Top 12 Techniques of Value Analysis

The following points highlight the top twelve techniques of value analysis. The techniques are: 1. Work in Specifics 2. Obtain All Available Costs 3. Seek Information from the most Authentic Source 4. Evaluate Function by Comparison 5. Discuss with Specialists and take Advantage of their Expertise Knowledge 6. Use Real Creativity 7. Consult your Suppliers for New Ideas and Others.

Techniques of Value Analysis:

  1. Work in Specifics
  2. Obtain All Available Costs
  3. Seek Information from the most Authentic Source
  4. Evaluate Function by Comparison
  5. Discuss with Specialists and take Advantage of their Expertise Knowledge
  6. Use Real Creativity
  7. Consult your Suppliers for New Ideas
  8. Use Standard Parts whenever Possible
  9. Identify and Overcome all Road-Blocks

Value Analysis: Technique # 1. Work in Specifics:

Very often people at the top in an organisation are likely to say, “This is the only method to make, this item. We have tried other methods but failed”. The best way of tackling such a situation is to be very specific and not to make a vague statement.

People at the top will be influenced by the specific proposal and it is possible that the right manufacturing process may be developed after careful examination. Hence, avoid generalities because they serve only to prevent changes and protect the status quo.

Value Analysis: Technique # 2. Obtain All Available Costs:

Information about all available costs should be obtained. It is possible that specific method may slightly increase cost in one department but may lead to substantial reduction in costs in other departments, resulting in an overall reduction of cost.

Value analysis is mainly concerned with comparing costs. Therefore, relevant costs for each function as may be required for the analysis should be obtained; and if costs are not readily available, these should be developed as accurately as possible.

Value Analysis: Technique # 3. Seek Information from the most Authentic Source:

Information on any aspect of cost, methods of manufacture, finishing, packing etc. should be obtained from the most reliable source. To get the correct information a questionnaire should be developed.

While collecting information, the particular questions that the value analyst is to ask are:

(i) What is the precise function of the product? How important is this function?

(ii) What is the cost of the product? Is the cost proportionate with its utility?

(iii) Does the design of the product contribute to value? Is it not possible to eliminate a part or a component without reducing its use value or esteem value? Will a change in the design of the product lead to lower cost?

(iv) Are all the features of the product essential?

(v) Is any better substitute available?

(vi) Is it possible to reduce cost of material?

(vii)Are all the labour operations necessary?

(viii) Is standardisation and simplification of products possible?

(ix) Is it possible that a number of products use common standard parts?

(x) Can a standard item be substituted for a non-standard item?

Value Analysis: Technique # 4. Evaluate Function by Comparison:

After identifying the function of an item, the natural questions to ask are—”How do other concerns perform the same function? What is their cost? Will the value of the function be reduced by eliminating unnecessary costs?” This probe will lead to a number of alternatives which can be examined to see if any of them is likely to result in a cheaper but reliable alternative.

Value Analysis: Technique # 5. Discuss with Specialists and take Advantage of their Expertise Knowledge:

Now-a- days, technology is advancing so rapidly that it is almost not possible for engineer and others working in an organisation to keep abreast of the latest developments. It, therefore, pays to be in touch with a specialist suitable for the specific problem and get his specialised knowledge. Without such expertise knowledge status quo will be continued and opportunity of improving value and reducing cost will be lost.

Value Analysis: Technique # 6. Use Real Creativity:

Value analysis involves a creative approach for finding out unnecessary costs. The human mind is capable of developing new ideas which lead to cost reduction and performance improvement. Creative thinking can be helpful in cost reduction by simplifying the existing part or item to do the same function.

Value Analysis: Technique # 7. Consult your Suppliers for New Ideas:

As your suppliers are dealing with many others who are in the same line of business, their ideas and suggestions will be of great help to you.

Value Analysis: Technique # 8. Use Standard Parts whenever Possible:

Standard parts are interchangeable and cheaper than specially made parts because standard parts are generally made by mass production methods leading to reduced costs. Specially made (non-standard) parts should be used only when is is unavoidable to do so.

Value Analysis: Technique # 9. Identify and Overcome all Road-Blocks:

Road blocks are the difficulties created by one’s colleagues and others who resist change and feel secure in the existing ways. The resistance to change to new methods and techniques is principally from ignorance and it can be overcome with patience, tact and carefully explaining the proposed method or technique to the individual concerned who is opposed to change.

11. Get the maximum cooperation from your colleagues in other departments with whom you have to deal. The value analyst should be polite and friendly with every one so that he may get the fullest cooperation.

12. The value analyst should always ask him this question, “Would he spend his money in this way?” Such an approach will be helpful in thinking of alternatives that are less costly.

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