What is an Operational Value Stream?

An operational value stream encompasses the sequence of activities an organization undertakes to deliver a product or service to a customer. Examples include manufacturing a product, providing a service, or fulfilling an order.

Operational value streams are typically categorized into four types:

1. Fulfillment value streams: Processes involved in receiving and processing customer orders, delivering products or services, and handling payments.
2. Manufacturing value streams: The transformation of raw materials into finished products ready for customer use.
3. Software product value streams: Activities related to developing, deploying, and supporting SaaS products and software platforms.
4. Supporting value streams: Internal workflows that support various activities, such as employee onboarding, supplier contracting, and financial operations

This concept is pivotal in Lean thinking because it helps businesses visualize and optimize the flow of value to their customers. It’s also fundamental to the Scaled Agile Framework (SAFe), which is a structured methodology designed to help organizations implement Lean-Agile principles at scale that’s widely used for large-scale product development.

Synonyms

• OVS

Understanding Operational Value Streams in the Scaled Agile Framework

Whether you realize it or not, every product already has an operational value stream, but not all are effective or optimized. And as organizations scale and add more products, the complexity of managing these value streams increases.

The Scaled Agile Framework (SAFe) provides guidelines, practices, and tools for enterprises to deliver value continuously, improve collaboration, and align teams across the organization, particularly in complex environments with multiple teams working on large solutions.

In SAFe, there are a few essential components of an operational value stream:

Steps and activities

These are the end-to-end tasks required to create and deliver your product or service to the end customer, starting from the initial customer request to the final delivery.

Steps include all functions — for example, ordering, production, assembly, packaging, shipping, and customer support. Each should be optimized to remove waste, improve efficiency, and ensure smooth flow from one to the next.

People

The people involved in an operational value stream perform the work and ensure that each step progresses as planned. This includes cross-functional teams with developers, operations staff, customer service reps, sales teams, and other stakeholders.

SAFe encourages team alignment, collaboration, and continuous feedback to ensure that personnel can rapidly respond to changes or issues in the value stream.

Systems and tools

Systems and tools enable your cross-functional team to execute each step and support the flow of work within the value stream.

Examples include:

• Software applications
• Databases
• Communication tools
• Physical infrastructure needed for production or service delivery

In SAFe, tools should be designed to support process automation, real-time data sharing, and collaborative work environments, aligning with Lean-Agile principles to reduce delays and enhance productivity.

Information and material flow

This includes the movement of data, documents, and physical materials essential for delivering the product or service.

• Information flow consists of customer orders, product specifications, inventory levels, shipping details, and more.
• Material flow involves the transfer of resources, whether that’s raw materials for manufacturing or digital assets for software development.

SAFe emphasizes minimizing delays and ensuring that information and materials reach the right people at the right time to maintain continuous flow.

Value stream mapping

The order of and efficiency with which steps and activities take place can have a major impact on the overall value stream performance. That’s why SAFe encourages value stream mapping as a tool to visualize, analyze, and optimize the entire process.

Mapping helps you identify bottlenecks, unnecessary steps, and areas for improvement. It also helps you set performance metrics, ensuring the value stream is continuously improved and aligned with customer needs.

Customer feedback loop

A vital component of operational value streams in SAFe is incorporating a feedback loop with customers. Regular feedback helps you refine the process, products, or services, ensuring that customer needs are met efficiently from every angle.

SAFe promotes the integration of early and continuous feedback to enhance the customer experience, maintain relevance, and deliver value faster.

Continuous improvement

SAFe encourages a culture of continuous improvement across operational value streams. Teams use metrics, retrospectives, and problem-solving techniques to identify opportunities for refinement, remove waste, and streamline processes.

How to Identify and Map Value Streams

Like we mentioned above, every product and service has a value stream, whether you realize it or not.

Value stream identification involves discovering and defining the interconnected value streams within an organization. It helps you understand work in the context of customer outcomes, assess team performance, and optimize value delivery.

