Value (streams)

Introduction

Introduction to Value Streams

Concept of Value Stream

A value stream is a series of processes that create value for a customer from the initial concept to the delivery and support of a product or service. It is a hierarchical arrangement of activities that align with the customer lifecycle, ensuring that each step adds value to the customer's experience. The concept is central to business architecture and is used in various methodologies, including Lean and Agile frameworks.

Key Components of a Value Stream

1. End-to-End Process: A value stream encompasses all activities from idea generation to delivery and support, focusing on creating a seamless flow of value to the customer[1][3].

2. Value-Adding Activities: Each stage within a value stream represents a set of value-adding activities. These stages are iterative and contribute to delivering a value proposition to stakeholders[1].

3. Stakeholders: Value streams involve two types of stakeholders:

   • Triggering Stakeholders: These are the customers or organizations that initiate and participate in the value stream.
   • Participating Stakeholders: These stakeholders provide or facilitate aspects of the value delivered in the value stream[1].

4. Hierarchical Structure: Value streams are often organized in a hierarchical manner, with higher-level processes broken down into subprocesses. This structure helps in managing complexity and ensuring alignment with business objectives[1][3].

Arranging Activities Along the Customer Lifecycle

Businesses arrange their activities along the customer lifecycle by aligning each process step with the customer's needs at different stages. This includes:

• Concept and Development: Activities focused on understanding customer needs and developing products or services that meet those needs.
• Production and Delivery: Processes involved in manufacturing and delivering the product or service.
• Support and Maintenance: Ongoing activities that ensure the product or service continues to meet customer expectations over time[3][7].

Benefits of Value Streams

• Customer-Centric Approach: Value streams ensure that all activities are focused on delivering value to the customer, enhancing customer satisfaction and loyalty.
• Efficiency and Optimization: By visualizing the entire flow of value, businesses can identify bottlenecks and optimize processes to improve efficiency and reduce waste[4][6].
• Cross-Functional Collaboration: Value streams promote collaboration across different departments, aligning teams towards common goals and improving overall business performance[4].

In summary, value streams are a powerful tool for businesses to organize their activities in a way that maximizes value delivery to customers throughout the lifecycle, ensuring alignment with customer needs and business objectives.

Citations: [1] https://en.wikipedia.org/wiki/Value_stream [2] https://www.ibbaka.com/ibbaka-market-blog/core-concepts-customer-lifetime-value [3] https://hyprinnovation.io/our-thoughts/value-streams-and-value-stream-networks [4] https://www.techtarget.com/searchcio/definition/value-stream-management [5] https://www.nowvertical.com/customer-lifetime-value [6] https://www.planview.com/de/resources/guide/lean-principles-101/what-is-value-stream-mapping/ [7] https://www.scagilize.de/upgrading-value-streams-to-profit-streams [8] https://www.simon-kucher.com/en/consulting/commercial-strategy-pricing-consulting/customer-product-market-strategy/customer-lifetime-value [9] https://www.netsuite.com/portal/resource/articles/ecommerce/customer-lifetime-value-clv.shtml

---

Value Stream, Customer Lifecycle and Customer Journey

The concepts of Value Stream, Customer Lifecycle and Customer Journey are aligned but they are not the same thing.

Understanding the differences between Value Stream, Customer Lifecycle, and Customer Journey is crucial for businesses aiming to deliver value and enhance customer experiences.

Value Stream

• Definition: A value stream is a series of activities that create, deliver, and capture value for customers. It encompasses all processes from idea generation to delivery and support, focusing on operational efficiency and eliminating waste[2][5][8].
• Focus: Internal processes and efficiency.
• Objective: To optimize the flow of value creation and delivery.

Customer Lifecycle

• Definition: The customer lifecycle refers to the stages a customer goes through from initial awareness to becoming a loyal customer. It includes stages like awareness, consideration, purchase, retention, and advocacy.
• Focus: Customer relationship stages over time.
• Objective: To manage and optimize customer relationships throughout their lifecycle.

Customer Journey

• Definition: The customer journey represents the series of interactions a customer has with a brand, from initial awareness to post-purchase support. It focuses on understanding customer emotions and experiences at each touchpoint[3][6][9].
• Focus: Customer experiences and emotions.
• Objective: To enhance customer satisfaction and loyalty by optimizing interactions.

