A value stream may be created for every product; however, it is more common to group products that use common processes into the same value stream. Allen Autoparts, for example, must establish at least five value streams: one for each product line and one for new product development. One way to identify the value streams is to use a simple two-dimensional matrix, where the activities/processes are listed on one dimension and the products on a second dimension. Exhibit 16-2 provides a simple matrix for the four wheel models: two aluminum models and two steel models. In this case, two value streams are indicated, where each is made up of two product models ( notice that products C & D have two different processes required when compared to A & B ).
Once value streams are identified, then the next step is to assign people and resources to the value streams. As a rule of thumb, each value stream should have between 25 and 150 people. As much as possible, the people, the machines, the manufacturing processes, and the support activities need to be dedicated to the value streams. This allows a sense of ownership and provides a means of direct accountability. It also simplifies and facilitates product costing. In a sense, the value stream is its own independent company, and the value stream team is responsible for its improvement, growth, and profitability.