To: All
Subject : Value Adding Actitivies; NVA, MUDA TIMWOOD
1 Many have heard about value added tax. It is now at 12% (in lieu of the sales
tax) What is it?
2. It is an activity that adds value to a raw material. It is a process. It converts
ordinary water to mineral or distilled water; converts palay from palay to rice
uncooked rice to cooked rice. Correspondingly at each step of the way, price
goes up.
Say 1 kg of palay - P5.00 kg
l kg of milled rice P35.000
1 cup of rice P10.00 maybe you have 10 cups/kg.
3. This is what you call the value stream. And businessmen can enter into
any one of them depending on his resources and skills;
4. There is no such thing as break even or same price of input and output
at the minimum BIR asks for takex as 2% CGT if you experience losses on
the first two years. You pay the wages the rent, the transport, cost of selling.. Thus you can not buy ball pen for two pesos and sell this for two
pesos also
5. Thus any staff, any process must align itself to value adding, all others,
none value adding are wastes and must be eliminated
6. NVA can be due to regulatory requirements - eg filing of reports, operating
anti pollution equipment hiring a Pollution Control Officer. (This is supposed
to VA for the planet - a long term insurance for earths viability
7. Say in fixing flat the activities that are VA are:
1. Removal of nuts
2. Raising the vehicle
3. Removal of the interior
4. Looking for the hole
5. Patching the hole
6. Reinstallation of the exterior and interior
7. Reattachment of the wheel lug nuts
NON VA:
1. Paper works for the repair
2. Getting the tools
3. Walking to and fro the vehicle
4. Smoking
5. Answering the CP
8. We must make robust the process to focus work on VA or even mechanize
1. Buy a a hydraulic jack
2. Acquire a pneumatic tool for nut removal
3. Acquire a pneumatic machine for for removal of tire bead from the
the rim;
4 Use dry patch, rapid drying glue for the patch up of the hole/puncture
These enables:
1. Fast turn around of cases;
2. More revenues
9. What are the activities that are neither NVA nor VA?
They are called MUDA and have acronym of TIMWOOD
1. T - ransportation - repeated handling of materials, single touch only
Dispersed location Thus tools must be near work place The Central
parts storage is obsolete.; delivery at work station is OK
2. Inventories - too much using Just In Case rather than kanfban pull syste
Just In time (works in a clustered industrial park as Toyota or Samsung
3. M - otion. Irrelevant motion after an industrial engineering study must be
reduced or eliminated
4. W - aiting. For other parts for the PO, for the signatures, for late parts
arrival, for the late workers, reports, etc. Thus we emphasize punctuality
5. O - ver production - Products that are left unsold consume storage space
(a huge waste in high rent or high lot price.) If money is borrowed it represents huge financial burden. if financed by equity, this represents
huge lost income opportunityes
6. Over processing - arises from lack of trust and unreliable staff. If employees cant have trustworthy or reliable output, we have to double
check every thing they do. Huge labor expenses
7. D - elay - start, construction, purchasing of equipment and materials
needed. Delay in docs Waste represents losses
For us to be wealthy and or have our wages paid:
1. Focus more on value added activities especiallyy those that are high value
addes;
2. Eliminate TIMWOOD muda.
Its either you are with us to show your gratitude (paying forward)
or against us (our enemies)