1. Value Analysis and Waste Identification
Welcome to the session!
Learn more about Value Analysis and Waste Identification at:

2. Let’s band together for Safety, Quality, Speed of Execution
Let’s take a minute for SAFETY:
Who has a safety concern/ contact or tip?
SAFETY FIRST

3. Objectives Review the concepts of value-added and non value-added work
Learn to recognize non value-added work and complete a Time Value Analysis (TVA) Chart
Understand the 8 common types of process waste
Learn the steps of a waste walk using memory jogger ‘DOWNTIME’

4. What is Value? Definitions: “Relative worth, merit, or importance”
“Estimated or assigned worth”
“The worth of something in terms of the amount of other things for which it can be exchanged…”
Definitions from Dictionary.reference.com

5. What is Value Add? Two types: Customer Value Add
Physical transformation of product or service
Customer is willing to pay for the transformation
Done right the first time
Business Value Add
Anything that the business benefits from:
Required by law, regulation, agency policy
Reduces risk, etc

6. Basic Definition of Work Activities
Value Added
Physical transformation of product or service
Adds a form or feature, moves it closer to final form
Customer willing to pay
Source/ enabler of “competitive advantage” (better, faster, cheaper)
Done right first time

7. Basic Definition of Work Activities
Business Value Added
Required by Federal, State, or Local Law or Regulation
Reduces risk (product, operational, financial, safety, etc)
Critical to avoiding process breakdown
Required by agency policy or specific contract requirement

8. Basic Definition of Work Activities
Non-Value Added
Everything else that is not customer value added or business value added
Not done right first time
Re-work, corrections, etc.
Activity customer is not willing to pay for:
Storage between operations, batching inventories
Unnecessary process steps
Movement of inventory, paperwork, etc.
Wait times, delay times, idle times

9. Evaluating Work Content
“VALUE”: Customer knows it when they see it
Value Added or Non-Value Added?
Greeting a customer
Taking an order
Doing a credit check
Filing a customer order
Filling a customer order
Vacuuming a reception area
Watering plants
Adding a component to a product
Testing a product
Inspecting a part
Pulling parts from a warehouse
Sweeping a production area
Welding

10. Necessary or Unnecessary?
Value Added
Continue Doing
Challenge Assumptions
Non-Value Added
Work to Reduce Challenge Need
Eliminate Immediately

11. Our Goal and Focus Customer Value Added
Improve the efficiency and effectiveness of the task
Improve the flow of value to the customer
Monitor to assure we are meeting customers’ evolving requirements
Business Value Added
Verification that it is truly required
Reduction/ elimination of requirements
Redesign tasks to meet requirements more efficiently
Non-value Added
Total and complete elimination, forever

12. In the Eyes of the Customer
Is the work to make this design Value Added??
If you are sitting down in a resort locale for a casual cup of coffee?
If you are four deep in a line waiting for a “cup of Joe” on your way to work?

13. Are there NVA steps here?
VA Work May Have NVA
Brew
coffee
Are there NVA steps here?
Waste likes to disguise itself as value-added work
Add cream / sugar
Pour in cup
Provide Wi-Fi
Take order
Grind coffee
Pre-heat vat
(Set-Up equip)
Write name on cup
Sell CD’s
Time Value Analysis Chart (TVA)

14. Customers Do Not Care About Your Process
The Bad News:
You don’t get credit for a good process
A customer pays based on the finished product or service
The Good News:
If you can save it in the behind the scenes processes, you get to keep it!

15. Value Analysis Steps
Using your process map, identify Lead times for process steps
Work Time
Wait Time
Transportation Time
Classify each step as Customer VA, Business VA (non value added, but necessary), or pure NVA
Calculate the VA to NVA Ratio
Total Customer and Business Value Added Steps
Divide by Total Time and Get % Value Add
Communicate using a Time Value Analysis (TVA) Chart

16. Priority
After analyzing root causes, the next step is to consider improvement
We will work to identify and remove waste and wasteful practices:
Eliminate Non Value Add work content
Reduce Business Value Add work content
Improve Customer Value Add
(“TCE” = Total Customer Experience)

17. Waste - Defined
Waste
Elements of an activity that do not add value from the customer perspective
Waste only adds cost and time
Things to remember about waste
Waste is really a symptom rather than a root cause of the problem
Waste points to problems within the system
We need to find and address root causes of waste

18. Types of Waste in Many Processes
Non-Value Added Work Content (most common) Use this Memory jogger: ‘DOWNTIME’
7 common types (+ 1):
Defects - incorrect data entry, inspection
Over production - preparing extra reports, reports not acted upon, multiple copies in data storage
Waiting - processing monthly not as the work comes in (i. e. closings, billings, collections)
Non-utilized resources (untapped creativity)
Transportation - extra steps, distance traveled
Inventory - transactions not processed, M&R parts, UTR’s queued
Motion - extra steps, travel from office to office / desk to desk, extra data entry...
Excess processing - multiple Billing sign-offs, inspection
Defects
Transportation
Over-production
Inventory
Waiting
Motion
Non-utilized resources
Excess processing

