Value added time

Value added time is the time spent that improves the outcome of a process. This is typically just the processing time associated with production. All of the other intervals associated with a process, such as wait time and queue time, contribute nothing to the outcome and so are considered non-value added time. This concept is used to identify non-value added activities and eliminate them from a process, so that the total time required to complete a process is reduced. When the duration of the production process has been shrunken in this manner, it can be a competitive advantage, since a business can respond more quickly to customer demands.

It may be possible to compress the amount of value added time in a process. However, it is usually easier to first eliminate or reduce non-value added time, since it comprises such a large part of the total processing time.

Related Courses

Activity-Based Management
Constraint Management 
Lean Accounting Guidebook