With every engagement we undertake, at some point we need to have “the conversation” around non-value added (or non-value-adding) activities. It’s a conversation that we always approach with a degree of trepidation, but it is also one that we know needs to be had if real change is to take place. Understanding where non-value adding activities exist within a business is critical if better, more efficient, more cost-effective ways of working are to be implemented.
What Are Non-Value Added Activities?
Let’s flip this first and look at what value-adding activities (or value-added activities) are?
Simply put, these are activities that add value to a product or service. In manufacturing, it could be the drilling, or joining two parts – something that transforms raw materials into a product. In Business, it could be a financial advisor adding their recommendation to a report – adding a depth of value to support the data and findings in the report.
Anything that doesn’t add value is, therefore, non-value adding. Or is it as clear cut as that?
Not All Non-Value Added Activities Are The Same
Just because an activity isn’t considered as adding value, it doesn’t mean it isn’t essential to the running of your business. For example, consider the correction of errors in your data, or rectifying manufacturing defects. While there is no inherent value to be gained from these activities, they need to take place and cannot simply be removed from the process. These are what we refer to as necessary non-value added activities. These types of activities can be prime candidates for automation or process re-engineering, to either remove the human burden (and room for human error) or find better ways of executing that element of the process.
However, if there are activities in a process that don’t add value and are not essential to the functioning of the process, then you need to consider removing these as soon as possible. When we uncover these types of activities, they tend to be related to over-processing e.g. checks or reviews that serve no purpose. Often these activities are part of the process because “we’ve always done it that way”, which brings us neatly onto….
Why Does It Happen?
We’ll refer to the old adage of “you can’t manage what you don’t measure”. If you don’t have clear process documentation in place, it can be very hard to identify where these types of activities are taking place, as they are normally very ingrained in what people do. Furthermore, without some form of process management, there’s always a chance that non-value added activities will creep into your everyday operations. Just because everything is great “today”, controls need to be put in place to stop the pendulum swinging the other way!
When non-value added activities are uncovered, it’s common for the people performing the role to say “it’s so obvious, I can’t believe we didn’t see that”. Clients are often surprised at the percentage of non-value added activities that exist in a process, but again, without some form of measurement and analysis, it is always going to be hard to identify where they occur. The problem is that when someone is in “the thick of it”, it can be very hard to take an objective step back and assess whether there are opportunities to change.
It becomes much easier once you have the correct process documentation in place, to see where these opportunities exist. Consider taking that step back if you can – things might seem clearer from there!
So, Why Is It An “Awkward” Conversation?
On the whole, people want to do a good job, so if someone claimed that your processes weren’t ‘adding value’, there’s a chance you may feel a little defensive. This is not an unreasonable assumption – no one wants to feel that they are wasting their time!
That’s why we need to be careful with how we frame this conversation. A better way of looking at this what could you be doing instead with the time you spend on non-value added activities?
There’s fantastic value to be earned from analysing the “low-value” and possibly mundane activities – especially when you consider alternative uses for your time and efforts.
Benefits of Eliminating Non-Value Added Activities
Firstly, consider things from the perspective of running your business. All business owners want to “do more with less”. They want to spend less time and less money, gain more ground, build revenue, and grow their customer bases.
Non-value added activities could, for example, be automated, outsourced, or re-engineered altogether. They could free up unlimited potential for cost reduction as well as time and space to bring in new, more valuable activities. Where the opportunity to “fix” the process does not immediately exist, then it is also worth looking at who is performing the task. We have come across instances where senior, highly skilled individuals are spending significant amounts of time on non-value added work. In these cases, we help them look at whether the tasks can be reallocated to a more junior member of the team. Not only does this reduce the cost of performing the work, but it immediately frees up the senior person’s time to work on higher value work and gives other team members more responsibility, exposure and the chance to upskill!
There are benefits for the team, too. Your staff could, essentially, bring more value to the business by taking on tasks that directly convert into measurable results.
Financial administrators, for example, could automate error correcting and data entry, and instead spend time chasing late payments, or onboarding new clients. Sales agents, too, could spend less time updating databases and more time actively engaging with new, prospective customers.
How we Help
At Map Your Process, we help to take you “out” of the process – to take a step back, and look at your daily running as-is. Our aim is to show you the what, the when, the why, and the who – to identify where your company is losing time, and potentially money – and what the long-term impacts are.
Part of our process involves, of course, identifying non-value added activities. We don’t want to change what you do – we want to help you find a way to change how you do it.
You’ll never understand your true potential unless you take stock – and that’s just as true for SMEs as it is for bigger businesses.
If you’d like to know more about streamlining your daily process, unlocking your potential – and erasing, delegating or automating those non-value added activities – we’d love to hear from you. Get in touch via email or phone, and let’s get the ball rolling…