Value is usually defined, at least in Lean-thinking context, as “something the customer is ready to pay for”, which leaves to customers the entire freedom to choose what makes value to them.
It can be something worth a lot of money because made of precious material, something desirable like an item that gives his owner pride or show his/her status or more basically something useful, or any combination of the three.
Value is not only limited to tangible things, services can bring value as well. Some customers will see value in the services provided by a personal shopper, in advice given by a counselor, etc.
Value-added is an improvement, enhancement or transformation that gives something a greater value. A plain log of wood can have a (trading) value per se but gets higher value if transformed into boards, shovel handles or chair legs.
In services, value-added can be having an MD analyzing your exams’ results and prescribing a remedy. Without the physician’s know-how, the exams’ results are of relatively low value for the man on the street.
A value stream is the sequence of all activities required to bring value to customer. This may include designing, manufacturing, shipment, installation, etc. A value stream can deliver services as well.
A value stream may be strictly internal to a company or may include external suppliers, thus the “supply chain”.
The name value stream infers the value flows to customers along streamlined processes, which is an ideal seldom seen in reality. Value streams are cluttered with non-added value processes, tasks and steps, so-called wastes.
Nevertheless such value streams deliver value. They could deliver it more efficiently with less expenses and efforts. This is the aim of Lean.
You may also like to read Why this lean obsession about waste?Follow @HOHMANN_Chris