Introduction:

Value Analysis is a process of systematic review that is applied to existing product designs to
compare the function of the product required by a customer to meet their requirements at the lowest
cost consistent with the specified performance and reliability needed.
 VA considers real-world feedback as to which product features the market cares about, which
ones complicate manufacturing, and which reduce operating efficiency.
 Value Analysis is a systematic, formal, and organized process of analysis and evaluation. It is not
haphazard or informal and it is a management activity that requires planning, control, and co-
ordination.
 The analysis concerns the function of a product to meet the demands or application needed by a
customer. To meet this functional requirement the review process must include an understanding
of the purpose to which the product is used.
 Value analysis is a set of techniques, knowledge, and skills used to improve the value of a product
by eliminating unnecessary costs or improving its functions without compromising its quality,
reliability, and performance. It involves understanding the components of a product and related
costs.
 Value analysis implies analyzing existing products and evaluating them to improve their
functioning or reduce cost. A step-by-step plan helps assess different aspects of a product, such as
functions, alternative components, design, and costs. Value analysis includes function analysis,
during which a product is broken down into components that are reviewed later.
 Understanding the use of a product implies that specifications can be established to assess the
level of fit between the product and the value derived by the customer or consumer.
 To succeed, the formal management process must meet these functional specification and
performance criteria consistently to give value to the customer.
 To yield a benefit to the company, the formal review process must result in a process of design
improvements that serve to lower the production costs of that product whilst maintaining this
level of value through function.

Value Analysis Techniques

Three Important Value Analysis techniques are:
 Be specific. Companies often try different methods and then report that none of them works. You
should be specific and not make vague statements to prevent this situation. A careful
manufacturing process requires accurate examination before it starts.
 Obtain data from authentic sources. Different types of data should be received from reliable
sources. You can use a questionnaire to obtain accurate information on costs, methods of
manufacturing, and packing. Prepare accurate and relevant questions on topics you find relevant.
 Use creativity. If you aim to find the unnecessary costs, you need to develop new ideas. By doing
this, you can eliminate the previous problems and implement some valuable improvements.
Besides, it enables you to discover how to simplify the existing component of a product and
reduce costs.

Value Analysis Steps are:

We can distinguish the five main steps of value analysis.
 Gather information. During this step, the main aim of your team is to understand the purpose of
a project. Team members collect project data and concepts and try to understand the project
scope. They analyze budget, risks, costs, and other issues, visit sites, and study various project
documents.
 Determine and analyze the function of a project. First, your team identifies the primary and
secondary functions of the project. Next, team members should determine value-mismatched
functions to improve them.
 Generate new ideas for improvement. This step is for team members to create and develop
improvement ideas. They should find alternatives so that the project could perform the same
functions.
 Evaluate these ideas and develop them. Team members discuss each idea in detail and identify
the costs. They review all the possible risks and choose the most relevant and suitable ideas. Once
ideas that make sense are identified, it’s time to work with them. Your value engineering team
develops the options and passes them back to the project team. These ideas should be thoroughly
explained so that project owners and stakeholders can understand them.
 Present improvements. At this stage, the ideas are presented to stakeholders. The best
salesperson is responsible for the presentation.

Why Use Value Analysis:

 A complex number of reasons exists that necessitate the structured approach of value analysis as a
means of logical cost reduction. These reasons can be divided into two key sources, those that lie
within the business and secondly those that are stimulated by the market for the product or
service.

Design related issues:

 The major reasons why VA exercises are conducted originate from the design process itself and
the lack of control systems concerning reviews of product performance once the product has
entered the production stage.

