Boosting Customer Value by Eliminating Non-value Activities

Many companies are investing significant effort into having their employees work harder to create more value for their customers, always striving to stay competitive. However, upon reflection, it’s clear that employees are already working diligently. Indeed, they’re engaged 99% of the time, striving to excel in their roles. The key challenge for a modern company lies in the actual processes: it’s not the people but the activities they undertake that create value.

By focusing on the process – the ‘things’ (paper or product) – and not the people, you’ll realize that those ‘things’ remain idle 99% of the time. To enhance the value delivered to your customers, it’s crucial to eliminate the idle time wasted by these ‘things’ in the process.

But how do you achieve that? It’s rather straightforward. Start by examining the entire process, focusing on the ‘things’ employees work on. If you notice items that no one is working on, you can safely assume that no value is being added there. These non-value-adding steps or activities should be eliminated, thereby removing wasted time from the process. This concept can be implemented using a Value Added Flow Analysis, which I’ll briefly outline for you.

Value Added Flow Analysis

1. Capture all the steps in the entire activity or process from start to finish.
2. Follow one of those ‘things’ (paper or product) from the receiving dock to the customer’s hands.
3. Record everything that happens and the time it takes. Include every single ‘step’, even when an order is sitting idle in a briefcase or notebook during transit back to the office. EVERYTHING! This list will be extensive, both in time and steps.
4. Assess each of these steps to determine if it adds value. A step adds value if it satisfies three conditions: the ‘thing’ in the process changes; the customer cares about the change; it was done right the first time. If any of these conditions aren’t met, the step is non-value-added and should be eliminated or improved.
5. After identifying all the value-adding steps, strive to eliminate or significantly improve all the others. While it may not be possible to eliminate all non-value-added steps, about 75% of them can usually be eliminated based on my experience.

Eliminating Non Value Added Steps

How can I assert with confidence that about 75% of these steps can be eliminated? Experience. Over the years, I’ve repeatedly found that about 75% of non-value-adding steps can be eliminated. Many of these redundant steps result from changing customer needs and adjustments made to processes over time.

Non Value Added Step Improvement

Not all steps can be eliminated as we often have to cater to multiple sets of customer values. Prioritization, not elimination, is key. Some non-value-adding steps that can’t be eliminated include paying taxes. While the ‘paying customer’ doesn’t care whether you pay taxes, to stay in business, you must. In such cases, focus on completing these steps as quickly and accurately as possible.

In conclusion, creating customer value doesn’t necessarily require something new, but often involves eliminating waste. This approach reduces costs without compromising quality and enables faster delivery, which customers appreciate. As always, feel free to contact me if you have any questions.”