How Non-value-added activities can be attributed

Non-value-added activities can be attributed to systemic, physical, and human factors. For example, systemic causes could include a processing requirement that products be manufactured in large batches to minimize setup cost or that service jobs be taken in order of urgency. Physical factors contribute to non-value-added activities because, in many instances, plant and machine layout do not provide for the most efficient transfer of products. This factor is especially apparent in multistory buildings in which receiving and shipping are on the ground floor, but storage and production are on upper floors. People may also be responsible for non-value-added activities because of improper skills or training or the need to be sociable.

Attempts to reduce non-value-added activities should be directed at all of these causes, but it is imperative that the “Willie Sutton” rule be applied. This rule is named for the bank robber who, when asked why he robbed banks, replied, “That’s where the money is.” The NVA activities that create the most costs should be the ones that management concentrates its efforts on reducing or eliminating. The system must be changed to reflect a new management philosophy regarding performance measures and determination of product cost. 

 

Physical factors must be changed as much as possible to eliminate layout difficulties and machine bottlenecks, and people must accept and work toward total quality control. Focusing attention on eliminating non-value-added activities should cause product/service quality to increase, and cycle time and cost to decrease.