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The value stream

The 

value stream

 is a concept closely related to the value chain. The difference is that it con‑

siders different types of tasks that are involved with adding value and looks at how the effi‑

ciency of these tasks can be improved. Womack and Jones (1998) define the value stream as:

the set of all the specific actions required to bring a specific product through the three 

critical management tasks of any business:

 1 

the  problem‑  solving task [the processes of new product development and production 

launch]

 2 

the information management task [the processes of order taking, scheduling to 

delivery]

 3 

the physical transformation task [the processes of transforming raw materials to 

finished product delivered to customers].

Tasks 2 and 3 are traditional value chain activities (Figure 6.8(a)), but task 1 is not.

Returning to the definition of customer value from Deise et al. (2000) shown in the equa‑

tion below, we can see that the lean thinking approach proposed by Womack and Jones is 

aimed at adding value by cutting out waste in each of these three management tasks. By 

reducing new product development and production times and costs, organisations can then 

either increase customer value by decreasing fulfilment time or price, and/or increasing 

product and service quality. Clearly e‑commerce plays a key role in decreasing time to mar‑

ket and production times and costs.

Customer value (brand perception) = Product quality 

* Service quality 

 Price 

* Fulfilment time