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About Creating Value EN.pptx

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About Creating Value EN.pptx

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The distinction between Value adding and Waste is not always crystal clear.

The Lean doctrine is: elimnate waste in order to maximize value.

But what is value?

Examples from healthcare, Government, Production and Retail.

Where Value and Waste are confusing or Value is bot valuaded at all (or only later) by customers.

If there are at all customers involved and there is demand.



The distinction between Value adding and Waste is not always crystal clear.

The Lean doctrine is: elimnate waste in order to maximize value.

But what is value?

Examples from healthcare, Government, Production and Retail.

Where Value and Waste are confusing or Value is bot valuaded at all (or only later) by customers.

If there are at all customers involved and there is demand.



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About Creating Value EN.pptx

  1. 1. Creating Yokoten About Value
  2. 2. ‘Turning labor and resources into something that meets the needs of others (customers, patients, citizens)’ Yokoten VALUE CREATION Source: various sources
  3. 3. Yokoten VALUE (1) ‘Value can only be defined by the ultimate customer. And it’s only meaningful when expressed in terms of a specific product (a good or a service, and often both at once) which meets the customer’s needs at a specific price at a specific time.’ Source: Lean Thinking (2003) - Womack & Jones
  4. 4. Yokoten VALUE (2) ‘Value is created by the producer. From the customer’s standpoint, this is why producers exist. In summary, specifying value accurately is the critical first step in Lean thinking. Providing the wrong good or service the right way is waste.’ Source: Lean Thinking (2003) - Womack & Jones
  5. 5. Some thoughts about creating value Yokoten
  6. 6. You are driving along the freeway. Your fuel gauge tells you it’s time to get gas. You leave the freeway via the slip- road to the filling station, where you park your car next to a gasoline pump. VALUE OR WASTE?
  7. 7. You switch off your engine, unbuckle your seatbelt, open the door, get out the car, and close the door. You walk around your car to open the gas valve and screw off the top. You stick the nozzle in the gas tank and allow the fluid to flow into it. When your tank is full, the pump switches off, and you can now replace the nozzle. Next, you close the valve and go inside to pay. Afterward, you get back into your car, and drive off.
  8. 8. This is a process with a number of actions. Its specific aim is put fuel in the tank. The entire process takes approximately 7 minutes. As far as the driver-customer is concerned, there’s only one moment in this process when value is created, and that’s when the fuel flows into the tank. This takes about 1 minute. All other actions are forms of waste; in this process they take up 83% of the time.
  9. 9. Total: 7 minutes Value creation: 1 minute Waste: 6 minutes Source: Lean for the Public Sector - B. Teeuwen CRC Press Summary:
  10. 10. It’s not the whole process that creates value, It’s just a few actions or only one Yokoten
  11. 11. VALUE OR WASTE ALL LABOR AND ACTIVITIES VALUE ADDING LABOR AND ACTIVITIES WASTE _ _
  12. 12. An act or activity is either Value Creation / Adding or Waste Yokoten
  13. 13. •If there is a transformation or modification •If it is first-time-right (no repair or correction) •If the customer is willing to pay for it •And there is a (latent) demand Yokoten AN ACT IS VALUE ADDING
  14. 14. If you take the value creating activity out of the process, that process becomes worthless Yokoten
  15. 15. • Eliminating waste (the Lean doctrine) • Create more (other) value Yokoten MAXIMIZE VALUE BY
  16. 16. Is the definition of Value Creation / Adding as clean cut? Yokoten
  17. 17. I guess not Yokoten
  18. 18. Yokoten ‘Indeed, the value-added/non-value-added distinction and the related concept that to improve efficiency one must "eliminate waste" is essentially vacuous, amounting to saying "do the right thing".’ ‘Of course we want to do this.’ Source: Factory Physics 3rd ed. (2008) - Hopp & Spearman
  19. 19. 1. Production 2. Government 3. Healthcare 4. Retail Yokoten FOOD FOR THOUGHT FROM
  20. 20. Yokoten Production
  21. 21. Yokoten THE BANKNOTES PRESS In manufacturing companies it is the machines (and manualy labor) that create value. The machines (or workers) are the money presses: as long as banknotes come out that are all first-time-right, value is created.
  22. 22. Yokoten THE BANKNOTES PRESS As soon as the machine (or worker) has downtime, for example to clean, changeover, repair or has other time consuming events. besides producing, like rework and internal transport, we call that “waste”.
