In the world of process improvement and operational excellence, distinguishing between activities that genuinely add value and those that merely consume resources is fundamental to organizational success. The Analyse phase of Lean Six Sigma methodology provides structured approaches to identify these activities, enabling businesses to eliminate waste and maximize efficiency. This comprehensive guide explores how to systematically evaluate your processes to determine what truly matters to your customers and bottom line.
Understanding the Analyse Phase in Lean Six Sigma
The Analyse phase represents the third stage in the DMAIC (Define, Measure, Analyse, Improve, Control) methodology. After defining the problem and measuring current performance, the Analyse phase focuses on examining collected data to identify root causes of inefficiencies and separate activities that contribute to customer value from those that do not. You might also enjoy reading about Fishbone Diagram Alternative Methods: Text-Based Root Cause Analysis for Problem Solving.
During this critical phase, practitioners apply various analytical tools and techniques to scrutinize processes with precision. The primary objective is to understand why problems occur and where opportunities for improvement exist. This understanding forms the foundation for targeted interventions that yield measurable results. You might also enjoy reading about Common Analyze Phase Mistakes: 7 Pitfalls That Lead to Wrong Conclusions in Lean Six Sigma Projects.
What Constitutes Value Added Activities?
Value added activities are operations that directly transform a product or service in ways that customers are willing to pay for. These activities must meet three essential criteria:
- The customer must be willing to pay for the activity
- The activity must physically change the product or service
- The activity must be performed correctly the first time
For example, in a manufacturing context, assembling components into a finished product represents a value added activity. The customer purchases the assembled product, not individual parts. The assembly process physically transforms the components, and when executed properly, it requires no rework.
In service industries, consider a healthcare setting where a physician conducts a patient examination. This activity adds value because patients specifically seek this service, the examination transforms their health status through diagnosis, and when performed competently, it provides immediate benefit without requiring repetition.
Identifying Non Value Added Activities
Non value added activities consume time, resources, or space without contributing to what the customer values. These activities fall into two categories: pure waste and necessary non value added activities.
Pure Waste
Pure waste includes activities that serve no purpose and should be eliminated immediately. Common examples include:
- Overproduction beyond customer demand
- Excessive inventory accumulation
- Unnecessary transportation or movement
- Waiting time between process steps
- Defects requiring rework or correction
- Overprocessing beyond customer requirements
- Underutilized talent and skills
Necessary Non Value Added Activities
Some activities do not directly add customer value but remain necessary due to regulatory requirements, safety protocols, or current technological limitations. While these cannot be eliminated immediately, they represent opportunities for minimization. Examples include quality inspections mandated by regulations, mandatory documentation, and certain approval processes.
Practical Example: Analyzing an Order Fulfillment Process
To illustrate the analysis process, let us examine a typical order fulfillment workflow at a consumer electronics company. The team collected data over four weeks, tracking each activity from order receipt to product shipment.
Sample Data Collection
The process mapping revealed the following activities with their average durations:
Order receipt and entry: 15 minutes per order
Credit verification: 10 minutes per order
Inventory check: 5 minutes per order
Multiple supervisory approvals: 45 minutes per order
Product retrieval from warehouse: 20 minutes per order
Quality inspection: 10 minutes per order
Packaging: 15 minutes per order
Documentation and labeling: 10 minutes per order
Waiting for shipping pickup: 240 minutes average per order
Loading onto delivery vehicle: 5 minutes per order
Total cycle time: 375 minutes (6.25 hours) per order
Activity Classification
The team then classified each activity:
Value Added Activities (65 minutes total):
- Product retrieval from warehouse (20 minutes): physically moves product toward customer
- Packaging (15 minutes): transforms product into shippable condition
- Quality inspection (10 minutes): ensures product meets specifications
- Loading onto delivery vehicle (5 minutes): advances product toward customer
- Documentation and labeling (15 minutes): necessary for regulatory compliance and tracking
Non Value Added Activities (310 minutes total):
- Order receipt and entry (15 minutes): necessary but could be automated
- Credit verification (10 minutes): necessary business protection but could be streamlined
- Inventory check (5 minutes): necessary but indicates potential system integration issues
- Multiple supervisory approvals (45 minutes): organizational bureaucracy with minimal benefit
- Waiting for shipping pickup (240 minutes): pure waste due to scheduling inefficiencies
Analysis Results
The analysis revealed that only 17.3% of the total cycle time consisted of value added activities. The remaining 82.7% represented opportunities for improvement. The waiting time alone accounted for 64% of the entire process cycle, identifying it as the primary target for intervention.
