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Unit 10: Value Analysis

points, manufacturing processes, positioning design reviews, and others. There are many ways Notes
to dimension a FAST model. The two popular ways are called Clustering Functions and the
Sensitivity Matrix.
Clustering functions involves drawing boundaries with dotted lines around groups of functions
to configure subsystems. Clustering functions is a good way to illustrate cost reduction targets
and assign design-to-cost targets to new design concepts. For cost reduction, a team would
develop an “as is” product FAST model, cluster the functions into subsystems, allocate product
cost by clustered functions, and assign target costs. During the process of creating the model,
customer sensitivity functions can be identified as well as opportunities for significant cost
improvements in design and production.
Following the completion of the model, the subsystems can be divided among product
development teams assigned to achieve the target cost reductions. The teams can then select cost
sensitive subsystems and expand them by moving that segment of the model to a lower level of
abstraction. This exposes the detail components of that assembly and their function/cost
contributions.

Self Assessment

Fill in the blanks:
11. ………… permits people with different technical backgrounds to effectively communicate
and resolve issues that require multi-disciplined considerations.
12. FAST is a creative stimulus to explore ……………………. avenues for performing functions.

10.5 Application of Value Analysis

Value analysis can be applied universally, i.e., to everything materials, methods, processes,
services, etc., where it is intended to bring about economics. One should naturally start with
items where the maximum annual saving can be achieved. This immediately suggests that items
whose total annual consumption in Rupees is high should receive top priorities in the application
of Value Analysis. In the same manner, scarce materials, imported materials, or those difficult to
obtain should also receive the attention of the value analyst. Bearing this in mind, Value Analysis
can be systematically applied to categories of items, such as those listed below in order to bring
about substantial cost reduction.

 Capital goods: plant, equipment, machinery, tools and appliances;
 Raw and semi-processed material, including fuel;
 Sub-contracted parts, components, sub-assemblies, etc;
 Purchased parts, components, sub-assemblies, etc.,
 Maintenance, repairs and operational items;

 Finishing items such as paints, oils, varnishes, etc.
 Packing materials and packaging;
 Printing and Stationery items;

 Miscellaneous items of regular consumptions;
 Power, water supply, compressed air, steam and other utilities (services), and
 Materials handling and transportation costs.

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