Explanation

Value analysis is a systematic review of the production, purchasing and product design processes to reduce overall product costs. This can be accomplished through a variety of activities, including the following:

- Designing products to use lower-tolerance parts that are less expensive

- Switching to lower-cost components

- Standardizing parts across product platforms in order to achieve volume discounts

- Altering production processes to minimize the amount of production cycle time, thereby reducing labor costs

- Introducing automation to strip labor costs out of the production process

- Altering product packaging to lower its cost while still protecting the product

The process is not a wholesale attack on costs. Costs are only reduced when the result will not im-pact the perceived level of quality experienced by customers, or the level of customer satisfaction.