Adding Value

Do you ever get the feeling that the processes at your organization aren’t adding value?

Most likely, many of them aren’t adding value in terms of a Lean mindset.

A typical process is 95% non-value added (NVA) to 5% value added (VA).

The Lean Electronic Health Record

The good news is that by focusing on the 95% of NVA, an organization is able to greatly improve with even the smallest positive changes to reduce waste in their processes and save large sums of money spent on that waste. Value added is defined as any activity that directly meets the needs of the customer.

Who is the customer? In terms of Lean, there is only one customer. If you are having trouble defining the customer as an individual or organization, ask the question, who is the main person that is pulling us all together? For example, in my current industry, healthcare, the main reason we are pulled together is because of the patient needing health services. Therefore, your customer is the patient.

One reason it is very important to clearly define your customer is so that you are able to maintain processes, system designs, and products that are optimized to their advantage. In other words, what is your customer willing to pay for? For example, from a software process standpoint, do they really want to pay for thousands of user stories or software that performs slowly? The answer is no. The patient wants the best care they can get and in the end they are paying for the specific service. Not long wait times, not unstable software, not complex system designs, and not 95% NVA activities.

Lean focuses on three main concepts: continuous improvement (reducing NVA), respect for people, and teachers/mentors. All three of these concepts focus on the customer and adding more value to their advantage.

Throughout my career, I have experienced multiple companies that grow quickly from a revenue standpoint. However, the waste and costs continue to sky rocket making expenses grow at the same rate. Many organizations think they have a resource issue, when in the end, more times than not, they have process and system design issues that contain 95% waste. Before jumping to a solution, make sure you are understanding the why behind the problem. There may be an opportunity to make the process and structure more lean rather than, for example, implement software to only continue the problem and make things more complex. Look for areas to reduce NVA in all of your processes and system designs.

What things have you or your organization done to reduce waste and add more value to your customer’s advantage?

Please share your thoughts in the comments below.

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