Value and Waste

A good starting point is to consider what value is, and what waste is. What are things with value?

Raw materials An end product that someone is willing to buy Tools used by the team The skills acquired by the team

What about intermediate products? They have some value in the sense that they give us the option to create the final product more cheaply than if we started from the beginning. They have no value if nobody is willing to buy the end result. And intermediate products clearly have a cost. And what is waste? If it doesn't add value, it's waste.

Waste anything other than the minimum amount of equipment, materials, parts, space, and worker's time, which are absolutely essential to add value to the product.

Taiichi Ohno is known as the father of lean manufacturing, and he identified seven types of waste. We'll consider them and find an example of each applied to software:

Waste Over production Waiting Time

Software Example Features that nobody ever uses. QA waiting for a feature to be written so they can test it.

Transportation Time waiting for files to copy. Waste Processing Waste Software written that doesn't contribute to the final product. A feature for which development has started, but nobody is currently working on it.

Inventory Waste

Doing a refactoring manually when the development Wasted Motion environment can do it automatically. Waste from Bugs. Product Defects

Ohno talked about a diagram of a boat that represents the pipeline translating raw materials to a finished product, traveling across the sea of inventory. Every waste in the system is like a hidden rock at the bottom of this sea, which may be a hazard to travel over, and which raises the level of the water and makes the boat travel further. To make these rocks visible, we will lower the inventory. Then we can work to remove the visible rock.

Value Added
Occasionally, it is unclear whether an event adds value. Here are three useful tests: Does the event physically transform the product in some way? If so, it probably adds value. If the customer observed the event, would he balk at paying its cost? If so, the event probably does not add value. If the event were eliminated, would the customer know the difference? If not, the event is probably non value added. Several types of events often bring on debate about their added value: Inspection-Inspection refers to an examination of the product to determine if work has been done correctly. It does not refer to process control activities that lie outside the chart. Inspection rarely adds value because it does not change the product. When the customer perceives inspection as value adding, requires it and pays for it, you may consider it a value adding event. Curing/Drying-These change the physical properties of the product and should use the "Operation" symbol rather than a "Delay" symbol. Transport-Transport and Handling rarely add value inside a factory.

The customer may perceive a "value of place" and is willing to pay for it. For example, a hamburger would hold little value if it was only available at the ranch where cows were raised. Availability around the corner is an important part of the customer's value perception