Choose one particularly problematic process and make a picture of it in the form of a flowchart, with each box representing one step in the process. I recommend doing this on a computer, because you will want to make changes as you go, and using pen and paper will get messy quickly. PowerPoint will do just fine (click on View -> Toolbars -> Drawing, then click on AutoShapes and use a combination of Flowchart symbols and Connectors). Next, stick your flowchart on a clipboard and go out and watch the work happen. Write down how long each step takes. This may take several days or even weeks, depending on the process. Sometimes you can ask the people doing the work to collect this data for you, but get actual data, not guesses. Recently a client estimated that a certain process took eight hours. After observing the process, they found out that the average time was actually 38 hours.
Once you know how long each process step takes, gather together a group of people that understand the process. Ask them to evaluate the flow chart and label each step as value-added or non- value-added. (I'll bet you can guess which ones we are going to work on eliminating.)
In a manufacturing process, a value-added step "changes the physical state of the material, in accordance with customer specifications." For example, welding two parts together, tightening a bolt, or painting a part are value-added; whereas inspecting your own or someone else's work, moving material from one place to another, and setting up a press are all non-value- added.
Note that just because a certain process step is necessary in your current operation (for example, changing over a machine to produce a different part), DOES NOT mean that step is value-added. For this reason, value-added is more challenging to define for office or paperwork processes. For example, it could be argued that accounting, while currently necessary, is completely non- value-added because it adds no value to the product your customer buys. On the other hand, product development contains value-added steps but most of them happen at random times inside engineers' brains.
It is important to remember that the purpose of value-added analysis is to identify potential areas of improvement. The tougher our definition (the fewer steps identified as "value added"), the more opportunities for improvement you will find.
You might consider the following definition for the office: A step is value-added if it involves a "mathematical manipulation of numbers, composing or editing of textual documents, or analysis of numbers, words, or ideas to produce knowledge."
Unless you have done lots of improving already, you will likely find that the value-added time of your processes is less than five percent of the total process time. Think of the 95 (or more) percent as "improvement potential." Waiting time (where the product is just using up valuable space while trying to avoid getting lost, damaged, or becoming obsolete) is frequently 70 or 80 percent of the non-value-added time.
Now is the time to get creative and start thinking of ways to eliminate process steps. Lean operating concepts, including 5S (workplace organization and cleanliness), work cells, and one- piece flow are exceptionally effective in both the office and on the shop floor, and setup reduction is crucial in manufacturing. Kaizen Events (one-week focused improvement efforts utilizing a cross-functional team) are also very useful for developing improvement ideas and implementing them in a hurry.
What kind of results will you achieve? Expect 50 to 90 percent lead-time improvement, 15 to 40 percent productivity improvement, (we had a whopping 102% improvement two years ago with one client), and a 50 to 75 percent decrease in defects. If you do not believe these results are possible, even commonplace, you need to educate yourself and see what is going on outside the walls of your organization before it is too late.
Don't wait until you are forced to make improvements to survive. Put the pressure on yourself now to stay ahead of the competition, and you will enjoy the challenge.
© 2001 Everest Consulting Group, Inc. (888)910-8326.
