Improvement is a Messy Business

The road to improvement is often a sloppy process of elimination that proceeds by fits and starts. The first problem we face when getting rid of waste is knowing what to look for. Waste is so prevalent that we often mistake it for real work!

Waste can be placed into one of two broad categories: something we’re already doing (active waste), and something we’re not doing but should be (passive waste). Let’s start by examining the category of active waste since it is easier to get a handle on.

To begin our study of waste, we’ll first consider two categories of work: value-added (VA) and non-value-added (NVA). Value-added work only includes the activities the customer is specifically paying you to do—provided that it’s done right the first time. Everything else goes into the non-value-added category of work. Immediately we see that 75%-90% of the work is not value-added. This is one of the first mental hurdles we must cross—acknowledging the reality that most of the work adds no value to the customer.

Waste can be found everywhere, but since NVA work typically exceeds VA work by a large margin, it makes sense to start looking for waste in the NVA work. NVA work includes many activities that are necessary to the operation of the business: marketing, sales, purchasing, billing, receiving, accounting, reporting, etc.—administrative processes that are sometimes referred to as “business value-added.” Also in the NVA category we have waiting time, travel time, and time off work.

One of the largest portions of NVA work is rework—doing something over that wasn’t done right the first time. Another term for this type of work is firefighting—reacting to the process/product problems that come to your attention each day. Some examples include: reworking/repackaging defective product; marketing/selling defective product at a reduced margin; reprocessing incomplete paperwork; looking for lost paperwork; inspecting for defects; routine testing for conformity; fielding customer complaints and returns due to errors or defects; and, repairing equipment that wasn’t fixed or maintained properly. With those examples in mind, you may be able to think of many more types of rework that take place in your business. You may also begin to see that we sometimes devote the resources of an entire department to the task of firefighting! There is clearly a paradigm shift needed for us to get out of reactive mode (firefighting) and get into proactive mode (planning and prevention).

As we explore this topic further, we’ll begin to look at some specific sources of waste, and develop an overall strategy to guide the improvement effort.

Reposted by permission. View the original post on LinkedIn here.

2 replies
  1. Chris Ryan says:

    Really good post J.R. Love your description of the differences between active waste and passive waste. Also like your explanation of what is value added vs. non-value added work. Just understanding these concepts can put a company on the right path.

    Chris

    Reply
    • Corinne Morris says:

      I loved this post–I often talk to people about the “opportunity cost” of not doing something you should be doing and doing something that isn’t really in the value category–busy work, excess documentation, creating a CYA process that’s constrictive to reactivity on the job–and employee morale. This is great!

      Reply

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