Value Analysis

A technique that offers a means of analysing in great detail all the material aspects that contribute to material or product cost with the object of minimising these costs for a satisfactory level of product performance. The means of analysis includes the application of ten tests for value.

BSI definition - 21090 - A systematic interdisciplinary examination of factors affecting the cost of a product or service, in order to devise means of achieving the specified purpose most economically at the required standard of quality and reliability.


Value analysis is not a highly organised, precisely systemised technique like evolutionary operation for example, because it leans heavily on simple questionnaires and creative thinking. Its worth lies both in its practical usefulness and its wide acceptance. Many companies use it and there have been many acknowledgements of the thousands of pounds (sterling) that it has saved. It has two special advantages; first that any savings that are realised will endure as long as the product itself, and secondly, that it ca be used by managers who have not received specialised training. Special training courses, however, are available for those who wish to derive the ultimate benefits from the technique.


In its early days, value analysis concentrated on engineered products; engine components, ashtrays and consumer durables, and relied on the sale of production to yield savings that were small for each unit. Now the technique is becoming applied to chemicals and services and by means of functional analysis it attempts to relate the article’s essential functions to all its design features. If a raw material is under study it would be quite common to extend the inquiry backwards from the supplier’s factory in the quest for simplicity, value and reduced costs. The limiting factor is likely to be the supplier’s willingness to co-operate, but fair to say that this is becoming less of a difficulty with partnership agreements being forged on the back end of Business Process Re-engineering (BPR). Even a study of components and work in progress may lead back to the suppliers if one is evaluating the economics of “make or buy”.

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