Non-Value-Added Activities Done by Industrial Engineers in the Garment Industry

As an industrial engineer, we focus on identifying non-value-added (NVA) activities in the garment manufacturing processes and in production activities. After identifying the non-value-added processes, our aim is to eliminate or reduce the identified NVA activities. These are the standard method followed by all the business houses.

Did you try to identify it ever that being an IE what all activities you are doing those are Non-value added in nature? Is it true that whatever activities industrial engineers do are NVA but essential activities? Or they do some value-added activities and some of the essential NVA activities.

A couple of weeks ago, One OCS reader asked me this question - what are the non-value-added activities done by industrial engineers in a garment factory? I thought this would be a good topic for discussion and through the discussion, we can find more value on Industrial engineers’ activities.

Definition of value-added activity

A process or activity that changes the form or shape of the product is a value-added process. When it comes to value-added services, if your activity brings changes in method and lead time, it will be a value-added activity.

An activity that increases the value of a product at a given stage in a production cycle or supply chain. - thefreedictionary.com

In another definition – It says value-added activities are those activities for which customers (buyers) pay to a garment factory. Apparel buyers pay for the activities like fabric cutting, stitching garment, finishing, the washing process, etc.

The answer to this question is subjective. I have shared my views and views from industry experts and industrial engineers working in the garment manufacturing industry.

Comments from industry and professionals

In the following comments and views - we have considered the definition of value-added activities and subjective parameters. 

1. Aditya Mahapatra, IE specialist in a Denim plant 

If we consider the widely accepted definition of value added activity as the work that physically transforms the product and most importantly, that the customer willing to pay for- none of the works that an IE does can be justifiably considered in this category. Because, neither an IE puts his/her direct labour into transforming the goods into finished product nor is the customer/buyer actually willing to pay the money for any activity rather than the ones which have direct impact on the desired finished product. An IE activity can be NNVA or completely NVA- based on the kind of work he is performing or asked for following the facility’s operational strategy, from customer’s point of view of willingness to pay.  But, practically, as long as a company is not running in loss, all the costs incurred in a manufacturing process- for direct or non-direct labor, in hidden or transparent way are actually made to be borne by the customer itself- as operating expenses or in other ways as overhead expenses. Since, the garment industry is still relying on traditional Product-based Costing rather than the ABC costing- the activities not pertinent to direct transformation of goods are eventually paid by only customers itself, though they are not really willing to pay for it. That entitles the IE activities as Non Value-added activities- be it necessary or unnecessary. In broader concept, to truly judge the activities of an IE, a different approach should be taken than the traditional one- where the company that an IE is working in should be considered as the ‘customer’ willing to pay in terms of salary for the service offered; the service that IE offers there should be considered as the ‘product’; while the improvement he/she is able to carry out in the bottom line should be considered as the ‘value’ added to the business/operational performance of the organization. Because, anyway, the manufacturer always negotiates its price with the buyer based on its order quantity and overhead cost incurred in the target lead time period and that price has a maximum limitation in the cost competitive market-beyond which there remains a risk of losing the business. So, if the IE succeeds to improve the performance in terms of productivity, efficiency or quality for the negotiated price with the client of the organization, it eventually reflects in the bottom line of the IE’s production facility resulting in a value proposition for the service he offers to it. So, it’s important to judge the value of an IE’s responsibility and work through more conceptual understanding on case to case basis- the job is trickier and to be truthful, something what can’t be decided on some hard and fast rule. This explanation can be understood with 2 simple cases below - Case 1- An IE is always expected to set the line layout as preparatory activity of an order. It’s not directly adding any value to the manufacturing facility but it still remains and essential activity, critical to running the production without disruption to achieve the target. In this sense, it can be considered a NNVA. Case 2- But during the line layout setting process, if the IE carries out a method improvement or successful workplace engineering which results in increased productivity/efficiency more than what is planned or any improvisation which results in better quality than the accepted 1st choice rate- it positively affects the bottom line of his/her organisation for that particular order. For both the salary paid to that IE for the time period and the negotiated price with the client(for both direct and overhead cost) for that order in that lead time, the activity results in improved profitability for the organisation. In a sense, the organisation here acts as the customer willing to pay for the service offered by the IE for its own cost-effectiveness and profitability. And this way, the earlier NNVA here turns into the Value added activity of that IE. This way the Value of an IE activity should be judged by the positive/negative impact on the bottom line of the organisation where he/she works for the service being offered by that IE as an employee.

