What is value-added work? Non-value added work?
The concept of value-added work and non-value added work is important for anyone in the world of manufacturing to understand. The success of your business, as well as the satisfaction of your customers, is dependant upon the amount of value-added work versus the non-value added work.
Value-added work is the work that is actually valuable and results in a finished product. Keep in mind that a customer is only going to want to pay for value; if they feel that their money is being wasted as a result of insufficient processes, the customer will take his business elsewhere.
It is important the customer values your work for obvious reasons - it's a chain reaction. The customer essentially provides the means to pay for the whole company, from supplies to salaries. Value-added work is utilizing resources that add value to the finished product, whether it's actually building a product or shipping it.
In order for work to be considered value-added, it generally takes three factors. These include:
- Capacity. The employees and tools used must have the necessary capacity to perform the work and add value to it.
- Information/Instructions. The workers must have the proper information and instructions needed to complete the job with as little non-value added work, or waste, as possible.
- Materials. This refers to the materials required to properly complete the work.
Non-Value Added Work
Non-value added work, also called waste, refers to work that doesn't add value to or is unnecessary for the overall project. Let's say for a moment you hired a housekeeper and paid her $100 to clean for two hours. But during those two hours, you find out that she read a magazine while waiting for the dishwasher to run instead of working on something else, or she mowed the lawn instead of cleaning the house like you paid her to. These are all forms of non-value added work. As an employer, you would probably be annoyed to find that you paid the housekeeper to read a magazine or mow the lawn instead of clean the house, which is what you wanted. It is no different in manufacturing. Customers only want to pay for that which adds value to the finished product or job; anything that detracts from that is considered waste.
There are seven main types of waste, or non-value added work:
1. Overproduction - this refers to producing more than is required, resulting in wasted products and labor
2. Excess Transportation - transportation that costs the customer money but doesn't add any value to the end product
3. Excess Inventory - more inventory than is required to complete the project
4. Excess Processing - refers to using more of the labor force than necessary
5. Waiting - idle time, either via machines or laborers
6. Correction - wasted time fixing a problem because it wasn't done correctly the first time
7. Motion - wasting time to run errands like pick up parts, etc.
Companies who strive to eliminate non-value added work while increasing their value-added work are the ones that will be the most successful. There are a number of ways to accomplish this. One of the most effective ways is to first evaluate the practices used, so you can recognize any non-value added work and then take steps to reduce it and be more efficient in your work.