Value streams and processes
A capability map says what Mangrove does. A value stream says how value reaches a stakeholder, stage by stage, and where it leaks on the way. In this lesson you model the partner shops' order to cash stream, measure it with lead time, process time and percent complete and accurate, and turn its pain points into numbers the board can weigh.
By the end you can
- Define a value stream with its trigger, stakeholder, value proposition and stages, each with entry criteria, exit criteria and a value item
- Explain how a value stream differs from a BPMN process, and when you need each
- Measure a stream with lead time, process time, %C&A, rolled %C&A and flow efficiency
- Cross-map stages to capabilities to show where the pain sits on the capability map
- Put a yearly number on each pain point in Mangrove's order to cash stream
The everyday picture
Think of a parcel you send to a friend in another city. You can describe the trip in two ways. One way is the courier's operations manual: who scans the label, which conveyor belt it rides, which van, which driver, which handheld device records the drop. That description is long, and it changes every time the courier buys a new sorting machine.
The other way is the trip as your friend experiences it: sent, collected, sorted, out for delivery, delivered. Five stages. Each one ends with something your friend cares about, and each one can be timed and checked. If the parcel takes six days, this view shows you at once that it sat four days in "sorted". You don't need the manual to see where the time went. You need the manual later, to fix it. A value stream is the five-stage view. A process model is the manual.
What a value stream is
The BIZBOK Guide from the Business Architecture Guild describes a value stream as an end-to-end collection of value-adding stages that creates a result for a stakeholder. The Open Group uses the same idea in its TOGAF Series Guide on value streams. Four parts make one:
- A triggering stakeholder and a trigger. Someone wants something, and an event starts the stream. For order to cash, the stakeholder is the partner shop and the trigger is "the shop needs stock".
- A value proposition. What the stakeholder gets at the end. Here: the right stock on the shelf by the next day, on credit the shop can rely on. Mangrove's side of the deal is cash in the bank, in full and on time.
- Stages. Usually four to eight. Each stage adds a piece of value that the next stage needs. Order to cash has six: Place order, Confirm (stock and credit), Pick and pack, Deliver, Invoice, Collect payment.
- Participating stakeholders. Who takes part in each stage: the shop, Mangrove's finance, the DC. It names who is involved, never which team, job title or system does the work.
Each stage has three properties you write down. The entry criteria say what must be true before it starts. The exit criteria say what must be true when it is done, and they usually become the next stage's entry criteria. The value item is what the stage produces. For "Confirm": entry is "an order exists for a known shop"; exit is "every line is reserved against DC stock and the order total fits the shop's available credit"; the value item is a confirmed order the shop can count on.
Naming matters. Many companies call this stream "order to cash", which is a name from the process world and is fine as a nickname. BIZBOK-style practice names a value stream with a verb and a noun from the stakeholder's point of view, such as "Restock partner shop", and names stages as short actions. The test for a good stage name: could a shop owner such as Ravi understand it without knowing how Mangrove is organised?
Quick check
Which is the best exit criterion for the "Deliver" stage?
An exit criterion describes the value that now exists, in words the stakeholder recognises: the goods arrived and both sides agree what arrived. A scan in a tool names a system, and a truck leaving on time is a step inside the stage, not its result.