ABSTRACT
Manufacturing companies survive because they transform raw materials into finished goods that their customers value. Processes transform material into products; operations are the actions (cutting, heating, grinding, bending, etc.) that accomplish those transformations. Operations are considered the process elements that add value, but processes also include non-value-adding elements. A value stream consists of everything-including non-value-adding activities-that makes the transformation possible:
Communication all along the supply chain regarding orders and order forecasts. (For example, for a value stream at a first-tier automotive supplier, communication takes place between the first-tier supplier and one or more second-tier suppliers; and between the first-tier supplier and its customer-the original equipment manufacturer.) Material transport and conveyance. Production planning and scheduling. The network of processes and operations through which material and information flows in time and space as it is being transformed.
