What is value added work and non-value added work?

What is value added work and non-value added work? Value added work and non-value added work refers to the idea that a customer will pay for work that adds value. If there is no value added a customer does not want to, nor will they pay for the product or service. This is only a fair way of thinking. However, how does this all come to play with different management options that are out there.

The application of programs like Six Sigma or Lean management uses these theories to bring a higher level of efficiency to the way a business is run. Manufacturing and other businesses are benefiting from the practices that impress upon employers and employees the importance of value added work.

As manufacturing plants and other businesses are constantly looking for better ways to make money, with fewer costs, and have better products, there are geniuses coming up with ways that will add value to the work, and eliminate non-value or waste.

Non-value added costs are costs that are simply associated with long lead times and quality. Quality is important, that will not be taken lightly. However, in some cases a slight quality change can cost tons of money for the manufacturers. However, there are some costs for quality that manufacturers are willing to accept.

The key difference is the costs that add no form, feature or functions to the customer values. These wasted costs are ones that are like; scrapping and replacing parts that were made incorrectly, or low direct labor productivity.

These types of expenses simply cost the plant money. There is no real benefit; therefore it is non-value added work. That is how you will know the difference. Is there a benefit from the cost that has a value in the end?

You can also look at things like the cost of obsolesce, excess in capital investments, transportation expenses, stock rooms, etc. You can include anything that does not offer direct value to the product.

In addition to these types of costs, you will find the non-value added work creeping in when there is an expansion for a higher volume of productivity. This is because so much of the time growth includes more resources, and therefore expenses in training, repair, replacement etc.

Lack of knowledge all to often will be a major contributing factor in the accumulation of a business having large amounts of non-value added work. Therefore, the best way to prevent more than necessary non-value-added work, you will need to make sure to work out each step of a growth, new product, or change in order to prevent the waste that will occur with inaccurate planning.

As with anything new, there is a new idea that work or don't work. There are more end products, therefore there are more parts needed to get those products. There are also more people needed to manufacture these products. This can all greatly contribute to the costs involved in non-value added work.

Quality and speed are also areas that will be figured with the non-value added work. Because a job that could be completed quickly and with good quality is what the goal is. Therefore if you are working to get this overall goal, then you will need to work a process that allows for those growths to happen.

The new technologies of today increase the speed and quality of production; in addition to lowers the non-value added work. This is the difference between value added work, and non-value added work. The work that adds value, and the work that is an expense that does not.