What is a Non Value Added Activity?

A non value added activity is an action taken that does not increase the worth of what is delivered to the customer. A process improvement study looks for and tries to eliminate these activities. By doing so, a business can reduce its costs while at the same time increasing the speed of its processes. For example, a process might include a review or approval step that does not add value to the end product; if this step can be redesigned or eliminated, the efficiency of the organization is enhanced. Non value added activities can comprise a significant proportion of the work processes of an organization.

Examples of Non Value Added Activities

There are many types of non value added activities within a business. Examples are moving paperwork or materials from one point to another, recording activities, reviewing and approving activities, setting up and breaking down equipment, and inspecting goods at the receiving dock or during the production process.

How to Reduce Non Value Added Activities

There three approaches to reducing the level of non value added activities within an organization. They are as follows:

Eliminate entirely. Is it possible to completely eliminate the activity? This involves an analysis to ensure that there are no bad effects that will impact other functions within the business.
Reduce the time requirement. If we have to retain the activity, then can we reduce the amount of time or other costs associated with it? Perhaps it might be possible to compress or eliminate some of the processing steps associated with it.
Combine activities. If there is no way to eliminate or reduce the time requirement for these activities, then consider combining them. Doing so concurrently may reduce the overall time requirement.