Value Streams

Earlier this year, we decided to divide up our company into Value Streams.  A quick explanation of a value stream is to say “business unit”.  Essentially, a separate line or section of the business that operates independently of other portions of the business, from the perspective of the products that run down that line.

Effectively, we are taking the standard Vertical corporation structure and breaking down the walls to create a horizontal structure.  So, rather than having a Planning/Scheduling department, a Purchasing department, a Production department, etc that are all working to their own metrics, we have a Value Stream that is responsible for the entire order to cash cycle of the products assigned to that Value Stream.  So, we have a value stream which consists of a full production line with team leaders and supervisors, a planner responsible for the planning of products on that value stream, a buyer responsible for making sure all parts are on order, a customer service rep responsible for making sure all orders are scheduled to ship accurately, and an overall Value Stream Manager responsible for the financial success/failure of the Value Stream.

The benefit of this structure is the team members assigned to the Value Stream are learning to be responsible for the products on their value stream.  We now have a team of all different disciplines living, eating, and breathing the products on their Value Stream.  Rather than focusing only on getting their specific job done, they now have a dual responsibility to make sure that their value stream is successful.  This has started to foster a team mentality within The Morey Corporation where any issue in the value stream, from an order through the shipment, is responded to immediately by any member of the value stream team (often by many members of the Value Stream).  Really, what this is doing is bringing employees closer to what makes the company money and ties them closer to customer.

Sure, this change hasn’t occurred without its hiccups, but one of the benefits from this is that people like myself have such a far greater understanding of the operations side than we ever did before.  Consequently, our production supervisors and manufacturing managers are now even closer to the effects on our overall business.  It’s much more difficult to stomach a delay in production when you know the domino effect that this can cause in a lean environment.

It’s extremely interesting to see people who have never been involved with shipping product now understanding the entire order to cash cycle and how their problems or delays affect the entire flow of the value stream.  It used to be, like traditional companies, that a lot of people did not know how their specific job helped the company make money.  Through Value Streams, we have been able to tie people directly to shipping units to our customers.

David Seifrid is currently the Manager of Planning and Customer Support at The Morey Corporation.