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Lean Six Sigma projects apply the Lean principle of value-added effort in the definition of the project and when identifying the opportunity for improvement.
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Quick reference
Lean Value
Lean Six Sigma projects apply the Lean principle of value-added effort in the definition of the project and when identifying the opportunity for improvement.
When to use
The elements of value are determined during the Define phase and used throughout the project to determine whether an activity is value-added or non-value-added.
Instructions
During the Define phase, the Lean Six Sigma team needs to determine all the elements of value associated with the outputs of the process. These elements of value are based upon what is valuable to the customers of the process, not what has been done historically or what is company policy.
The Lean tools will enable the team to determine for each of those elements of value, what, when, and where the process delivers the value and often why a step must occur. The Six Sigma tools will help to answer the question of how, or at least how well, the process delivers that value.
With this definition of the elements of value, the team will determine over the course of the Lean Six Sigma project which process steps are value-added and which are not. In addition, during the Improve and Control phases, the team will strive to eliminate the non-value-added steps and optimize the flow through the value-added steps.
When categorizing process steps or portions of a step as value-added, the activity must be directly contributing to the customer value, not just enabling another step to add value. For instance, if the item must go through a special process to add value, the special processing is adding value but the movement to and from the special process area is not adding value.
A further analysis will be done by the Lean Six Sigma team to determine the value-added time in the process. This is the time associated with conducting a value-added activity on an item. The non-value added time is then both the time associated with non-value added activity and the time spent by the item in the process waiting until the next step. The process time will be calculated using a 24-hour, seven-day-a-week clock, since that is the total time the customer is experiencing. It is quite common to find that the vast majority of the time an item spends in a process is non-value added.
Hints & tips
- The managers and operators in the process will often have difficulty classifying activities as non-value added. They will say, “But you must do this activity, or another step will not be as efficient.” Nevertheless, if that step does not directly add an element of value, it is non-value added. The implication is that the team should consider other ways to improve or control the value-added step rather than expecting non-value-added steps to do this.
- Be very careful when classifying non-value activities. If that activity is the primary job of someone, they may take offense and think you are saying that they are a worthless person. Affirm that they did the job well, but the work is no longer needed.
- 00:05 Hi, I'm Ray Sheen, and I want to take a few minutes to talk about value,
- 00:09 but this time from the Lean perspective.
- 00:12 In my experience, Lean Six Sigma Black Belts and Green Belts have a tendency to
- 00:17 over-focus on the Six Sigma statistics, and miss the tremendous benefit that they
- 00:21 can realize from the Lean portion of the analysis.
- 00:24 Some of this problem comes from not truly understanding what the stakeholders value
- 00:28 during the defined phase.
- 00:30 Now both Lean and Six Sigma rely on customers or
- 00:32 stakeholders to define value for the team.
- 00:35 They both expect the project to create value for the organization.
- 00:39 When listening to the customers and stakeholders describe the problems they
- 00:42 are experiencing, consider the kinds of issues that are brought up.
- 00:45 Depending upon the questions asked, either Lean or
- 00:48 Six Sigma tools are more appropriate for the analysis.
- 00:51 Lean is particularly well-suited to answer questions within the process along
- 00:56 the lines of what is done, when it is done, where it is done, and why it's done.
- 01:01 This is in contrast with Six Sigma,
- 01:04 which is very good at asking the question of how it is done.
- 01:08 Now we've been saying all along the two methods are complimentary and
- 01:12 that they blend very well together.
- 01:14 In my experience, most customers and stakeholders are asking both types of
- 01:18 questions, so we should be using both sets of tools.
- 01:22 My caution to you is to make sure you don't lose sight of the questions best
- 01:26 answered with Lean tools.
- 01:27 Quite frankly, when time or money is the primary justification for
- 01:31 the project rather than defect reduction,
- 01:34 the Lean tools are usually much better suited to achieve dramatic improvement.
- 01:39 This is due to the concept of value added activity versus nonvalue added effort or
- 01:45 activity.
- 01:46 I've been mentioning these terms several times, but
- 01:48 let's take a deeper look at the concepts.
- 01:51 It's during the defined phase that the attributes of value are determined,
- 01:55 and therefore the attributes that will be used to classify effort as value added or
- 02:00 non value added.
- 02:01 As we have already stated several times,
- 02:03 the Lean tools help to identify the flow of the process.
- 02:06 When using Lean analysis, we'll also assess the purpose of each step.
- 02:11 The question will be asked,
- 02:13 does this step perform any value added activities from a customer's viewpoint?
- 02:17 We do this to identify and eliminate waste, both wasted effort and wasted time.
- 02:22 So each process step is then divided into a value added portion and
- 02:27 a non value added portion.
- 02:29 Right now, you're probably asking, well, how do you decide that?
- 02:32 It's a judgment call, although it's often based upon direct observation of the step.
- 02:37 Every action or activity in the step is analyzed to determine what portion,
- 02:42 if any, directly creates value as defined by the process customer.
- 02:47 The step may be doing lots of work that is required of the procedure, but
- 02:51 does any of it directly contribute to something that the customer wants?
- 02:55 In fact, let's look a little bit more at the term non value added activity.
- 03:00 The Lean analysis will put a spotlight on non value added effort so
- 03:04 we can target that for reduction or removal.
- 03:07 Some examples of steps that do not directly contribute to the creation of
- 03:11 customer value are those associated with moving the material or
- 03:15 process item through the various business processes or facilities.
- 03:19 Now you may say, but that must happen in order to do the work.
- 03:23 I agree, it must occur.
- 03:25 But from the customer's perspective, it is not adding any new value to the item.
- 03:30 That is why we will look for
- 03:32 ways to minimize the amount of movement since movement never adds value.
- 03:36 Another example of non value added activities are those that are doing work
- 03:40 to comply with internal procedures or corporate practices.
- 03:43 Again, I'm not advocating violating policies just to violate policies.
- 03:48 But does compliance change any aspect of customer value as stated by the customer?
- 03:53 Determining value added activity is harder than you might think,
- 03:57 because those people in the process have a tendency to think that everything
- 04:01 they are doing is important.
- 04:02 It's been my experience that when we examine processes as part of
- 04:07 Lean analysis,
- 04:08 it is common to find that less than 25% of the action are true value added.
- 04:13 This is great news for the Lean Six Sigma team.
- 04:17 If you can reduce non value added effort by half,
- 04:20 it will often be a huge benefit to the business.
- 04:24 In addition to looking at value added and non value added effort,
- 04:28 we will measure the amount of actual time spent in the process and
- 04:32 categorize the time into value added time and non value added time.
- 04:37 Of course, we can immediately see that value added effort is associated
- 04:41 with value added time, but
- 04:43 there's a lot of non value added time that is not associated with any effort.
- 04:47 The item is just waiting to start the next step, or
- 04:50 it may be part of a batch process and it is waiting for its turn within the batch.
- 04:55 Process cycle time is measured on a 24-hour clock, 7-day work week.
- 05:01 All that nighttime and weekend time is non value added from a customer perspective.
- 05:07 One other non value added category that we find in many processes is
- 05:11 associated with tangled flow.
- 05:13 When an item must stop and a determination made of whether it should
- 05:17 be doing one thing or another, that is non value added effort and time.
- 05:21 A number of the lean tools will help us to overcome this non value added problem.
- 05:26 Our goal will be to have straight line flow with no branches, no interruptions.
- 05:32 During the define phase, we need to have a clear understanding of what the customer
- 05:37 considers to be valuable.
- 05:38 And that way, we can determine what in the process is truly adding value.
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