Key Differences

Aspect	Value Stream	Customer Lifecycle	Customer Journey
Focus	Internal processes and efficiency	Customer relationship stages	Customer experiences and emotions
Objective	Optimize value creation and delivery	Manage customer relationships	Enhance customer satisfaction and loyalty
Scope	End-to-end business processes	Customer stages over time	Interactions with the brand
Viewpoint	Business-centric	Customer-centric (relationship)	Customer-centric (experiences)

In summary, while value streams focus on internal processes to deliver value efficiently, the customer lifecycle manages the stages of customer relationships, and the customer journey emphasizes understanding and optimizing customer experiences at each interaction point.

Citations: [1] https://enterprise-architecture.org/university/value-streams-and-customer-journeys/ [2] https://www.ardoq.com/knowledge-hub/value-streams [3] https://www.linkedin.com/pulse/complete-guide-understanding-customer-journey-hernandez [4] https://techstrongitsm.com/features/value-stream-and-customer-journey-mastery-in-complex-organizations/ [5] https://eawheel.com/blog/2023/05/business-streams-and-value-processes/ [6] https://www.bynder.com/en/glossary/customer-journey/ [7] https://insight7.io/value-stream-vs-customer-journey-key-differences/ [8] https://www.dragon1.com/terms/value-stream-definition [9] https://delighted.com/blog/guide-to-customer-journey-mapping [10] https://neonex.de/en/iiot-hub/smart-factory-basics/definition-value-stream

---

For Essity, it has a series of defined customer-lifecycle aligned value stream steps.

What is important to note is the overall value stream can be considered yet another dimension of activities separate to the dimensions of technology, territory and time.

What this means in practical terms is that a solution (a combination of technologies developed over time and rolled out into various territories) can support one of more stages of the value stream. Take the example of a country brand website.

• it has the usual mix of CMS, domain, content etc
• it has been built, deployed and maintained
• and has a clear territory in mind

but it also serves multiple purposes

• it is clearly used in the aware-to-engage marketing activities to promote the brand online in that country
• it also supports lead-to-cash activities through online and offline channels
• it helps customers get support for the product

For Essity, it has a series of defined customer-lifecycle aligned, and cross-process (traversal) value stream areas, which are summarized below and expanded upon in the child pages.

advice

It is usually the case that solutions are aligned to the value stream stage or sub-process where the solution is mainly used. That does not preclude the same solution from contributing to other areas of the value stream

Aware to Engage (A2E)

• Digital Marketing - Consumer Goods
• Digital Marketing - Corporate and Shared
• Digital Marketing - Health and Medical
• Digital Marketing - Professional Hygiene

Lead to Cash (L2C)

Lead to Cash covers the end-to-end processes of sales from marketing, order taking, cash collection and continued customer service. L2C looks into creating new business models with digitally enabled products and services, ultimately harmonizing across all business units. Sub-processes include:

• Lead to Contract
• Customer Master Data
• eCommerce
• Order to Cash
• Service Management
• Analytics
• Business Process Management
• Change Management

Source to Pay (S2P)

From identifying a potential supplier (source) to when a purchase order is placed and payment is made to supplier (pay). Sub-processes include:

• Source to Contract
• Indirect Procurement
• Direct Procurement & MRO
• Invoice Processing
• S2P Analytics
• S2P Change Management

Idea to Solution (I2S)

R&D, Product Lifecycle Management, Artwork Management, etc

Plan to Product (P2P)

It covers the manufacturing process all the way from production planning until products have been produced and transferred into the warehouse, including

• Production Execution
• Quality Management
• Plant Maintenance.

Forecase to Stock (F2S)

From the demand (Forecast) for a product to when products are manufactured and kept in inventory (Stock). Sub-processes include:

• Processes, Transversals & Links
• IBP (integrated Business Planning)
• Demand Planning
• Supply Planning
• Transportation
• Warehousing
• Data & Analytics

Infrastructure (INFR)

​​​​​​​Infrastructure

Finance (FIN)

• Accounting & Reporting
• Capex & Asset Accounting
• Economic Model
• IBP Financial Planning
• Tax
• Treasury
• Finance Change Management

Data (DATA)

Master Data Management

Analytics (ANA)

Reporting, Analytics, Data Engineering, Data Science, etc

• Analytics Services

Hire to Retire (H2R)

Talent Management, Payroll, Employee Management, etc

• Hire to Retire

Digital Workplace (DWP)

Office365, Workplace & Collaboration, ec(PC), Desktop installations, etc

• Digital Workplace

Cross-Process (XPR)

Cuts across more than 1 E2E process and there is no Lead process identified

• Tier 2 Solutions
• Digitally Enabled Products
• Supporting Services
• Technology Innovation