Here’s the sad truth: Non value added activities are everywhere in your business. This means that your teams are spending more time on wasteful activities than they are being productive. Fear not! This article will help clarify what it is and how to reduce the bleed. Show
What are non value added activities? They are activities in a process, which do not physically change the nature or shape of the product or service you are providing. Things like searching for information, dealing with errors from previous steps in the process, processing mistakes, excessive walking and moving around, meetings, setting up machines or processes and waiting for others to provide you work or information, are all typical examples of non value added activities. They are found in all types of processes: from manufacturing, to office processes and increase lead time of a service and cost. It’s important to be able to see non value added activities, so you can then eliminate them. Here’s how to do it. Let’s Start with ValueIn every process, there are both non value added activities and value added activities. The definition of value add is: An activity which physically changes the nature or shape of a product or service, in the eyes of what the customer wants. It could also be determined as any activity which the customer experiences and wants more of. In manufacturing, value add could be the following:
These activities are the steps that help transition and shape from raw material to finished product. Interestingly, typical activities that are non value added ones, in this case would be:
In a warehouse business, value add is typically the following:
All other activities are really defined as non value added, like some examples below:
In a training organisation, value added could be:
Everything else is non value added activities, like some of the following:
The ratio of Value Add (VA) to Non Value Add (NVA)Hopefully, it’s clear to see that the majority of work businesses conduct, consist of largely non value added activities.
In fact, up to 95% of all activities in a business can often be apportioned to non value added work. This means that there is a lot of improvement to go after; jsut as long as you can see it. Being Busy Does Not Mean Being ProductiveJust because our teams are busy and have little time on their hands, doesn’t mean they are productive. We know this because we can expect typical 95% of work to be non value added activities. So, when someone complains that they have too much work to do, help them observe what they’re doing. Try to find the areas that are slowing them down, because they are non value added activities and by eliminating this, you can free up their time. For instance, if our picking team is too busy, Find out how much time is lost to excessive walking and finding products? Does the picking team have to ask questions to understand the pick note and job information? Are products hard to find, causing even more time lost to searching? Are there many pick errors, which means things have to be picked again? The same is true for manufacturing: is the information hard to find, which means lots of lost time asking questions before the job even starts? Are the machines taking too long to changeover between jobs? In business processes, are we correcting other people’s errors, or turning back to ask a lot of questions that shouldn’t have to be asked? Do we hold too many handoff meetings to pass information on, which could have been given in a simpler way? Here’s How to See NVA – Think of Tim WoodsWhat are non value added activities? The simple answer is to look for the 8 wastes, often referred to as TIM WOODS. We’ve written a guide on continuous improvement and TIM WOODS, for further information. Here, we’ll provide some examples for each process waste element.
First, we need to observe the process in question. This means standing there with your team to watch the value being created in front of you As you do, take notes on what waste you and your team see. Where is TIM WOODS happening?
We want to eliminate waste as much as possible, but unfortunately, you won’t be able to eliminate it all. Some activities have to happen to ensure that the value added activities are conducted.
But don’t let this stop you challenging non value added activities when you see them. Here’s how to do it. 3 Steps to Reducing Non Value Added ActivitiesWhen you find a non value added activity, ask the following questions: Step 1: Look to eliminate that activity completely. Is it just bad practice that’s been carried on over the years? Can we simply get rid of it? For instance, if a process is performing extremely high quality levels, do we even need to complete multiple sign off checks? Probably not. The process is stable, so get rid of wasted checks. Can we eliminate duplicate data entry onto different spreadsheets? Can we eliminate middlemen, and converse directly with stakeholders or customers? Step 2: If we can’t eliminate it the activity, can we reduce the time it takes to conduct that activity? For instance:
Step 3: If we can’t reduce the time, we need to see if we can combine these activities, so as to shorten their time together. Try to focus on multiple activities happening concurrently. In this case, you can literally take a group of tasks that when conducted in sequence, may take 20 minute lead time, for example, but if combined, whereby people work together at the same time, the process lead time may only take a few minutes. Here are some examples:
In fact a great example of a group of activities that have been combined, is the Formula 1 Pitstop. This is from Scott Bellchamber’s channel on youtube. Notice that a team come together to change 4 tyres in a fraction of time. This involves, jacking the car up, replacing all 4 wheels and fastening them up, within a second or so. This a classic process where most of the non value added activities have been removed. https://youtu.be/aHSUp7msCIE What are Non Value Added Activities: Other Related QuestionsWhat are some examples of non value added lead time? Lead time refers to the total time it takes for a process to complete. This includes value added time and non value added time. Non value added lead time can come from too much work in queues. The longer these queues, the more waiting time and hence, greater lead time; lots of rework adds to lead time and so too, long change over times between machines or processes. These are examples but represent some of the most frequently occurring ones. How will you know if activities are non value added activities? If they are not adding value (physically changing the product or service, or what the customer specifically wants), then they are non value added activities. Look for TIM WOODS and observe these wastes as the processes are being worked on. Is testing or Inspection a value added activity? In general, no. Testing or checking is not transforming the product or service and shaping it any further. It’s a way of ensuring we have done the process right, but it doesn’t add value. This really comes at a cost to you. The customer just wants their product or service and is not bothered how many times you check or test. The only caveat to this is if the customer specifically asks everything to be tested and a certificate for each part. In this case, you could argue that the customer has asked for it and so it becomes value add. Which of the following is valueValue added is thus defined as the gross receipts of a firm minus the cost of goods and services purchased from other firms. Value added includes wages, salaries, interest, depreciation, rent, taxes and profit.
What are valueValue-Added Activities are those that transform raw materials (plastic, lithium, copper) into the finished product (a smartphone) for which the customer is willing to pay. Some examples include molding, cutting, drilling or assembling parts.
Is inspection a valueInspection
Inspection is a non-value-added activity. Since organizations have to inspect to provide confidence to their clients, in that case, inspection should not be a standalone activity. It should be built into the process so that you do not need to spend extra effort on it.
Which one is an example of valueValue added time is made up of processes that improve products. The only value added time process in the cycle time example is the process time. This is the amount of time it takes to actually produce the product. Obviously, production time is a value added time because it creates a product from raw materials.
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