The second principle is to define the “Value Stream”. The goal is to identify material and information flows currently required to deliver a product or service. This activity will highlight bottlenecks, hand-offs, lead-time and where inventory. The result is a pictorial of your current processes from start to finish and all parts in-between. The key is to focus on the 65-95% of non-value added actions occurring.
The third principle of lean is to eliminate waste. Waste in the value stream is any activity, which the customer is not willing to pay for since it adds no value to the product or service and often, is consuming resources. Waste exists in all parts of the business – front office to the factory.
This effort results in redefining the current value stream to one of value adding activities and what we call “Sustaining” (SNVA) activities. Sustaining steps are defined as, non-value-added activities performed for one of two reasons, (1) required to by law or regulation or (2) because it contributes to business effectiveness.
This provides an outward focus and responsiveness to ever-changing customer needs as opposed to traditional redesigns which are outward focused as they relate to your inward focused needs.
There is a simple tool offered by www.LeanPowerTools.com to assist companies in understanding and making decisions about value added in the value stream. The tool provides step by step guidance so that even the most novice of users can benefit. Every system or process contains waste. Every firm (from manufacturing to distribution to service-related) contains activities that add no value to the customer. The tools and techniques used will depend on specific situations and needs.
Lean is a holistic approach to reduce waste in the value stream of any process. Like any other paradigm, Lean requires constant attention and commitment, every day of every week of every month of every year. It is a never-ending effort. Toyota went lean over forty years ago and is still at it.