Focus On Non-Value Added Activities
22nd December 22
Definition: “Non-value added” – A work-study jargon referring to time that does not contribute to providing a service for your customers.
As non-value added activities are not seen or appreciated by your customers, you can strip them out of your operation without much impact, making them a good target for savings and freeing up resources to invest in growth areas. And there is always something more useful that can be done with a colleague’s salary investment.
Examples of non-value added activities
- When the number of colleagues available outstrips the customer demand; instead, colleagues may complete tasks slowly, start chatting or simply stand and wait for a customer to serve
- When systems are slow – colleagues and customers end up waiting for a system to churn. If you have stood in a queue to check-in to a hotel, a flight or to collect a hire car, it’s likely you’ve been a victim of a non-value adding system delay
- Time spent travelling across a large area (such as a warehouse). In fact, in many warehouses, travelling can account for half of all the time spent in the operation. Finding a way to reduce this can be the biggest single efficiency improvement there is in the warehouse
Our efficiency review consultants recently studied a retail operation where over half of the team’s time was spent on non-value added activity. This sounds incredible, until you consider the number of hours in which a store is open with relatively little activity taking place. And think of the much larger stores where lots of colleagues are required to provide coverage on the sales floor, whether it’s busy or not.
Historically, counters and separate departments that require coverage during trading hours drive a lot of non-value added down time; part of the reason why many supermarkets have removed counters and why quieter department stores struggle to make a profit.
How can I tackle non-value added activities?
If you want to spot the non-value added activities in your business, focus on those times outside of your peak operating hours and identify how many colleagues are in place compared to the customer flow demand. If the balance seems off, try minimising it by matching resource levels to demand and reallocating down time into something more productive – all whilst protecting the busy times that matter most to your customers.
An efficiency review is a great way to quantify non-value added time across your business. When does it happen? Is it worse on particular days? How is it spread across the day? Is it the same across all stores, or are budgets out of line meaning some locations have more down time than others?
This is where our efficiency review consultants can help. Using specialist diagnostic tools, we can determine where and how time is being spent, helping to identify what adds value and what doesn’t.
Want to know more? Get in touch with our team.