Value Analysis

Value analysis asks what function each element of a product or service actually performs, and whether that function can be delivered more cheaply without losing quality or performance. It might mean simplifying a specification, substituting a material, standardising a component or removing features that add cost but little value.

Closely related to value engineering, this discipline shifts the focus from price to the ratio of function to cost. In procurement it is a powerful lever because it challenges over-specification — a common source of hidden cost — and can be run collaboratively with suppliers who often know where cost can be taken out of a design.