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Value Added vs Non-Value Added Activities

Value added activities are those that a customer is willing to pay for and that change the product or service. Non-value added activities consume time and resources but do not add value for the customer. There are three types of non-value added waste: muda which includes unnecessary activities; mura which causes variation; and muri which causes overburdening of systems. Lean aims to eliminate all non-value added activities to improve efficiency and reduce waste.

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167 views2 pages

Value Added vs Non-Value Added Activities

Value added activities are those that a customer is willing to pay for and that change the product or service. Non-value added activities consume time and resources but do not add value for the customer. There are three types of non-value added waste: muda which includes unnecessary activities; mura which causes variation; and muri which causes overburdening of systems. Lean aims to eliminate all non-value added activities to improve efficiency and reduce waste.

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hardikp197
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© © All Rights Reserved
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Value Add & Non Value Add

Value Added Activity (VA)


Any activity the customer values (and is willing to pay for)
To be considered value add, a process step must have YES to all these questions
Does the customer care?
Does it change the thing?
Is it done right the first time?
Is it required by law or regulation?

Non Value Added Activity (NVA)


Any activity that consumes time and / or resources & does not add value to the service or
product for the customer is Non Value Added activity. These activities should be eliminated,
simplified, reduced, or integrated.
Necessary Legal / regulatory requirements
Unnecessary - Transportation (product), Inventory, Motion (people), Waiting, Over-
processing, Over-production, Defects (Errors), and Underutilised people.

In Lean, non-value-added activities are further described by the three Ms muda, mura,
and muri:
_ Muda (waste): Muda is an activity that consumes resources without creating value for the
[Link] are two types of muda:
Type-1 muda includes actions that are non-value-added, but that are for some other reason
deemed necessary for the organization.
Type-2 muda are those activities that are non-value-added and unnecessary for the
company.

_ Mura (unevenness): Mura is waste caused by variation in quality, cost, or delivery. When
activities dont go smoothly or consistently, mura is the result. Mura consists of all the
resources that are wasted when quality cannot be predicted, such as the cost of testing,
inspection, containment, rework, returns, overtime, and unscheduled travel to the customer.
You apply variation reduction techniques to eliminate mura.

_ Muri (overdoing): Muri is the unnecessary or unreasonable overburdening of people,


equipment, or systems by demands that exceed capacity. From a Lean perspective, muri
applies to how work and tasks are designed. Muri is caused by movements that are harmful,
wasteful, or unnecessary. You perform ergonomic evaluations and detailed job analysis of
operations to identify movements that are either harmful or unnecessary.

Lean strives to eliminate all non-value-added activities.


Value and Non-value Activities Examples

Electronic Assembly Process


Activity Value Non-Value
Apply Solder X
Place part by machine X
Place part by operator X
Visual inspection X
|Oven X
Testing X
Attach Hardware X
Visual inspection X
Pack in box X

Loan Sanction Process


Activity Value Non-Value
Call to apply loan X
Gather information X (incidental)
Assign Sales Representative X
Contact Lead X
Interview customer X
Collect information X
Send to Loan Department X
Complete Loan application X (Incidental)
Review information of form X
Perform Credit check X (Incidental)
Loan is approved X
Inform customer X

Fabrication Operation
Activity Value Non-Value
Unload Coils X
Received and create tickets X
Store coils X
Convey coil to stamping press # 1 X
Mount on coil roller and feed press X
Stamp initial (Flat) Shape X
Accumulate stamped parts during run X
Convey parts bin to storage X
Store parts X
Convey parts in bin to stamping press # 2 X
Load parts in feeder to feed to press X

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