Definition
Continuous critical review of existing and newly designed functions to achieve the necessary functions in the most economical manner, reducing material and labour costs and activating core growth on a yearly basis.
In detail
Value Analysis and Value Engineering (VAVE) is a continuous critical review of the functions of existing and new designs to achieve necessary functions in the most economical way, thereby reducing material and labor costs year over year and activating core growth. In the system, it is a growth tool addressing the balance between cost and value. Its difference from cost reduction is that VAVE focuses on the relationship between function and cost, not simply price negotiation. It typically outputs function analysis tables, alternative solutions, cost-saving opportunity lists, and implementation plans.
Example in practice
When product margins decline, the company organizes a cross-functional team to conduct VAVE analysis on a mature product. The team deconstructs product functions, discovering that some functions are not needed by customers, while certain necessary functions are too costly. Through redesign, simplifying structure, and using more economical materials while maintaining core functions, the product cost is reduced after implementation, but customer satisfaction remains unaffected, and market competitiveness is enhanced.