Intro: Welcome to the E6S-Methods podcast with Jacob and Aaron, your source for expert advice on Lean, Six Sigma, and performance improvement methods. In this episode number 37 we discuss the difference between Value-Added and Non Value-Added work, how we witness Non Value-Added work everywhere. And it stinks. Here we go.
***Stop and Smell the NVA, It's Everywhere, and It Stinks!***
Objection 1: Finance/accounting, HR and regulatory processes are business requirements. They are VA by definition.
Counter 1: By Definition that is completely false. These functions have no impact on the product or service, and the customer does not care about them. The business put them in place to handle some other internal business challenge or imposed requirement, having nothing to do with the paying customer
Objection 2: Customer requires Inspection/Quality Control, so this must be VA.
Counter 2: Just because the customer requires it, doesn't mean they're willing to pay extra for it. They require some NVA because they have learned that VA processes still produce problems. And they don’t want your problems.
I Definition of NVA & VA
a. "NVA = Non-Value Added or Non-Value Creating. Work we do that does not transform the service or product of a single transaction in any way.
b. VA - Value Added or Value-Creating. Transforms the service or product of a single transaction in some way. This is what the customer is paying for
c. BVA - Also known as Business Value-Add. Non-Value Added, but may be required for the business, may be regulatory. Watch out for this. It's a slippery slope. "
II Most companies are 98+% NVA in their processes. Most jobs are NVA by definition.
a. Example, Expense Reporting Process.
i. Submit Itemized Expense Reportà Collect Receipts àScan Receipts à Print Scanned Receipts à Fax Printed/Scanned Receipts à Manager Approval à AP Prepay Audit Checkà Cut a Reimbursement Checkà Mail Reimbursement Checkà Deposit Reimbursement CheckàPay Credit Card
b. Aaron's NVA Job.
i. Elevator Speech – How do you add value to your final customer?
1. Transfer knowledge to the people who will work on the processes that are used by the people who do the VA work and interface with the final customer. (At least 3 steps removed from VA on most days, sometimes only 1 step removed.)
c. Office Space Quote:
"What would you say ya do here?" …. Answer: "I have people skills. I'm good at dealing with people."
d. Stencils Project
i. Plant took up the entirety of 20K sqft, and needed less than 1K sqft. With lots of empty space between. An entire job was created and maintained for a woman to deliver paperwork between process functions, all a result of a horrible layout.
III NVA discussions can result in heated debate, ego/fear fueled denial, and even hostility.
This comes up in every VSM project, and every VSM training, and I believe it is tied to people's egos, not wanting to consider that they themselves may be NVA, threatening their sense of company or self-worth.
a. I've had colleagues get black-balled from speaking to certain parts of an organization due to this debate, and disagreeing on what's NVA vs. VA. This company has a "command-control" very hierarchical company, and was not open to a different/new perspective.
i. It’s always interesting when a company hires a consultant due to a problem, and then proceeds to fight the consultant at each step they try to solve the problem.
Outro: Thanks for listening to episode 37 of the E6S-Methods Podcast. Stay tuned for episode number 38, where Jacob and I discuss our experiences for how projects fail. Subscribe to past and future episodes on iTunes or stream us live on-demand with Stitcher Radio. Follow us on twitter @e6sindustries. Find us on LinkedIn to join a discussion. Outlines and graphics for all shows are posted on our website, www.E6S-Methods.com. “Journey Through Success”