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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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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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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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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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2. Write each function on a small card
3. Select card containing what is considered the basic function.
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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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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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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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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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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