Value

The word is used in two senses in lean thinking:

(1) In the context of industrial lean production, value consists of the potential benefits the customer gets when she buys from a company (they are only “potential” because what she actually does with what she has bought is another matter). So value is . . .

A capability provided to a customer at the right time at an appropriate price, as defined in each case by the customer.^V1

In the application of lean thinking to the local Lean Economy, value is what makes most sense for the people who live there; what they have decided, for now, to achieve.

(2) The Value Stream: When the “value” has been decided in lean production, the “value stream” is the series of things that need to be done to achieve it. It does not include the things that don’t need to be done, and that is not a redundant statement, because most actual organisations waste most of their effort on activities that are not actually needed—on unnecessary paperwork, for instance.

The definition in the literature is:

The specific activities required to design, order, and provide a specific product, from concept to launch, order to delivery, and raw materials into the hands of the customer.^V2

Rule 2 in lean thinking is to identify the elements which comprise this value—the “value stream”. In Lean Logic, it is called lean means.