is the Value Method?
The Value Method was originally developed by Larry Mills (General Electric)
in 1943. It has been highly refined and honed by many over the years. It's designed to use highly efficient procedures that are consistent
with sound management techniques and is tuned to achieve maximum performance, in the minimum amount of time required. As a complete and mature
process with more than 50-years of successful application, it has been used in almost any endeavor contemplated. (You
may want to see our on-line presentation for manufacturing executives and management
a "good job"
general, all organizations and people want to do a good
job. They want to meet the needs of their customers. When
an organization or person consistently fails to meet the
needs of the customers well, they eventually fail: few
plan to fail. Unfortunately, the best direction is not
always clear. The limitations of time, money, expertise,
and other resources require us to take shortcuts or make
decisions that may not be based as well as we would like.
person must also contend with our own human limitations
such as how many items we can keep in the forefront of
our mind at the same time, the number of times it takes
us to develop understanding and comfort in any new item,
and the limited experiences that we have been exposed
to in our lifetime.
people decide they want to do something optimally, the
results are astonishing. To decide to do something better
is the first step. To use good techniques to do it is
the second step. The third step is acquiring those skills.
As people acquire those skills, they and their employer
benefit. Whether applied by the individual, team, or organizationally,
the Value Method is one of those skills that produces
great benefits without having to endure hard lessons through
the "school of hard knocks."
may have heard of it.
of the Value Method are known by several common names.
Value Engineering (VE), Value Analysis (VA), Value Management
(VM), and Value Planning (VP) are some of the most common
names used. These names describe small variations in the
general Value Method process related to the timing, selection,
type of activity, or other specific application. Application
of the Method is usually referred to as value studies.
Each year companies save billions of dollars in expenditures;
improve quality, service while improving customer satisfaction;
and increasing revenue, market share, and profits.
The Value Method process uses tested and successful procedures
that are directed toward achieving success in meeting the
purposes for the "project" by all involved. The
process instills "common understanding", generates
high production and high performing team activities, reduces
the time necessary to obtain a product, and focuses the
efforts on the purposes behind the project or activity being
studied. A standard "job plan"
is used to guide the entire process.
The Value Method generates, examines, and refines creative
alternatives toward the concept of producing an end product
that produces high customer acceptance. The process endeavors
to widen the number and scope of the available alternatives.
This is done to increase the potential for enhanced satisfaction,
and take advantage of the added expertise brought into the
studied activity through the value study process.
Functions and FAST
One of the most unique and useful qualities of the Value
Method is its use of functions to describe the activity
or product being studied. The value study breaks the "project"
into components so as to avoid misunderstanding of the planned
intents for the project. Then a Functional Analysis is conducted
on each component. In the Value Method process, functions
are limited to the shortest sentence possible. Just two
words are usually allowed: a verb (active preferred) and
a noun (measurable preferred). The main functional purpose
for the component being studied is the primary function.
Of course, things often happen as a result of the choice
of a component, or something must be done to make the selected
component work as needed. These functions are called supporting
or secondary functions. The results of the functional analysis
are placed into a function-logic diagram called a FAST (a
short term for Functional Analysis System Technique).
The true value of a activity or product is its relationship
to its perceived worth as opposed to its life-cycle costs.
In Value Method terms: Value = Worth / Cost. When an item
has a Value greater than 1.0, the item is perceived to be
a fair or good value. When an item has a Value is less than
1.0, the item is perceived to be a poor value or bad value.
When the perceived worth far exceeds the life-cycle cost,
we usually consider purchasing the item.
The worth of a product involves many features.
The most common cited are: benefits received, services obtained,
satisfaction of the product performance, quality, safety,
and convenience. The worth of the product is a measure of
what is in it for the customers involved. It is a measure
of how well the end product meets the involved essential
needs and the added desires of those that have a voice in
the product selection or its use. An end product must always
supply the essential need, or its worth will be poor
The true cost of an item is not just the amount of money
that you pay when you buy it. Much more is involved. When
you buy something, you also buy its long-term effects. The
initial costs plus these long-term costs are called life-cycle
costs. This includes things like the time involved to get
the project done, the people needed (number, expertise and
so on), the degree of difficulty involved, availability
of money or other resources, the amount of maintenance needed,
and the money that must be expended and kept in reserve.
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