Market induced Reasons:

 There are many modern competitive trends and pressures that make the VA approach a valuable
activity within any business. These pressures include:
 Pricing Practice: The traditional approach to setting the price of a product has been to determine
the costs of the product and then to add a ‘margin’ to provide the profit. However, in the modern
competitive environment, the market tends to determine the acceptable price that can be
commended for a product. As such, companies with high costs and a relatively fixed market price
will command less profit if costs are not managed properly and reduced continuously. The VA
process accommodates this need to manage and continuously seek ways of reducing product
costs.
 The Advent of E-Commerce: The new information technology available to customers means
that product purchasing is now a global exercise. Therefore, to maintain a relationship with an
existing customer and to protect this relationship, enhancing the value and lowering the costs of
existing products will be vital to competitiveness.
 Reducing Complexity: The general trend in European industry is to rationalize the number of
suppliers to a business and to reduce the vast number of parts that were traditionally bought and
stocked. Therefore, the ability to redesign products to incorporate common parts will lead to
financial savings in space and the costs of inventory.
 Compliance with Quality Regulations: Most of the quality management systems, such as
ISO9000 series, require companies to operate a formal design review process to ensure that the
quality of the product can be assured. This is an element of the quality accreditation system that is
monitored and audited by external agencies. As such, companies that fail to comply with these
procedures will fail to qualify for the quality award and can lose business as a result.
 New Technology and Materials: The discovery and invention of new processes and materials
means that this form of innovation can be incorporated within existing product designs such that
the reliability and quality of the product can be improved whilst simultaneously reducing costs.
This market intelligence and the ability to take advantage of innovation for product designs are
vital to improving the performance of the product and the factory.
 Environmentalism: The growing awareness of environmental issues is reshaping the buying
behaviour of customers and consumers in Europe. It is effectively redefining the esteem value of a
product and can, through legislation, affect what materials can be used in the production of
products and therefore environmental pressures serve to redefine the ‘use’ value through changes
in product specifications.

Value analysis examples:

 Value analysis improves the value ratio (function/cost) by analyzing all components of the
product cost through a Pareto chart. This analysis includes the manufacturing process cost and
proposes ways to increase value or function at the existing cost or remove cost while preserving
function and quality.
 Optimizing a plastic bottle closure design is an is an example of VA. A commercially-available
bottle may have a delivery nozzle that threads onto the bottle and a separate sealing cap that
attaches to the nozzle, protecting it from the air that could evaporate the product’s fluid. The cost
Pareto may show that the sealing cap is significant to the overall product cost, leading the
engineering team to design an integrated sealing cap-nozzle that provides both functions in one
component.
 This solution would likely require additional tooling for the new shape. Still, it would reduce a
significant amount of material by removing a component (also a sustainability win) and the
assembly time to place and install the cap. In addition, this design change would reduce
manufacturing tolerance stack-ups that could reduce scrap rate or introduce an additional leak
path.

References:
 Rich, N., & Holweg, M. (2000). Report produced for the EC funded project INNOREGIO:
dissemination of innovation and knowledge management techniques.
https://ivma.org.au/wp-content/uploads/2019/05/14.-Value_Analysis_Value_Engineering_-
_Rich_and_Holweg_2000.pdf
 Bicheno, J, (1998), 'The Lean Toolbox', PICSIE Books, Buckingham, ISBN0951382985 *
Introduction to basic lean and related operations concepts. Provides a good overview and an
excellent basis for further reading.
 Dell’Isola, A. and Dell’Isola, A., (1998), ‘Value Engineering: Practical Applications…for Design,
Construction, Maintenance and Operations’, Robert s Means Co, ISBN0876294638 * A complete
system for understanding and conducting value engineering and life cycle costing studies for
design, construction, and facilities operations. Contains step-by-step instructional chapters, seven
case studies and electronic forms in LOTUS and EXCEL format on a separate disk.
 Cooper, R., Slagmulder, R., and Barth, C., (1997), ‘Target Costing and Value Engineering’
(Strategies in Confrontational Cost Management Series), Productivity Press, ISBN1563271729 *
Describes the combination of target costing process and value engineering in the new product
development process (NPD).
 Shillito, L. M. and Demarle, D. J., (1992), ‘Value: Its Measurement, Design and Management’,
John Wiley and Sons, ISBN0471527386 * Focuses on product development, and provides a
structured approach to professionals. Contains four chapters: nature, measurement, design, and
management of value.

To create a swimlane document flowchart for the Old-Fashioned University

Course Scheduling Process, organize the steps according to the roles involved:
Student, Advisor, Receptionist, OFU Computing Center, Super Duper Course
Registration Program, Registrar, and Academic Department Secretaries.

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