Value streams based strategy: modeling for lean management performance∗

This paper seeks to present a methodology to assess performance and to provide management decision support. A “management by value streams” model was developed to assess company performance. It was implemented to support decision-making at an industrial company. The idea behind the model is that products or services should continually flow in the organization, as values streams. The model includes a set of metrics to measure the level of achievements versus previous established organization strategic objectives. The approach aims to promote the spirit of continuous improvement and collaboration, breaking the individual and segmented logic of the traditional distribution of work. The model leads to the definition of two integrated performance indicators: the Process Sustainability Index and the Organization Performance Index. These indicators provide an analysis on the level of performance of existing value streams, as well as on the organization, as a whole. This analysis will contribute to identify new improvement opportunities. The paper concludes that the model helps the implementation process of the organization strategy deployment: it works as an invaluable tool to act and to promote communication at the several organization levels.