Tools and Techniques for Activity Analysis
Several analytical tools support the identification of value added versus non value added activities:
Process Mapping
Visual representation of workflows helps teams see the entire process and identify bottlenecks, redundancies, and wasteful steps. Value stream mapping specifically highlights value added versus non value added time.
Time Value Analysis
This technique involves measuring the time spent on each activity and calculating the ratio of value added to non value added time. The resulting metrics provide quantifiable targets for improvement initiatives.
The Five Whys
When examining non value added activities, asking “why” repeatedly helps uncover root causes rather than addressing symptoms. This technique reveals whether activities exist due to genuine necessity or organizational habit.
Spaghetti Diagrams
These visual tools track movement patterns of materials, information, or people through a process. Excessive movement often indicates non value added transportation or motion waste.
Implementing Improvements Based on Analysis
Once activities are classified, organizations can develop targeted improvement strategies. The order fulfillment example led to several interventions:
The team implemented automated order entry integration with the company website, reducing entry time by 80%. They streamlined the approval process, eliminating redundant supervisory sign offs and reducing approval time from 45 to 10 minutes. Most significantly, they negotiated more frequent shipping pickups, reducing average waiting time from 240 to 60 minutes.
These changes reduced total cycle time from 375 to 145 minutes, increasing the value added ratio from 17.3% to 44.8%. Customer satisfaction scores improved by 23% due to faster order fulfillment, and the company processed 35% more orders without adding staff.
Common Pitfalls to Avoid
When conducting activity analysis, practitioners should avoid several common mistakes. First, never assume that long standing activities are necessary simply because “we have always done it this way.” Challenge every process step with fresh perspective.
Second, involve frontline employees who perform the work daily. They possess invaluable insights into inefficiencies and potential solutions that may not be apparent to management. Third, resist the temptation to skip the data collection phase and rely on assumptions. Accurate measurement forms the foundation of effective analysis.
Finally, remember that the goal is not to eliminate all non value added activities immediately, but to systematically reduce waste while maintaining quality and compliance standards.
The Business Impact of Effective Analysis
Organizations that excel at distinguishing value added from non value added activities achieve remarkable results. Reduced cycle times translate to faster customer response and improved satisfaction. Lower operational costs improve profit margins and competitive positioning. Enhanced quality results from focusing resources on activities that matter most.
Beyond immediate financial benefits, this analytical discipline creates a culture of continuous improvement where employees at all levels critically examine their work and seek better methods. This cultural transformation represents perhaps the most valuable long term benefit of Lean Six Sigma implementation.
Conclusion
The Analyse phase of Lean Six Sigma provides powerful tools for distinguishing activities that create customer value from those that merely consume resources. Through systematic data collection, classification, and analysis, organizations identify improvement opportunities that drive operational excellence. The methodology transforms intuition into evidence based decision making, enabling targeted interventions that deliver measurable results.
Whether you work in manufacturing, healthcare, finance, or any other industry, the principles of value added versus non value added analysis apply universally. Mastering these techniques positions you to lead meaningful change within your organization and contribute directly to bottom line performance.
Are you ready to transform your organization’s performance through Lean Six Sigma methodology? Enrol in Lean Six Sigma Training Today and gain the skills to identify waste, optimize processes, and drive continuous improvement. Our comprehensive certification programs provide hands on experience with real world applications, preparing you to deliver immediate value to your organization. Do not let inefficiency hold your business back. Take the first step toward operational excellence and enrol in Lean Six Sigma Training Today.
