All commercial activities are performed with the objective of providing value of some
kind, where the value is a combination of the benefits gained from the activity and the
cost of achieving these benefits. In many situations, both the benefits and the real
costs are not understood, for example where they are measured at such a gross level
that individual activities cannot be accurately determined. This can cause problems for
projects that are aimed at improving these activities, as the real value cannot be found.
Value Analysis is an approach to improving the value of an item or process by first
understanding the functions of the item and their value, then by identifying its
constituent components and their associated costs. It then seeks to find improvements
to the components by either reducing their cost or increasing the value of their
Functions may be broken down into a hierarchy, starting with a basic function, for
which the customer believes they are paying, and then followed by secondary
functions, which support that basic function.
The purpose of functions may be aesthetic or use, and basic functions may be either
or both of these. For example, a coat may have a use function of 'making you warm'
and an aesthetic function of 'looking attractive'. Aesthetic and use functions tend to be
separate, and either may be of higher value.
The product or process may be broken down into components, which can be
associated with the functions they support. The value of the product or process may
then be increased by improving or replacing individual components. This also applies
at the whole item being analyzed, which may be completely replaced with a more
functional or lower cost solution.
Although this is a simple-sounding technique, it can be quite difficult in practice, as it
requires deep study and analysis of process