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The value added improvement – Impact?

At the heart of lean manufacturing, it’s all about eliminating waste through continuous improvement. So this means we should be looking at every single process, every single day with an eye for making it better. A great guideline is to work towards making everything easier, better, faster, cheaper. And in that order.

But there is a huge pitfall here which I would love to help you avoid.

First we must understand the difference between value added activity and non-value added activity. One way to look at it would be that everything your customer is willing to pay for could be considered value added.   Another wonderful way to decipher value versus non-value would be to ask yourself are the parts changing shape? Is what you’re doing getting that component closer to being a finished part?   Let’s quickly look at some examples:

  • I’m pushing a piece of wood through a saw, this is value added. The part is changing shape.
  • I’m carrying that same piece of wood from the saw to the shaper, this is non-value added as the part is not changing shape and the customer doesn’t care how far we carry parts in our factory
  • Setting up a machine, despite the fact that we have to do it, is still considered non-value added activity. From a customer’s perspective they don’t care if it takes you one minute or one day to set up a machine they just want their parts. And during the time you were setting up the machine nothing transformed or changed shape.
  • What about all those hard-working people in the front end? The Receptionist?  The team of Engineers? Your Bookkeeper? These are all necessary functions, and the business can’t run without them so surely there must be value, right? Well, not so much. All of those activities are non-value added to the customer.
  • What about finally being able to deliver your product to the customer? And none of us get paid until the product has been delivered, so definitely a value added activity right? Once again, this is 100% non-value added. I know it sounds crazy, but no parts are changing shape as a matter of fact absolutely nothing is happening in transit.

It takes a keen eye to distinguish between non-valuated and necessary.  We have many tasks and operations that are considered necessary, I mean, if we don’t do them the whole place will come to a screeching halt.   Doesn’t mean they are exempt from improvement scrutiny, actually quite the opposite.  So when you come across a “necessary” function you know is non-value added, just add two words on the end of your sentence to remind you it’s still waste.  When someone says “yes, but we have to do that” simply add ….for now.  Then we keep a keen eye on how to reduce it.  We are all programmed to eliminate non-value added activity.  It’s why we use a GPS when we drive, no one wants to take the long way anywhere.

Now that we’re all on the same page with the two different types of activity in your factories, let’s talk about the big pitfall we’re trying to avoid. All too often when we’re trying to improve a process, I will use sanding for an example, we carefully watch the operator.  How they’re sanding, their sanding techniques, how fast they are sanding etc. there in lies the trap! This will be a tough nut to crack for almost all of us, because we all feel overworked and underpaid.  But more than 90% of everything we do in the course of a day falls into the non-value added category. And when we try and improve a process we get drawn to the value added portion. So we’re spending the majority of our time focussed on improving what amounts to 10% or less of the overall process time.

I will put forth that so long as the job is being done adequately don’t waste your time trying to improve the value added portion, but focus your efforts on everything that’s happening around that value added activity, try and reduce the non-value added component that accounts for 90% of the process time. There will be much more low hanging fruit in the non-value added portion.

If an overall process time is ten minutes and the value added component of that is 10% or one minute.  And you make a process improvement of 50% of the value added activity you just save 30 seconds per part.  But if you make that same 50% productivity gain Focussing your effort on the non-value added component you will have saved 4 1/2 minutes!  That improvement is 8x better.  It’s easy to see why this could be such a dangerous trap.


Every single process we are involved in every single day is riddled with non-value added activity.  Target the non-value added component and watch your improvement efforts skyrocket.