Value analysis is a very useful technique. It results in lower costs, lower prices, higher sales and more profits. In addition to cost reduction, it has the following purposes or advantages :
Advantages of Value Analysis:
(1) It leads to improvements in product design so that most appropriate products are produced.
(2) High quality (value) is maintained.
(3) All-round efficiency is achieved by eliminating waste of various tykes.
(4)Cost savings provide a measure for judging managerial effectiveness.
(5) New ideas are generated and incorporated.
(6) Team spirit and morale are improved.
(7) Arms requiring attention and improvement are pinpointed.
(8) A means for evaluating alternatives and quantifying intangibles is provided.
(9) Value analysis is applicable to all areas of industrial operations, e.g., purchasing, hardware, products, systems or procedures, etc.
7 Phases of Value Analysis Exercise
The main phases of a value analysis exercise are as follows
(1) Origination phase. In the first phase a value analysis study team is constituted. The project is selected and &fined. The team examines in detail the product and its components to understand thoroughly their nature.
2. Information phase. After familiarization, a functional analysis is carried Out to determine. the functions and uses of the product and its components. The cost and importance of each function are identified. A value index is calculated on the basis of cost-benefit ratio for each function. A list is prepared in which the items or functions are arranged in decreasing order of value.
3. Innovation phase. This is the creative phase concerned with the generation of new alternatives to replace or removing the existing ones.
4. Evaluation phase. Each and every alternative is analyzed and the most promising alternatives are selected. These alternatives are further examined for economic and technical feasibility. The alternatives finally selected must be cable of performing the desired functions satisfactorily. These must meet the standards of accuracy, safety, maintenance and repairs, environmental effect, etc.
5. Choice phase. In this phase, a report is prepared. This report contains a summary of the study, conclusions and specific proposals. The decision makers choose the alternative. Programmes and action plans are then developed to implement the chosen alternative.
6. Implementation phase. The chosen alternative is put into use with the help of programmes and action plans developed in advance.
7. Review phase. The progress of value analysis changes is continually monitored and followed up in order to provide assistance, to clarify any misconceptions and to ensure that the desired results are achieved.
