Value Analysis
A short summary of the main ideas
What is Value Analysis?
It is an orderly and creative method to increase the value of an item. This " item" can be a product, a system, a process, a procedure, a plan, a machine, equipment, tool , a service or a method of working. Value Analysis, also called Functional Analysis was created by L.D. Miles.
It is an orderly and creative method to increase the value of an item. This " item" can be a product, a system, a process, a procedure, a plan, a machine, equipment, tool , a service or a method of working. Value Analysis, also called Functional Analysis was created by L.D. Miles.
The value of an item is how well the item does its function divided by the
cost of the item (In value analysis value is not just another word for cost):
value of an item = performance of its function /
cost
An item, that does its function better than another, has more value.
Between two items that perform their function equally well, the one that costs
less, is more valuable.
The "performance of its function" could include that it is beautiful (where needed).
Do not be surprised if as a result of value analysis the cost of an item is less that half of its previous cost.
The "performance of its function" could include that it is beautiful (where needed).
Do not be surprised if as a result of value analysis the cost of an item is less that half of its previous cost.
Select the item to be studied and form a study group
To make a value analysis we form a study group of 4 to 6 persons, preferably each with different knowledge, with different backgrounds. They meet in a room free from interruptions.
To make a value analysis we form a study group of 4 to 6 persons, preferably each with different knowledge, with different backgrounds. They meet in a room free from interruptions.
Then we select the item to be studied. The item should be one that gives
the impression that its cost is too high or that it does not do its function
well.
Value Analysis
The value analyst should always be aware of functions, not of products, shapes, or processes. The main function is what the item does, is that which somebody wanted to archive by creating the item. Express this function (if possible) with just two words, a verb and a noun.
The value analyst should always be aware of functions, not of products, shapes, or processes. The main function is what the item does, is that which somebody wanted to archive by creating the item. Express this function (if possible) with just two words, a verb and a noun.
If the item is composed of various parts, it is useful to ask for the
function of each part, and how they contribute to the main function of the
item.
Do not be distracted by mere aggregate functions such as the rubber on a
pencil's end or the ice producing part of a refrigerator. These were functions
added since it was economical or easy to do so. They have no relationship with
the main function.
Gather information
Find the main function and the secondary functions of an item. Get the cost of realizing each function.
The attitude of a value analyst should be critical, aggressive, nonconformist, never satisfied with what she/he receives for the money given.
The first action of the group should be to gather all the information about the item. Ask the best specialist of the field, not the person most accessible. Get a detail of costs. Collect drawings, specifications, all the written data on the item. Don't be satisfied with verbal information.
Find the main function and the secondary functions of an item. Get the cost of realizing each function.
The attitude of a value analyst should be critical, aggressive, nonconformist, never satisfied with what she/he receives for the money given.
The first action of the group should be to gather all the information about the item. Ask the best specialist of the field, not the person most accessible. Get a detail of costs. Collect drawings, specifications, all the written data on the item. Don't be satisfied with verbal information.
For a pencil, for instance:
· What is it? (a pencil)
· What is it for? (make
permanent marks)
· What is the main
function? (make marks, write lines)
· What is the method,
material or procedure that was used to realize the main function? (a graphite
stick and wood)
· What are the
corresponding secondary functions? ("transfer graphite to paper" and
"facilitate holding the graphite"
· What does the item cost
and how can we distribute the cost of realizing the main function into each
secondary function?
·
Comparing these costs to an item of a similar function,
how much should each function and the total cost?
(This example, the pencil, is already a high value item).
Center the attention of the value analysis group on the main function,
because, during the analysis, the secondary functions may change. The group may
choose different secondary functions to realize the main function.
It is not important that the individual costs assigned are imprecise.
Because even an imprecise numerical value is much better than an expression
such as "very costly" or "of low cost".
Measure the value of the way each secondary function is realized, is
materialized:
· Does it contribute
value? (Is there something that does not contribute value?)
· Is the cost in
proportion to the function realized.
· Does it need all its parts,
elements, procedures?
· Is there something
better to do the same function?
·
Is there a standard part that can do the function?
Investigate the cost of a function. Put a dollar sign on tolerances and
strict specifications. See what's thought to be necessary and which somebody
put in, just to be on the safe side. Remember: All that does not contribute to
the main function is waste and should be eliminated.
Creativity (the brainstorming session)
The objective is to find a better way to do the main function. We try to find a different material, or concept, or process, or design idea, that realizes the main function.
People looked for conditions under which the human mind produces really original ideas, a method that helped creativity. These conditions and procedures are stated below and need strict adherence:
The objective is to find a better way to do the main function. We try to find a different material, or concept, or process, or design idea, that realizes the main function.
People looked for conditions under which the human mind produces really original ideas, a method that helped creativity. These conditions and procedures are stated below and need strict adherence:
1- State the main function clearly and shortly on paper or a blackboard
(verb and noun), so that the group can fix their attention on it. State it
without mentioning the physical object or the specific process. (Do not state
secondary or aggregate functions).
2- The leader of the group says "We begin now" and when the ideas
do not flow so fast anymore (about 15 to 20 min.) The leader says "That's
all".
