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1.3. Value Analysis


How To Invent (Almost) Anything > 1. Analytic Invention > 1.3. Value Analysis

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Value Analysis is an established part of the discipline of Value Engineering that is founded on the principle that when you use or make something, it should add clear value, and that the value created should be greater than the cost incurred. As Fig. 1.3 indicates, this can be done through identifying components and their cost, then comparing this with the functions they perform and the value thus created. For example, a volume control on a radio performs the function of changing the level of sound. Although quite cheap, it adds useful value.

Fig. 1.3 Decrease the cost or increase the value

The general principle of value is a simple ‘return on investment’ idea. People will spend money on things that they think are worth it. These ‘people’ include those who invest in the company (and to whom lower production cost is of value) and end customers, to whom functions of the product or service you offer provides distinct value.

The first step of Value Analysis of a component is to identify the primary functions of a selected component. These may be either use or aesthetic functions and can often be identified by asking ‘What is the customer actually paying for?’ For example, a coat has a use function of ‘keep me warm’ and an aesthetic function of ‘make me look attractive’.

Secondary functions may then be discovered which support the primary functions. For example, secondary functions that support the ‘attractive’ aesthetic function may include shape, colour, and so on.

Further breakdown can then reveal the parts of the product, the processes that create them and the costs incurred in each, consequently enabling you to question and improve any of these, as in Fig. 1.4.

Fig. 1.4 Partial functional breakdown of computer mouse

Value Analysis aims to make visible that which is often intangible, which makes it a very useful technique for use in service and other people-oriented situations where value is particularly key and aesthetic functions may be as important as use functions.

Other logical/analytic tools:

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