Page 135 - Six Sigma Demystified

116 Six SigMa DemystifieD

• A step that creates value for the customer. These steps are classified as
value- added (VA) activities.

• A step that creates no customer value but is required by one or more re-
quired activities (including design, order processing, production, and de-
livery). These steps are termed type 1 waste and are classified as business-
value- added (BVA) activities to reflect the necessity of their use given the
current business process.
• A step that creates no customer value and represents the proverbial
low- hanging fruit. These steps can and should be eliminated immediately.
These are termed type 2 waste and are classified as non- value- added (NVA)
activities.

Quality function deployment (QFD) and simpler matrix diagrams are useful
tools for comparing the contribution of each process step to value, as defined
by the customer. To identify NVA activities, it is sometimes useful to ask these
questions:

• Is this something the customer is willing to pay for?
• Does this step change the form, fit, or function of the product? Or does it
convert input to output?

If the answer to both questions is no, then it is likely that the activity does
not create value in the customer’s eyes. Inspection and review activities, such
as monitoring of sales calls or management signoffs on exceptions, are exam-
ples of NVA waste. They do nothing to change the product (or service) and
are necessary only to address the poor quality associated with the underlying
process. Unfortunately, if their removal would degrade the quality of the

delivered product or service, such as for out- of- control or incapable processes,
then they are necessary type 1 waste and properly classified as BVA
activities.
Taiichi Ohno of Toyota defined the first five of the following six types of
waste. Womack and Jones (1996) added the sixth.

1. Errors requiring rework. Rework refers to any operation required to fix or
repair the result of another process step. In service processes, management
intervention to resolve a customer complaint is an example of rework.
2. Work with no immediate customer, either internal or external, resulting in
work in progress or finished goods inventory.
3. Unnecessary process steps.