  23. 23. So far So good Yokoten
  24. 24. When waste becomes Value? Yokoten But what
  25. 25. WASTE BECOMES VALUE Suppose there is an activity, such as internal transport or rework, that a company sees as waste. It outsources this to another company for which providing internal transport or reworking is core business. So for them it is value creation. Waste becomes Value when done by others.
  26. 26. Yokoten Government
  27. 27. No Customer? Yokoten But what when there is
  28. 28. 26 City STOP voter partner subject user customer administrator taxpayer IS A CITIZEN A CUSTOMER? THE CITIZEN AS
  29. 29. Citizens are rarely customers, in fact only for government services that can be privatised Yokoten
  30. 30. Other “Customers” involved? Yokoten But what when there are
  31. 31. WHO DECIDES WHAT’S VALUE? In government processes, value is not only created for an individual citizen, as if they had nothing to do with anyone else. But also for the rest of society, because they want the government to create certain value only for other citizens who are entitled to it.
  32. 32. WHO DECIDES WHAT’S VALUE? If a citizen asks the government for financial assistance (like a subsidy), and receives it. That is value creation for that person. But the other citizens in society want a check to be made in that process to see whether that citizen is entitled to that money. That is also value creation.
  33. 33. WHO DECIDES WHAT’S VALUE? When an individual citizen applies for a building permit. The handling of objections to that structure, which is in fact waiting time (waste) in the eyes of the applicant, is value creation for the applicant's neighbours
  34. 34. Government: Municipality State Federal Gvt Individual citizen Group: Society Neighborhood Interest Group WHO DECIDES WHAT’S VALUE? Value Value I want value We want value
  35. 35. In most government processes, value is not only created for individual citizens, but at the same time also for a group of citizens (such as the local residents, society)
  36. 36. No Demand? Yokoten But what when there is
  37. 37. Yokoten NO DEMAND In youth care, passionate people help young people. They get a push, a nudge. Sometimes against their will. Or not in the way they would like it.
  38. 38. Not valued or later? Yokoten But what when value is
  39. 39. Yokoten VALUED LATER Sometimes the young people don't appreciate that nudge, until they look back and see the positive effects.
  40. 40. It is not always the “customer” who determines what value creation is, but sometimes it is the professional.
  41. 41. Read more about: LEAN for the PUBLIC SECTOR by Bert Teeuwen Yokoten https://www.amazon.nl/Lean- Public-Sector-Perfection- Government/dp/1138463345 ENGLISH GERMAN At the CETPM-shop: https://www.cetpm.de/shop/ DUTCH https://www.bol.com/nl/nl/p/creeer-flow- op- kantoor/9300000095642390/?suggestionTy pe=featured_product
  42. 42. Yokoten Healthcare
  43. 43. No transformation or modification? Yokoten But what when there is
  44. 44. Yokoten NO TRANSFORMATION When I was in a hospital, doctors and nurses reacted rather coldly. To them I was a medical file. A tumor, not a human being. A very interesting, rare tumor, that is.
  45. 45. Yokoten NO TRANSFORMATION But the food assistant was the first who gave me a smile, chatted, and, at my request, gave me a second hard-boiled egg with a little salt and pepper (a world class egg, for sure). Understanding the value of human-to-human empathy and comfort.
  46. 46. “For kindness begins where necessity ends” Amor Towles – The Lincoln Highway 2021 Yokoten
  47. 47. Yokoten Retail
  48. 48. Unexpected Value? Yokoten But what when there is
  49. 49. Yokoten UNEXPECTED VALUE In supermarkets in the Netherlands, most cash registers are unmanned. And at the manned checkout it's time to hurry. Yet there are some supermarkets that have so-called ‘chatter checkouts’. The cashier is trained to chat with customers.
  50. 50. Yokoten UNEXPECTED VALUE For some customers it is the only human contact of the day. The cashier also pays extra attention to unusual customer behavior and latent requests for help and responds accordingly.
  51. 51. “For what is kindness but the performance of an act that is both beneficial to another and unrequired?” Amor Towles – The Lincoln Highway 2021 Yokoten
  52. 52. Yokoten UNEXPECTED VALUE Is kindness value adding?
  53. 53. Creating Yokoten About Value
  54. 54. Yokoten In order to properly determine what value is for customers, you really need to know the needs of customers well.
  55. 55. Yokoten You’ll be surprised sometimes
  56. 56. And again: If you take the value creating activity out of a process, that process becomes worthless Yokoten

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