Q. What is Value Analysis ? How is it different from Value Engineering ? Explain any two techniques of value analysis.
OR
What is Value Analysis ? Discuss various techniques of value analysis.
OR
What is the meaning of value analysis ? What are the techniques of value analysis ?
Ans. Meaning of Value Analysis: Value analysis or value engineering is such a technique which reduces the cost of products or services through following a scientific approach and analysis. The various unnecessary costs associated with the products or services are identified and eliminated without affecting the quality. The unnecessary costs are those which neither provide any additional satisfaction to customers nor their removal will affect the quality of the product or services. If these costs are identified and eliminated, it will reduce the cost of the products or services and ultimately the volume of turnover will increase. This technique saves the scarce resources and promotes indigenous development of substitutes.
Value analysis and value engineering are different in a sense that the term value analysis is used for existing products or services, whereas value engineering refers to new products or processes which are not finalised. Although these words are generally used interchangeably.
Techniques of Value Analysis: The two techniques which are used in value analysis are as follows:
1. Functional Analysis System Technique (FAST): It is an evolution of the value analysis process which is created by Charles Bytheway. The set of original questions for FAST given by him includes the following:
(i) What subject or problem would you like to address?
(ii) What are you really trying to do when you want to do something?
(iii) What higher level function has caused to come into being?
(iv) Why is it necessary?
(v) How is it actually accomplished or how it is proposed to be accomplished?
(vi) Does the method selected to cause any supporting functions to come into being?
(vii) If you did not have to perform, would you still have to perform the other supporting function?
(viii) Do apparent dependent functions come into existence as a result of the current design?
FAST permits people with different technical backgrounds to effectively communicate and resolve issues that require multi-disciplined considerations. FAST builds upon VA by linking the simply expressed verb-noun functions to describe complex systems.
The FAST model has a horizontal directional orientation described as HOW-WHY dimensions. HOW and WHY questions are asked to structure the logic of the system’s functions. The two steps are followed:
(i) Start with a function and ask HOW that function is performed to develop a more specific approach.
(ii) Abstract the problem to a higher level and ask WHY that function is performed.
Addressing any function on FAST model can be as follows:
(i) The questions WHY is answered by the function on the left which expresses the goal of that function.
(ii) The questions HOW is answered by the function on the right, which is a method to perform that function.
2. Brain Storming: Brains Storming was originated from advertising industry to stimulate the creative thinking. It is a group activity in which the members of the group throw out ideas after applying their imagination to a single problem. The group is consisted of four to ten members. The ideas are welcomed no matter how ridiculous it may seen. It attempts to promote creative thinking. Chairman notes down every idea but they are not evaluated at the time of presentation. The logic behind this that one idea even though ridiculous will stimulate the other idea and so on. This process will ultimately lead to a genuinely original and workable solution to the problem. When the brain-stomming session is over, the resulting ideas are evaluated in terms of contribution on reducing cost.
3. Comparative Analysis: Sometimes comparative analysis off similar items provide more savings than by applying tests of value individually to each item. A comparison might provide some clues. For example, an analyst of cooler industry might review all the available alternatives regarding front grill. If he replaces the iron sheet grill with fiber or plastic grills, it will reduce the weight and will also decrease the cost. Simultaneously the cooler will be noiseless and will be more handy to clean. Some analysis plot it on a graph taking to different variables on X-axis and Y-axis. A curve like graph appears after plotting the values on the graph. The value that do not follow the curve are not necessarily poor values, since there may be some additional features that justify the premium charged in cost. But they should be properly investigated.
4. Design Analysis: First of all the components and functions of the products are to be visualised thoroughly. When a product is designed and developed, initially engineers developed the components or parts individually. Then the value analysis team analyses each sub-assembly in relation to each other and to the total product. After analysing, they made suggestions regarding new material and method to be used or to add or eliminate an assembly for adding more value to the product.
5. Buyer-Supplier Seminars: The number of suppliers for each smallest part may be numerous and each supplier may have different knowledge about the functioning performance and usefulness of the part. This technique of Buyer-Supplier Seminars is to create a pool of knowledge and know-how. In the seminars, the suppliers introduce new components, new knowledge, etc. On the other hand, the company’s executives introduce their new initiatives, objectives and discuss future plans. They may also invite suppliers for their valuable suggestions for improvement in the product.
6. Gordon Technique: This technique is closely related to brainstorming technique. But the major difference between the two is the approach. In this technique, the group leader opens the session with a statement of the board to be discussed, while in brainstorming session technique, the problem is pinointed.
7. Checklist Technique: The value analysis procedure starts with the detailed checklist to ensure that every pertinent questions is asked about each component. But in this technique, the checklists are prepared specifically for solving a particular problem. The following type of suggestions are included in the checklist:
(i) What does it cost?
(ii) What does it do?
(iii) Can it be eliminated?
(iv) Can a standard item be used?
(v) Can the item be redesigned?
8. Synectics Techniques: This is the preset method was first introduced in 1960 by J.J. Fordon. Synectics was derived from the Greek word ‘synektiken’ which means joining of different items together and reflect the early discovery of the synergistic effects of ‘banging things together’ where the creative equation of A + B = C illustrates how new ideas can be created from two old ideas. Thus synectics is a structured and efficient method of creative problem solving. In Synectics, the problem is stated very broadly such that problem solvers have not even inkling of the problem. When the discussion proceeds and perspectives are formed, then the facts of the problem are revealed which makes the solution more refined and specific to the actual problem. Team leader plays a crucial role during the session. The analogous and metaphorical information is exchanged within group of individuals having different specialisations and personalities.
9. Morphological Analysis: This method was deloped by Fritz Zwicky in 1966. Morphological analysis is actually a group of methods that share the same structure. This structure breaks down a system, product or process into its essential sub-concepts. Each concept represents a dimension in a multi-dimensional matrix. Thus every product is considered as a bundle of attributes. New ideas are found by searching the matrix for new combination of attributes that do not yet exist. It doesn’t provide any specific guidelines for combining the parameters. It tends to provide a large number of ideas. It helps in discovering new relationships and configurations which are overlooked by others.
10. Attribute Listing Technique: Attribute listing is a technique from the early 1930’s which takes an existing product or system, breaks into parts and identifies various ways of achieving each part. It prompts the different ways to change, modify or improve each attribute and recombine them to identify new forms of the product or system. Attribute listing is a very useful technique for quality improvement of complicated products, procedures for services. Let us take an example of business of making torches. The torch has different components - casing, switch, bulb, battery and the attribute weight. A list of ideas can be developed to improve each one.
Attribute Listing – Improving a torch
| Feature | Attribute | Ideas for Improvement |
|---|---|---|
| Casing | Plastic | Metal |
| Switch | On/off | On/off/flow beam |
| Battery | Power | Rechargeable |
| Bulb | Simple Bulb | LED |
| Weight | Heavy | Light |
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