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3. Value added and Non Value added
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Value Added Activity
● The activity changes the product towards something that the customer wants.
● Any part of the production process that improves the product for the customer.
● The customer would be willing to pay for it.
Non-Value Added Activity- Pure Waste
● Consumes resources but creates no value in the eyes of the customer. Can and should
be eliminated
● Examples: idle/wait time, rework, excess inspections, excess transportation(all seven
wastes are in this category)
Non-Value Added Activity–Necessary Waste
● No value is created, but can not be eliminated based on
current technology or policy
Examples : Company’s Mess / canteen, ISO compliance,
employee’s insurance etc.
5. 1) Waste of Over-production
This waste can be simply defined as doing or
making things those are not required now. Over
production generate excess inventory.
It may:
• Increase Transportation
• Consume resources before needed
• Occupy space to store excess products
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6. 1) Waste of Over-production
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Reasons
● Poor scheduling and planning
● Unbalanced cells or departments
● Working on forecast / inaccurate
information, not actual demand
● Bull Whip Effect
Counter measures
● Balance supply to demand
● One-piece flow
● Proper production planning
8. 2) Waste of Transportation
It may:
● Consume time and energy
● Require excess people and
management work
● Require excess equipment or
materials
● Cause to damage products
When work is transferred from one
place to another is a non-value added
activity.
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9. 9
Reasons
● Batch production
● Push production
● Poor layout
● Lengthy or complex material
handling
Counter measures
● Standardization
● Optimum man and machine
layout
● Pull System
2) Waste of Transportation
13. 3) Waste of making defective products
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Defective products are produce when
they deviate from what the customer
requires or the specification.
Defects interrupt the smooth flow of
production It may:
● Waste of material and efforts
● Require skilled persons for
repairing work
● Require skilled persons for
monitoring abnormality of
machine
14. 14
Reasons
● Process failure
● Incapable machines
● Inadequate training
Counter measures
● Fool-Proofing (POKAYOKE)
● Automation
● If you can’t prevent a defect-
making process then you must
stop the process
● Never send defective products
to the next process
3) Waste of making defective products
15. 4) Waste of movement
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The excessive movement of man or
machine within the work space.
It takes time. (The manufacturing cost
increases)
It may:
● Consume time of his own as well as of
related people
● Make it difficult to establish standards
● Low worker moral
● cause more fatigue
16. 16
Reasons
● Poor workstation design,
excessive walking, bending.
● Unsafe work area
● Poor method design,
transferring parts from one
hand to an other
● Missing items
Counter measures
● Standardization
● Optimum man and machine’s
layout
● Study Motion Economy
4) Waste of movement
18. 5) Waste of Over processing
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Processes which don’t add value
to work.
Over processing is adding more
value to a product than the
customer actually requires
It may:
● Consume time of machine
operation
● Produce high quality products
which really not required by
customer
● Require skilled persons to
watch
19. 19
Reasons
● Customer voice not understood
● Designs “thrown over the wall”
● Inadequate technology or
design of process
● Bad machine maintenance
Counter measure
● Study thoroughly if the process
adds value or not
● If not, then think how to
eliminate the process
5) Waste of Over processing
20. 6) Waste of waiting
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It is the act of doing nothing or
working slowly whilst waiting for
a previous step in the process.
It may:
● Consume time
● Cool down muscles
● Cool down high feeling
● Deteriorate morale
21. 21
Reasons
● Work imbalance
● Bad Process Design
● Lack of necessary goods
● Push production
● Lack of priority
● Lack of communication
Counter measure
● Standardization
● Line balancing
● One operator handles several
machines
● at once (Multi skilled worker)
● Leveling (quantity, variety,
timing)
6) Waste of waiting
23. 7) Waste of Inventory
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Inventory is the raw materials, work
in progress (WIP) and finished goods
stock that is held, we often hold far
more than is required to produce
goods
It may:
● Consume time
● Consume space (area)
● Consume resources before it
needed
24. 24
Reasons
● Incapable process
● Lack of balance in work flow
● Making more than the
customer wants or in advance
of customer demand
Counter measure
● Just in Time (JIT) production
● balance your production
processes
● Use kanban system
7) Waste of Inventory