The inherent worth of a product as judged by the customer and reflected in its selling price and market demand.
The value in a typical product is created by the producer through a combination of actions, some of which produce value as perceived by the customers and some of which are merely necessary given the current configuration of the design and production process. The objective of lean thinking is to eliminate the latter class of activities while preserving or enhancing the first set.
Any activity that the customer judges of value. A simple test as to whether a task and its time is value-creating is to ask if the customer would judge a product less valuable if this task could be left out without affecting the product. For example, rework and queue time are unlikely to be judged of any value by customers, while actual design and fabrication steps are.
Any activity that adds cost but no value to the product or service as seen through the eyes of the customer.