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.

1. Creating
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About
Value

2. ‘Turning labor and resources into something
that meets
the needs of others
(customers, patients, citizens)’
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VALUE CREATION
Source: various sources

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. 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. Some thoughts about
creating value
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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. 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. 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. Total: 7 minutes
Value creation: 1 minute
Waste: 6 minutes
Source: Lean for the Public Sector - B. Teeuwen CRC Press
Summary:

10. It’s not the whole process that
creates value,
It’s just a few actions or only
one
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11. VALUE OR WASTE
ALL LABOR AND ACTIVITIES
VALUE ADDING LABOR AND ACTIVITIES
WASTE
_ _

12. An act or activity is either
Value Creation / Adding
or Waste
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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
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AN ACT IS VALUE ADDING

14. If you take the value creating
activity out of the process,
that process becomes
worthless
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15. • Eliminating waste (the Lean doctrine)
• Create more (other) value
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MAXIMIZE VALUE BY

16. Is the definition of Value
Creation / Adding
as clean cut?
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17. I guess not
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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. 1. Production
2. Government
3. Healthcare
4. Retail
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FOOD FOR THOUGHT FROM

20. Yokoten
Production

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. 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. So far
So good
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24. When waste
becomes
Value?
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But what

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. Yokoten
Government

27. No Customer?
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But what when there is

28. 26 City
STOP
voter
partner
subject
user
customer
administrator
taxpayer
IS A CITIZEN A CUSTOMER?
THE CITIZEN
AS

29. Citizens are rarely customers,
in fact only for
government services
that can be privatised
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30. Other “Customers”
involved?
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But what when there are

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. 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. 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. 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. 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. No Demand?
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But what when there is

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. Not valued
or later?
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But what when value is

39. Yokoten
VALUED LATER
Sometimes the young people don't
appreciate that nudge,
until they look back and see the positive
effects.

40. It is not always the
“customer” who determines
what value creation is,
but sometimes it is the
professional.

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. Yokoten
Healthcare

43. No transformation
or modification?
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But what when there is

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. 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. “For kindness begins
where necessity ends”
Amor Towles – The Lincoln Highway 2021
Yokoten

47. Yokoten
Retail

48. Unexpected
Value?
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But what when there is

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. 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. “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. Yokoten
UNEXPECTED VALUE
Is kindness value adding?

53. Creating
Yokoten
About
Value

54. Yokoten
In order to properly
determine what value is for
customers,
you really need to know the
needs of customers well.

55. Yokoten
You’ll be surprised
sometimes

56. And again:
If you take the value creating
activity out of a process,
that process becomes
worthless
Yokoten