Lean Supply Chains and Lean Production

Abstract

Added value can be defined as products, services, processes, and activities, which generate a certain value to the organization and enterprise. Value-added must be regarded from the customer viewpoint and is everything for which the customer is willing to pay for. It is important that value-added is recognized and perceived as value by the client. Many studies have shown that we only add value to a product for less than five to fifteen percent of the time, the rest of the time is wasted (Helmold & Terry, 2016a, 2016b). The opposite is non-adding value or waste as shown in Fig. 6.1. Waste (Japanese: Muda, 無駄) is anything that adds cost or time without adding any value or any activity which does not satisfy any of the above conditions of value-added is a waste or a non-value-adding activity in a process. The focus in operations management must therefore be in eliminating activities such as waiting time or rework (Ohno 1990; Liker, 2004). Enterprise must target value-added process and eliminate or reduce waste, whereby waste can be visible (obvious) or invisible (hidden) as shown in Fig. 6.2.

Perfection is not attainable. But if we chase perfection, we can catch excellence.

—Vince Lombardi (1913–1970)