In a value added analysis steps within a process can be defined as value-added activities

Have you ever stopped to think about how much of your work is actually dedicated to activities that add value to your organization? People often assume that everything they do is important. However, only when they begin to analyze processes from a Lean perspective they do realize that a number of these activities end up just wasting time and resources.

Lean methodology evolved from the Toyota Production System and is aimed at improving the quality of deliveries, reducing deadlines and reducing costs by eliminating any waste that may exist. To help identify areas of waste, a common practice is to break down a process, grouping activities into three categories:

• Value-Added Activities;
• Necessary Non Value-Added Activities;
• Waste.

 This makes it easy to identify which activities are really necessary to satisfy customers’ needs, and which ones simply consume resources. Following this classification, companies can work towards improving processes, eliminating activities that do not add value, reducing activities that generate waste and maximizing those with added value.

Let’s take a look at what each one of these categories means to understand them better.

Value-Added Activities

To be considered a value-added activity, it must satisfy the following criteria:

• Work that a customer is willing to pay for;
• Work characterized by transformation (product, information);
• Work that is done right the first time.

Necessary Non Value-Added Activities

These are activities that do not add value to a product or service, but need to occur for a reason, such as:

• Contract or customer specification;
• Market standards (ISO 9001, IATF etc.);
• Government regulation;
• Outdated work method;
• Obsolete equipment.

Waste

Finally, waste is defined as activities that consume resources, but do not add any value to a product or service.

Now that we understand the concept, let’s look at how they are applied in everyday life.

Let’s use a factory that makes smartphones as an example. Value-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. In administrative processes, this could involve activities such as preparing reports or technical specifications for a customer.

In the case of Necessary Non Value-Added Activities, an example could be the inspection of finished products. Although the activity does not add value, it is considered necessary because the customer expects to receive a smartphone that meets technical specifications and quality standards. In the case of an administrative process, an example would be filling in forms and documents required by a regulatory agency. In many cases, the activity does not add value to the product or service, but it generates work and needs to be done.

Activities that involve Waste are those that use time and resources without adding anything to the product, such as unnecessary transport or movements, or defective products that require rework. In an administrative process, an example could be copying and filing documents.

The practice of breaking down a process and classifying and analyzing all the steps helps your company to be more efficient, in addition to saving resources and increasing customer satisfaction. You just need to ask yourself, does this activity add value?

Now that you understand the concept of a Lean process, I invite you to learn more about SoftExpert BPM, a solution that facilitates and enhances the modeling, automation, analysis and improvement of your processes using the Lean concept. To find out more about the advantages and benefits that a BPM solution can offer your company, contact our SoftExpert specialists. They understand your challenges and can recommend the best way to implement a BPM solution to meet your needs.

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