In today’s competitive business environment, organizations continuously seek ways to eliminate waste and improve efficiency. One of the most critical aspects of process improvement is identifying and measuring non value added time. This essential component of Lean Six Sigma methodology helps businesses understand where their resources are being wasted and provides actionable insights for improvement. In this comprehensive guide, we’ll explore the measure phase and how to effectively quantify non value added activities in your organization.
What is Non Value Added Time?
Non value added time refers to any activity or period within a process that consumes resources but does not contribute to creating value from the customer’s perspective. These activities increase costs, extend lead times, and create inefficiencies without improving the quality or functionality of the product or service. You might also enjoy reading about Measure Phase Documentation: What to Record and How to Organize It for Lean Six Sigma Success.
To understand this better, consider a customer ordering a custom piece of furniture. The customer values the actual crafting of the furniture, the quality inspection, and the delivery. However, they do not value the time the raw materials spend sitting in a warehouse, the time spent moving materials between different departments, or the time wasted due to miscommunication between teams. These latter activities represent non value added time. You might also enjoy reading about Process Capability Analysis Explained: Understanding Cp vs. Cpk vs. Pp vs. Ppk in Quality Management.
Types of Activities in Process Analysis
Before diving into measurement techniques, it is crucial to understand the three categories of activities in any process:
Value Added Activities
These are activities that directly transform the product or service in a way that the customer is willing to pay for. Examples include manufacturing a component, performing a medical procedure, or writing code for a software application.
Non Value Added but Necessary Activities
These activities do not add value from the customer’s perspective but are required due to regulatory, legal, or current technological constraints. Examples include compliance reporting, certain quality checks, and regulatory documentation.
Pure Non Value Added Activities
These are activities that add no value and are not necessary. They represent pure waste and should be eliminated immediately. Examples include excessive approvals, redundant data entry, waiting time, and unnecessary movement of materials or information.
The Measure Phase in Lean Six Sigma
The measure phase is the second phase in the DMAIC (Define, Measure, Analyze, Improve, Control) methodology of Lean Six Sigma. During this phase, teams collect data to establish baseline performance metrics and quantify the extent of the problem. Measuring non value added time accurately is essential for understanding the current state and identifying opportunities for improvement.
Steps to Measure Non Value Added Time
Step 1: Process Mapping
Begin by creating a detailed process map or value stream map of the current state. Document every step in the process, including activities, decision points, waiting periods, and hand-offs between departments or individuals. This visual representation helps teams see the entire workflow and identify potential areas of waste.
Step 2: Classify Each Activity
Review each step in your process map and classify it as value added, non value added but necessary, or pure non value added. This classification should be done from the customer’s perspective. Ask yourself: Would the customer be willing to pay for this activity?
Step 3: Time Study and Data Collection
Conduct detailed time studies to measure how long each activity takes. This requires careful observation and documentation over multiple cycles to ensure accuracy and account for variation. Use stopwatches, time stamps in software systems, or automated data collection tools to gather this information.
Step 4: Calculate Key Metrics
Once you have collected sufficient data, calculate important metrics that quantify the extent of non value added time in your process.
Practical Example: Order Processing Department
Let us examine a real world example from a customer order processing department at a manufacturing company. The team decided to measure their order fulfillment process to identify improvement opportunities.
