The Lean Enterprise
Value Analysis/ Flow Analysis
Lean Foundations
Continuous Improvement Training
The Causes of Waste in most Processes
Focus on
reduction
Waste
Types of Waste
Value
Added
People
Motion
Waiting time
Process
Overproduction
Processing time
Defects
Inspection
Product
Non- Value Added,
but necessary
Problems/ Causes
(7W’s)
Transportation
Incorrect layouts
Lack of proximity of machines
Off-line resources
Waiting workers, machines, materials
Long set-ups and lead times
Large batches, raw material stocks
High WIP, finished goods stocks
Making for the sake of it
Ignoring customer demands
Long cycle times- process, itself
Reduced efficiency- over processing
High overall lead times
Long delays for rectification
Costly rework
Dissatisfied customers
Approvals of approvals
High number of verification steps
Reliance- Mass inspection techniques
Unnecessary movement
Extra handling
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Value Analysis
Overview
Methodology For Reducing Muda
(waste)
Value-Added Flow Analysis (VA/ FA)
 A Group of Practices (using rigor and discipline)
which evaluates the individual steps or activities
in a process to determine if they ‘add value’ to the
output
– VA/ FA can be used to improve the process or
aid in the creation of a new process
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Definitions

Value Added
– Any activity or operation performed that helps transform a product or
service from its raw state into its finished form.
– Completed right the first time.
– Any activity customer is prepared to pay for. Activity required to ensure
that a product or service is delivered in conformance to specification.

Non-Value Added
– Any activity that doesn’t help to transform a product or service into its final
form. Activity not performed right. Activity customer not willing to pay for.
– This includes:
 Unnecessary process steps
 Movement of inventory, paperwork, etc.
 Re-work, corrections, etc.
 Storage between operations, batching inventory
 Queue –
Wait times, delay times, idle times (reference: Time-Value Analysis )
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VA/ FA Steps

Step 1
– Define and describe process to be analyzed
•
•
•
•
Project charter
Clearly define goals
Cost benefit analysis
Signatures – Champion, Controller, Belt
(minimum)
• Time Frame for completion
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VA/ FA Steps

Step 2
– Map the process and determine major and
minor activities
– Start with the customer
• Customer – receiving department of an output,
the next person in line, or the (external)
Customer
• Conduct detail inquiry of what occurs
• Use investigative questions
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VA/ FA Steps

Step 3
– Identify value-added activities or processes
– Utilize investigative questions
•
•
•
•
What does it do?
Why does it work?
What must it do or accomplish?
How does it relate to other systems, units, or
components?
• What requires this step to be done?
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VA/ FA Steps

Step 4
– Calculate the time spent on value-added
activities or processes (Value Stream Map)
– Spread Sheet Analysis (VA to NVA ratios)
– Time-Value Analysis
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Value Analysis
Investigative Techniques
VA/ FA Questions

DECISION POINTS
– Does the decision point represent as
appraisal, a review, or an inspection which
could be eliminated if prevention were built
into the process at an earlier point?
– Is this a necessary decision or can the
process proceed without a decision here?
– Is there repetition of decision within the
process?
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VA/ FA Questions

VALUE ADDED
– Does each activity within the process add
value to the output, the product, or service
which the customer receives?
– Is the activity necessary to meet the
customer’s requirements and expectations?
– Would the customer be willing to pay for
that step of the process if the customer
knew it existed?
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VA/ FA Questions

ACTIVITY FLOW
– Does the process move frequently back and
forth between various units of the
organization?
– Can any of these movements be eliminated?

DUPLICATION OF ACTIVITY
– Are some of the activities duplicated or
repeated?
– Can any activities be removed from the
process while meeting the customer’s valid
requirements for outputs?
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VA/ FA Questions

TIME REQUIRED
– What is the time required for each of the
steps or activities within the process?
– Can the time be shortened for any of the
steps or activities?
– Is unnecessary time wasted on
transportation, storage, or delays?
– How much time is used between activities?
– Can time activities be reduced?
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VA/ FA Questions

MATERIALS
– Are the supplies and materials used in this
activity effective?
– Have new materials been developed that
would perform the function at less cost?
– Has there been any price, delivery, or
quality problems?

TECHNOLOGY
– What is the cutting edge?
– Is there related technology which could be
adapted to improve this process?
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VA/ FA Questions

PROCESS USERS
– Why are you doing this?
– What document controls this activity?
– How were you trained?
– Was the training adequate?
– How do you know you are performing the
activity correctly?
– Where do you get the inputs you need to
perform this activity?
– What types of errors come to you?
– Do you have any problems related to this?
– What makes the job difficult?
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VA/ FA Best Practices

KEY POINTS
– ASK the person if they have any
suggestions on how to improve to process!
– Value can be viewed as a relationship of
functionality or effectiveness over cost
VALUE =
Functionality
Cost
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VA/ FA Best Practices

KEY POINTS
– The VALUE of the output can increase by either
reducing costs or by increasing effectiveness
– EVALUATE alternatives based on their impact on
both efficiency and effectiveness
– Achieving a minor increase in functionality at a
major cost is not justified
– A major increase in functionality with a minor cost
could be acceptable
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Value Engineering
Overview
VA/ VE = Continuous ‘Cost’ Improvement
Attacks the Total Cost of Producing a New Product
Manufacturing
Costs
=
Part
Costs
+
Assembly
Costs
Overhead
Costs
+ Tooling
+ Overhead
Costs
Part Costs
•
•
•
•
•
•
•
•
•
Material
Finishing
Design
Dimensions & Tolerances
Tooling Type
Process
Volume
Standardization
Packaging
Assembly Costs
 Assembly Time
 Parts Handling
 Levels of Assembly
 Labor Rate
 Volume
 Design
 Standardization
Tooling Costs
•
•
•
•
•
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Volume
Process
Tooling Material
Dimensions &
Tolerances
Standardization
Approach for Reducing Costs
Design for Assembly (DFA)
 A Group of Practices which Minimizes
Manufacturing Costs
– Minimize the Number of Parts
– Avoid Separate Fasteners
– Establish Assembly Surfaces
– Eliminate or Simplify Adjustments
– Reduce Handling
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Design for Assembly Benefits






Fewer Drawings
Less Assembly
Less Handling, Inventory
Less Inspection
Improved Quality (Fewer Problems)
Less Purchasing
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Methodologies for Reducing Waste
Value Engineering
 Occurs During the
Design Process.
 Examines the Function
of the Design.
 Documents the Cost of
Each Function.
 Explores Alternatives
for how the Same
Function can be
Provided at a Reduced
Cost.
 Maintains the Focus on
Customer Satisfaction.
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Value Analysis
 Occurs on After the
Design has been
Completed or on
Carryover Products.
 Existing Designs are
Evaluated to Increase
Function or Reduce
Cost.
The Lean Enterprise
Value Analysis/ Flow Analysis
Lean Foundations
Continuous Improvement Training