Category Archives: Value-added work

How to Devote More Resources to Value-Added Work

Our previous post defined the concept of “value-added work” as being work our customers would be willing to pay for if they knew what we were doing. That post also noted it is common for 50% – 80% of all work within an organization to be “non” value-added!

Here are four ways to devote more resources to increasing the amount of work that is value-added within an organization:

1 — Work On The Bottlenecks
When we work on many things that have a small effect, we will have a small impact. The way to increase value most substantially is to work on the bottleneck, or constraint. All improvement effort that is off the critical path will have a lower impact on increasing the value add. If the bottleneck can be widened even just a little, it provides a pure increase in value.

2 — Increase Understanding of And Alignment With What Customers Truly Value
One of the biggest wastes is when the products or services we offer do not align perfectly with the customers’ needs and values. Errors are possible in two directions:

  • Bundling a feature into the product or service that the customers do not really need or want
  • Overlooking ways we could leverage our capabilities to solve a problem that the customers may not even have articulated to themselves

3 — Get At The Root Causes
Replace the constant working on problems and symptoms with lasting solutions by drilling down to root causes. For example, the sales force of one company needed to better understand the value of additional services they could provide to customers. Rather than addressing the issue / opportunity in each proposal, they developed a calculator to make it quick and easy to help the customers (and themselves!) see the value provided by the additional services.

Another example is data accuracy issues in software that helps a company develop routes for drivers. Any error in the data input will create errors in the routes — inefficient or even impossible routes. The underlying cause is errors in the data input, but the root cause is somewhere in the process through which the correct data should be identified and entered. Studying the input process to identify where and how errors are made will help lead to and address the root causes and greatly reduce the amount of resources NOT creating value for the customers.

4 — Eliminate The Non Value Adding Administrative Work
A great deal of time in most organizations is spent on emails, meetings, and reports that do not produce additional value for the customers or the organization. Finding ways to reduce email clutter, improve meeting management, and streamline reports are just a few examples of how this non-value-added work can be reduced or eliminated.

Is Your Work Value-Added?

One of Bill Conway’s favorite sayings has always been, “The most important business decision people make every day, is deciding what to work on.”

It’s important for us all to continually self-evaluate in this area. What should we work on? What value will it add for our customers?

Once people know what to work on, they can then determine which tools and methods to use – i.e., How should we go about it? But deciding “what” to work on and “why” must be the first considerations.

Most of us would likely agree that we want our workforce to spend most if not all of their time on “value-added” work, which is often defined as the work our external customer would be willing to pay for, if they knew what we were doing.

Sometimes this is a product, sometimes a service, and sometimes a combination of product and value-adding service. For example, a value-adding distributor delivers the product to a work-site but can also prepare or pre-stage the material, so it is ready to be put into use, saving the construction company time and money. The value goes beyond the product they sell to the service of presenting it in the form that is ready for use.

Common Categories of Work

People are often surprised at the amount of “non-value-added” work that is part of the day-to-day reality in most organizations. Even in the best performing organizations, it is well under 50% of the work being done. In many organizations, over 80% of time and resources are not adding value.

Consider these common examples of non-value-added work:

  • Inspections to find errors
  • Rework to fix errors
  • Errors or defects that are never found and make their way into defective final product
  • Work that sits waiting in front of a bottleneck, or resources that are idled behind a bottleneck
  • Unnecessary work
  • Necessary work such as filling-out expense reports
  • Excess inventory
  • Work product that does not match customer needs or customer needs that go unmet because they have not been surfaced

So, the question is, what can, or should, we do to increase the amount of value-added work within our organization? Our next post will focus on some answers…

Launching a Time Management Improvement Plan

The Value of Time?

A previous post focused on five steps for improving our use of time. In that post it was suggested that using “time” as a measure to find and focus opportunities for improvement has three big advantages:

  • Time drives important business results
  • Time is universally applicable
  • It is very simple to do

Should you decide to launch a time management improvement plan in your organization, it will be important to prepare people by ensuring that the following points are thoroughly understood:

  • The waste in the system is not the fault of the people doing the work; it is there because of the way the process is designed or because of the way that the supplying processes are designed.
  • The people closest to the work can help you find and fix what is wrong with the way the processes are designed.
  • Recognizing non-value-adding work does not mean that you can simply make it go away. It only means it is a candidate for elimination or reduction. An effective solution may not yet be at hand. That’s OK. Recognizing the waste is the first step to searching for a better way.
  • Value-added work is not as plentiful as people might think – on average, only 20% of all work is truly value-added. Keep in mind, every process will contain “necessary” work that is not value-added. The goal is to optimize time spent on value-added work, reduce time spent on other work, and eliminate waste.
  • Someone who has never done this before might find it difficult to identify non-value-added work during their analysis because it is hard to recognize the waste in standard operating procedures. “If we have always had to do something, it usually seems that it surely must add value,” they will likely think. In addition, rework typically compensates for a problem that is so familiar that everyone takes it for granted. Recognize and improve as much as you can, then circle back and look again.
  • With practice and coaching (and amnesty) people can identify more opportunity.
  • Everyone must have amnesty. If people are afraid for their jobs, either because they might be blamed for the waste or be no longer needed if the work is streamlined, there is every disincentive to find and eliminate waste.
  • Successes in reducing cycle time or saving time overall should be measured and celebrated!

