So now let's explore the concepts of value, add and non-value add, these two concepts are extremely
important when it comes to they form the basis of all process improvements when it comes to.
So the biggest requirement of Lane is to identify value adding and non value adding steps and seek ways
to move the non value adding steps without disrupting the process.
Right.
One of the key concerns people have when it comes to process improvement and price reforms is how disruptive
will this be?
That's why some people are concerned when it comes to lean Six Sigma that concerned about the disruption,
the benefits of doing this include reduction of waste, more efficient processes, products getting
to market quicker, and colleagues being happier in their roles.
Now there are three types to explore.
You have your value adding steps are those which the customer would actually pay for.
They actually affect the end product.
You have non value adding steps are those that do not affect the end product and non value adding,
but required steps are those that do not add value to the final product but are required from a legal
or regulatory standpoint.
So let's look at some examples.
So from a value add perspective, this is steps that the customer would actually pay for because this
actually affects the end product, so we could have things like adding new features, the product,
upgrading it, updates to software, building that product, delivering training, receiving an order,
invoicing for an order.
Those sorts of things actually add value to the process because these affect the end product, right?
Even the invoicing affects the end product.
When it comes to non-value add moving products around, rework peer review and checking audits, storing
information, reporting and process a lot of the non-value add steps in the process may actually benefit
the business itself, right, to the person producing these products.
For example, peer review, they say if we peer review or check the data, the information service,
we're going to get ninety nine point five percent accurate.
When we don't give you a check, we notice we get down to 95 percent.
Right.
So we have to do that.
The customer doesn't care about that.
Right.
The customer expects you to get it right.
First time they're paying for service or product.
They expect you to get that right.
First time.
They do not want to pay for you to fix your mistakes.
So often when it comes non-value add, you want to try and reduce as many of these steps as possible.
But obviously you need to think about quality.
If I knew I had a process, I was highly volatile.
I would not go removing the peer review or checking steps because I know that could lead to accuracy
reduction, which then could lead to customers complaining and or leaving the organization.
Right.
And then you got the non-value add that required steps, right?
So some of my fans having a legal secretary, data privacy, checkmating data protection forms, legislative
checks, safety testing, all of those things are needed.
I've worked a number of processes where I have to go through data privacy checks, make sure our new
prices have the right legal standpoint.
From a data protection perspective, these things don't add value to the end product, but they are
legal requirements.
Therefore, they have to happen.
Therefore they have to stay within that process.
So if you looked at a process from a VA and non VA prospective.
Often the way I would do that is I would look at my end and process and say, OK, I can see how many
swim lines I have, how many agents have working on this.
I can see that flow of information.
I always color code this right.
If I'm trying to deliver to leadership team to say these are the value added known value add steps in
the process, I like to color coordinate.
Obviously red will be those steps that aren't actually adding value.
We don't need those steps in this process.
The green steps are those that do add value.
And to this particular process, we saw significant amounts of money, intervention, waste chasing,
checking things that just were not needed in this process.
When you reform the process and remove the non value adding steps, you can get to a much more streamlined
process.
Now, of course, in the new process, you can see on here there is still four different teams involved.
There are also handoffs.
Right.
And we want to try and get as few hands as possible to reduce that waiting time.
But I can guarantee the waiting time for the new process compared to the old process was very, very
different.
Big reductions in waiting time here.
So here you can see the real benefit of identifying which of those steps are adding value, which are
not adding value.