Value Analysis is often used when an existing product has become too expensive.
That makes sense – but it is not the only possible time.
The earlier functions, customer requirements and cost targets are considered together in a development project, the greater the scope for shaping the product, as a rule.
At the same time, Value Analysis can also open up significant new solution spaces for existing products.
The crucial question is therefore not only:
“Has the product already been developed?”
But rather:
“Which decisions can we still influence?”
Value Analysis for Existing Products
For an existing product, real data is available.
This can be a major advantage.
What is often available:
- actual manufacturing costs,
- supplier data,
- production effort,
- complaints,
- experience from service and assembly,
- specific customer feedback,
- competitor information.
This enables a project to analyse very reliably where costs and benefits arise.
At the same time, changes can become more difficult because:
- tools already exist,
- production equipment has been defined,
- approvals are affected,
- customers expect certain solutions,
- change costs are incurred.
Value Engineering in Development
Early development phases offer different opportunities.
Technical concepts, architecture, materials, manufacturing processes and the distribution of functions have not yet been fully defined.
This allows cost targets to feed into technical decisions from the outset.
At this stage, Value Analysis or Value Engineering can help to link customer requirements, functions, target costs and technical solution development systematically.
When Is There a Particular Need for Action?
A Value Analysis project can make sense when, among other things:
- cost targets are not being met,
- manufacturing costs are well above those of competitors,
- a new product generation is being planned,
- high technical complexity has developed,
- variants are to be reduced,
- customer value needs to be reassessed,
- new regulatory requirements are being integrated,
- material or procurement costs are rising sharply,
- an existing product is to be fundamentally further developed.
It Can Also Be Too Early
Value Analysis requires a sufficiently clear task definition.
If neither the target group nor the basic product function or project objective has been defined, a detailed Value Analysis process may still be premature.
In very early innovation phases, other methods may take priority.
However, as soon as functions, requirements, target costs or economic conditions can be made more specific, the Value Analysis perspective becomes more important.
The Ideal Time Depends on the Objective
For an existing series product, the task is often:
Improve the cost and value of the existing product.
For a development project, it is more likely to be:
Shape cost and value before key technical decisions are locked in.
Both can be Value Analysis.
However, the approach and the data available differ.
Further Reading
- Systematic Product Cost Reduction
- Target Costing and Design-to-Cost
- What Are Value Analysis / Value Engineering and Value Management?
- The Value Analysis Work Plan in 10 Steps
- Project Potential Assessment: Selecting the Right Projects
- Reducing Variant Complexity
- Cost Reduction Project and Cost Reduction Workshop