Have you ever gotten to the end of hectic day full of back to back meetings and deadlines and wondered, “what did I really accomplish today?” I think we’ve all experienced this right? The fact is that activity is not synonymous with productivity. The vast majority of our lives is spent performing actions that do not really add value. Some of the leanest processes in the world are still 80% waste. Often, when we first start really analyzing processes, we find that less than 1% of our activities actually are really adding value.
Time and energy spent eliminating waste has a far greater ROI to the overall process efficiency than does working to increase the speed at which a wasteful activity is carried out. But before we can begin to eliminate waste, we must first learn to see it. Use these three criteria for evaluating your business process activities as value add or waste:
- The activity must physically change the object.
Remember that lean has its roots in manufacturing so this rule was developed around processes that produce physical products like cars, shovels or squeegees. So this means that an action that turns raw material into a part that can be used in the end product passes this value rule. Think cutting a shape out of a piece of metal or painting a car body. But for those of us not living in the world of manufacturing, this principle still applies. Think about a business process like preparing a report. You add information or maybe some charts and graphs which have now physically (or virtually) changed the report. Then you send the report to your manager who reviews it and sends it back for revision. The review does not change the report and therefore does not satisfy this first rule and leads us to the second rule. - The activity must be done right the first time.
Keeping in line with the above manufacturing example after the piece is cut out it is sent to the next station that files off burrs and saw marks after cutting. De-burring and filing both physically change the piece. Lean thinking teaches us though to ask, “why is deburring and filing necessary”. The answer is that the cutting activity is not “done right” the first time requiring more downstream work. Could burrs and saw marks be reduced or eliminated by using a sharper blade or changing the speed or pressure of the saw? Instead of focusing on how to improve the filing and de-burring step, lean encourages us to think about what we can do to eliminate it altogether. In business, we see this kind of refinement and rework all the time. A project plan that needs an adjustment to scope or schedule. A sales order that has to go back to the sales rep multiple times for clarification. An expense report that is rejected for insufficient documentation or violation of policy. Instead of focusing on improving the corrective or refinement activity, we need to ask, how can we eliminate the need for it altogether. - The activity must be something the customer is willing to pay for.
The problem many people have in applying this rule in business processes is understanding who the process customer is and what that customer values. We must think of the customer in specific terms relative to the process in question. The customer of the expense reporting process for instance is the employee getting reimbursed. While the employee does not “pay” for this service, if he or she did, what parts of the process would be seen as valuable? Certainly the actual reimbursement would be seen as valuable. But what about filling out the report? Scanning receipts? Reviewing and approving? Required to be reimbursed because the process requires it but the steps themselves are likely not things the employee would view as valuable.
When you begin to look at your business processes through the lens of these rules, you will be shocked at just how much action is really waste. But don’t despair. This is the beginning of every lean journey. Learning to see the waste around us is the first step to improvement. First we see waste, then we look deeper to analyze how to reduce or eliminate it and only then can we take actions that truly improve the way we work and live.
Read on here:
http://leanmanufacturingtools.org/89/value-add-vs-non-value-adding-processes/