Value Network Mapping

Modeling Notation

Knowledge work has significant differences from work based on

manufacturingManufacturing

Processes are stable, change when new products are introduced

Fixed constraints, stable bottlenecks

Remove variability, source of unpredictable performance

Focus on reducing cycle time by eliminating non value added activities

Emphasis on manufacturing, operational activities

Increase efficiency, reduce cost

Serial processes, linear, fixed, concrete units of work with precise lead

times and throughput

Knowledge Work

One time / adaptive processes, you are always building something new

Floating bottlenecks, constant movement

Variability is a pre requisite to knowledge work, model and maximize

profitable kind

Focus on reducing inventory, cycle time will improve, waste will be

reduced as a consequence

Emphasis on creation, design, research

Increase effectiveness, increase value

Non Linear, parallel, work scatters, merges, and changes shape

Our Value Network Design framework supports modeling demand and the patterns necessary to

manage that demand in a way that is suitable for knowledge work

Taken from Manufacturing, used to map

flow of work from start to end of

delivery process

Identifies bottlenecks and inventory size

of work in progress

Enables measurement of processes

Many sources of demand

Varying risk, size and knowledge to

process demand

Demand also can break up and merge

repetitively,

Demand can be process in parallel

Required capabilibilities to deliver work

may vary

forManage ways how resources can be

managed and used when delivering

knowledge work

There can be varying delivery models

which require people / teams to work

together in many ways

Description Examples

Value Stream Basics

Demand Profiles

Variability Management

Patterns

Team & Team Interaction

Patterns

Activity Team Inventory

Cross Functional Team Specialist Pool

Standard

Risk Load Balancer

Fix-Date Internal

Investments

Capacity Reserve

Emergency

Design your value network following these steps

Start designing your value network by mapping out how your

current delivery process works using Value Stream Mapping

Refine and explore the value stream according to a finite set of

Standardized Demand Profiles

Group workers into teams according to Team Composition

Patterns based on the shape and frequency of demand

Lay out how teams coordinate to deliver value according to

Team Interaction Patterns

Design for variation through the application of one or more

Demand Variation Management Patterns to your value network

Layout out how teams coordinate to deliver value according to

Team Interaction Patterns

Annotate your value network with Additional

Requirements to process value

Notation for Value Steam Mapping

Value stream mapping allows you to map out the end-to-end delivery process, identifying bottlenecks, and

refining that value stream based on potential countermeasures:

Provides a holistic end-to-end picture of how work flows through each step of the assembly line

Enables measurement of processes - “actual work” vs. “wait time”

Identifies bottlenecks and inventory size of work in progress

Start designing your value network by mapping out how your current delivery process

works using Value Stream Mapping

Release

planning

Story

analysisDevelop

Customer

demo

Infrequent and long lead time to meet

customers and collaborate one direction

Existing solution constraints only

taken into account during

development, causing RBQS churn

Ensure solution SME is available during analysis to ensure requirements

framed in context of solution

Value Stream Mapping Notation

Symbol Description

Explicit Activity that needs to be completed for value to be created

The need for multiple activities to be completed by a co-located team

in order to provide value

People color color-coded for different expertise

Inventory gets created based on people doing work and artifacts being

created

Based on a top down upfront plan, work is pushed to the next stream

only once it is completed. Not knowing if the downstream team has

capacity.

Downstream teams pull work when they have the capacity to do so,

triggering that a upstream team can start work

Flow of information between people, activities and work cells

Activity

Team

Inventory

Pull

Information

Flow

Push

Person

Value Stream Mapping Notation

Waste

Potential

Countermeasure

Root Cause

problem

Activity is performed according to a fixed cadence, for instance standups may

be held one time per day, and story planning one time per week

Edit inefficiency or ineffectiveness identified in the value creation process (eg:

defects, waiting, unfinished work, rework, etc.) waste is often looked at as the

ratio between effort and the overall lead time

Reason why the waste is occurring, often uncovered using 5 whys analysis

Ultimate cause of the problems that affecting the system work

Identified options that can best mitigate the impact of the problem at least for

now

Symbol Description

Notation for Handling Demand

Refine And explore the value stream according to a finite set of standardized demand profiles

