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VALUE ANALYSIS

VALUE ANALYSIS

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Published by vikas vatsyan

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Published by: vikas vatsyan on Mar 14, 2011
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INTRODUCTION TO VALUE ANALYSIS 
Lawrence Miles conceived of Value Analysis (VA) in the 1945 based on the applicationof function analysis to the component parts of a product. Component cost reduction wasan effective and popular way to improve "value" when direct labor and material costdetermined the success of a product. The value analysis technique supported costreduction 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, alsocalled "supporting functions", described the manner in which the basic function(s) wereimplemented. Secondary functions could be modified or eliminated to reduce productcost.VA is an step by step approach to identify the functions of a product, process, system or service; to establish a monetary value for that function and then provide the desiredfunction at an overall minimum cost without affecting any of the existing parameters likeQuality, Maintainability, Productivity, Safety and other Performance characteristicsAs VA progressed to larger and more complex products and systems, emphasis shiftedto "upstream" product development activities where VA can be more effectively appliedto a product before it reaches the production phase. However, as products havebecome 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 analysisevolved into the "Function Analysis System Technique" (FAST) which is discussed later.It is also known as Value engineering and Value management.
OBJECTIVES OF VALUE ANALYSIS 
The VA / VE objectives is to find and improve on value mismatches inproducts, processes and capital projects.
Find important functions ± define necessary versus un - necessary functions
Find and improve on low performing functions.
Define and segregate the necessary functions from the unnecessaryfunctions and thereby creatively develop alternative means of accomplishingthe necessary functions at lower total (life cycle) cost.
 
 
How 
is Value Analysis different fr 
om
Value Engineering? 
 
Traditionally Value Analysis (VA) is used to describe the application of theµtechniques to an existing product or services or after the fact.
Value Engineering (VE) has been used to refer to the design stage or beforethe fact. Value Engineering (VE) approach is used for new products, andapplies the same principles and techniques to pre-manufacturing stages suchas concept development, design and prototyping.
Value Analysis and Value Engineering (VE) is a powerful ChangeManagement and Problem Solving' tool with over a century of worldwideapplication track record.
VE is used to create functional breakthroughs by targeting value mismatchesduring product, process, and project design.
VA is also a vital tool to deal with post product release problems and processimprovement innovation.
Value Analysis (VA) is considered to be a process, as opposed to a simpletechnique, because it is both an organized approach to improving theprofitability of product applications and it utilizes many different techniques inorder to achieve this objective.
The techniques that support VA activities include 'common' techniques usedfor all VA exercises and some that are appropriate for the product under consideration.
A few other names for VA / VE are - Value Management, Value Planning, etc.
VA is also a vital tool to deal with post product release problems and processimprovement innovation.
Value Analysis (VA) is considered to be a process, as opposed to a simpletechnique, because it is both an organized approach to improving theprofitability of product applications and it utilizes many different techniques inorder to achieve this objective.
The techniques that support VA activities include 'common' techniques usedfor all VA exercises and some that are appropriate for the product under consideration.
A few other names for VA / VE are - Value Management, Value Planning, etc.
Value Analysis process attacks unnecessary costs and is thus one of themost effective ways to increase an organization's profitability.
However that is only doing half the job.
A truly effective value improvement program cannot only reduce costs, butalso improve operations and product performance.
The VA approach can be effectively used to analyze existing products or services offered by manufacturing companies and service providers alike.
The VA / VE methodology involves function analysis and everything has afunction.
Therefore the methodology has universal application.
Value Analysis / Value Engineering can be applied with equal success to anycost generating areas.
 
 
AT IS VALUE ANALYSIS AND VALUE ENGINEERING? 
VA / VE 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 / Value Engineering is defined as 'the professionally applied,team based, function - oriented, systematic application of recognized techniques(function analysis) which1. Identify the "function of a product, process, project, facility design, system or service,2. Establish a monetary value for that function,3. Provide the necessary function (defined by the customer to meet his / her requirements),4. Consistent with the specified performance and reliability needed at the lowestIife cycle cost (cost over the expected life).5. And thus Increases customer satisfaction and adds value to the investment.6. Value analysis involves identifying product function (s) relating to cost andprice analyzing the design and construction with an eye for eliminatingelements not contributing to function.7. Some designers think VA undermines good design. If the design was soundthe start VA is redundant. Yet designs and technology change.8. Sound, innovative designs age and become uncompetitive - rivals catch up.9. Remember car windscreens are today glued into place by robots (adhesivetechnology).
How 
D
o
es It 
o
rk? 
To understand value analysis it is necessary to understand some key concepts:
V
alue
:
the ratio between a function for customer satisfaction and the cost of thatfunction.
Function
:
the effect produced by a product or by one of its elements, in order tosatisfy customer needs.
V
alue analysis
: methodology to increase the value of an object ± the object to beanalyzed could be an existing or a new product or process, and it is usuallyaccomplished by a team following a work plan.
Need
: something that is necessary or desired by the customer.

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