In today’s global environment, finding ways to reduce inefficiencies, increase productivity, and implement processes to drive customer and business value are of utmost importance. The “if it isn’t broke, don’t fix it” mentality is beginning to be replaced with a mindset of process improvement to achieve lean business growth. Proper process analyses is the beginning of process improvement initiatives. Therefore, to help you analyse processes effectively, we brought a series of blogs based on 10 process analyses techniques. We have already shared 7 techniques in our previous blog posts. You can read them here:
1. Analysing Process Outcomes
2. Process Standardisation
3. Analytical Techniques to Improve Business Processes
In this blog post, we will focus on value analysis.
The goal of Value analysis is aimed at eliminating unnecessary activities, expenses, and steps incurred in the process of creating a product or service without sacrificing customer satisfaction and then to eliminate (or at least minimise) all non-value-added activities
Eliminating activities from a process must be done with some caution. The Analyst cannot simply handpick activities to be removed without some rigour or analysis behind it. Value Analysis is a technique and discipline which minimises process cost without diminishing product or service quality, reliability, performance and appearance. For value analysis, each activity in a process is analysed and classified into one of the categories: customer-value-adding activity, business-value-adding activity and non-value-adding activity.
CUSTOMER VALUE ADDING (CVA)
CVA activities refer to activities within the process that are effective and directly contribute to satisfying the customer’s expectations. Examples of these are answering a customer query via telephone or email. An easy way to identify these activities is to ask yourself the question: ‘If I were to dial the customer and ask him/her to pay for this activity, would the customer do so?’ If no, then it is not a CVA activity, instead, try to classify this to either BVA or NVA.
BUSINESS VALUE-ADDING (BVA)
BVA activities are activities that are essential for the business to function. This includes activities relating to policy, regulatory compliance, necessary approvals etc. These activities add cost to the process but do not add value from the customer’s perspective. However, the business cannot function without these.
NON-VALUE-ADDING (NVA)
NVA activities neither add value to the process from the customer’s perspective nor are the activities required to conduct business. NVA activities represent waste in the process and potential for change. Examples of these are activities such as rework, unnecessary approvals and double entries.
Once the Value Analysis is complete, the opportunity presents to eliminate the NVA activities from your process.
Bringing together all components of the detailed process map to review each step in a process to see if the activity provides any value to the customer, can be difficult on paper.
However, it can be done quickly with a value stream mapping software by creating robust and thorough value stream maps. PRIME BPM comes equipped with a value stream mapping template and many other features useful for value analysis.
With leading business process improvement technology like PRIME BPM, organisations can create comprehensive process maps that can be transformed into accurate value stream maps to drive organisational change. Leveraging a proven value stream mapping software such as PRIME BPM can help you quickly identify bottlenecks, calculate value-add at each task level, and analyse areas of waste. With value stream mapping, process changes can be tested to see how they affect the value for both the customer as well as the organisation. To experience the full value stream mapping feature, register now for a free trial. Click here to get started.