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April 2015 • The PCB Magazine 51 work and scrap are maintained at minimal lev- els. Not only are the dollars being spent in the right places, consider the order of magnitude of total cost. All the costs in the best practice business model, combined, amount to less than the money a traditional company is wasting in scrap alone. Talk about financial metrics; these savings transfer directly to the bottom line! Defining Value & Waste One of the most critical steps in identifying where to improve your process is recognizing non-value (waste) in the process. If we use my simple definition of value, which is "anything the customer is willing to pay for," then waste would be the direct opposite: "anything the customer is not willing to pay for." Value-add- ing activities are tasks that transform (add value to) the product in some way. This transforma- tion can take the form of either hard changes to the product, or soft changes such as brand vs. private label products. Each step, of each task, of each process needs to be objectively evaluat- ed against these two definitions to successfully identify wastes that can be eliminated. Ironically, to my earlier point, the actual drilling time that is trying to be reduced is a cost the customer will pay for, while the time wasted in queue, transportation and waiting for raw material (which are not being addressed) are costs that the customer will not pay for. The following five principles can be used to guide an organization in this evaluation: 1) Define value from the customer perspective 2) Identify the value stream for each product family 3) Make the product flow 4) Create pull to build only what is needed, when it is needed 5) Strive toward excellence Throughout any best practice activity, it is critical to remain focused on the right things, which are activities that impact improvement of the organization's products or services. PCB BEST PRACTICES 101, PART 6 continues poInt oF vIew Figure 2: relative distribution of expenditures of a typical company. Steve williams is the president of Steve williams Consulting llC and the former strategic sourc- ing manager for Plexus Corp. He is the author of the books, Quality 101 Handbook and Sur- vival Is not Mandatory: 10 Things every Ceo Should know about lean. To read past col- umns, or to contact williams, click here.