What is Value Analysis?
Value analysis is a systematic appraisal of the design, quality, and performance of a product to improve its value. The concept was first developed by Dr. Lawrence D. Miles in the 1940s as a means to improve the quality of manufactured products. Dr. Miles identified three key areas of focus for value analysis: function, quality, and price.
What Are The Objectives Of Value Analysis?
The objectives of value analysis are to improve the quality of a product while simultaneously reducing its cost. This is accomplished by examining every element of the product and finding ways to either improve its function or reduce its cost without sacrificing quality. Value analysis originated in the 1940s as a way to improve the quality of manufactured products. It was developed by a team of engineers at the General Electric Company led by Luther Halsey Gulick. The team’s goal was to find ways to eliminate defects in GE’s products.
Value analysis has since been used in a variety of industries, including healthcare, construction, and manufacturing. It is now considered an essential tool for any organization that wants to improve its products or services.
Value Analysis is a Systematic Appraisal of The Design, Quality, And Performance of a Product to:
Value analysis is a systematic appraisal of the design, quality, and performance of a product to: determine optimum value for the product, streamline production, and/or reduce costs. The first recorded use of the term “value analysis” was in a speech by Lawrence D. Miles in 1941. He described value analysis as “the analysis of all factors in the design and construction of an article or service to determine the optimum combination of these factors with the least expenditure of time, money, and effort.”
The Origins of Value Analysis
The origins of value analysis can be traced back to the early 1920s when an industrial engineer named Lawrence D. Miles developed a technique he called functional analysis. This was a systematic examination of the functions of an individual component in a product or system and the determination of the optimum way to achieve those functions. The objective was to achieve the required functions at the lowest possible cost, taking into account all factors including quality, reliability, aesthetics, weight, size, etc. In other words, it was a method for achieving maximum value for money. Miles’ technique was later refined and developed by other engineers including Harry Kester and Chester Feigenbaum who are generally considered to be the founders of modern value engineering. Value engineering became widely known in the 1940s when Feigenbaum taught it to Japanese engineers working on rebuilding their war-torn country. The Japanese engineers were so impressed with the results that they adopted value engineering as a national policy and it remains an integral part of Japanese industry today. In the 1950s, value engineering began to be used in the United States government and soon became a standard tool in many private companies. It is now used around the world by businesses of all sizes in all industries as a means of achieving continuous improvement in product quality and cost-effectiveness.
The Development of Value Analysis
Value analysis is a systematic appraisal of the design, quality, and performance of a product to:
– improve its value
– find ways to reduce costs
– identify ways to improve quality or performance
The first recorded use of the term “value analysis” was in a paper by H.L. Stephens presented at an American Society for Quality Control conference in 1941. Stephens defined value analysis as “a technique that is concerned with function… rather than form, commodity rather than appearance; adequacy rather than luxury.” In other words, value analysis is about finding the best way to do something, not necessarily the most expensive way. The concept of value had been around long before Stephens’ paper. In fact, the concept can be traced back to Benjamin Franklin who said, “The differential between what we very gladly pay and what we grudgingly pay represents values received.” In other words, value is what we are willing to pay for something. Franklin’s ideas were further developed in the early 1900s by people like Lillian Gilbreth (one of the first industrial engineers), who applied concepts like economies of scale and work study to find ways to improve productivity and efficiency in factories. These ideas were then adapted for use in other industries like healthcare and construction. It wasn’t until WWII that value analysis really took off. As companies scrambled to find ways to increase production while dealing with shortages of raw materials and labor, they turned to industrial engineers like Lillian Gilbreth for help. Gilbreth’s sons, Frank and Ernest, were working as consultants at the time and began applying their mother’s methods to help companies increase production without sacrificing quality. The Gilbreths’ work led to the development of modern techniques like cost-benefit analysis and time-motion studies.
After WWII, interest in value analysis dwindled as companies turned their attention back to consumer products and away from war production. It wasn’t until the 1970s that interest in value analysis began to pick up again as companies looked for ways to cut costs during a period of economic stagnation. In recent years, there has been a renewed interest in value analysis as healthcare organizations look for ways to improve quality while reducing costs.
How is Value Analysis Used Today?
Value analysis is a systematic appraisal of the design, quality, and performance of a product to: improve the value of the product, improve the quality of the product, and reduce the cost of the product. It is used to improve the value of a product by improving the quality of the product and reducing the cost of the product.
In Manufacturing
In manufacturing, value analysis is used extensively to streamline processes, improve quality and reduce costs. It can be used at all stages of product development, from initial design to final inspection. In the design phase, value analysis can be used to identify potential problems and optimize the design of a product. For example, a designer may use value analysis to determine the most efficient way to manufacture a part or to select materials that will meet performance requirements while minimizing cost. During the production phase, value analysis can be used to streamline processes and improve quality. For example, a manufacturer may use value analysis to assess the impact of changes in raw materials or production methods on the overall cost of the finished product.
Value analysis can also be used during the final inspection phase to ensure that products meet quality standards and customer expectations. For example, inspectors may use value analysis to identify potential sources of defects or to assess the impact of changes in inspection procedures on the overall quality of the finished product.
In Healthcare
In healthcare, value analysis is used to assess medical devices, pharmaceuticals, surgery techniques, and anything else that impacts patient care. The goal is to determine if a particular product or service provides the best possible value in terms of quality and cost. Value analysis teams are typically composed of clinicians, surgeons, nurses, and other medical professionals with a good understanding of both the clinical and financial aspects of healthcare. Together, they will review the available evidence on a given product or service and make recommendations accordingly.
In recent years, there has been a growing focus on using value analysis to reduce the cost of healthcare without compromising quality. This has led to an increase in the use of value analysis tools and methods such as cost-benefit analysis and life-cycle costing.
In Construction
Value analysis is sometimes also called value engineering, value management, value study, or value planning. The goal of all these terms is to help you create something—a product, a service, a system—that offers the best possible value for the money. Value analysis is used extensively in the construction industry to appraise different aspects of the building process. For example, a value analyst might consider the strength of different types of concrete or the life cycle costs of using carpeting versus hardwood flooring. By carefully considering all the factors involved in a building project, analysts can help ensure that costs are kept under control without sacrificing quality or function.
The Future of Value Analysis
Presently, value analysis is performed on a diverse array of products, including manufactured goods, food items, office supplies, and healthcare products. The methodology is also used in service industries such as banking and insurance. Given the ubiquity of value analysis, it is likely that the methodology will continue to be used in a variety of industries in the future.