MSG Team's other articles

12166 An Introduction to Process Documentation

Multinational companies are facing the problem of knowledge management. Industries like software and ITES hire extremely skilled employees to work for them. However, they face several problems. This is because the skill lies in the “employee’s minds” and not in the system. As a result, if the employee goes on long leave or quits the […]

9492 The Great Indian NBFC Crisis

The Non-Banking Financial Companies (NBFCs) are quasi-banking institutions in India. They are allowed to make loans just like banks do. However, they are not allowed to take deposits from people in order to make these loans. Hence, these Non-Banking Financial Companies (NBFCs) borrow money from the bond market in order to make loans. Traditionally retail […]

11892 What is Six Sigma ? – A Tool to Conquer Variability

Definition of Six Sigma Six Sigma is not a mere methodology or a quality tool. It is a philosophy i.e. a systematic way of thinking to solve quality problems. Six sigma involves use of statistics to convert raw data into facts about how the processes of the organization are being run. The thrust is on […]

12535 Building Decision Support System User Interface

Decision support systems are now widely used in organizations and military across the world, helping decision makers apply analytical, statistical and scientific techniques to decision making. In recent years, there popularity has significantly increased because of their ability to execute, interpret, analyze and suggest. Decision support systems can be used in the areas of economic […]

10728 Privatization of Water

The world is facing a scarcity of water. Each year about 3.4 million people die due to the scarcity of water! Several million more fall sick due to the poor sanitary conditions of the water supplied. The current situation is proof of the fact that the global water supply is not being managed properly. Many […]

Search with tags

  • No tags available.

Introduction

All organizations strive to create value for their customers. This value creates mind space for product and services. Value analysis, therefore, is a scientific method to increase this value.

Value is a perception hence every customer will have their own perceptions on how they define value. However, overall at the highest level, value is quality, performance, style, design relative to product cost.

Increasing value necessarily does not mean decrease in all-inclusive cost of production but providing something extra for which a premium can be charged.

The objective and benefits of value analysis can be summarized as below:

  • Value analysis aims to simplify products and process. There by increasing efficiency in managing projects, resolve problems, encourage innovation and improve communication across organization.

  • Value analysis enables people to contribute in the value addition process by continuous focus on product design and services.

  • Value analysis provides a structure through cost saving initiatives, risk reduction and continuous improvement.

Activities for Value Analysis

Activities for value analysis are separated into following activities:

  1. Product/Service: The 1st step is to identify the product or service which is based on usage/demand, complexity in development and future potential.

  2. Cost Analysis: The next step understands in detail cost structure in developing and manufacturing the product.

  3. Define product and function: The next step is to define all the primary function of the product and service through satisfying the basic need and then taking next step in delighting the customer. For this better understanding of product components and characteristics is required.

  4. Evaluation of alternatives: Through brainstorming possible alternatives can short listed which can provide value to the primary function of the product. Cost evaluation at high level needs to be done for all the alternatives, and the cheapest alternative is short listed.

  5. Secondary Function evaluation: Secondary functions of the product and services are studied and evaluated.

  6. Recommendation: Value Analysis done has to communicate to the various level of the management team as to get acceptance.

Value Analysis Team

The process of value analysis is carried out by value analysis team. So it becomes paramount that team selection for value analysis also follows a structured process.

Value analysis team consists of trained and qualified team members who have background and knowledge about the project. Team leader is selected by the project manager. Team size for value analysis is 5 to 8.

Value Analysis Process

Value analysis process can be divided into three phases of mainly - pre-analysis, analysis and post analysis.

  1. Pre-analysis contains activities of project selection and team selection.

  2. Analysis phase as the name suggests consists of activities like investigation, speculation, evaluation, development and presentation of the report.

  3. Post analysis consists of activities’ implementation of the report and regular audit.

Functional Analysis part of Value Analysis

Function analysis is required to transform the project elements from design of product towards function of product. The main categories are Basic, Secondary, Required Secondary Aesthetic, Unwanted, Higher Order and Assumed.

Article Written by

MSG Team

An insightful writer passionate about sharing expertise, trends, and tips, dedicated to inspiring and informing readers through engaging and thoughtful content.

Leave a reply

Your email address will not be published. Required fields are marked *

Related Articles

Capacity Planning – Meaning, Classification and its Goals

MSG Team

What is Aggregate Planning? – Importance and its Strategies

MSG Team

Operational Transparency

MSG Team