2. Ram Chandra Das, Senior Consultant, Rajesh Bheda Consulting Pvt. Ltd.

Ram Chandra Das prepared a chart and listed common activities performed by industrial engineers. He has marked activities in 3 categories.   NNVA – Necessary Non-value Added NVA – Non-value added VA – Value Added

 3. Santosh Kumar Subudhi, Apparel industry expert and Consultant

Santosh has shared his views on this question in the following pointers. Making duplicate reports, which keeps them occupied and busy. Roaming on the sewing floor without a plan. Just to show a manager that they are busy enough and doing work on the floor though they do not have any defined job on the floor. Not aware of “how long they should spend in front of the computer & how long on the floor” Most of them are occupied in data capturing (hourly operator output etc.), which should be done by “production writers”. Industrial Engineers should focus on analyzing the data and take action instead of data capturing. Involved in shifting or arranging the machines during style layout change. It should be done by supervisors (As per OB) & mechanic.

4. Dr. Manoj Tiwari, Associate Professor at NIFT, Jodhpur 

Manoj has shared his views on this question - It is commonly observed (especially in India and Bangladesh factories, not in Sri Lankan factories though) that IEs just do Time Study, which is a Non-value-added activity. Whenever there is a bottleneck, IE starts doing a time study.!!! There is no meaning of time study without Method study and method improvement. Further, a very common scenario is that most of the time an IE suggests an improved method, implements it, and moves forward to the next issue or problem. The monitoring and assessment of the method implemented are not conducted. Also, the challenges faced by the operator are either not discussed or given due attention. This makes the entire exercise futile and results in wastage of time, efforts, money as well as the loss of reputation and credibility of an IE. Any improvement is useless until it is not developed as a habit. It is observed that most of the time IEs are involved in the number of activities, which are out of their domain. Such activities involve Chasing the Supervisors and Production In-charge or Production managers for production figures, they do waste a lot of time in such follow-up. Industrial engineers are involved in the production (where the core idea of method improvement is missed out), an IE should be only involved in the production as far as method study, method improvements, and establishing the right practices are concerned. Handling the shop-floor is primarily the responsibility of production in-charge/Production Manager, of-course an IE is there in a supporting role (but not in the main role). With all due respect to IEs (I myself have been an IE, and teaching Industrial Engineering since the last 11 years), most of the IEs love data collection and making fancy reports with beautiful charts and figures, it consumes a lot of valuable time and efforts. Many a time such documents are not referred by anybody, as these are just data without proper analysis with no/minimal correlation with what is exactly happening on the floor. Such activities are also non-value-added activities. An IE should document the things in a concise and crisp manner with a clear reflection of ground realities, also their suggestions/recommendations should be pragmatic as well as cost-effective.

My views:

As per my understanding, if an IE does an activity for which he/she is not responsible for should be considered as a non-value-added activity to the factory. If we go with the definition of value-added activities, then most of the activities done by engineers in a garment factory are non-value-added.  

1. Over-processing – Doing something more than necessary. 
2. Making unnecessary reports is a non-value-added activity. Factories that have software for making automated reports but their engineers spend time making reports on the Excel sheet.
3. Collecting production data but not utilized. Many data is collected by IE and those data are not used or analyzed. Why should you capture data if you are not going to use it?
4. Preparing Operations bulletin though you have one OB - when you get the same from the central IE team.

What else? 

Add your points and help me to make a better list of NVA activities performed by industrial engineers in a garment factory. 

Once you have this list you can consider whether you should spend more time on NVA activities or concentrate on the value-added activities only.