Question

Give examples of two non-value added activities that may be found in each of the following organizations and explain why.

(1) a university,

(2) a restaurant,

(3) a bicycle repair shop

Answer 1

A non-value added activity is the one that generates a negative or zero return on the investment of resources and generally can be eliminated without hampering a process. These activities increase the time spent on, a product/service without increasing its market value like - Manufacturing CompanyService CompanyRepair of machines Taking appointments Storage of inventory Reception Moving of raw materials, Bookkeeping etc.

1. University - The library and reception in a university can be held for adding to a non-value activity as -

• Library: It involves repairing damaged returned books.
• Searching for the requested book on a shelf that is nowhere to be found that could be the result of a keying error by the librarian in the first place
• The movement of returned books from a temporary storage shelf to the permanent bookshelf. This doesn’t add value to the services provided to the library users.
• Numerous calls or letters to inform borrowers of overdue books. This could be costly if the borrower’s contacts are not verified and are incorrect.
• Reception - Excess handling refers to the unnecessary activities of the recepitonist to unnecessary handling of calls realted to staff and other inventory.
• This is the most obvious waste and it does not add value. For example, if a receptionist is killing time waiting for the calls to arrive, there is waste which can be eliminated through better scheduling. However, not all waiting time is wasted time.

b. Restaurant- Some of the major non-value adding activities in a restaurant is -

• Customers wait to be seated as there is high occupancy.
• Customers wait to place an order as the staff is busy or unavailable
• Prepared food waits for pickup by the staff
• Customer waits for the check after billing
• A customer waits for the change money

c. Bicycle repair shop - Major NVA are

• Reworks and sorting defect material
• Not doing things right the first time
• Unnecessary equipment stoppages or manufacturing downtime
• Lack of materials or manpower hindering operation flow
• Unlabelled or unidentifiable material
• Running out of consumables (order in advance)
• Too long or insufficient set up times