VALUE ANALYSIS

IT IS A SYSTEMATIC PROCEDURE FOR THE EFFICIENT

IDENTIFICATION OF UNNECESSARY COSTS (Costs
which provides neither quality, nor life, nor appearance
nor customer features) .
IT PROVIDES THE DESIRED FUNCTION AT THE
LOWEST COST

TYPES OF VALUES

USE VALUE IS THE PRICE THE PURCHASER WILL OFFER TO

ENSURE THAT THE PURPOSE OR FUNCTION IS ACHIVED

ESTEEM VALUE THE PRICE WHICH IS OFFERED FOR THE

OWNERSHIP( ATTRACTIVENESS)

EXCHANGE VALUE = USE VALUE + ESTEEM VALUE

COST VALUE IS THE SUMOF ALLTHE COSTS (LABOUR,

MATERIAL AND OTHER COSTS) INCURRED IN PROVIDING THE
PRODUCT OR SERVICE

STEPS OF VALUE ANALYSIS

1. SELECT THE PRODUCT TO BE

ANALYSED
2. RECORD THE NUMBER OF PARTS

3. IDENTIFY THE FUNCTION OF EACH PART

PRODUCT

FUNCTION

Mirror

Reflect Light

Brake

Arrest Motion

Light Bulb

Emit Light

Lighter

Provide Ignition

Coffee Cup

Hold Liquid

VALUE TESTS

1. IS IT POSSIBLE TO ELIMINATE THE PART?

2. CAN YOU PURCHASE IT AT ALOWER COST?

3. DOES IT NEED ALL ITS FEATURES?

4. IS THERE ANY ALTERNATE MATERIAL?

5. CAN TWO PARTS BE COMBINED?

6. CAN A STANDARD PART BE USED?

 STEPS (Contd)
4. NOTE THE COST OF EACH PART
5. FIND OUT ALTERNATIVES FOR EACH PART WHICH
WILL PROVIDE THE SAME FUNCTION WITH LESS COST

VALUE ENGINEERING
VALUE ENGINEERING IS THE APPLICATION OF
VALUE ANALYSIS TECHNIQUES AT THE DESIGN
STAGE OF THE PRODUCT OR SERVICE