Value Added

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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:

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  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.
Tip:

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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.
Challenge:

• 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? Share your answer in the comments section below and receive a coupon to one of Lean Strategies International LLC's courses.

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