8 Business Sins of Non-Value Added

In the past 2 blogs I talked about non-value added activities

To recap, non-value added are activities in your business product or service that the customer does not perceive as valuable. These can be addition labor time, additional service, and even additional items in your product.

We also learned how to identify these non-value added activities. Just remember, if the customer isn’t willing to pay for that activity, then it’s not value added.

Now we are going to talk about the 8 business sins.

These can be identified in the acronym DOWNTIME. DOWNTIME is:

Defect

Overproduction

Wait

Not Utilizing Talent

Transportation

Inventory Excess

Motion Waste

Excess Processing

#1 Defects: Is defined by what is acceptable to the customer. The customer makes the rules on the what is and isn’t acceptable. They know what they want the final product and service, do and look like. And when it doesn’t meet those expectations, then there is defects in the product or service. Some of the defects can be:

  • Improper quality controls
  • Improper repair
  • Lack quality documentation
  • Lack of standards
  • Weak or missing processes
  • Misunderstanding customer needs
  • Poor design
  • Undocumented design changes

It is impossible to be 100% defect free, however, you should be working to your minimize your defects to as little as possible.

#2 Overproduction: Overproduction happens when you have employees who keep doing their work even when they go past the limited amount needed for the day. This is mainly seen in manufacturing where an employee will produce a single product until quitting time. The problem with over production is:

  • It freezes up that work from doing other jobs in the area
  • Creates storage problem
  • Items may have a defect and those over produced have the defect too.
  • Increases obsolete scrap

It’s best for the employee to work only for the forecast amount for that day and have the employee use his/her talent to produce other products after the quota has been finished

#3 Waiting: This is the most easy one to recognize. This is where you or an employee is standing there, waiting, for the next step. Just counting the minutes going by for that other part, or for someone to sign that document. But you are in a stand still and have to wait for the process to catch up and be sent to you. The causes of waiting can be any one of these:

  • Unbalanced workloads
  • Unplanned downtime
  • Long set-up times
  • Producing to a forecast
  • Insufficient staffing
  • Work absences
  • Poor process quality
  • Poor communication

What ever the reason, waiting is caused by bottlenecks in the process and need to be eliminated to have a healthy work balance and make your product and service flow smoothly.

#4 Not Utilizing Talent: At first, this may not seem like a non-value added activity, but the customer probably cares about who is producing or serving them to their full capabilities. Therefore, if you are not utilizing someone to their talent, knowledge, or skill, it may be cost the business quality, time, and customer service by not utilizing the talent within your business. You can typically see them through the following behaviors:

  • Assigning staff to wrong tasks
  • Wasteful admin tasks
  • Poor communication
  • Lack of teamwork
  • Poor management
  • Insufficient training

You can utilize the position and task of your employees by understanding their accomplishments, goals, education, and training and placing them where they seem best fit to be in.

#5 Transportation: When we think of transportation we think of vehicles. Well, vehicles are just a mechanism for transportation. But in this example, we think of transportation as moving things around in the process of our work. Too much transportation can increase cost and cause delays. Examples of transportation problems:

  • Plant/office layout
  • Unnecessary or excessive steps in the process
  • Misaligned process flow
  • Poorly-designed systems

Limiting the amount of transportation to the right person or area will make the process less complicated and more efficient.

#6 Inventory Excess: The excess in inventory is caused when there is too much is produced or ordered than what meets the customer’s demand. This can be caused by:

  • Overproduction
  • Mismanaged procurement system
  • Not understanding the customer’s needs
  • Unmonitored inventory process

#7 Motion Waste: Also known as Movement. This is any unneeded movement done by employees in the product or service to full fill the need of the customers. This can be caused by:

  • Poor process design and controls
  • Poor workstation/shop layout
  • Shared tools and machines
  • Workstation congestion
  • Isolated and siloed operations
  • Lack of standards

To fix this issue is best to do audits on how to make supplies within arms reach of the employee and minimize the amount of time it takes to walk.

#8 Excess Processing: When this happens, the the task or process has to be done again in the process. Some examples of this are:

  • Multiple signings
  • Rework
  • Excessive reports
  • Poor communications

In no order are these sins any deadlier than the other. Some maybe more deadly depending on your business.

The good news any one or more of these 8 Business Sins can be reduced or eliminated to give your customer and your income statement better performance.

To find out how to remove these 8 Business Sins from your business, just click the link below to set up a 15 minute business evaluation call to speak one-on-one with Valorie Hendrix about how we can remove these 8 Business Sins and gain you more income.

Click Here (1)

Valorie Hendrix

Owner

Dynamic Empire Consulting

 

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