Value-Added Analysis

Description

Value-added analysis is a method for identifying problems within a process. The analysis allows a team to examine individual process steps so it can separate the steps that add value for the user from the steps that do not.

Uses

When searching for sources of waste in a process flowchart.

To ensure non-value-added activites are included in a flowchart.

How do I use this tool?

1. OBTAIN OR CREATE A DETAILED FLOWCHART of the process you want to analyze.

2. For each step, ASK QUESTIONS to determine whether the step is necessary for output production, and whether it contributes to the satisfaction of the end user. If the answer is yes in both cases color-code the step green to mark it as "real value-adding."

3. If either question had an answer of "no" in the previous step, ASK WHETHER THE ACTIVITY CONTRIBUTES TO THE OVERALL NEEDS OF THE ORGANIZATION. If the answer is "yes," then mark the step as "organizational value-adding."

4. IDENTIFY AND DENOTE that the step is non-value adding if the answer to all the previous questions is "no."

5. (Optional) DETERMINE THE AMOUNT OF TIME or cost required for each step. Determine the totals for each category as well as the overall process and calculate the percentage of time or cost spent on real value-added tasks.

6. STUDY THE NON-VALUE-ADDED ACTIVITIES so they can be reduced or removed.

7. STUDY ORGANIZATIONAL VALUE-ADDING ACTIVITIES so they can be reduced or removed.

Expertise Required
This tool is easy to use and requires little or no training.
Advantages

Provides useful addition to a flowchart.

Is simple and easy to use.

Disadvantages

Need to create or obtain a flowchart.

Where can I go to learn more?

Bauer J, Duffy G, Westcott R. Improvement tools. The quality improvement handbook. 2nd ed. Milwaukee, WI: ASQ Quality Press; 2006. p. 109-48.