Value Analysis

Presented By: Mohd.Aarish

Value Analysis

It is an orderly and creative method to increase the value of an item. This " item" can be a product, a system, a process, a procedure, a plan, a machine, equipment, tool , a service or a method of working. Value Analysis, also called Functional Analysis.

Value of an item = performance of its function / cost

(The value of an item is how well the item does its function divided by the cost of the item (In value analysis value is not just another word for cost)

  An item, that does its function better than another, has more value. Between two items that perform their function equally well, the one that costs less, is more valuable.

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Value analysis is evaluates a product utility, esteem and market values, each of which are defined below :

Utility value – how useful / functional the product is seen to be.

Esteem value – the value that customer / user gives to product attributes, not directly contributing to utility but more relating to aesthetic and subjective value. Esteem issues and functionality should not be overlooked or compromised.

Market value – what market is prepared to pay for the product.Market value = Utility value + Esteem value

The Value Equation

How to improve the Value?

Component cost reduction of the product

Relating the cost of components to their function contributions.

Secondary functions could be modified or eliminated to reduce product cost.

Providing a method of communication within a product development team and achieving team consensus

Facilitating flexibility in thinking and exploring multiple concepts

Focusing on essential functions to fulfill product requirements

Identifying high cost functions to explore improvements

Why Value Analysis is needed ?

Assessing Customer Needs & Affordability Capturing Customer Needs and Priorities Obtaining Customer Feedback on Value Product Planning Reduced material use and cost Reduced distribution costs Reduced waste Improved Profit Margins Increased Customer Satisfaction Increased employee morale

Thank you