Value-Added / Non-Value-Added Analysis: Find Where Your Process Time Actually Goes

Value-Added / Non-Value-Added Analysis classifies every process step as VA, BNVA, or NVA to identify waste elimination opportunities. That is the whole job. You list the steps, you label each one, you attach a time and a cost, and the tool totals the three buckets for you.

The three labels have plain meanings. Value-Added means the customer would pay for that step and it changes the product or service. Business Non-Value-Added means the customer would not pay for it, but the business cannot drop it today because a policy, a control or a law requires it. Non-Value-Added means the step exists because of how the process grew, not because anyone needs it.

This tool belongs in the Analyse phase of RDMAICS. By that point you have defined the problem and measured the current state. You know the process takes too long or costs too much. What you do not know is where the time sits. Classification answers that question before you start proposing changes.

Use it when a process has visible steps you can walk, when more than one function touches the work, and when people disagree about which step is the bottleneck. Do not use it as a first move on a process nobody has mapped yet. Map first, then classify.

The example used throughout this guide is fictional. It ships with the tool as sample data so you can see a complete analysis before building your own.

The process is called Invoice Processing. It has eight steps, running from the arrival of an invoice email through to the physical copy being filed. It is a familiar shape. Some of it is digital. Some of it is paper. One step waits on a person who is busy with other work.

Here is the full list as loaded into the tool, with the classification, time, cost and the note recorded against each step.

Start with the process name. In this case it is Invoice Processing. Keep the name narrow. A name like Finance will produce a list of steps that is too broad to act on.

Then list the steps in the order they happen. Use the words the people doing the work use. Print and sort invoice is better than Document preparation, because the first one tells you there is a printer involved.

Classify each step next. Be strict about Value-Added. Only one step in this case earns that label, Schedule payment, and the note explains why: it is the core process step. Everything else either supports a control or exists because of how the work is organised.

Time and cost are the two numbers you attach. Time here is elapsed time, not hands-on effort. That matters. Manager approval under $500 carries 1440 minutes because the invoice waits a full day for a signature, not because signing takes a day. The reason column carries the evidence. Currently required by approval policy is a statement about today, not forever.

The tool returns three summary blocks and a chart. Value-Added comes out at 0 per cent, covering 3 minutes, $5.00, and 1 step. Business Non-Value-Added comes out at 95 per cent, covering 1456 minutes, $44.00, and 4 steps. Non-Value-Added comes out at 5 per cent, covering 80 minutes, $61.00, and 3 steps.

Read the percentages as time share. Value-Added shows 0 per cent because 3 minutes against a total measured in thousands rounds to nothing. That is the headline. Almost none of the elapsed time in this process does anything the customer would pay for.

Now read the cost column separately, because it tells a different story. Non-Value-Added holds only 5 per cent of the time but $61.00 of cost, which is more than the $44.00 sitting in Business Non-Value-Added and more than the $5.00 in Value-Added. Time and cost do not point at the same steps.

The value-add profile chart lets you switch between elapsed time and cost. Both views are built from the visible steps. Use both. A team that only looks at the time view will go straight for the approval step. A team that only looks at the cost view will go straight for discrepancy resolution. Looking at both keeps the conversation honest.

The tool also offers an AI review that explains the result in words. Treat that as a reading aid, not a decision.

Classification does not tell you what to do. It tells you where to look, and it separates two very different kinds of conversation.

Non-Value-Added steps are the first conversation. Print and sort invoice at 5 minutes and $3, Manual data entry into ERP at 15 minutes and $18, and Resolve discrepancies at 60 minutes and $40. Each note names a cause. Paper-based system. No integration with supplier portal. Data entry errors and supplier mistakes. These are process design problems, and they are yours to fix without asking permission.

Business Non-Value-Added steps are the second conversation, and it is a different one. You cannot remove Manager approval under $500 by redesigning a form. The note says currently required by approval policy. The 1440 minutes sit there because of a rule. Changing that number means changing the rule, which means a different room and a different approver. Same for Three-way match, noted as a required fraud-prevention and compliance control, and File physical copy, noted as required by archiving policy.

The useful output is therefore two lists. One list of redesign work. One list of policy questions, each with a number attached. Walking into a policy discussion with 1440 minutes on the page is a stronger position than walking in with an opinion.

The most frequent error is labelling too many steps Value-Added. Teams feel defensive about their own work. If you find half your steps classified as VA, test each one against the customer. In this case only Schedule payment survives that test.

The second error is mixing elapsed time with touch time in the same column. If one step records the two minutes someone spends and the next records the day an invoice waits, your totals mean nothing. Pick one definition and hold it across all eight steps.

The third error is treating Business Non-Value-Added as permanent. The word in the notes is currently. A policy that requires manager approval under $500 was written by someone, for a reason, at a point in time. That reason may still hold. It may not. The label flags the question rather than closing it.

The fourth error is skipping the reason column. Without Paper-based system or No integration with supplier portal, you have a number with no cause and no obvious action.

It will not validate your numbers. The 1440 minutes against manager approval is there because someone typed it. If that figure came from a guess in a workshop rather than from system timestamps, the result will look just as confident and mean far less. Classification inherits the quality of your measurement.

It will not tell you whether a Business Non-Value-Added step should stay. The tool records that four steps carry 1456 minutes and $44.00 under that label. It has no view on whether the archiving policy is sound or whether the approval threshold is set at the right level. Those are judgement calls that need a risk owner, not a chart.

It will not estimate savings. Nothing in this result says what the process would cost if the paper step were removed. The tool reports the current state only. Any future state number is something you build separately and test.

It will not show variation. Every step here carries a single time and a single cost, so the analysis describes one typical path. Real invoices vary. Some clear approval in an hour. Some discrepancies take a week. A single figure per step hides that spread entirely, and the spread is often where the real problem lives.

It will not capture steps you did not list, and it will not catch a step you classified wrongly. Nothing in the tool checks your labels against reality. The output is a tidy summary of your own judgement, which is useful, provided you remember whose judgement it is.