Process Value Analysis - PVA

You run a manufacturing facility that makes monster trucks. Every time you receive a shipment of parts, the guy driving the forklift drives in a circle three times before he takes the items off the shipping deck and puts them into the warehouse. Are the three spins adding to final product? Or does the forklift guy just...have issues?

Time for a little process value analysis. It's a formalized process of looking at what everyone at the company is doing, and then deciding whether it adds to the final product.

Managers utilize PVA to judge the processes involved in producing a company's goods or services. The goal is to identify activities that don't add value to the process (and eliminate them), or find procedures that could be made more efficient.

Basically, the managers look at each of the firm's business operations and assign all the company's costs to the various tasks. That way, they can see where productivity improvements can be made, where they can eliminate steps (like spinning a few forklift donuts before moving shipments into the warehouse), and where more resources should be invested.