Productivity is measured by the quantity of good output generated from a specific amount of input during a time period. Any factor that either slows down (or stops) a production process or causes unnecessary work (redundancy) hinders productivity. Activity analysis can be used to highlight such factors.
The various repetitive actions performed in making a product or providing a service can be classified in value-added (VA) and non-value-added (NVA) categories. Value-added activities increase the worth of the product or service to the customer; non-value-added activities consume time and costs but add no value for the consumer. Minimizing or eliminating non-value-added activities increases productivity and reduces costs.
Three important NVA process activities include:
- storing products for which there is little immediate demand,
- moving materials unnecessarily, and
- having unscheduled production interruptions.
Another non-value-added activity is caused by supplier quality problems: having to inspect incoming components. To minimize or eliminate this NVA activity, some companies require their suppliers to provide only zero-defect components. To ensure compliance with this requirement, companies may do quality audits of their vendors.
Production View of Quality
![Production View of Quality]()
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