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Value Added

1/13/2021

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  Value added work is the actual work that a customer is willing to pay for.  It can be described as any activity that transforms a product or service from one condition to another, is done right the first time through and somebody is willing to pay for it.  With that said, value added work has three defining characteristics. We’ve outlined them in a checklist below:
  • To be value added somebody must be willing to pay for the service or item.  
  • Transformation occurs.
  • The activity is performed correctly the first time.  ​
Example:
Value Added Email
  Here is an example of a value added activity.  Keep in mind that no process is 100% free of waste.  John receives an order for a part he must machine.  John begins machining his part and completes it correctly the first time through.  This is seen as value added because the customer is willing to pay for it, the transformation occurred on the machine and he machined the part correctly the first time through.  Let’s look at one more example.  Martha requests some information from Dianne.  Dianne gathers the necessary information and emails Martha.  When Martha receives the information she is grateful.  She reads through the email and is able to get all the information she needs to complete her task.  This would be considered a value added email because Martha requested it, the email contained all the necessary information and it was performed correctly the first time.

Helpful tip:
Value Added Questions
Some activities can be difficult to determine whether they are value or not.  If you are unsure as to what type of work the activity should be classified as, ask yourself the three questions shown below:
  • Was the customer willing to pay for this product, service, activity or information?
  • Did transformation occur?
  • Was the transformation that occurred completed with no errors or defects the first time through?

  If any of your answers were a no, the activity can not be value added and is either Business necessary work or non-value adding work.

Question:

  John receives a second order for parts he needs to machine.  He begins machining the parts however one hole is undersized.  Because it is undersized he can rework the hole.  Is this activity still value added?

**Place answers in the comments tab below.**
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Active Inventory

1/12/2021

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Inventory
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  Active Inventory is inventory that is to be used or sold within a defined period.  Such as a specific accounting year. 

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5S System

1/8/2021

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Above video created Apr 28, 2017
  The 5S system is a visual workplace management system that promotes safety, efficiency and teamwork while making abnormalities visible. 

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Dedicated Line

1/6/2021

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Dedicated Line
Picture Ref: https://en.wikipedia.org/wiki/Automotive_industry
  A dedicated line is one that is configured to run, produce or supply either information or parts one piece at a time.  This allows production to move from station to station at a more rapid pace and ultimately improves quality, efficiency and eliminates waste.  Dedicated lines should be established only after analysis as they often times require larger investments.

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Lean

1/5/2021

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  Lean is a continuous improvement strategy that a company embarks on to maximize customer value and minimize waste.  The term "Lean" was first used in the book The Machine That Changed the World by James Womack.  A lean organization focuses on providing complete value or Value added activities to their customers.  One of the ways that lean accomplishes this is through the complete and total elimination of any form of waste.  

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Six Sigma (6σ)

12/29/2020

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  Six Sigma is a strategy that gives organizations a structured means to improve business processes and solve problems.  The result of improved business processes leads to increased performance, reduced defects, reduced variation, improved use of capital and resources and more stable and consistent results/outputs.  

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Quality

12/22/2020

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Quality
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  Quality is how well a product or service meets the needs of a customer according to some said standard. 

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8 Wastes

12/14/2020

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  The 8 forms of waste are also referred to as the 8 forms of muda.  A Lean strategy attempts to remove any and all forms of waste from business processes.

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Standardization

12/1/2020

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Standardization
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  Many processes depend heavily on standardization.  Which is simply the process of establishing, sharing, conforming and improving standards. 

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Defect

11/23/2020

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  A Defect is any output from a service or a product that does not meet the customer required specifications, standards or requirements.  A defect is not the same as defective.  There may be more than one defect in a defective product or process.  A Defect is also one of the 8 forms of waste or muda. 

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