Value Analysis

Value analysis is an ongoing process in which a product is subjected to various techniques designed to determine how much “use” or “value” the product has. The primary goal of value analysis is to offer a superior product at a minimal cost. An emphasis is placed on keeping things that are useful for the customer while removing aspects that add no real or perceived value to the product.

Products and services are assigned value based on their usefulness and the perception that consumers have. While two products may do the same basic task (such as sanitizing a counter), resulting in an equal degree of usefulness, customers may perceive one cleaner as superior for a variety of reasons. Any business which must compete to attract customers must, by necessity, focus on perceived value.

Any hospital in a given region may be able to perform most medical treatments, but a hospital that is known for being cleaner, having a more friendly staff, or is otherwise perceived as somehow “better” will be the preferred location, resulting in more business. Similarly, medical equipment that is perceived as being faster, safer, or more reliable will be purchased more often than slower, less safe, or notably unreliable products.

Why is it used?

To determine and improve the value of a product or process by first understanding the functions of the item and their value, then its constituent components and their associated costs, in order to reduce their costs or increase the functions value.

When is it used?

Value Analysis should be used:

• For analysing a product or process, to determine the real value of each component,

• When looking for cost savings, to determine components that may be optimised,

• Only when the item to be analysed can be broken down into subcomponents and realistic costs and values allocated to these.

How it works — detailed review

To understand Value Analysis it is necessary to understand some key concepts:


the ratio between a function for customer satisfaction and the cost of that function.


the effect produced by a product or by one of its elements, in order to satisfy customer needs.

Value analysis:

Methodology to increase the value of an object. The object to be analysed could be an existing or a new product or process, and it is usually accomplished by a team following a workplan.

Need: something that is necessary or desired by the customer.