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Introduction
The need for Value Management is more obvious when product or process costs are in trouble than when things are going well. How do we measure "goodness," by the standards set by the competition? Without our changing anything we could go from good to poor by the competition changing the base line. Are we truly responsive to the customer's, or stakeholder's needs or have we incrementally incorporated non-value adding expensive features not needed or wanted by our customers? Are our customers looking for functions and features offered by our competitors, but lacking in our product or process offerings? Have we investigated a range of alternative ways to satisfy the market need and least costly approach, or are we locked into "traditional" practices? If there is room for improvement it is better to find it before the competition does.

Value Management utilizes a fundamental methodology and, as such, is applicable to a broad range of disciplines. Value Management has been successfully applied to systems, equipment, facilities, processes, methods, software, and support services, to name a few. A Value Manager is a specialist in the principles and applications of the Value Management methodology. The technical aspects of the problem, or opportunity under study are generally provided by those knowledgeable in the specific disciplines involved. The Value Manager, as the facilitator of the methodology, requires a high degree of interaction with others. The benefits to be realized in employing Value Management include: the contributions to the goals of the profit plan; the development and building high performance teams to problem solve; the ability to apply creative thinking in daily job performance.

Value Management Defined
Value Management is defined as:

An organized effort directed at analyzing the functions of goods, processes, and services to achieve those necessary functions and essential characteristics in the most profitable manner.

The key terms in this definition are:

An organized effort... -Value Management utilizes methodology that was developed for problem solving over 50 years ago.

...analyzing and achieving necessary functions... -a deliberate effort to identify what is being furnished and what the market needs, as opposed to perceived wants. The element interfaces engineering production and marketing to define the priority requirements from the point of view of the customer, or stakeholder and includes the product's target selling price.

...and essential characteristics... -in addition to achieving the product functions, other requirements, or attributes must be satisfied such as reliability, maintainability, and quality.

...in the most profitable manner...-the cost is determined by generating and evaluating a range of alternatives including new concepts, reconfiguration, eliminating or combining items, and modifying process and procedures. This also considers environment, safety, operations and maintenance of the product, or process over its normal life expectancy - the cost of ownership. These elements interface engineering, production, and marketing.

The end results must satisfy the intended business purpose such as timeliness of development, compatibility with other product lines, resources, market share, growth, and after-market. The disciplines of marketing, engineering and production, as well as other supporting disciplines working together, maintain a focus on the performance requirements and attributes as seen from the customers' sense of value.

 

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