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Analysis Paper, 3 pages (650 words)

Value analysis

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The technique simultaneously pursues two complimentary objectives: •Maximizing the utility provided by the product or service •Minimizing or eliminating waste.

The analyst’s goal is to eliminate as much of the non-value-added elements as possible by reengineering the design of the product or process. Equally important, the analyst also considers the possibility of substituting functionally equivalent elements for the value-added elements of the product or process design. In the latter case, a substitution is justified when the functionality of the element is maintained or enhanced at a reduced cost to the producer.

Value analysis may be applied to the design and redesign of products, services, and processes Component cost reduction was an effective and popular way to improve “ value” when direct labor and material cost determined the success of a product. The value analysis technique supported cost reduction activities by relating the cost of components to their function contributions. Value analysis defines a “ basic function” as anything that makes the product work or sell.

A function that is defined as “ basic” cannot change. Secondary functions, also called “ supporting functions”, described the manner in which the basic function(s) were implemented.

Secondary functions could be modified or eliminated to reduce product cost. Finally, design changes may be proposed to eliminate, reduce, or replace elements that fail to add sufficient value to the overall product or process. As VA progressed to larger and more complex products and systems, emphasis shifted to “ upstream” product development activities where VA can be more effectively applied to a product before it reaches the production phase.

However, as products have become more complex and sophisticated, the technique needed to be adapted to the “ systems” approach that is involved in many products today.

As a result, value analysis evolved into the “ Function Analysis System Technique” (FAST) VALUE ANALYSIS METHOD: Identifying the function in the broadest possible terms provides the greatest potential for divergent thinking because it gives the greatest freedom for creatively developing alternatives. A function should be identified as to what is to be accomplished by a solution and not how it is to be accomplished. How the function is identified determines the scope, or range of solutions that can be considered. That functions designated as “ basic” represent the operative function of the item or product and must be maintained and protected.

Determining the basic function of single components can be relatively simple. By definition then, functions designated as “ basic” will not change, but the way those functions are implemented is open to innovative speculation. As important as the basic function is to the success of any product, the cost to perform that function is inversely proportional to its importance. This is not an absolute rule, but rather an observation of the consumer products market. Few people purchase consumer products based on performance or the lowest cost of basic functions alone. When purchasing a product it is assumed that the basic function is operative.

The customer’s attention is then directed to those visible secondary support functions, or product features, which determine the worth of the product. From a product design point of view, products that are perceived to have high value first address the basic function’s performance and stress the achievement of all of the performance attributes. Once the basic functions are satisfied, the designer’s then address the secondary functions necessary to attract customers. Secondary functions are incorporated in the product as features to support and enhance the basic function and help sell the product.

The elimination of secondary functions that are not very important to the customer will reduce product cost and increase value without detracting from the worth of the product.

The cost contribution of the basic function does not, by itself, establish the value of the product. Few products are sold on the basis of their basic function alone. If this were so, the market for “ no name” brands would be more popular than it is today. Although the cost contribution of the basic function is relatively small, its loss will cause the loss of the market value of the product.

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