Value Added and Non-Value Added Activities (Q6)

Value Added activities

These activities are those which adds value to a business process or product and for which customer is willing to pay.

Value Added Activities must satisfy the following criteria:

  • Work that physically transforms the product (or document/information)
  • Work that is done right the first time

One easy way to remember this definition is to use the acronym CPR, which stands for: Customer pays for it, Physically transforms the product, Right the first time.

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Non-Value Added activities

These are those which do not add any value to the product or service but are an important part of the process.

  • Customer contract or specification
  • Industry standard such as ISO 9001
  • Government regulation
  • Outdated work method or equipment
  • Process steps which are not needed
  • Rework due to defects found in products

It is always important to look to minimise these elements where possible, but not as far as to impact on the quality.

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Last modified: Thursday, 3 September 2020, 3:50 PM