Category Archives: Value-added work

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.