Non-value added work refers to any processes that fail to transform a product into its intended quality. Waste and scarp are the two major elements used to describe this process. Based on this concept, efficiency in any business entity can only be achieved by reducing or eliminating non-value added activities in its product cycle ( Hoerl & Snee, 2012) . With these activities in place, a business entity is likely to experience losses which serve to undermine its profitability. For instance, if a client notifies a credit business that there is an error in its invoice, the company is likely to re-issue another document to correct the error. In doing so, the business entity will be tasked with a job that would have been done in the first place. Due to this unnecessary task, the company makes losses since it channels its resources in redoing the initial process. Even though these activities are directed towards making amends to committed mistakes, they serve to add extra costs to the production process. For instance, restaurants experience heavy losses when customers send back uncooked or cold foods to the kitchen. In this case, the restaurant is made to shoulder unnecessary costs since it will have to dump the foods while at the same time provide customers with an alternative product.
Another example of a non-value added activity is when a salesperson repeatedly makes calls to amend the initial information mishaps made to the client. With this process, the firm incurs losses through the time and resources wasted in correcting an error that could not have occurred in the original process. Considering that non-value added activities are geared toward undermining the prosperity of an institution, it is prudent to reduce these steps for efficiency. However, these unnecessary activities can only be eliminated or reduced by adopting value added strategies. This involves focusing on processes that are geared towards adding monetary value to any product even if the business process is functioning as intended.
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Reference
Hoerl, R., & Snee, R. D. (2012). Statistical thinking: Improving business performance . John Wiley & Sons.
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