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.
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- Outdated work method or equipment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.