19. Defects
Information, products, parts, or services that require rework, correction or are scrapped
Correcting an error or repairing a defect in materials or parts adds unnecessary costs because of additional equipment and labor expenses

20. Overproduction
Make more earlier or faster than the next operation needs it
Doing this requires more raw product inventory than necessary, over uses machines and people and requires more storage area

21. Waiting
Waiting for machines, materials, information, or people, sign-off’s etc.
Idle time between operations or events

22. Non-utilized Resources
Not utilizing people’s experience, skills, knowledge, creativity, or ideas
Excess equipment or technology
Unused contribution
Underutilized ambition
and drive

23. Transportation Moving material, information, or equipment around
Transportation is a required action that does not directly contribute value to the product
It’s vital to avoid unless it is supplying items when and where they are needed (i.e. just-in-time delivery)

24. Inventory Any supply in excess of one-piece flow
Excess inventory masks unacceptable change-over times, excessive downtime, operator inefficiency and a lack of organizational sense of urgency to produce

25. Motion
Any movement of people that does not contribute added value to the product
Excessive walking, twisting, bending, reaching, or motion to complete a task

26. Excess Processing
Effort that adds no value to the product or service from the customer standpoint
Processing work that has no connection to advancing the line or improving the quality of the product or service

27. Causes of Waste Types Motion Waiting time Overproduction
Problems / Causes / Examples
Incorrect layouts causing excessive walking
Time chasing information and data
Lacking ergonomic workspace design
Lack of proximity of machines, off-line resources
Equipment downtime
Waiting workers, machines, materials, approvals
Long set-ups and lead times
Large batches, raw material stocks
High WIP, finished goods stocks
Making for the sake of it/ Ignoring customer
Excessive paperwork trails, checklists
Long cycle times- process, itself
Unnecessary steps/ handoffs
Re-entering data, making extra copies
Missing or incomplete information
Lost paperwork or documents
Work not meeting standards
Approvals of approvals
High number of verification steps
Reliance- Mass inspection techniques
Unnecessary material movement
Extra handling / Moving data
between computer systems
Types
Motion
Waiting time
Overproduction
Excess Processing
Defects
Inspection
Transportation
People
Process
Product
(NOTE: Non-utilized resources can touch each of these)

28. Examples of Waste in Many Processes
Layout (distance)
Insufficient maintenance
Poor work methods
Ineffective scheduling
Incorrect final point of rest
Counting inventory
Multiple Signoffs
No back-up/cross-training
Excessive Mobile Equipment
Lack of workplace organization
Too many outside trucks in the yard
The longer waste occurs, the more accepting you become!

29. Waste in the Form of Rework
Each defect must be detected, repaired, and placed back into the process (costs time and money)
HIDDEN FACTORY = “SHADOW TERMINAL”
Waste Causes A ‘Hidden Factory’ Increased Cost & Lost Capacity

30. Example of Transportation Waste
Mobile Equipment makes a trip to the hook before receiving its first move instruction

31. The Challenge: Find and Eliminate Waste
Objective
Ask each team to take one of the typical wastes and find
at least one example in their site and eliminate it
Conduct Waste Walk
A planned visit to where the work is being performed to observe what’s happening and to note the waste
Include waste elimination execution in status reports
Require waste elimination every month / every day
Reinforce / reward for found and eliminated waste

32. Waste Walk Steps 1) Huddle with your team members Describe the purpose
Describe the various forms of wastes and examples
Pass out copies of the Waste I.D. and Recording Form current-state map and identified problems
Assign areas to walk within your team
Usually better to have a pair of people for each assignment
2) As a group, walk the whole flow (value stream) depicted on your map to confirm the areas of the individual/pair assignments

33. Steps (continued)
3) Explain to the people in the area of observation what you are doing 4) Share the map and waste examples and describe the objectives of the observation activity 5) Move to areas for individual assignments, and study the areas for minutes 6) As you see work that appears to be waste, jot down the example you see on the form 7) Return to the team and discuss what you have seen

34. Steps (continued)
8) As a team, match the wastes you see to problems previously identified in the current-state map 9) Put the results of the waste walk next to the current-state map being shared in the area and use the examples to continue to socialize the current state and the system-level problems that frustrate the people and process NOTE: If other significant problems are identified during the walk, place them on the map also

35. Review
Explore definition of value added and non-value added work and Time Value Analysis (TVA) chart
Recall the 8 common wastes within processes
Understand the concept, step(s), and form for a Waste Walk
Utilize the memory jogger: ‘DOWNTIME’
Watch the DVD - “An Introduction to Continuous Improvement & Lean Principles” by GBMP

36. Value Analysis and Waste Identification
Thank you for attending the session!
Learn more about Value Analysis and Waste Identification at: