Definiton of Value – Part 2
A few weeks ago I posted a blog about the definition of value that I use. James Lawther posted a great comment about that post with some good questions. I felt the questions were good enough that it warranted a blog post to highlight the questions and give my thoughts in response.
With James’ permission here is the comment he left:
Not sure I agree
1. It must be something the customer finds valuable and is willing to pay for
2. It must change the form, fit, or function of the product/service
(If it doesn’t why would I pay for it?)
3. It must be done right the first time
(If it wasn’t, why would I be willing to pay for it?)
Am I being a pedant? Don’t I only need one definition? What am I missing?
My thoughts on James’ comment are below.
I see all three points as one single definition with three parts that must be met. I agree with your assessment on points 2 and 3 of “If it doesn’t, why would I pay be willing to pay for it?”
The issue comes up when discussing value added activities during an improvement event or discussion. Having a stringent definition helps make the discussion less personal and more objective. Two examples that I run into are inspection and finance (or any support function).
With inspection, I have heard the argument that people will pay to have the product right. I would disagree but can understand that argument. With the stringent definition though inspection immediately fails point number 2. Inspection does not change the form, fit or function of a product or service. People tend to agree with this and the discussion ends.
When the discussion becomes about someone’s specific job like finance, people can get very defensive. Again, a support job like finance fails point number 2 and does not change the form, fit or function of the product or service. People will argue that it is necessary to run a business. I completely agree with so at this point we start to discuss necessary versus pure waste.
There are things that are necessary like reporting the company’s finances or even transportation but it is still not value added and it should be made very clear. Waste is stuff that can be completely eliminate like extra motion or rework.
Point three about doing it right the first time is part of the definition because sometimes the rework has been so engrained into a process that people think it is normal. This helps to reinforce the notion that anything that is being redone is not value added and should be scrutinized.
What are your thoughts?