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Value Analysis

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Value Analysis

Historical perspective, the genesis Military background

Shortages, to find alternatives

No option but to win

From warfare to business

1950s - OR techniques, logistics, VA

L D Miles, father of VA

Initiative of US Navy-1950s

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Customer satisfaction

Customer delight-the Minolta camera!Why the above?

4

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Challenges of competitive business

to stay alive and prosper in business

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Some VA examples

Refrigerator VIP bag

Folding umbrellas!

Fountain pens, ball pens.!

Cotton and artificial fibers, Metals and

plastic material substitution

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Why poor value exists?Lack of review, Weak PDCA

Designed under urgency

Lack of awareness New materials

Technology

Attitude, reluctance to change

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Value tests to identify poor value areas

1.Does the product perform intendedfunction? Pen should write, mirror andimage, cigarette lighter and music!

2.Can the design be changed to eliminate a

part?- door handle3.Can you purchase it at a lower cost? bolts

& nuts (bought out parts)

4. Does it need all its features?- lock

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Value tests to identify.

5. Is there anything better for intended use? Paper cups/plates in place of crockery

Aluminum in place of copper Velcro in place of buckle Chain in place of buttons

6. Can a usable part be made by a lower costmethod?

Change of process Welding and extrusion, 3 piece cans and 2

piece cans (cola cans)

machining & cold forging (bearing rollers)

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Value tests to identify poor value

areas..

7. Is it made on proper tooling considering thequantities involved? - HSS, Carbide, Ceramic

tools?

8. Are there any newly developed materialsthat can be used? e.g. special alloys, plastics

(artificial fibers and cotton)

9. Can two or more parts be combined intoone?-ball pen top, 3 piece cans and 2 piece

cans

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10. Can any specifications be changed to

effect cost reduction?

glass wool/poly urethane

copper/aluminum

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People in research, design, sales, and

production must work as a team, to foresee

problems of production, and in use, that may

be encountered with the product or serviceUse feedback from producer, user and

service provider

Reduce costMake usage easier

Make product safe

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Who is the user (customer) of materials?

The internal customer, operations

The producer and service provider?

The vendors (processors)

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Value Added Management

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What is Value Added Management?Managing the process that creates value-

added products is VAMWhat isValue?

Value is in the eyes of the customer, like

beauty is in the eyes of the beholder!Value attracts the customer

Value propels the customer to buy the

productWhat is management?Effectiveness & efficiency

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Why Value Added Management?

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CompetitionInternal as well as external

Changed customerGrowth for survival

Challenges of the competitive business

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What is value added?

Adding value to a raw product at its present

stage of production

What creates a value-added product?

Improvements in every stage of value

creation process (production process) to

enhance value

To enhance value we should know

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Does the product or service meet or exceed

customer expectations?Quality

Functionality Does the product or

service provide the function needed of it?

Form Is the product in a useful form?

Ease of use is it easy to use?

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Cost

Cost of makingCost of delivering

Can we reduce the cost?

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Delivery

Place Is the product in the right place?

Time Is the product in the right place at

the right time?Lead time can we cut down on the lead

time? Waiting time for customer

Ease of possession Is the product easyfor the customer to obtain? ATMs

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Know your customers Juran

Who are our customers?Retailers?Agents?

Manufacturers?Consumers?

Who are the end users of our products?

Categorize the customersABCKnow their expectations

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Process of VAM1.Prioritize customer categories or customers

2.Establish their expectations3.Map the process that produces theproducts map the entire value stream

4.Map value stream for material flow andinformation flow separately5.At the end of the value stream fix current

customer satisfaction levels andexpectation levels

What is the gap in Q C D?

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INV

OPN I

INV

Q C D

INSPOPN II OPN III OPN IV

Q C D

?? ? ? ? ?

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(Process of VAM..)

6.At every stage of value stream establishparameters influencing customer

expectations like lead time, quality level,

inventory level etc.7.Prioritize the parameters for improvementor value addition in order to deliver better

Q C D to customer

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Q C D

Q C D

Q C D

Q C D

Q C D

Rollers

Inners

Outers

Cages

Roller bearings

Q C D

?

?

?

?

?

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Q C D

Q C D

Q C DQ C D

COLD FORGING

HEAT TREATMENT

SUPERFINISH

EN31 STEEL COIL

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(Process of VAM..)

Prioritize the area for improvementSet objectives and chalk out an action plan

PDCA

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VAM in Materials Management

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???

?

?

?

SourcingOrder

placement

& expediting

Vendor

(Supplier)

TransportationReceiving

Material

Handling

Storage,

Retrieval

& Issue

Internal customer

(Operations)

QCD

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Opportunities in Materials Management

Lead time reduction, procurement lead time

Inventory reduction, speed up flow

(inventory turns)

Vendor Development, QCD enablement

One item one vendor

Customer/supplier proximity

Alternate material

Variety reduction in parts

Standardize size and shape of material

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RESOURCE UTILIZATION

LEVEL I- WHAT IS THE PRODUCTIVITY? LEVEL II- WHAT IS THE PRODUCTIVITY?

LEVELIII- WHAT IS THE PRODUCTIVITY?