Value analysis is based on the application of a systematic workplan that may be divided into six steps: orientation/preparation, information, analysis, innovation/creativity, evaluation and implementation and monitoring.
Value Analysis: Examples
A product manager at a company that produced nails had received several requests from customers for a nail that could not work loose. Identifying this 'improved nail' as a possible new product line, he decided to do a Value Analysis to help identify costs and values.
In the field of value investigation, value refers to economic value, which itself can be sub-divided into four types as cost value, exchange value, use value and esteem value.
Value analysis is a systematic review of the production, purchasing and product design processes to reduce overall product costs. This can be accomplished through a variety of activities, including the following: Designing products to use lower-tolerance parts that are less expensive. Switching to lower-cost components.
Five steps of value analysis
- Gather information. During this step, the main aim of your team is to understand the purpose of a project. ...
- Determine and analyze the function of a project. ...
- Generate new ideas for improvement. ...
- Evaluate these ideas and develop them. ...
- Present improvements.
“elements of value” that meet four kinds of need—functional, emotional, life changing, and social impact—and that, when optimally combined, increase customer loyalty and revenue growth. The elements of value work best when a company's leaders recognize their ability to spark growth and make value a priority.
The principle behind value analysis is that it is a functionally oriented method for improving product value by relating the various elements of product worth to their corresponding elements of cost. Thus value analysis allows the required functions to be performed at the minimum cost.
A critical advantage to using value analysis is its potential for reducing costs, which is a benefit that permeates all advantages of the system. Because value analysis breaks down a product or service into components, it enables you to analyze each component on its own, evaluating its importance and efficiency.
Value Analysis is a standardized, multi-skilled team approach which aims at identifying the lowest cost way and ensuring the highest worth to accomplish the functions of a product, process or service.
Value analysis is a structured approach to identifying the functional requirements of a project in order to optimise costs and ensure alignment of scope with the objectives of the project. This process is typically done as part of the front end development stage of a project where the value potential is greatest.
The four types of value include: functional value, monetary value, social value, and psychological value.
Larry Miles, Father Of Value Analysis.
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.
The Elements of Value Pyramid
They are a range of external and internal needs consumers seek to meet. These building blocks are usually represented in a pyramid and fall into four different categories: functional, emotional, life-changing, and social impact.
Value defines how light or dark a given color or hue can be. Values are best understood when visualized as a scale or gradient, from dark to light. The more tonal variants in an image, the lower the contrast. When shades of similar value are used together, they also create a low contrast image.
We're talking about three things: cash flow, risk, and growth.
Demand: the desire or need for ownership supported by the financial means to satisfy the desire. Utility: the ability to satisfy future owners' desires and needs. Scarcity: the finite supply of competing properties. Transferability: the ease with which ownership rights are transferred.
Even if a thing has utility and scarcity, it must be transferable to have value. If a commodity cannot be transferred from the buyer to the seller, value cannot exist. If the owner of a property cannot be determined, it cannot be transferred.