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Value, Shmalue

As I troll the Internet looking for juicy new Lean topics to sink my teeth into, I frequently come across questions from people asking about how to classify tasks as value-added or non value-added.

Now, the concept of value-added and non value-added work is great. It is important to understand how the tasks we do link to the needs of customers. Unfortunately, it is a very messy Lean topic. Nearly every definition I have heard has some flaws to it.

For example, the most common definition is that it is a value-added process if the customer is willing to pay for it. Sounds simple, right? Wrong.

Imagine you are a java connoisseur, and love sitting down at a coffee shop with a big latte with a beautiful design in the foam.

Value-Added Work is in the Eye of the Beholder

You’d apply value to the time spent on the artwork. On the other hand, the guy behind you in line who just wanted a quick cup to go thinks that it is a waste to do such temporary art, especially when the clock is ticking. So, is creating the design value-added or not? It is easy to say value is in the eye of the beholder, but what if you are serving more than one customer segment? That would mean that the same task is both value-added and non value-added. Sort of defeats the purpose of categorizing.

Since the waters are already muddied, let’s add to the confusion. Assume, for simplicity’s sake, that every customer values having coffee brewed instead of having it served in its component parts, namely hot water and whole beans. Is the brewing process value-added? If you said yes, what about task like tamping the ground beans, or installing the attachment under the espresso machine? If the tasks could be improved, doesn’t that imply they have waste in them, and if they are waste, can they be value-added?

The problem with the ‘customer is willing to pay for it’ definition is that it is not the work that he values, but the result of the work. A customer doesn’t apply value to the cutting process of a piece of fabric, regardless of how efficiently the work is done. The customer values having pants that fit right. The work you do is irrelevant to the customer. But that’s actually a good thing. Why? Because when we make improvements, we get to keep the profits. If we were paid by the task, and we improved a task, it would follow that the value the customer sees would drop. That is not the case. When we take less time to do something, profits go up.

So, instead of worrying about how to categorize a task, just identify what the customer values. And then focus on delivering whatever that is consistently and efficiently.

Note: The coffee picture is a derivative work of Mortefot’s image on Wikimedia Commons.

 

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2 Comments

  • Jeff,

    You are using a good common sense approach. A lot of people confuse value added with necessary work. There are certainly things that have to be done even in a lean manufacturing site that are necessary but not value added.

    Chris

    • Jeff Hajek says:

      Chris,

      Thanks for the comment. You are absolutely right about tagging someting as necessary. I stayed away from the necessary/unnecessary breakdown to keep from complicating the issue even more. I’d need to drink a few more of those lattes before tackling that point as well.

      Similar confusion arises with labeling something as necessary. One company may call a batch size of 100 pieces necessary because they don’t know about setup reduction. Another may be doing the same process with single piece flow. Are the batches then really necessary for the first company?

      Jeff

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