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.
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 Value
In 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:
- Shaping and bending a bit of raw material in line with producing a product for the customer
- Screwing a bolt in place
- Assembling 2 pieces together
- Cutting the shape of an insert
- And so on
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:
- Walking to get product or raw material
- Inspecting products – most people say this is a value add step, but it isn’t unless your customer tells you that they want 100% inspection
- Searching for tools
- Setting the machine up
- Checking paperwork and drawings
- Asking questions before proceeding
In a warehouse business, value add is typically the following:
- Same day delivery or next day (depending on what your customer wants)
- The act of picking the product off the shelf that your customer wants
- Putting it in a box
- Labelling the package
- It could also be same day delivery – the customer may love this and want more of it!
All other activities are really defined as non value added, like some examples below:
- Walking between aisles to pick jobs
- Picking the pick note – (this has to be done, but it’s still not adding value)
- Going to get the pick note
- Asking questions and correcting picking mistakes
- Checking for stock
- Getting boxes and tape to prepare for packing
In a training organisation, value added could be:
- Writing the training documentation
- Providing the training
- Giving supporting training guides to attendees
- Providing follow up coaching
Everything else is non value added activities, like some of the following:
- Enrolling candidates
- Researching to create the training materials
- Administration activities as part of enrollment
- Organising venues and events
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.
- A screw takes a few seconds to be tightened (VA), but laying out all the components before starting the activity takes 10, 20 or even 30 times longer to do (and is NVA)
- Writing training material takes a long time (VA), but in comparison to all other activities, including researching and planning the courses (NVA), it pales into a small proportion of overall time
- Picking an item off a shelf (VA) is miniscule compared to the time lost walking around the warehouse to pick items in the first place (NVA)
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 Productive
Just 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 Woods
What 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.
|T = Transport|
|Moving paperwork around between process steps to clarify, correct or add more information|
|Moving product around from one place to the next (including getting material or passing it on)|
|Getting multiple sign offs and checks|
|I – Inventory|
|Too much stock|
|Too much work built up, waiting to be processed (bottlenecks)|
|M – Movement|
|Excessive meetings, talking about the job at hand|
|Movement of people between processes, finding tools and equipment or information|
|Excessive walking to get what you need|
|W – Waiting|
|Waiting for sign offs or checks before proceeding with work|
|Waiting for assistance from questions or issues|
|Waiting for work from a previous step|
|Waiting to be told what to do next|
|Waiting in queue (in tray,s inboxes, etc)|
|O – Overprocessing|
|Doing too much when it’s not needed (E.G. excessive checking, and making everything perfect, when it’s not needed)|
|Doing things because they’ve always been done that way, when in fact they’re not needed|
|Checking something, then signing it, it to get a counter sign or even an additional counter signature|
|O – Overstocking|
|Processing work too far ahead of time (this pushes other work out that may be more urgent|
|Making too much before its been sold|
|D – Defects|
|Conducting rework or reprocessing the whole thing again|
|Any gaps to plan – For instance, something that didn’t happen as expected, like stock outs, work not completed on time|
|S – Skills|
|Not including team members in day to day improvement ideas|
|Lack of training of team members|
|Lack of coaching and development|
|Lack of reward and recognition|
|Not utilising skills and ideas of team members|
What to Do With Non Value Added Activities
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?
- Use a post it-note for each observation. And pin it to a board or simple flip chart paper.
- Capture as many observations as you and the team can find.
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.
- When writing training programmes, you still have to conduct research
- When picking products, you still have to walk between aisles
- When manufacturing product, you still have to get your materials and set the machine up
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 Activities
When 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:
- Can we move high frequency picked products closer, so we spend less time walking between locations?
- Can we change the machine over faster, to reduce downtime?
- Can we develop a process that allows us to research quicker, so we can spend more time creating a training course?
- Can we have faster handoff meetings by getting more pertinent information upfront, spending less time asking questions at the meeting?
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:
- Someone gets the raw material whilst the other changes the machine around
- The designer and sales rep attend the first client meeting, to agree all customer specifications up front and reduce the need for long hand off meetings later down the line
- Two people picking the same job
- A team processes a quote, technical drawings and specifications at the same time, saving weeks of total lead time between departments
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.
What are Non Value Added Activities: Other Related Questions
What 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.