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VA/NVA/BVA Activities

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  • #49826

    Schuette
    Participant

    Does anyone have a perpective on companies whom have applied lean concepts specifically NVA,VA, BVA activities that have a process running < 60% VA.  My understanding is that Ford havebeen applying these concepts for decades yet are still running under 50% value add.  Insights and views are appreciated.
     

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    #170982

    Mikel
    Member

    I don’t think you understand the question. No one has >60% VA, not
    even Toyota.

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    #171350

    Roger Ellis
    Member

    I am a former Industrial Engineering Manager for Midsize car lines at General Motors.  When discussing percent value added, we first need to clarify whether we are talking about just direct (touch) labor, or total labor to build a car at an auto assembly plant, or total labor including headquarters operations.  Let’s discuss just direct (touch) labor in an assembly plant.  When we first began to classify direct labor as value aded or non value added at GM, we discovered that we were approx. 50% value added (place and secure parts) and 50% non-value added (walk; get parts).  We established a goal of 75% value added for direct labor, based on benchmarking companies such as Toyota, and utilized sophisticated assembly aids and very detailed workplace design to try and reach that level.  It is very difficult to get the average of direct labor content above approx. 70% value added.  If we start talking about value added direct labor as a percentage of total labor in the assembly plant, the percentage will be much lower, perhaps around 25%, and even lower if we look at the entire enterprise.  Please bear in mind that I have been retired from GM for several years, so these numbers should only be used to provide a general frame of reference – don;t treat them as gospel!  Regards,  Roger Ellis

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    #171359

    Alderman
    Participant

    I can hardly believe that any company would be that high of a % of value added vs. non-value added. Heck if you are at 25% you are considered World Class… And I know GM is not at a Toyota level. Even talking direct labor that is a very high number, I guess one could be there if they just re-classified their labor differently but when one looks at costs.. one must consider everything not just direct.

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    #171361

    Roger Ellis
    Member

    Well Capt. Kaizen, you are free to believe it or not.  I was responsibile for many years for managing a group of industrial engineers who developed and maintained labor standards for six GM automotive assembly plants.  What is your basis for not believing what I said?  Regards,  Roger Ellis

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    #171395

    United
    Member

    Maybe some better definitions are in order adn we may find we are all in agreement. Value = ? If we define value added as:
    1. The customer says it adds value
    2. There is a conversion to higher value desired by the customer
    3. We are doing it for the first time
    4. The customer is willing to pay for it
    and, we are talking just direct labor and not an entire business. The value may be in double digits. If we are talking all human resources in a business bigger than just direct labor, then it would be rare to see anything bigger than 1%. Yes, one percent. The definition we use may drive some different behaviors, yes?

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    #171438

    Roger Ellis
    Member

    When I was involved in determining value added and non-value added percentages for direct labor work content at GM, we classified work elements as value added if the work element involved placing or securing a part.  We classified the work elements as non-value added if they involved walking or getting a part, tool, fixture, etc.  We also recognized that the total value added work content could be reduced by applying Design for Manufacturing and Assembly principles.  I served as the DFMA Champion for midsized cars for several years.  Regards,  Roger Ellis

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    #171441

    Bill Hovey
    Participant

    I think this group is missing the point. Any company that is in the process of calculating %VA is already moving in the right direction. No company will openly post what their %VA is, for two reasons. 1) It’s nobodies business but their own and 2)is it fair to lump all processes together to calculate total %VA? NO.
    Business measures results in dollars not VA. BUt, as Six Sigma proffesionals we know there is a correlation. So my suggestion would be, measure where you are at today. Set an agressive goal and move towards it and don’t look for a benchmark on this one.
    Bill Hovey

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    #171760

    Alderman
    Participant

    It has been a while since I have been here. So I will now reply to you: Roger.. It is not that I am not believing what you are saying… I think you are missing what I am trying to say to the forum… Think about things as a whole.. A value stream as it is you said small cars.. ok that is one value stream.. Now you will have direct labor The people who pick and place parts, now that is all well and good, now one must ask What is the customer paying for … a finished car, How many of the managers pick and place car parts? How many supervisors? How many people are working for that VALUE STREAM that do not pick and place parts? Like the previous poster said.. is the customer willing to pay for the guy who sweeps up the line at the end of the day or are those costs adsorbed by the Value Stream? That is my point there are many “hidden” cost associated with the value stream, hours that the Value Stream Manager has to account for when considering VA/NVA calculations that is all I was trying to say…

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