Value analysis, often also called functional analysis or functional cost analysis, was developed around 1947 by the American engineer and then GE purchasing manager Lawrence (Larry) D. Miles.
The initial focus was on reducing material costs at GE’s Baltimore plant. With the help of the value analysis, the cost of
for product functions is examined and evaluated in relation to its benefit. The lowest cost should be identified for the product functions expected by the customer, but the quality, reliability and marketability of the product should not be negatively affected.
Today, value analysis is understood as a management method or a system for problem solving in the context of innovation.
The aim of the analysis is a fundamental reduction in costs and the avoidance of superfluous costs as well as an increase in value or enrichment of an existing product or service or one that is still in development.
The starting point of the analysis is the so-called value, which can be calculated as the quotient of function and effort: Value = Function : Benefit.
