The Value Methodology process is sometimes referred to as Value Analysis, Value Engineering, Value Management, Value Thinking and Value Planning.
The different terms used by companies often reflect their use of the process.
Value Methodology (VM) encompasses all of the above and is a
- Structured
- Flexible
- Function Based
- Value Adding
- Thinking
- Framework
in which proven tools and techniques are applied to add value to processes, products, projects, designs, procedures and systems. Value Methodology can yield multiple benefits.
Structured
VM uses a 5 phase Job Plan
- Information Phase
- Function Phase
- Creative Phase
- Evaluation Phase
- Implementation Phase
Flexible
VM is a powerful and flexible method of Change Intervention. The techniques are used across industrial, commercial and government sectors to add value to all facets of company activities and operations.
It is effective in addressing the value-adding challenges in structure, strategy development, capital investment projects, marketing, production, new product development, design, administration and all other functions.
Function Based
At the heart of VM is functional thinking and function analysis. Every activity and object has a “function” – something that “it does”. In VM a verb and a noun define functions. For example, a cup “holds liquid”.
The discipline of functional thinking and analysis focuses attention, clarifies confusion and differentiates VM from other problem solving techniques.
F.A.S.T. diagrams are used to show relationships between functions.
Value Adding
Companies and other organisations strive to obtain maximum “value” . In VM value is defined as the ratio between cost and function. When the function is performed at a lower cost, value has been gained. Function performance is maintained or improved with less effort or investment.
VM is not cost reduction! Cost reduction will adversely impact function. VM is about adding value.
Thinking
The VM Job Plan requires different types of thinking during the phases of the process.
Focussed, convergent, logical and analytical thinking is mainly used in the Function and Evaluation phases.
Creative, imaginative, divergent and innovative thinking is used in the Creative Phase.
The Information and Implementation phases require both convergent and divergent thinking.
Framework
The framework provided by the Job Plan assists in keeping the team on track, encouraging the appropriate thinking, and ensures that the VM process is carried out in the correct sequence.
Benefits
The benefits of Value Methodology are usually major and include:
- Major enhancements in value for money
- Considerable improvement in function, performanceand quality
- Improved business procedures, processes and project lead times
- Improved understanding of the real issues
- Better teamworkfor all those involved
- More effective communication between all the parties involved
- Stimulation of an improved working culture
- More satisfied customers
- Gaining a competitive advantage
The following examples clearly demonstrate the benefits of Value Methodology to a wide range of organisations in very different sectors of the economy:
- A manufacturing company achieved 250% increase in sales
- A supplier reduced cost of a product by 20%
- A construction firm identified 40% savings on a project
- A car manufacturing successfully attacked the cost and time to make components
- A small business developed a successful marketing strategy
- A Church committee raised funds for a new Church building
- A farming group turned their business around
To learn more you might be interested in the Value Methodology Course