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Dear Sir,
In order to take a call whether activity is Value adding or Non Value Adding to the process. I came across one of the activities as “Customer Credit Checks”. 10% of Staff Time is expended on the same.
My understanding is that
1) It is Value adding as it ensures to keep bad debts to the minimum if credit checks are done properly.
2) Can I suggest that Credit Checks may only be done for new orders and NOT for repeat customers as it would save staff time which could then utilized for some other value added activity
3) Will the suggestion (2) above is acceptable and feasible or I am moving to wrong direction by suggesting that it should be done only for new customers.Kindly advise.
Deep
Value adding activities add value for the customer. Would the customer pay for the activity?
Good design and quality control are value adding but carrying out a credit check is probably not unless it can be argued that the chack is part of the cost of the customer enjoying credit.
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