Lean is a philosophy of continuous, incremental
improvement of business processes, products and
services. Lean methodology helps in identifying the
real value-adding activities involved in providing
services to customers. Lean methodology is focused
on shortening the time line between the customer
request and the delivery of the service demanded
by customers through the elimination of
nonvalue-adding activities. However, to achieve
this, an organization needs to understand
customers’ needs and wants and should identify
key waste elements that will impact the delivery
time line and quality of the services or products
delivered to customers. Lean methodology defines
waste as any activity that adds time and cost,
but does not improve the services and products
delivered to the customer.
Lean methodology does have a key technique
called value analysis that helps identify value-adding activities present in a chain of activities.
Value analysis in lean implementation involves
assessing each process step through the eyes of the
customer and determining whether the step is:
• Value-adding activities (VA)—These are
activities that will directly achieve customer
requirements and the ones for which the
customer is willing to pay.
• Nonvalue-adding activities (NVA)—These are
activities that will take time or resources, but
do not directly achieve customer requirements,
or the ones for which customers will not
be willing to pay. Typical nonvalue-adding
activities include reworking, inspection,
movement and any of the eight wastes referred
to in Lean methodology.
• Value-enabling activities (VE)—These are
activities considered NVA from a customer
perspective, but can satisfy a regulatory/
compliance issue or other business
requirement. These are also called “nonvalue
added, but necessary,” “business value add,”
or “nonvalue added, but required.” For
example, documentation required to satisfy
regulatory compliance reporting is a value-enabling activity.
Figure 1 depicts considerations of Lean
methods related to waste in a value chain.
Vimal Mani, CISA, CICA,
Six Sigma Black Belt, is an
associate vice president with
Standard Chartered Bank and
is based in Chennai, India. He
is responsible for strategizing
and building the information
risk management practices
of the bank’s global human
resources operations. Mani
is a subject matter expert in
enterprise information and I T
governance practices and has
assisted clients in addressing
various information and
technology risk. Mani also
guides clients in a variety of
business transformation and
risk consulting engagements.
He can be reached at vimal.
Optimizing Software Development
With Lean Value Chain Analysis
Do you have
to say about
Visit the Journal
pages of the ISACA
web site ( www.isaca.
org/journal), find the
article and choose
the Comments tab to
share your thoughts.
Go directly to the article:
Figure 1—Lean Methods Related to Waste in a Value Chain
Source: Vimal Mani. Reprinted with permission.
Defects—Correcting defective products or information
Overproduction—Producing more product than needed
Waiting—Idle operator, machines or product
Not Utilizing Talent—Not fully utilizing people’s talents
Transportation—Material movement not supporting value-added steps
Inventory—Buliding and storing extra services/products the customer has not ordered
Motion—Movement of people or machines that does not add value
Excess Processing—Any process/operation not adding value to product