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What is value add?

Something the customer is willing to pay for.

Here are some examples of what may be considered as Value Add in a Lean office:

  • Inspections and Documents that the customer is paying for

  • Processing a fee-based transaction as the customer is paying for it

  • Processing Late payment fees - as the customer will ultimately have to pay for it

Some questions to ask yourself:

  • What is the necessary output from the customers perspective?

  • What is the product your company produces for the customer?

  • What are the absolute minimum steps required to give it to the customer if everything worked perfectly?

  • Does the task meet the customer requirements? Does the customer care?

  • Is there a benefit that the customer expects from your company which other companies do not include in the price?

  • Does the task physically change the product, information or service?

  • Is the task done right the first time?

  • What's the simplest way to identify Value Add vs. Non Value Add?

  • First ask the questions - What is the problem I am trying to fix? What is the output I am trying to affect?

Break down the job – list every detail

  • Ask the question - What is the current performance of these tasks/processes? What is the customer perceiving as a service they are willing to pay for? Product only? On-hand service support in addition?

  • Question every detail to see if something can be eliminated - Why is this step necessary? What it its purpose?

  • Question the steps to see what is the best order to perform these tasks in, and look for opportunities to combine steps - Where should it be done? When should it be done?

  • Question the people performing the task to ensure they are in the best location, that they have the tools and process instructions to perform the task, and that they escalate anything which is not the way it should be - Who is the best person to do it?

  • Question the whole process, look for simplifications - How is the best way?

And keep the end in mind. You need to find out the benefit/cost equation as per the customers perception, and ensure the output your process gives falls within your customers perception.

If the answer is yes, your process is value adding.

Do you have any other examples of Value Added services in a Lean Office environment? We would love to hear from you!


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