Value-Added Vs Non-Value Added Process

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Process management is at the top of every manufacturing manager’s list every day. “Is this actually adding value to the product?”, is the question asked every day. In a machining operation, the actual drilling of the part or working with it in some manner that leads to a finished product is a value-added operation to the finished product. Moving the part from one machining center to another (drilling holes to threading drilled holes) is non-value added and is not something the customer is willing to pay for; however, it is a necessary function of the operation. Non-Value-Added Operations are defined as using valuable resources. Therefore, is there a way to eliminate the moving or transporting the part from one machine to the next one? This is an example of value-added vs. non-value-added process.

In every process there are 3 distinct stages.

  1. Value Added Operations – customer willing to pay for this process
  2. Non-Value-Added Process (but necessary) – transporting the part to another process
  3. Non-Value-Added Process (not necessary) – waiting for part to be transported to the next step.

Identifying Value Added Operations is usually quite easy in any manufacturing facility or office. Performing an operation that transforms or creates a product is the first of three steps in identifying Value Added Operations. The second, is the customer willing to pay for it? and the third is the step must be performed correctly every time, otherwise the process is not adding value to the operation and adding to the non-valued process for the re-work.

To find the savings in any manufacturing process, the Non-Value Added steps must be identified and determined if that step is “Non-Value Added – but necessary” or is it “Non-Value Added” steps that add no value to the process. Consulting specifications to ensure the part is being manufactured correctly is an example of non-value added but necessary functions.

Example of these three parts of determining the Value-Added Process and finding what can be eliminated to improve the process. The purpose of examining operations is to find areas to cut unnecessary cost out of the process to increase the benefit to the customer.

Valued-added operations are defined as, will the customer pay for, is it work that transforms the product, and is it done right every time? If the answer is “yes” to all three of these, then it is considered a value-added operation. Rooting out the inefficiencies of a process is more difficult as some of them are ingrained in the culture of the company. If a part must be moved from one operation to another, the transport is a non-value added but necessary function of the process. It could be improved by shortening the amount of time it takes to move the part. This would shorten the cycle time for the part and lend to more efficient use of resources.

Companies invoke this examination on every process in the plant to find ways to decrease the use of valuable resources. It is never a case of examining a process for improvements, enacting them, and moving on something else. This is an ongoing process, called Continuous Improvement. Over time processes will continually be examined and improved upon. Not all changes to a process will reflect the intended results. Many times, it takes continual testing and experimenting to see if it improves the result.

Six Sigma Quality Processes takes this value-add production vs. non-value production and formalizes the process for examining each process in a manufacturing cycle to determine its value to the customer.

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