Knowledge work is inherently variable

A multitude of factors can make demand different,

making meaningful analysis across demand

challenging

One approach is to measure each unit of demand

according to a unique combination of “demand

categorization” factors

This approach makes it impossible to compare units of

work, as each unit gets tagged somewhat differently

from the last

A multitude of factors can make demand variable and difficult to measure

Aggregate factors into a set of standard demand profiles

MaintenanceOperational work to maintain health of the

system

EnhancementsWork focused on extending functionality of

application assets

NewWork necessary support development for

entirely new applications

Break-FixFixes to systems already in production,

typically of critical urgency

Investment

Work focused on enhancing system, people

and process capabilities, low impact to

business and no tangible cost of delay in the

near future

Blockers

Visualizes an obstruction (internal or external

to the team) that prevents a work type from

completing its current activities

Defects

Visualizes an error in a completed work type

that must be corrected before being pulled

When defining a value network, define intake work that goes into the system according to a set of well-defined

demand profiles

Examples

Solution

Value Type

Cost of Delay

Size

Market Risk

Customer

Work Item

LOB2

LOB4

LOB3

LOB1

Differentiator

Spoiler

Defend

Commodity

Emergency

Fixed DateIncremental

Investment

Java Web

SAPMassive

MediumSmall

Large

DefectCR

Business

Technical

Integration

Expedite Class

High and immediate impact to business (very significant cost of delay)

Break-fix type of work that needs immediate attention. Automatically jumps queues

Requires specialist resources drop other work in preference to working an expedite class item

Release dates may be adjusted to accommodate required delivery date

Cost of Delay Function

Standard Class

Shallow but immediate impact to business (medium cost of delay)

Most work types needed with some urgency should be treated as standard class items

Processed on a first in first out basis

Investment/

Maintenance Class

Low impact to business.

No tangible cost of delay associated with this type of work in the near future

Will be pulled through the system in an ad-hoc fashion.

Can be displaced by all other classes of work

Fixed Date

Medium/High impact to business (high cost of delay after delivery date)

Delivery date constrained by legal commitment with customer or supplier, or

regulatory/legislative requirement, or ministerial promise

Estimate and move from input queue close to estimated days away from due date

Selected for work over standard class. May be promoted to ‘Expedite’ if late

Applying a Class of Service to each demand profile allows you to indicate the cost of delay of not

completing a type of demand, and enables you to apply a service level promise to the demand

profile

Profiling demand in a hierarchical format allows you to break demand into smaller pieces which

will result in faster delivery times and higher quality

Project #1

MMF#1 MMF#2 MMF#3

Iteration#1 Iteration#2 Iteration #3 Iteration#4 Iteration#5 Iteration#6

Story #1

Story

#2

Story

#3

Story

#1

Story

#2

Story

#3

Story

#1

Story

#2

Story

#1

Story

#2

Story

#3

Story

#1

Story

#2

Story

#1

Notation To Represent Demand Profiles

Notation Type Description

All knowledge work stems from a good idea

Delivering business value

Emergencies varying in size may occur

A fixed date communicated by the business for delivery

Any optimal system should also spend a certain portion of its

work on fine-tuning/optimizing itself, keeping technologies up

to date (e.g. Platform Upgrades)

Work has become blocked and requires management

intervention

Generating ideas on how to improve the work

Idea

Business

Work

Emergency

Fixed

Date Work

Investment

/Fix Work

Blocker

Improvement

Opportunity

Stop

Notation Type Description

Knowledge work will frequently start as a very large concept,

scatter into finer grained projects, and further scatter into

releases/stories/features/use cases/etc. so that it can be

completed in small atomic units

Knowledge work will aggregate from discrete specific units

into something of business value. For example individual user

stories can merge into a business release based on customer

needs.

Features are distinguishable characteristics of a project which

can be completed in small atomic units

Represents the smallest collection of features that could be

deployed as a unit giving meaningful business value

Notation To Represent Demand Profiles

Feature

MMF

Aggregate

Scatter

Features

Minimal

Marketable

Features

Delivered Value

Represents a product,release, feature, or other

valued item or service that has been put in the hands

of the customer

Symbols for Team Interaction Patterns

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Group workers into teams according to Team composition patterns based on the various

patterns of demandDedicated teams, collaborative, cross functional and

hopefully co-located; perform various activities

necessary to create value. Work enters and is

completed without any external influences. The team

is self-organized and empowered.

Dedicated team with specialist workers. Demand

transitions from team to team until it is finished. Each

team has a well-defined interface that describes the

kind, quantity, and throughput of demand it receives,

along with expected outputs.

Cross Functional Team

Specialist Pool

Highly specialized workers that are in high demand

across a number of teams. This demand can be ad

hoc, but when required is critical to creating value.

