Ramana

In assessing a process, it is important to understand which activities in the process actually add value to the end result. All other activities are non value added. Commonly used 3 questions (also referred as 3C method - Customer cares / Changes the thing and Corrects first time) as prescriptions for value addition might not suite in all circumstances. It is indeed required to interpret differently rather than modifying these questions depending on the process/ situation/ industry. When we say interpret differently we need to define VA with respect to Customer value add and Business value add and if required further additional thought probing questions can be added. Critical thinking is the key when we try to understand whether the task/activity is VA or NVA For example in Software industry where the development teams adopts Agile /SAFe frame work for the execution, then exactly asking those 3 prescribed questions might not translate in to what we want to achieve. When we are trying to assess a VA /NVA in Agile development - PI planning/Sprint planning or retrospectives - Customer is not willing to pay for that, which does not mean they are not value added. That is where value added can be thought of Customer value add and Business value add. Customer Value Added – or just VA for Value Added: adding form fit or function to a product or service, an activity that the customer would be willing to pay for in isolation if they knew it was being done – e.g. Creating code, implementing functionality Business Value Added – non-negotiable waste: an activity that is required to operate the business but the customer is unwilling to pay for – e.g. PI planning/Sprint planning or retrospectives, code documentation, CI CD and DevOps activities. Non-Value Added: an activity that is not required by the business nor is the customer willing to pay for – e.g. Defects,Waiting for resource allocation, hand offs, Partially Done Work,Task Switching, Relearning etc. Thought probing questions for defining VA & NVA : Customer Value-Added Questions: Does the task add a form or feature to the product or service? Does the task enable a competitive advantage (Enhanced UX, reduce price, faster delivery, acceptable defects)? Would the customer be willing to pay premium or prefer us over the competition by doing this task? Business Value-Added Questions: In addition to customer value-added activities, the business may require us to perform some functions that add no value from the customer’s view point Does this task required by law or regulation? Does this task reduce the financial risk of the owner(s)? Does this task support financial reporting requirements? (Ex: moving to GST?) Would the process break down if this task were removed? Recognize that these activities are really non-value-added but we are currently forced to perform them. We need to try to eliminate or at least reduce their cost or effort Non-Value-Added Questions: Does the task include any of the activities: switching between, frequent had offs, inspecting, transporting, moving, delaying, storing, all rework loops, expediting, multiple signatures? So the conclusion it is not important to stick to those 3 questions always for assessing VA/NVA. Depending upon situation and type of industry it is required to modify / interpret them in that context.