On Value and Waste

Abstract: Value and waste are concepts that are used in improvement projects. In lean the concepts are fairly simple. Reduce the waste and the value has increased. However, value is both multidimensional and differs over time. If the concepts value and waste are to be used, the concepts must be clearly defined and measured. Otherwise, value can be reduced for the customer/user and the cost increased for the producer/seller. The purpose in this thesis is to investigate how value and waste are perceived by different stakeholders, how value and waste are related, and how value and waste are measured. The focus of the study is the improvement of production and services. The study does not investigate the product/service development. The conclusions are based on a number of cases and research from different fields such as resource-based view and marketing. The study use mix of qualitative and quantitative methods. Measures of forecasting accuracy and their relations where explored with different statistical tools in order to understand the influence of measures and dimensions. The view of value concerning energy efficiency was examined in a statistical analysis of a survey concerning stakeholders’ view of a specific value, energy efficiency, as well as their influence on the value creation process. A multiple qualitative case study explores the relation between value and waste in different settings and the consequences of waste focus. The findings in the multiple case study are confirmed and elaborated further by an additional case study, both qualitative and quantitative, of value stream mapping.Value and waste are analysed with the use of order winners and qualifiers. Also, a model to clarify the consequences of mixing value creation and value exchange for customer/user and producer/seller have been defined and used in the analysis.Depending on the stakeholder there is a difference between whether value can be regarded as a use value, exchange value or both. Even if exchange value is related to a specific moment in time, use value is not. The view of value differs among stakeholders which increase the risk of sub-optimisation in production.Value and waste have multi-dimensional properties and there are links between the different dimensions. The relationships depend upon the situation in question. The lean seven types of waste are not independent dimensions. Also, the concept of waste as anti-value is too simplistic. In all cases studied the focus is on waste, not value. Also, it is often the symptoms of waste that are of interest in measures taken not the root causes. Reduction of waste without considering the value can create new waste. Since waste is a dependent variable, it should not be measured without considering value. Another complication is that value and waste often occurs at different points in time and in different settings.Single measures are sensitive to its environment. Several measures are more robust. Measures distort and influence the perception and thereby the decision of the studied phenomena. Also, the notion of value and waste becomes harder to define and trace as the resolution and detailing of the studied process increases.