WHAT IS A VALUE STREAM?

Definition

A Value Stream is defined by a consistent set of products manufactured on a given industrial asset.
Example: Vanillin Saint Fons Chimie codification: VDP04
Vanillin Baton Rouge codification: VDP33

The Value Stream codification is unique at worldwide level.

The Value Streams are defined by the Entreprise Industrial Directors. The VS list & codification are maintained by the Manufacturing Direction.

Management rules

• A Value Stream must be included in one Cash Generating Unit (CGU) and only one to ensure consistency with Finance indicators.
• A Value Stream belongs to a single production site*. But, if the CGU is worldwide (for ex.: CGU Diphenols Silcea), and if the VS products are in a different plant’s stock than its production plant, the VS can be defined in more than one controlling area.

• Each Value Stream belongs to a Value Stream Technology (TVS), defined by the Entreprise Industrial Directors.
   The TVS is specified in the VS code => for ex.: in VDP04, DP means Diphenols

Structure

• The VS is available in the profit centers standard hierarchy in every controlling area.
  The standard hierarchy in each controlling area has 6 levels:
  Level 1: Controlling area, for ex. Z006 for Europe.
  Level 2: Entreprise, for ex. SL SILCEA (ZFR3-Z0004)
  Level 3: Business Unit, for ex. DIPHENOLS – SLDIP (ZFR3-E0108)
  Level 4: CGU, for ex. CGU Diphénols SLCGU816 (ZFR3 – C0816)
  Level 5: Value Stream, for ex. SFCDP004 Saint-Fons Chimie vanillin (ZFR3-VDP04)
  Level 6: Profit Center, for ex. Vanillin_SFC (7681-I1046)

• A Profit Center (CDP) can belong to only one Value Stream.
• Each Value Stream code is equal to the last 5 characters of level 5 of the standard hierarchy
• The same VS can be available in several controlling areas (for the stocks).
• The VS is defined by:
  o the articles linked to the relevant plant profit centers and,
  o the direct production cost centers linked to the profit centers associated to the VS and to the major market

Accounting Rules & description:

• Definition & usage of a profit center: see Costing general documentation. The profit center is used mainly to represent the intersection of a market,a VS and a plant.
• How to choose the right profit center for an article (link between material and VS) : see specific document Rules for assignment VS-Material"
• Link between the direct production cost center and the VS:
• The cost center must be linked to the relevant profit center according the major market & value stream.
  
  

...

/warning

...

User

...

validation 

• Check standard profit centers hierarchy per controlling area (RCS transaction KCH6N)
• Check the list of articles linked to the profit centers by plant (specific query “list of material by VS” in BW)
• Check the direct production cost centers allocation to the VS in the PROD plant (and the label « multivs ») (specific query “cost centers by VS” in BW)