Any process or event that does not make a product more like what a customer is willing to pay for.

Comments: This is a very simple definition but has far reaching implications. Lean Manufacturing is almost completely about removing waste from manufacturing and processes. Waste is best defined as “any process that does not add value to a product.”

To appreciate the definition of “NVA” we should revisit the concept of “VA” or “Value-Adding” which states that “Value-Adding” activities are “Any activity that makes a product more like what a customer is willing to pay for.”

No customers want to pay for activities that do not “add value” to their products. The fact is all customers indirectly pay for Non-Value-Adding activities because suppliers build them into the sales price of everything they produce.

Example: Customers want “widgets” delivered to them. A supplier company makes great widgets, but has to move them to shipping (NVA), put them in boxes (NVA), and ship them (NVA). These activities were essential, but none of them made the widgets anymore valuable to the customer.

From the standpoint of the widget supplier all of these activities constitute “COSTS” or “Operating Expenses.”