The Psychology of Quality and More

Value Analysis / Engineering (VA/VE)

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 product generation 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 (VA) 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.

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. Functions may be aesthetic functions (such as the look of a camera) or use functions (so the camera captures images), and basic functions may be either or both of these. When the functions are understood, including how they are produced, then they can be improved as needed. 

A close cousin of Value Analysis is Value Engineering (VE). One is basically the reverse of the other. Analysis is discovery of what is (or is not) already there, engineering is the creation of something new.

There are many derivatives of Value Analysis, such as Customer Value Analysis, Strategic Value Analysis, etc. The bottom line is always the same: what is valued, how is it created and how can it be improved. The original Value Analysis as an engeering methodology was developed by Lawrence Miles at General Electric in the late 1940s.

Note: 'VA' also stands for Value-Added.

See also:

Toolbook chapter: Value Analysis