Category Archives: Waste

4 Ways to Increase Value-Added Work

value added work

Our previous post noted that approximately half of the work done in well-run organizations is value-added, which is defined as “the work our external customers would be willing to pay for if they know what we were doing.” Regrettably, the percentage plummets to only 20% in many businesses!

Yet in reality, a great deal of “non-value-added” work is necessary and important!

Consider that many people and functions play a vital role in helping the internal customer provide value for the external customer. These are the folks ‘on the banks’ of the value stream, some of them providing key enablers such as technology, safety, or information to those creating the value for external customers.

The key is to find the right balance. In most cases, the ultimate conclusion is that it’s to our advantage if we can increase the percentage of value-added work by identifying and eliminating the “waste” that is non-value-added.

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. 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.

  1. Bundling a feature into the product or service that the customers do not really need or want. Does the technology have features that are seldom used? Does the product have any bells and whistles no one really cares about? What features have been introduced with inadequate understanding about how the products or services will actually be used? A systematic and thorough understanding of the customers is the only effective way of ensuring we are not merely adding cost instead of value when we add features to our offering.
  2. We also can err by overlooking ways we could leverage our capabilities to solve a problem that the customers may not even have articulated to themselves. We all, to a certain extent, take the world somewhat as we find it, assuming boundaries of what is possible simply by understanding what has always been. So listening to what customers would like to see is unlikely to surface needs. Innovative value creators will try to understand what the customers need before they even know they need it. Steve Jobs did this with the IPod: surfacing an unarticulated need that the resources at his disposal could brilliantly address.

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.

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. Here are a few approaches to reducing this waste:

  • Reduce clutter in the inboxes
  • Introduce and enforce meeting management protocols and best practices
  • Streamline reports


Which Half of Your Organization’s Work is Value-Added?

categories of work

Bill Conway often said, “Half of Continuous Improvement is working on the right things.”

This means finding ways to increase the amount of “value-added” work that is done each day within our organizations, which is defined as the work our external customers would be willing to pay for if they knew what we were doing. The work must also be done right the first-time and have an impact on the products or services provided by the organization.

While we want our workforce to spend most of their time engaged in value-added work, you might be surprised at the amount of non-value-added work that is part of the day-to-day reality in most organizations.

For example, think about telephone calls you might have made over the past several months to organizations such as your bank, credit card company, cable company, or some type of customer service group. The odds-are you were first greeted by an automated system of some sort, which asked you to provide information, presumably to expedite the process. This information might have included:

  • Your account number
  • Reason for your call (i.e., tech support, billing support, etc.)
  • Personal PIN number
  • Last four digits of your social security number
  • Date of birth, and so on…

Now think back… because in a high percentage of cases, when finally connected to a person, you are asked most if not all of the same questions!

Do we enjoy this experience?

Most people say, “Heck no!”

From the perspective of being value-added, what value did the auto-attendant have for the caller (customer)?
Most people agree, none!

Possibly the auto-attendant is helpful for call-routing purposes, so it might provide value for the organization that is receiving these calls, but it really provides no value for those calling in.

What is typical?
So, you might be wondering, how much of total work is “value-added” in a typical organization?

Even in the best-performing organizations, value-added work represents 50% of the work being done at best, and in many organizations, over 80% of time and resources are not adding value.

A few examples:

  • Inspections to find errors (vs. doing it right the first time…)
  • 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
  • Lost opportunities (perhaps the biggest waste of all) due to work product that does not match customer needs or customer needs that go unmet because they have not been surfaced

But just because a process step is not value-added does not mean it is a bad thing. Processes all include steps that do not add value but are required to make the product or service happen – this is typically referred to as “non-value-added but necessary” work.

In our next post we’ll share some proven ways to increase the amount of value-added work.

Identify Waste by Going to Gemba

identifying waste

As you may know, “Genba,” which has been popularized as “Gemba,” is a Japanese word meaning “the real place.”

The word is widely used in Japan, where detectives frequently refer to a crime scene as genba, and Japanese TV reporters often refer to themselves as reporting from genba/gemba.

In the business realm, gemba refers to the place where work is done and value created. For example, in manufacturing gemba is typically the factory floor, but looking further afield it can be any location — a construction site,
administrative office, or sales bullpen — where the actual work is being done.

When it comes to Continuous Improvement, problems are most visible in these areas, and the best improvement ideas will come from going to gemba. If your objective is to identify waste, there is no substitute for ‘going to the work’ and there are things that can only be learned by going there and watching the work with a purpose.

Thus a gemba walk, or waste walk, is an activity that takes management and other stakeholders to the front lines to look for waste and opportunities for improvement; to observe the work where the work is being done, and to identify what goes wrong or could go wrong, how often it does or could go wrong, and the associated consequences. The waste walk is designed to help everyone understand the value stream and its problems; it is not to review results and make superficial comments.

Aside from identifying waste and the specific gains made during waste walks, there are also higher-level benefits associated with the practice:

  • Engagement: Since people at all levels are involved, and since the waste walks have proved to be an effective method of detecting hard-to-identify problems as well as solutions which improve both productivity and day-to-day quality of work life, a noticeable increase in workforce engagement is a common by-product. People like it when problems they have known about for a long time are finally solved!
  • Trust: Company leaders are able to establish greater levels of trust with the people closest to the work, by showing interest and seeking the opinions and input of those doing the work.
  • Learn the Truth: Going to gemba enables leaders to identify reality versus what they think (or hope) is happening. Waste walks help leaders to question their assumptions as well.
  • Better Ideas: When the people who are doing the work or executing the process every day start talking, thinking and feeling empowered, the ideas really flow…
  • Ask the Right Questions: as suggested in an earlier post, questions are often the “answer” to making breakthrough improvements. However, the quality of those questions is the key! Getting the data and seeing it for the first time based on direct observation is powerful; and then if you can get customers, suppliers and company personnel working through the chain, the quality of questions that surface promote more innovative and accurate solutions.
  • Improvement vs. Habit-forming Execution: The combination of fresh eyes, diverse perspective, amnesty, and a collective, sincere interest to eliminate waste and continually improve the work process tends to bring about real, often outside-of-the-box solutions; true Improvement versus dong things the same way.

The Case of Improvement v. Waste

waste

Former Red Sox star Ted Williams is considered the greatest hitter in baseball… His .406 batting average for the 1941 season is legendary, and he finished his playing career with a .344 overall average, 521 home runs, and a 0.482 on-base percentage — the highest of all time.

A newspaper reporter once said to Ted, “Gee Mr. Williams, you’re the best batter the game has ever seen — you must be a great student of hitting.”

Ted replied, “No sir, I’m a great student of pitching!”

Just as there is a difference between focusing on hitting versus pitching in baseball, there is a big difference between focusing on “improvement” versus “waste” in the Continuous Improvement arena.

As many CI leaders know, and as Ted Williams knew, seeking solutions to the latter in both of these instances is the key to achieving breakthrough results in the former.

In other words, it’s the understanding of what waste is and how to search for it, that makes all the difference. In fact, if your implementation of Continuous Improvement is simply to look for ideas for improvement, you will follow a road of diminishing returns. But if you search for WASTE, regardless of whether you already have a solution, you can delve into the underlying causes to make truly important improvements. And with each
significant transformation, new opportunities will come into view. Recognizing waste is a matter of vision, and vision is the starting point of real business transformation.

In our next post we’ll share ideas on identifying waste.