The minimum money which has to be

expended in purchasing or manufacturing a

product to create the appropriate use of
esteem factors.
Value is what customers are demanding- the
right combination of product quality, fair
price and goods and services.

Use value: The properties, features and
qualities which accomplish the use, the work
or the service- causing the item to perform or
serve an end.

Esteem value (or need value): The properties,
features or attractiveness which cause us to
yearn to posses it, causing the item to be
sold.

Exchange value: The properties or qualities
which enable us to exchange an item for
something else we want.

Cost value: The total of material, labour and
other costs that have to be incurred to
produce an item.


Value Analysis is an effective tool for cost reduction and the results
accomplished are far greater.

It improves the effectiveness of work.

It is an organised approach to a problem.

It is value applied at the design stage itself.

It reduces unnecessary costs, obvious and hidden which can be
eliminated without adversely affecting quality, efficiency, safety and
other customer features.
Value analysis is the study of the relationship
of design, function and cost of any product,
material or service with the objective to
reduce cost through modifications of design
or material or specification or the
manufacturing process, changing source of
supply (external or internal) or possible
elimination of parts or their incorporation
into a related item.

1.Capital goods plant, equipment, machinery, tools, etc.
2. Raw and semi-processed material, including fuel.
3. Materials handling and transportation costs.
4. Purchased parts, components, sub-assemblies, etc.
5. Maintenance, repairs, and operational items.
6. Finishing items such as paints, oils, varnishes, etc.
7. Packing materials and packaging.
8. Printing and Stationery items.
9. Miscellaneous items of regular consumptions.
10. Power, water supply, air, steam & other utilities (services).
1. To provide better value to a product/service.
2. To improve the companys competitive position.
3. To ensure that every element of Cost (
Labour, Materials, Suppliers and service )
contribute equally to the Function of the product.
4. To Eliminate unnecessary Cost.

# Stage Description
1.
SELECTION &
ORIENTATION
To select those critical areas where a potential for cost
reductions is expected.
Use the common Paretos ABC analysis.
General scope, restrictions and aims of the study is defined.
2. ANALYSIS
Examine the data at a VA group/team meeting.
Record the minutes of each brainstorming session.
Apply the Tests for Value.
Propose further action.
3.
RECORDING
IDEAS
Write down the minutes of analyses meetings and circulate
them to group/team members for further queries.
It includes the agenda for the next meeting.
4.
INNOVATION/
CREATIVITY
Arrange team meetings in order to discuss the ideas
analyzed and any new information obtained.
Think upon practical measures for reducing costs and
increasing value.
# Stage Description
5. EVALUATION
Investigate suggestions for reducing costs and to make
them practical and acceptable to client management.
Obtain definite prices and costs in order to estimate cost
reductions accurately.
6.
RECOMMENDATIONS
Recommend cost reductions to client management.
Present the recommendations in a comprehensive report.
Recommend a member to act as an implementation
consultant for VA recommendations.
7.
IMPLEMENTATION
& MONITORING
Implement the recommendations accepted by the
company management. Monitor the results as suggested
in VA report.
Jot down the feedback of the management upon
completion of VA assignment.
Value engineering is a total of management
which approaches the question of saving cost
from the point of view of value.
Requires co-operation of all functional
departments.
In large organisations, there are value
engineering teams having full time jobs.

Value and cost

Value = Function
Cost
Value: What the product is worth to the
customer.
Function: Properties and qualities of product.
Cost: Money value of materials used, Labour
& indirect costs.

DESIGN ANALYSIS
BRAIN STORMING
CHECK LISTS
PRICE ANALYSIS


THANK YOU