This lecture is about value added and non value added activities. The learning objectives are to learn and identify the waste in terms of excess inventory space, best inspections, rework, transportation, storage etc. Lean is all about identifying and eliminating the waste stages in process. What are the waste stages and how will we define it to de add classified the waste ages into eight types. This classification suits well for any processes respective of whether it is manufacturing or services there are nearly overproduction means manufacturing products that does not have a term customer order. Over processing means producing with a specification that is beyond the requirement of customers.

Transportation wastages that includes employee frequently moving from one place to another to get tools or machining done. Waiting of employees for machine are spares excess inventory either in form of finished goods or raw material. Excess movements of workers from place to place inside the factory as part of product realization process. defects occurred during production or services, the most important waste as per Toyota, the unused creativity means not utilizing the creativity of employees, staff or subordinates. We can also classify these wastes into value added activities, non value added activities and acquired non value added activities. Value Added activities are those that changes the nature, shape or characteristics of a product in line with the customer requirement, example, such as welding of parts, painting of parts, stitching of readymade trousers, typing of letter etc after each of these activities either neither Shape are characteristics of the product changes, isn't it?

Non value added activities are just opposed to value added activities. It does not change the nature, shape or characteristics of a product and of course, customer is not willing to pay for these activities. For example, does the shape of the product change when it is moved from one point to other or does the nature similar for the case such as waiting for parts rework etc. Also the customer is not paying us for the movement inside our factory, they are paying only for the value addition into the product or services. The strategy for the non value added activities should be eliminate Do you Simplify wherever applicable and possible. There is one more category of waste, the required non value added activities.

Those are required for the completion of the product or services also required for increasing the efficiency of the process. However, the customer is not willing to pay. Could you brainstorm some of such activities? Absolutely right. inspection is one such activity. inspection is required for the purpose of assuring quality to customers.

However, customer is not paying for the inspection. Once again, customer is paying only for the value addition and to the product or service. Other example includes training activities conducted by organization as well as supplier audits or selection of Right supplier, what should be the strategy are required non value added activities? Of course, we cannot eliminate required non value added activities. So reduce such activities wherever possible Well, we'll learn to classify the non value added activities and required non value added activities, as well as discussed that those activities should be eliminated or reduced wherever appropriate question before us is, how will we reduce or eliminate those activities that does not add value to the finished product? Well, lean concepts provide a structured way of problem solving named Kaizen.

In Japanese Kaizen stands for continuous improvement. These are improvements without large capital investment. There are two types of Kaizen the flow Kaizen and the process Kaizen process. Kaizen could further be classified as Kaizen event for small improvement projects with some kind of data collection and analysis, and mini Kaizen, or very small, continuous improvement projects taken up at grassroot level. VSM stands for value stream mapping. As the name suggests, this tool depicts the value chain and the complete production or service delivery process.

It is a paper and pencil representation of processes that maps both material information flow, it gives a visualization of the entire production process the step or VSM or identify the product family for application of this tool. Draw current state VSM that depicts all kinds of non value added activities. Draw a future desired VSM by eliminating or reducing those non value added activities, then plan and implement the value chain to increase the efficiency of current process. We had the overview of both Six Sigma and lean methodologies. Let us review the difference between them. Goal of lean is to eliminate waste and create flow.

Whereas, goal of Six Sigma is to reduce variation and the processes lean in primarily for manufacturing processes, whereas Six Sigma is a process approach and equally applicable for both manufacturing and service processes. In lean project is selected using VSM tool and for six sigma, it is project selection methods that we have discussed in lecture three. Another major difference between the Lean and Six Sigma strategies is the length of project for lean, it is usually one to three weeks, and for six sigma, it could vary from three to six months. End of lecture we will move to the next and last lecture of the section designed for six sigma in organization. Thank you