What is Value Stream Management?

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  • 0:05 What Is Value Stream…
  • 1:25 Management Responsibilities
  • 3:50 Lesson Summary
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Lesson Transcript
Instructor: Kasandra Lane
When a manager's main focus is value, he is practicing value stream management. This lesson focuses on what this type of management style looks like as well as why it is important.

What Is Value Stream Management?

Ray is a manager at an electronics store. He surveys his customers quarterly, which helps him identify which products best fit their needs. This allows Ray to focus on stocking and displaying these products. As customers shop, they're incentivized to be loyal to the store because they see value in the options it's offering. This allows the electronics store to purchase products that will keep its customers happy, as well as keep waste, in this case inventory overload of unnecessary products, as low as possible. Whether he realizes it or not, Ray is practicing value stream management, a management style that focuses on customers and their values while doing one's best to eliminate wasted time and resources.

This type of management can help companies become more competitive in their markets and improve business performance. With value stream management, the manager's values lie with the best overall production methods, which they must maintain while keeping the customers' values in mind. So, what's meant by customer values? It's the small things that managers are able to identify to keep their customers happy. It means asking questions like:

  • Why do specific products make customers happy?
  • What products do your customers need and why?

Management Responsibilities

Let's consider the value stream management responsibilities in four steps.

1. Identify products and their value.

Identifying what products are important to your customers and having them readily available can increase customer satisfaction. As a manager, you must be able to maintain consumer confidence in your company and its products by offering something with more of a competitive edge than your competitors.

2. Plan to keep product and customer values up.

This step is very important and relates to step one. When you do your best to maintain product reliability, you'll find a relationship between product and customer values. We've discussed how value stream management feeds on values, so when product values are up, meaning the manager has an understanding of why this product is important to his or her customers, the manager will see customer values increase.

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