These type of workers are organized into pools. In

this way cross functional or specialist teams can be

extended with workers from these pools on a just-

in-time basis, typically for the duration of the

request

Specialist / Service Team

Stable teams are complemented by drawing on one or

more specialist pools JIT. Team Members and Team

Leaders self-organize the allocation of specialists on

either a Feature or MMF basis. Specialist typically

become part of the team for as long as it takes to service

the request, at which point they go back into the

specialist pool

Use dedicated teams to act as channel specific entry

points for different business clients. Support these teams

with a common pool of workers that possess skills

necessary to manage demand across the different

channels. Useful when aspects of the intake or analysis

process required differentiated knowledge, but skill can

be applied across the channel for the remainder of the

lifecycle, also useful to manage cross channel variability

in demand.

Structure the value network by laying out how teams coordinate to deliver value according to

Team interaction patternsSpecialist teams coordinate the delivery of value through

explicit intake and output service interfaces for each

team. Demand tends to scatter across individual teams

to be processed independently, then aggregated into a

cohesive unit of value before being shipped to the

customer.Service-oriented Value Network

Multichannel Service Intake

Dynamic Feature Team

Team Interaction

Pattern

Prerequisite to thinking about team – Classify demand

Demand Notation Description

Demand Collaboration

LevelFreq Infreq

Stable Adhoc

• Demand is coming in often and with a fairly

predictable re-occurrence

Example

• Long lived program

• Enhancements

• Demand does not come in often but comes in with

a fairly predictable re-occurrence

• Seasonal work

• Demand is coming in often but sporadically • Project

• Run

• Demand does not come in often and it is sporadic • Emergencies

High

Upstream Downstream

High Low

Frequent and

Stable

Infrequent but

stable

Frequent but ad-

hoc

Infrequent and

ad-hoc

E.g. Customer, Business

SD, I&O, etc.

E.g. Customer, Business

SD, I&O, etc.

Work

Classification Example

• Team requires

specialist skillset in

a highly

collaborative way

(i.e. pool)

Frequent and Stable

Infrequent but stable

Frequent but ad-hoc

Infrequent and ad-

hoc

High Low

High Low

High Low

High Low

Thinking

about teamsCollaboration

LevelDemand

Notation for Variability Management Patterns

Design for variation through the application of one or more demand management

variation patterns to your value network

Specialized

work according

to role

Adaptability

and elasticity

span between

roles

Individuals and teams are

defined by a combination

of specialized and general

skills. These are

distributed according to

the adaptability and

elasticity of the

organizational design

they need to operate

within.

Notation to Handle Variability in Demand

Notation Type Description

Limiting how many hours in the day that should be reserved for a certain piece of work (e.g.

coding). The greater the cost of delay is for a particular piece of work, the more critical it is

that capacity be reserved to handle variability

Load balance work coming into a system across risk/priority profilesThis will allow knowledge

workers to drop low priority work for higher priority work whenever it comes into the system.

It allows knowledge workers to reserve capacity for high priority work by making themselves

busy doing lower priority work that is still essential for improvements.

A T shape resource is a resource who takes the time to make sure he is competent in both

upstream and downstream processes. The resource not only gets better at his core

responsibilities, he also makes sure that he can contribute in other areas as well. Creating

these kinds of people cost money, and causes them to be less effective on their core

capability than if they only practiced in their primary function. This however is a worthwhile

economic trade-off in almost all aspects of knowledge work, due to the high degree of

variability. It is very hard to predict the amount of work required for each skill set, requiring

more senior people to have a balanced set of skills is one of the best strategies out there for

dealing with fluctuations demand.

The part-time expert spends enough time with two teams to understand the context of both

to make himself useful as a part timer. When one of the teams faces a spike in demand, the

part timer switches to full time (plus overtime if necessary) and significantly increases the

teams capacity until things get under control

Risk Load Balancer

Capacity Reserve

T-Shaped Resource

(Generalizing Specialist)

Part Time Expert

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Other

Notation

Annotate your value network with additional requirements to process value

At times to complete work, it has to be done through meetings

Continuation of the initiative is decided by a steering committee. The

decision is based on the information available at the time, including

business case, risk analysis, and availability of necessary resources

Decision rules are used to constraining environment so that not every

decision needs to be made over and over again. Great care needs to be

taken that decision rules do not become inflexible and permanent.

Requires relative sophistication on the part of the organization to apply in

an appropriate way.

Signals are used to initiate a automated activity, notify interested parties

uncertain events, and/or transform information for reporting purposes

Automated Activities are an important part of any agile delivery model,

and are often used to automate the application lifecycle, including tasks

such as testing, quality verification, developer integration, and

package/deployment

DescriptionNotation Type

Meetings

Stage Gate

Decision Rule

Signal

Automated Activity