Driving Efficiency and Productivity by Maximizing Value-Added Work

What is value-added (VA)?

To begin, let's consider the idea of a process. Every process involves taking an input and going through various steps, activities, and tasks to produce an output. The SIPOC expands on this concept. Inputs typically include fundamental components like people, equipment, materials, methods, measurement, and environment, often called the 6Ms. Outputs can vary and may consist of products, services, information, or any other outcome of the transformation process.

Value-adding (VA) involves the activities that modify the suitability, shape, or purpose of the item being processed for transformation. These activities entail taking the initial input and turning it into a valuable result for your customers — something they find worth paying for and that you execute accurately from the beginning of your process.

Below are key questions you can ask to evaluate if a task is valuable:

• Was the item transformed through the process or not?

• Did moving something from one location to another within the facility change the fundamental nature or quality of the item, or did it just shift its position?

• Before inspecting a part for quality, have you made any changes to the item, or is it in the same condition as before the inspection?

There are four primary interpretations of the concept of VA:

1. Customer Value-Added (CVA) work: This refers to the tasks that modify the product, hold significance for your customer, and for which they are willing to compensate you.

2. Business Value-Added (BVA) work: Encompassing tasks essential for your business's functioning yet often overlooked by customers, who generally show little interest or concern in these activities. For instance, the essential functions carried out by your HR, legal, or accounting departments are crucial for business operations. However, customers are generally not interested in these functions and are unlikely to be willing to pay for them.

3. Business Non-Value-Added (BNVA): Some organizations consider the functions described above, which are essential for business operations but not customer-centric, as non-value-added activities from a business perspective, with the assumption that the customer determines value.

4. Non-Value-Added (NVA) work: These tasks do not contribute value to your customers or business. They typically stem from outdated process activities that are no longer necessary or beneficial. Such tasks represent pure waste and should be removed as soon as possible.

Performing a VA analysis is common practice during process mapping. After identifying and mapping all process tasks, revisiting and classifying each task as either CVA, BNVA, or NVA is helpful. A standard colour scheme can be employed with blue representing CVA tasks, green for BNVA tasks, and pink for NVA tasks. This will enable you to evaluate your workflow quickly. If pink is the dominant colour, there may be areas for enhancement.

Three advantages of Value-Added (VA) 

By distinguishing between the various value-added (VA) definitions, you can evaluate the proportion of your efforts dedicated to creating value for your customer versus generating output that does not result in payment.

1. Benchmark

Identifying the value-added steps in your process allows you to assess the potential for enhancement. When minimal value-added activity exists, be prepared to take action and begin the improvement process.

2. Calculation of PCE

Process cycle efficiency, or PCE, represents the proportion of value-added work about process lead time (PLT). In simple terms, this fundamental Lean concept indicates the percentage of time an item spends in your process that contributes to customer value.

3. Employee morale

The majority of employees can distinguish between value-added and non-value-added tasks. They frequently wonder about the necessity of following prescribed procedures.

Stay connected with us for further insights on Lean principles and techniques.