"A value stream depicts the ways in which an organization orchestrates its business capabilities to create stakeholder value."
It shows for a given persona, what the organization needs to be able to do, in order to provide the value that this persona is looking for.
As an example, consider the following value stream that one can encounter in an amateur sports club: Fundraising events.
The customer in question is typically a parent, or grandparent, (persona) of one of our players who is looking for a nice and cozy family activity (value) while at the same time supporting the club (value capture).
To facilitate this value stream the club needs to be able to maintain relationships with suppliers, manage a product catalog on their behalf, offer their products for sale, accept payments, prepare the event location etc... until the day of the event itself, which should run as smooth as possible (so that it is cozy and not frustrating). Even after the event the club still has administrative work to do in order to stay in compliance with e.g. tax and other laws.
Analogy to Unix Piping
A usefull analogy to compare value streams to, is that of unix piping.
In Unix you can pass the output from one command to another using the | (pipe) symbol.
cat file1.txt | sort | uniq > file2.txt
This chain of commands will load the content of file1.txt, then sort the rows, filter out duplicates and finally write the result to file2.txt
You can think of a value stream in a similar way.
product definition | product inquiry | quotation | purchase order configuration | etc...
The output of one capability will become the input of another, and so on, until all value is delivered.
Chain of realizations
The above example is a generalization of the concept, showing the generic capabilities.
In practice each capability will be represented in the value stream by a specific realization of said capability.
The specific realization will depend on the needs of the persona being targetted.
This implies that the data exchange between the capabilities doesn't have to be digital communication, it can also imply information written on a paper, email or excel file...
E.g., in our club we allow Product Inquiry and Order Configuration via the club website, but we also offer a paper flow for the less technology savvy (e.g. grandparents of players).