To figure out the path your product’s value follows from start to finish, use the following steps:

1. Define ‘value’ for your organization and customers.

Customers often define value based on the outcomes they wish to achieve, such as improved efficiency, cost savings, convenience, or better experiences. You have to align these outcomes with your product’s or service’s benefits. For example, if faster delivery is a key outcome, focus on streamlining processes that support speed.

You can define value from the organization’s perspective by aligning it with strategic objectives like revenue growth, profitability, market expansion, operational efficiency, or brand reputation. From there, you can prioritize value streams that directly contribute to these business goals, ensuring that the organization’s resources and efforts are focused on driving measurable results.

2. Map the customer journey.

Your next step is to map out the customer journey, because that’s ultimately how value flows to your customers (from their perspective, at least). Start by identifying the key stages of customer interaction, from initial contact to final delivery and support.

Generally, these involve:

• Marketing and lead generation
• Sales, negotiation, and pricing
• Product or service delivery
• After-sales support and customer success

They initialy discover you through marketing and lead gen efforts, your sales team moves them through the funnel, development teams deliver a high quality product, and your customer success team supports them long after the sale is completed. 

When you map out the touchpoints like this, it’s easy to see where everyone in the organization contributes to value delivery.

3. Identify activities that add value.

Value-added activities are the ones that contribute to delivering value to the customer at one of those touchpoints. For example, a sales call qualifies the lead, and through the negotiation process, you position the product as a solution to their needs.

A non-value-added activity would be anything that doesn’t directly contribute to value delivery, such as waiting and delays, administrative tasks, or overproduction. Or, it could simply be something that’s done in a suboptimal way, adding time or effort without creating any extra value, like an unnecessary approval workflow.

To optimize the value stream, business process should focus on value-added activities and eliminate or reduce non-value-added tasks to optimize efficiency. Your value stream map should highlight these activities, so you know exactly where to focus your efforts.

4. Group activities that are related to one another.

There will be some activities that are related to each other, forming a subprocess within the value stream. Grouping these together helps you see how they contribute to value delivery and allows you to identify any inefficiencies or opportunities for improvement within the process.

An example of this is in software development, where coding, testing, and deployment are often grouped together as a subprocess. Agile teams collaborate on these activities to deliver a working product increment, and value is added at each step.

5. Analyze the dependencies.

Dependencies are anything that impacts the flow of value through the stream, like resources, approvals, or handoffs between teams. Identifying the dependencies between activities and subprocesses in your value stream helps you understand how one activity affects another and where bottlenecks or delays occur.

For example, marketing activities may be dependent on product development milestones, such as when a new feature is released. If there is a delay in development, it would therefore impact the timing of marketing campaigns, and ultimately, value delivery.

6. Prioritize value streams.

Finally, rank each value stream in your business (from the individual product to the particular customer) based on its importance to your overall business objectives and customer satisfaction

• Sales and marketing channels
• Market segments or use cases
• Product options, variations, and features
• Customer support and success initiatives
• Internal efficiency and production capacity
• Customer tiers or segments (e.g., enterprise vs. SMB)

What’s most efficient and profitable for your business? How do customers prefer to communicate? Where are the most significant opportunities for your product’s growth?

Some products, channels, customer segments, etc., will be more important than others based on how you and your customers define value. Based on what you’ve discovered in step #1, prioritize the highest-value streams.

Benefits of Operational Value Streams in SAFe

Establishing and optimizing your operational value streams offers untold benefits in terms of time-to-market, operational efficiency, and customer satisfaction.

Improved cross-functional alignment

Operational value streams prioritize activities that directly contribute to delivering customer value. By linking value delivery to strategic goals, they ensure that daily operations are centered around what customers and the business deem important.

This clear focus on value helps indivisual teams understand how their work impacts the broader business strategy, fostering a more aligned approach to execution. And as a result, both the business side (strategic planning) and the execution side (day-to-day operations) remain in sync.