How Much of Your Work is Value-added?

Most of us would likely agree that we want our workforce to spend most if not all of their time on “value added” work, which is often defined as the work our external customer would be willing to pay for, if they knew what we were doing.

But studies indicate that even in the ‘best performing’ organizations, “value-added work” is well under 50% of the work being done!

Consider the following examples of “non-value-added” work:

  • Inspections to find errors
  • Rework to fix errors
  • Errors or defects that are never found and make their way into a defective final product
  • Work that sits waiting in front of a bottleneck, or resources that are idled behind a bottleneck
  • Unnecessary work
  • Excess inventory
  • Work product that does not match customer needs or customer needs that go unmet because they have not been surfaced.

If this list is a familiar one, you’re not alone… and while this list could go on, the point is that there is a huge opportunity for improvement for most of us if we could simply convert just some of the non-value-added work into pure value-added work.

Simple… but not easy!

Assuming we conduct an honest assessment of all work processes, here are four ideas for increasing the amount of value-added work:

  1.  Work on the bottlenecks
  2. Increase understanding of/ alignment with what customers truly value
  3. Identify root causes of errors, defects, etc.
  4. Eliminate non-value-adding administrative work such as unnecessary email, unproductive meetings, or reports that do not produce additional value for the customers or the organization

Read the full article…

How to Make Work More Value-Added

valueadded22Given that value-added work is “the work our customers would be willing to pay for if they knew what we were doing,” the core value- add of an organization’s leadership is to study and improve the system of work and to maximize the amount of work that is value-added.

By using the insights and information of people doing the work and knowledge about improvement tools and methods, a manager can improve the system of work so that everyone’s performance improves, more value is created, and the organization becomes stronger and more profitable.

Here are four ideas to increase the portion of resources that are directed at value adding activities:

  1. Work On The Bottlenecks – When we work on many things that have a small effect, we will have a small impact. The way to increase value most substantially is to work on the bottleneck, or constraint. If the bottleneck can be widened even just a little, it provides a pure increase in value.
  2. Increase Alignment With What Customers Truly Value – One of the biggest wastes is when the products or services we offer do not align perfectly with the customers’ needs and values. Errors are possible in two directions.
    • Bundling a feature into the product or service that the customers do not really need or want.
    • Overlooking ways we could leverage our capabilities to solve a problem that the customers may not even have articulated to themselves.
  3. Get At The Root Causes – Instead of  working on problems and symptoms, drill-down to root causes so that lasting solutions can be found.
  4. Eliminate The Non Value Adding Administrative Work – A great deal of time in most organizations is spent on emails, meetings, and reports that do not produce additional value for the customers or the organization. By taking proactive steps such as reducing inbox clutter or introducing meeting effectiveness practices, an organization can reduce waste and quickly boost people’s capacity to perform more value-added work.

By tackling these four things — the bottleneck, understanding and alignment with what the customer really values, the root causes and the non-value adding administrative work — any organization should be able to greatly increase the value content of the work.

Read the full article…

A Closer Look at Value-Added Work

value1As noted in our previous post, the most elementary definition of value-added work is “work our external customer would be willing to pay for. if they know what we were doing.”

Sometimes this is a product, sometimes a service, and sometimes a combination of product and value adding service. For example, a value adding distributor delivers the product to a work-site, but can also prepare or pre-stage the material so it is ready to be put into use, saving the construction company time and money. The value goes beyond the product they sell to the service of presenting it in the form that is ready for use.

But a large portion of every organization’s resources goes not to true value creation but to all the additional activities we have in place because we have not yet found a way to make them unnecessary.

For example, if given the choice, the customer would be willing to pay us to do the job right, but not to pay us to do it wrong first and then fix it.

Would they be willing to pay extra for error-prone processes that require us to inspect the output to try to find the mistakes?

Would they be willing to pay us to warehouse inventory (as it slowly grows obsolete), or to build in features they would never use?

Would they be willing to pay us to wait for the work that is held up by our bottlenecks?

Adding Value to the Bottom Line
The customer may be willing to pay the price we ask, but all of the waste is on our dime. Every bit of it we can eliminate can be taken right to our bottom line.

Many people and functions play a vital role in helping the internal customer provide value for the external customer by providing key enablers such as technology, safety, or information to those creating the value for external customers. Some of these people may also remove the complexities or problems from work, possibly through inspection and rework,  or through process improvements.

If we can eliminate the root causes of these complexities and impediments, the time we spend removing them can be redeployed to creating more value. However, if an organization is not yet well aligned and 100% focused on creating value for the external customers, internal customers may actually create waste by requesting products or services from internal suppliers (i.e., coworkers) that do not create value. This may include attendance at non-value adding meetings, reports that do not increase ability to serve external customers, data or analysis that do not increase ability to provide more value to the customers.

We can manage this risk and increase alignment by constantly challenging and rethinking work to ensure it creates value for external customers or helps internal customers create value for external customers.

In our next post we’ll take this final point further, and identify specific steps for increasing the percentage of work that is value-added.