Value Analysis Process advantages and disadvantages


Puneet Pal Singh
Guru Nanak Dev University

This paper was prepared regarding Value Analysis Process


The value analysis process is the systematic way of identification of unnecessary cost which incurred during production of products. Moreover the review of the existing product is done in order to meet the needs of the customers as customer satisfaction is the sole aim of the value analysis process. It aims at improving the quality, effectiveness, efficiency and reducing the cost and maintenance of the existing product. The aim of this paper is to highlight the advantages and disadvantages of Value Analysis Process.


Value analysis was developed in 1940 in America after second world war. Value analysis is the systematic process of identifying the unnecessary costs occurred during the manufacturing of products. It mains refer to the review analysis of the existing products designs in order to compare with the products which are required by the customer to fulfill their needs at economical cost with greater reliability and performance. It is often by applied by the companies in which the process is broken into small components and various methods are used to improve the products effectiveness and efficiency. It is driven by proper management activity which requires planning, coordination to understand the functional specification and performance criteria in order to give value to the customers[1]. It basically aims at reducing the cost of the products manufactured by substituting it with other economical products thus improving the effectiveness, quality and reducing the maintenance cost of the products. It is becoming very renowned these days as all companies are implementing this process in order eliminate the extra costs incurred during manufacturing process thus leading to higher levels of customer satisfaction.


1.Eliminating Cost:

As it is the process in which the components are broken in to different parts thus each part can supportively be examined for efficiency and effectiveness. Thus the products which are not fulfilling the the specified requirements and incurring more cost in the manufacturing must be replaced accordingly. Thus replaced products should be used to reduce the cost of the final products thus eliminating the excess cost[2] .

2.Customer Satisfaction:

In the value analysis products are manufactured with the aim of fulfilling the needs of the customers. The every step involved in the  manufacturing process should be directed towards satisfying their  needs and if the required step in the process is not directed towards the same thus it could be eliminated which in return helps in streamlining the process. This could benefit the company in reducing the use of resources which could have utilized at skipped step.


As the products are manufactured by various companies with sole aim of satisfying the needs of customers which gives rise to competition as value analysis helps in deeper understanding of one's products relative to another. SWOT analysis is basically done to determine the strengths and weaknesses of one's products in comparison to the products in the competition[3].


1.As the value analysis is based upon the fact this is very flexible approach and can be modified according to the needs of the customers. As big company's needs a huge investment for the functioning and manufacturing process by implementation of various polices and strategies in a particular order. Thus this is not plug and play process in which the modifications can be done anytime anywhere which in turn would create hindrance in value analysis process[4]. Though value analysis is very much familiar process but it could be operated by few experts which is again a problem.

2.The value analysis process is very long process as it need lot of effort and time to complete the whole process and to point out the problems in the various parts of the manufacturing units .Moreover to analysis the competitors strategies so you can cope up with them and increase production for the customers seeking in view their interest.

3. As the cost ,revenues, assests which are to be used for the value analysis are always calculated for a single period from the present financial information of the company. As in case of long term process the change in decision can lead to changes in cost structure, capital investments, working capital which might not be available at that particular time which can lead to serious difficulties[5].


[1] Bicheno, J, (1998), 'The Lean Toolbox', PICSIE Books, Buckingham, ISBN0951382985  Introduction to basic lean and related operations concepts

[2] Gage, W. L., (1967), 'Value Analysis', McGraw Hill, London  One of the first textbooks on VA. Easy to read, well structured and provides many examples.

[3] Norton, B. R. and McElligott  W. C., (1995) 'Value management in construction: a practical guide', MacMillan

[4] Gibson, J. F., (1968), 'Value Analysis: The Rewarding Infection', Pergamon Press Limited, Oxford A 'quick-and-dirty' guide to VA.

[5] Taguchi G (1979) 'Introduction to Off-line Quality Control', Central Japan Quality Control Association, Magaya Japan

Puneet Pal Singh
Guru Nanak Dev University

Source: E-mail July 2, 2014


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