Value added and non-value added activities are the most basic fundamental of Lean Six Sigma. The basic definition of these two activities can be summarised as below :

Value-added activities change the form, fit or function of a product or services in which customers are willing to pay for.

Non-value added activities are activities that are not adding any value to the process, do not help to create conformance to customers’ specification, including all activities which customers’ are not willing to pay for. Typically, non-value added activities account for at least 70% of the total lead time. Non-value added activities can be either eliminated, reduced, or minimised.

When looking at activities in a process, we must determine if the activity is effective and efficient.  We must also determine if the activity can be improved to provide a better product or service for the customer.

Value added analysis can be performed based on who is carrying out the activities. These value add and non-value added activities can either be done by

1. People or operator – Activity of the People
2. Machine, tools or equipment – Activity of the Machine
3. Product or Process – Activity of the Product or Process

Click to gain access to Value Added Analysis – Activity of the People template for a quick evaluation on the activities carried by the people or operators.