3- Members of the group state loudly any solution to the problem they can
think of. It is very important that they do not analyze their own thoughts or
those of others. They should not smile or react when exotic, improbable or
senseless ideas are stated. They should not criticize or speak with others. They
should only let their imagination run wild and state ideas. An idea can be
inspired by a previous idea. (If no rare ideas are stated, then the members are
analyzing, not making a brain storm).
4- The leader registers all ideas on paper or a blackboard.
5- When the session has finalized, if there is any doubt what was meant by
an idea, the leader clarifies the idea with the help of members. He does not
analyze or discard any idea.
This finalizes the brainstorm.
Evaluation
The evaluation should be done after an interval, at best about two days after the brainstorm, to allow the group to gain perspective.
The evaluation should be done after an interval, at best about two days after the brainstorm, to allow the group to gain perspective.
Now the group analyzes each idea. They group similar ideas. When
evaluating, do not think why the idea would not work, why it is not possible.
Develop each idea, making it more practical, making it function better.
Estimate a very approximate cost for each idea and investigate carefully ideas
with an apparently low cost. When an idea is canceled, that should be based on
facts, not opinions.
Identify barriers and eliminate them tactfully.
Barriers are excuses or preconceived ideas that cannot be substantiated with numbers, facts, detailed and precise information or experimental evidence. Barriers can be honest beliefs. Normally there is gold behind a barrier. Now select the two to four ideas having the lowest cost.
Obtain information for analyzing and developing an idea. Do not work in isolation. Once the group has advanced as far as it can on its own, make contact with specialists. This may be necessary in the selection and also during the development of ideas. The value analyst is a coordinator of specialists, of groups of experts in other companies (Pay them for their contribution in some manner).
Obtain information from the best source, not the nearest or most accessible one. Do not take into account an answer by a person or specialist that lies outside his field of expertise. The use of specialists is a powerful way of tearing down barriers. Avoid generalizations. Do not accept second hand information. Ask for copies of documents.
Barriers are excuses or preconceived ideas that cannot be substantiated with numbers, facts, detailed and precise information or experimental evidence. Barriers can be honest beliefs. Normally there is gold behind a barrier. Now select the two to four ideas having the lowest cost.
Obtain information for analyzing and developing an idea. Do not work in isolation. Once the group has advanced as far as it can on its own, make contact with specialists. This may be necessary in the selection and also during the development of ideas. The value analyst is a coordinator of specialists, of groups of experts in other companies (Pay them for their contribution in some manner).
Obtain information from the best source, not the nearest or most accessible one. Do not take into account an answer by a person or specialist that lies outside his field of expertise. The use of specialists is a powerful way of tearing down barriers. Avoid generalizations. Do not accept second hand information. Ask for copies of documents.
Development of the two to four ideas selected.
Make a real effort to develop the ideas of lowest cost that do the main function. Make tests, prototypes, get quotes of cost. Estimate costs of short term alternatives, of long term alternatives and of any new ideas produced during the evaluation.
Make a real effort to develop the ideas of lowest cost that do the main function. Make tests, prototypes, get quotes of cost. Estimate costs of short term alternatives, of long term alternatives and of any new ideas produced during the evaluation.
At the end of this process, the idea of least cost should have been
identified. Ask yourself: Would I spend my own money on this solution? If not,
modify it.
Recommendation
If you work in an organization or enterprise, be sure that the person really interested in applying the solution gets to see it. Present the final solution in writing, on a single sheet of paper, to the person that should implement it. Give a copy to his boss. This sheet should state the savings, costs and a detailed plan for implementing the idea. It should have all the information needed so that a person that does not know this subject can understand it and do it.
The value analysis group should not itself implement the idea, if this is outside its normal area of work.
If you work in an organization or enterprise, be sure that the person really interested in applying the solution gets to see it. Present the final solution in writing, on a single sheet of paper, to the person that should implement it. Give a copy to his boss. This sheet should state the savings, costs and a detailed plan for implementing the idea. It should have all the information needed so that a person that does not know this subject can understand it and do it.
The value analysis group should not itself implement the idea, if this is outside its normal area of work.
Implementation and Follow Up
Value analysis is not a method of controlling the work of others or of investigating errors.
Normally the amount of work to implement an idea is greater than the amount of work needed to produce the idea. Therefore it is a good procedure to let the people that implement the idea get most of the praise and merit. That produces excellent relations.
Obtain that the group that implements the idea informs of the savings produced and, if possible, benefits from these savings. If needed, help them to establish the way the implementation will be checked and the savings calculated.
Value analysis is not a method of controlling the work of others or of investigating errors.
Normally the amount of work to implement an idea is greater than the amount of work needed to produce the idea. Therefore it is a good procedure to let the people that implement the idea get most of the praise and merit. That produces excellent relations.
Obtain that the group that implements the idea informs of the savings produced and, if possible, benefits from these savings. If needed, help them to establish the way the implementation will be checked and the savings calculated.
For
continuos reading, like a book - continue here.
Jump to the How to increase our Intelligence document / e-book Contents.
Jump to the How to increase our Intelligence document / e-book Contents.
Last Edited 6 Mar. 06 / Walter Fritz
Copyright © New Horizons Press
Copyright © New Horizons Press
No comments:
Post a Comment