Faster time-to-market

Mapping operational value streams helps identify and eliminate inefficiencies, redundancies, and bottlenecks in the workflow. By visualizing and analyzing each step, teams can focus on streamlining activities that directly impact delivery speed. This results in a smoother flow of work, enabling faster completion of tasks and quicker delivery of value to customers.

Operational value streams in SAFe also support incremental and iterative delivery, allowing teams to release smaller increments of work more frequently. This approach reduces the time between initial development and customer feedback, enabling faster adjustments and refinements.

By delivering in short cycles (i.e., Program Increments), organizations can adapt to changes, meet evolving customer demands, and bring new products or features to market a lot faster.

Higher customer satisfaction rates

Incorporating regular customer feedback into operational value streams ensures that products evolve based on real-world use and preferences. Feedback-driven improvement creates a product that is better aligned with customer expectations, reducing dissatisfaction and enhancing long-term customer loyalty.

On top of that, by optimizing your value streams, your teams can ensure consistent, reliable delivery of products or services, reducing unexpected downtime or performance issues. Customers appreciate dependable services that work as promised, and they’re far likelier to turn into loyal customers (and advocates) for it.

Better visibility into the value delivery process

Value stream mapping provides a complete, 360º view of how value is created and delivered to customers. When you have this visual representation, it’s easy to identify any inefficiencies, dependencies, or bottlenecks in the workflow that may be hindering value delivery.

SAFe also incorporates key performance indicators (KPIs) into operational value streams to measure progress and performance. Metrics like cycle time, lead time, quality indicators, and customer feedback scores provide measurable insights into how value is being delivered.

Implementing Operational Value Streams

Implementing an OVS within the Scaled Agile Framework involves a structured approach to visualize and enhance the flow of value to customers.

This requires you to:

1. Identify the value stream (i.e., the end-to-end process that delivers value to customers).
2. Map the current state of the value stream, including all inputs, outputs, and dependencies.
3. Analyze dependencies between activities/subprocesses for redundancies and non-value-adding activities.
4. Design an optimized process that uses Lean principles to enhance value delivery.
5. Outline steps to transition from the current to the future state, along with responsibilities and timelines.
6. Execute the plan, ensuring clear communication among stakeholders.
7. Continuously monitor progress and adjust as needed.

To execute this, you’ll need cooperation from all levels of the organization, as well as a deep understanding of the value delivery process and customer needs.

Your value stream engineer or value stream manager will analyze and document the flow of activities required to deliver a product or service to customers. And they’ll work closely with various departments—such as product development, operations, and quality assurance—to ensure alignment and smooth implementation of process enhancements

Challenges and Best Practices for Value Stream Implementation

Implementing operational value streams in SAFe can be challenging, especially for organizations with complex processes or heavily siloed departments.

However, some best practices can help alleviate these challenges:

Resistance to change

Employees may be hesitant to adopt new methodologies due to comfort with existing processes or fear of the unknown. To mitigate this, make sure organizational leaders are visibly supportive of the value stream implementation, providing resources and reinforcement.

To drive adoption faster while working out the kinks with your team, you could even consider starting with a pilot project focusing on a specific value stream segment to test methodologies and gain insights.

Data collection challenges

Gathering precise and comprehensive data for each process step is essential yet challenging. Most information is sitting in different systems and departments, making it hard to collect in a structured way.

Investing in automation tools and integrating your tech stack can help streamline data collection and reduce human error.

Maintaining alignment

Aligning various departments and teams to work cohesively on value stream improvements can be problematic. It’s a good idea to assemble teams with representatives from various departments to ensure diverse perspectives in the mapping and improvement processes.

Sustaining continuous improvement

Keeping your momentum over time requires persistent effort and commitment. To accomplish that, you’ll need to establish KPIs and regular review mechanisms to monitor progress and identify areas for ongoing improvement.

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