Process Overview
The order processing workflow included the following steps:
- Customer submits order via email
- Order waits in inbox for assignment
- Order entry clerk reviews order
- Order entered into system
- Order waits for credit approval
- Credit check performed
- Order waits for production scheduling
- Production scheduled
- Order sent to warehouse for fulfillment
- Order waits in warehouse queue
- Order picked and packed
- Order shipped to customer
Sample Data Collection
The team tracked 50 orders over two weeks and collected the following average time data for each step:
Customer submits order: 2 minutes (Value Added)
Order waits in inbox: 45 minutes (Non Value Added)
Order review: 8 minutes (Value Added)
Order entry: 12 minutes (Value Added)
Wait for credit approval: 120 minutes (Non Value Added)
Credit check: 5 minutes (Non Value Added but Necessary)
Wait for scheduling: 180 minutes (Non Value Added)
Production scheduling: 10 minutes (Value Added)
Wait in warehouse: 240 minutes (Non Value Added)
Pick and pack: 25 minutes (Value Added)
Shipping process: 15 minutes (Value Added)
Analysis of Results
Total process time: 662 minutes (11.03 hours)
Total value added time: 77 minutes
Total non value added time: 585 minutes
Process cycle efficiency: 11.6%
This analysis revealed that only 11.6% of the total process time actually added value from the customer’s perspective. The remaining 88.4% consisted of waiting time and other forms of waste. This stark reality provided the leadership team with compelling evidence to justify improvement initiatives.
Common Tools for Measuring Non Value Added Time
Spaghetti Diagrams
These diagrams track the physical movement of people, materials, or information through a space. They help visualize unnecessary transportation and motion, which are common sources of non value added time.
Time Value Analysis Charts
These charts display each process step along a timeline, color coded by category (value added, non value added but necessary, and pure non value added). They provide a clear visual representation of where time is being wasted.
Work Sampling Studies
This statistical technique involves making random observations of work activities over time to determine the proportion of time spent on different types of activities. It is particularly useful for processes that are difficult to observe continuously.
Process Cycle Efficiency (PCE)
This metric calculates the ratio of value added time to total lead time. The formula is: PCE = (Value Added Time / Total Lead Time) x 100%. A low PCE indicates significant opportunity for improvement.
Challenges in Measuring Non Value Added Time
While measuring non value added time is essential, several challenges can complicate the process. One common difficulty is gaining accurate data when processes are not well documented or when significant variation exists between cycles. Resistance from employees who feel they are being monitored can also affect the accuracy of observations.
Another challenge is correctly classifying activities. What appears to be non value added from one perspective might be necessary from another. For example, quality inspections might seem redundant, but they may be preventing defects from reaching customers. Engaging cross functional teams and maintaining the customer perspective helps address this challenge.
Benefits of Measuring Non Value Added Time
Organizations that effectively measure and reduce non value added time experience numerous benefits. Lead times decrease significantly, allowing faster response to customer demands. Operating costs decline as resources are redirected from wasteful activities to productive ones. Employee satisfaction often improves as frustrating, meaningless tasks are eliminated. Most importantly, customer satisfaction increases due to faster delivery times and improved quality.
The data collected during the measure phase also provides a baseline for measuring the impact of improvement initiatives. Without accurate baseline measurements, organizations cannot demonstrate the return on investment from their process improvement efforts.
Taking the Next Step in Your Process Improvement Journey
Understanding how to measure non value added time is just one component of the comprehensive Lean Six Sigma methodology. This powerful approach to process improvement has helped thousands of organizations across industries eliminate waste, reduce costs, and deliver greater value to their customers.
Whether you are looking to improve processes in manufacturing, healthcare, financial services, or any other industry, the skills you gain from Lean Six Sigma training will provide you with a structured framework for driving meaningful change. You will learn not only how to measure non value added time but also how to analyze root causes, implement sustainable solutions, and control processes to prevent problems from recurring.
The demand for professionals with Lean Six Sigma expertise continues to grow as organizations recognize the competitive advantage these methodologies provide. By investing in your professional development through Lean Six Sigma training, you position yourself as a valuable asset capable of leading transformation initiatives and delivering measurable results.
Do not let waste continue to drain your organization’s resources and frustrate your customers. Take action today to build the skills that will enable you to identify, measure, and eliminate non value added time in your processes. Enrol in Lean Six Sigma Training Today and join the thousands of professionals who are making a real difference in their organizations. Transform your career while transforming your workplace. The journey to operational excellence begins with a single step, and that step starts with proper training in these proven methodologies.
