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Value Analyse

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    VALUE ANALYSIS

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    CONCEPT OF VALUE ANALYSIS

    It aims at a systematic identification and elimination ofunnecessary costs.

    It critically investigates and analyses the different aspects ofmaterial, purchase, design and production of each and everycomponent of the product.

    Any thing that doesnt add value to the product from customer

    point of view is unnecessary cost.

    This includes inventory, transportation etc.

    It is normally applied to existing rather than new products.

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    WHAT IS VALUE

    Value can be defined as the combination of quality, efficiency,price and service which ensures the ultimate economy andsatisfaction of the purchaser.

    Value = functioncost

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    FOUR TYPES OF ECONOMIC VALUE

    1 Cost value : Sum of all costs to produce the product.2 Functional Or Use Value : It is the measure of properties, qualities

    and features which make the product accomplish a function.

    It is the price paid by the buyer in order to ensure that theproduct performs the intended functions

    3 Esteem Value : It is the measure of properties, features,attractioness, packaging etc., which increases sales appeal or whichattracts persons and creates in them a desire to posses the product.It is the price paid by the buyer beyond the use value.

    4 Exchange Value : It refers to the price that a customer will offer forthe product, the price being dependent upon the satisfaction (value)which he derives from the product.

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    AIMS & OBJECTIVE OF VALUEANALYSIS

    To maintain the functional objectives of an item at the desiredlevel.

    Three Functions :

    Primary

    Secondary,

    Tertiary

    Save money or increase profit

    Time consideration : Ease of manufacture, timely delivery ofproduct etc..

    If product is to be for a short durationNo quality issues. Ex. Beachwear.

    Quality promotion : Helps in the analyses of repeated failure of acomponent or part.

    It Can improve quality.

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    CONTINUE

    Standardisation : Standardisation of material, process,products etc.

    Increase the utility of the product.

    Ex Mixer Grinder, Vacuum cleaner for Painting.

    Improve organisational effectiveness by eliminating wastefulactivities.

    Develop logical and analytical approach to solve problems.

    Modification and improve product design

    Ex. Carburetor cap of bike

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    DIFFERENCE BETWEEN VA & VE

    Though the process is same , the difference lies in the time andat the stage when the technique is applied.

    VA is the application of a set of technique to an existing productwith a view to improve its value It is thus a remedial process.

    VE is the application of exactly the same set of techniques to anew product right from the design stage so that no unwantedfeatures are added to the product.

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    WHEN TO APPLY VALUE ANALYSIS

    In the development of a new product

    ROI of investment in a product is reducing.

    Sales of the product is going down

    The cost of manufacturing / tooling is rising. Competitors products are available at low price

    Cost of raw material is increasing disproportionate to thevolume of production.

    The firm is unable to meet delivery schedule.

    Customers complaints regarding performance of the product.

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    STAGES IN VA OR VA PROCEDURE

    1 Orientation Phase : It involves identification of the problem,selection of projects, formation of teams, laying down objectivesand targets, and in depth training of all team members.

    Selection of Project:

    Carry out ABC analysis ( Pareto Analysis- to identify vital fewcomponents, process, parts that contribute to the bulk of product cost)

    Identify problematic area that may be in production, maintenance,design, etc..

    Formation of Team : It should be form different departments.

    2 Information Phase : Collection of all relevant information likedrawings, manufacturing process, tech. specification, cost brake up

    etc.. Collect data

    Decision and costsEx. location of a m/c on the plant will affectmaterial movement (ex. Dairy plant)

    Assimilate facts and data into the required formmay be on a

    standard workbook.

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    CONTINUE

    3 Function phase : This is heart of a value analysis. One tries to answer :-

    What does it do?

    How much does it cost?

    What is its worth?

    Importance of function (ex. Sports shoe)

    Type of function : Use function and sell function

    Ex. Tie Clip Restrict Movement Improve appearance

    Define Function : Define in just two words, a verb and noun.

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    CONTINUEVerb Noun

    Violin Produce Sound

    Gas Cooker Produce Heat

    News Paper Provide Information

    Other ex. May be: Attract Attention, Improves looks

    Why Two words

    If not able to define in two words, not all information is

    available It forces to break the problem into simplest elements

    It provides better communication

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    CONTINUE

    Identify levels of function : Primary

    Secondary

    Tertiary

    Estimate function cost :A customer wants to pay for fruit juiceand not for the container yet without container they cant take it

    to customer.

    Estimate worth of each essential function : worth in VA is thelowest cost to achieve the basic function. It is derived by creativelyestablishing other not so obvious means of accomplishing eachfunction.

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    FUNCTIONAL ANALYSIS SYSTEMTECHNIQUE ( FAST)

    This technique answer three questions why?

    How?

    When ?

    The steps are :1. Prepare a list of all the function of the assembly or system using the

    verb and noun technique.

    Example : a ball pen

    2. The functions are

    1. Make Mark Basic Function.

    2. Improve aesthetics

    3. Provide grip Secondary Function

    4. Control Flow

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    The Pen consists of Six parts :

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    CONTINUE

    2. Write each function on a small card

    3. Select card containing what is considered the basic function.

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    CONTINUE

    4. Apply the logic question why and how an the selected functionto determine the functions right and left of this.

    MAKE

    MARKS

    CommunicateIdeas

    MakeMarks

    Contain Flow

    Contain ink

    Ask Why ? Ask How?

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    CONTINUE

    Scope liner identifies scope of the current product. For ex. Ideamay be communicated by film, OHP etc.

    All time function are placed on the top RHS of the diagram.

    MakeMarks

    Contain Ink

    Control Flow

    CommunicateIdeas

    PositionRefill

    ProvideTension

    MakeMarks

    ContainInk

    ControlFlow

    Communicate Ideas

    PositionRefill

    ProvideTension

    EnclosedParts

    RestrictMovement

    WHY?

    WHY?

    HOW?

    HOW?

    SCOPE LINER

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    CONTINUE

    5 Creation Phase : To identify what else will satisfy the sameneeded function

    Alex Osborne's Brainstorming :

    Carry out for 35-40 minutes, suspend judgment, freewheeling isallowed, quantify not quality is required

    Modify / combine idea to produce result

    The Gordon technique :

    Similar but the exact problem is not known and is gradually broughtinto the focus.

    The morphological Analysis techniques.

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    CONTINUE

    6 Evaluation Phase : During creation phase, The team focuses only on the generation of

    idea and not on their relative merits.

    Some techniques used at this stage are :

    i. Using filters of Safety, Technology and ImplementationManufacturability to prove the product idea.

    ii. Segregation of ideas into long and short term :

    1. Make sure if short term ideas ( 3 Months may be ) can neimplementable.

    iii. Ranking : Simple ranking in terms of best and worst ideas.

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    CONTINUE

    iv. Feasibility ranking approach : Evaluate ideas against severalcriteria by preparing evaluation Matrix :

    Criteria PROPOSALSI II III IV

    Tech. Level 10 5 8 6Cost ofImplementation

    9 5 7 3

    Potential

    Benefit

    2 8 7 4

    Safety 5 7 10 6

    Adherence toQualityStandard

    7 5 6 8

    Total 33 30 38 27

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    v Weighted Evaluation :Assign weight to ideas as per theirrelative importance.

    The Recommendation Phase : If possible, conduct trial beforerecommending the changes. Present potential savings if the ideais implemented.

    The implementation Phase :

    Plan Action

    Record Progress

    Organize review meetings

    Establish feed back systems

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    THANK YOU


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