down on a specific step or topic and then rush to generate an overall view.  The only step in the process described here that I would obsess over is setting and understanding the goals.
  • Pursuing the wrong perspective
    • The greatest potential error is that of perspective. The focus of a Value Chain Map needs to be on the creation and delivery of an external product. A service delivered to clients is equivalent to a development and development of a manufactured product. Focusing on an internal or intermediate product, for example on an internal data warehouse of client information, shifts the focus off improving and understanding the flow of the ultimate product. Therefore improvements may or may not improve the amount of delivered value. You often see this problem if a support process has been mistaken for a core process, or the goal of the Value Chain Mapping exercise is too restrictive (too narrowly focused) so that you can’t examine the whole process.
  • Complexity
    • The examples of Value Chain Maps in textbooks and articles are generally not overly complex. Explaining complexity is difficult, so the examples (like our publishing model) tend to be simple. Real life value chains tend to be more complex, because organizations tend to have more than one product causing parts of the Value Chain to intersect and interact. A comprehensive map needs to describe interacting and competing channels. You must take care to ensure that any simplifying assumptions do not simplify away the value of the exercise.  You need to validate all simplifying assumptions against the goals of the exercise.

Value Chain Mapping provides value by exposing the direct product flow, how indirect process support delivering value and bottlenecks. I am not sure it is an overstatement to say that the value that understanding your Value Chain is incalculable.  But only if done correctly. Approach the process iteratively, focus on real products and respect complexity and it will be difficult to miss the mark.