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A Toolbook for Quality Improvement and Problem Solving (contents)

Value Analysis: How to do it

The Quality Toolbook > Value Analysis > How to do it

When to use it | How to understand it | Example | How to do it | Practical variations


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How to do it

  1. Identify what is to be analyzed. This will typically be one of:
    • A manufactured item. This can be anything from a screw to an engine, although a more complex item is likely to result in a more complex and time-consuming analysis.
    • A process or service. Again, all levels can be analyzed, from a hand assembly process to a complete customer service organization.
  1. Identify and prioritize the customers of the item from step 1. This may include external customers, such as 'auto suppliers' and internal customers, such as 'finance manager'.


    Note that external customers are usually more important than internal customers, and that seniority does not necessarily equate with priority. Ask, 'What do they do with it?', 'What would they do without it?'. Thus a customer's preference for a product feature should be more important than the opinion of a senior designer.

  3. Identify the basic functions of the item or process from step 1. Basic functions are those things for which the customer believes they are paying. There are usually only one or two basic functions per product or service.
  4. The best way of finding basic functions is usually to ask the customer. Another possible approach is to observe them in action. Consulting specifications may be appropriate, but is based on the possibly false assumption that these are correct.

    Find the real basic functions by repeatedly asking 'Why?' the item is required until answers can no longer be found. For example, the function of a teenager's dress might be 'to look good'. Asking 'Why?' results in the more basic function of 'attract attention of opposite sex'.

    Differentiate between aesthetic functions and use functions. Aesthetic functions are associated with feelings, but serve no other practical purpose, for example 'elegant shape' or 'pleasant service manner'. Use functions describe how the item is used, for example 'cutting paper' or 'smoothing wood'. Basic functions may be aesthetic or use functions.

    Describe functions with verb-noun combinations, such as 'cut' and 'wire' in a clear phrase or sentence. Where possible include information that will enable it to be measured, as this will allow improvements to be identified. For example, 'hand-cut mild steel wire of at least 4mm diameter'.

  5. Identify the secondary functions of the item by finding other functions that support the basic functions from step 2.
  6. This may be helped by asking 'How?'. For example, where the basic function of a bottle is to 'contain liquid', a secondary function may be to 'be strong', as this will contribute towards the bottle continuing to contain the liquid, even if it is dropped.

  7. Determine the importance, or 'value' of each function to the customers identified in step 1. This will help to prioritize improvements. Assigning a number to this will enable the relative value of different functions to be highlighted. Alternatively a simple rating scale may be used, such as from 'Very Low' to 'Very High'.
  8. This is not always easy and a degree of estimation is often required. The task can be eased by comparing functions with one another or with value figures that have been used in the past. If possible, use actual customer preferences.

  9. Break down the item into its constituent components, for example by using a Tree Diagram for a manufactured item or a Flowchart for a process.
  10. A manufactured item may benefit from analysis of both materials and process, as this will make costing in step 7 easier, and may also help with determining where value is and is not being added.

    For complex systems, limit the depth to which it is broken down in order to keep the overall analysis to a manageable level. If necessary, separate Value Analyses may be performed on individual sub-components.

  11. Measure the cost of each component, as accurately as possible. This may include direct material costs, time costs, labor costs and other resource costs. If they can be measured, additional costs may be included, such as the cost of inspection, testing, scrap, lighting, heating, etc.
  12. Costs and components may be matched by using a table, such as below.



    Fig. 1. Components and Costs


  13. Compare the components with the functions, determining which component contributes to which functions. This is often a one-to-one relationship but may also be one-to-many or many-to-many, for example where a book entertains as well as educates.
  14. Matching functions and components may be done with a table, as in Fig. 2.



    Fig. 2. Function and Value


  15. Identify components that may be improved either to give the same functionality at lower cost or to increase the contribution towards functions. Approaches include:
    • Look for redundant components that do not contribute to any function and which may be eliminated.
    • Look for unsatisfied functions that have no components satisfying them.
    • Identify high cost components, especially those that satisfy low value functions.
    • Identify high value functions and identify components that contribute towards them.
  1. Use Brainstorming to create a list of possible improvements to the components identified in step 9.
  2. Also look for different ways of satisfying the basic functions, even if it means rejecting the current approach and starting again with a clean drawing board. This requires the product or process to be 'mentally destroyed' and then rebuilt anew.

    It may also be worthwhile to investigate new technologies that can be used to increase the value of functions or reduce the cost of components.

  3. Evaluate the ideas from step 10 to determine their cost and select those that can be practically implemented. This may include work to develop and refine promising ideas into practical and optimum solutions.


  5. Implement selected ideas and measure the costs and values to identify the real benefits gained.




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