Function Analysis is an essential component of the Value Engineering/Value Analysis process. Value Engineering and Function Analysis are similar in that they are both used when a new product is being developed. However, not surprisingly, Function Analysis uses the functions of a product as the basis for cost management.
What is Function Analysis?
The purpose of Function Analysis is to increase profits. You can do this in several ways:
- By reducing the cost of the product
- By improving products by cost-effectively adding extra features that customers can’t resist
Fundamentally, it’s a technique to identify and understand the needs of your product. So you can think about it in terms of:
- What does it do?
- What does it need to do?
Here’s an example of Function Analysis. Imagine a standard home appliance: the coffee machine. It’s made by a company that’s revolutionising the way we drink coffee—how the machines are manufactured and sold; and the company also invent new products. After they created their latest design, but before producing it, the marketing team did a cost exercise to consider what the customer would be willing to pay. Then, thinking from last to first, the team worked out their target cost. They decided to do a Function Analysis by:
- Breaking down exactly what the product is made of
- Listing the functions the coffee machine would perform
- Researching the importance the customer placed on each of the coffee machine’s functions
Any functions that were “nice to have” but for which customers were not prepared to pay were immediately removed. They then calculated a target cost. The idea of the Function Analysis was to establish a value for the use of the coffee machine—what features does the customer want and value?
Why use Function Analysis?
Function Analysis allows teams to be creative and solve problems. Instead of being fixated on a product that you think should be created—perhaps one with far more features than are necessary—you can focus on what customers want or need from the product.
For what can Function Analysis be used?
- Defining and specifying product requirements
- Understanding how an existing activity, process, or solution addresses the needs of a product
- Establishing product requirements
- Identifying needs of the customer and purpose of a product
How can you identify the functions of a product?
There are several techniques used to identify functions:
- Environmental Analysis
- Process Mapping
- Movements and Effort Analysis
9 steps to get the most out of a VA/VE Function Analysis?
We advise using a systemic approach when you carry out a Function Analysis exercise. Here are nine steps you could follow to get the most out of the technique.
Decide what you are going to analyse. For example, a new product is a good candidate, or perhaps you might choose one with a complex design or high cost of production.
The final objective of the analysis will be determined by the product you choose. An example goal could be to reduce size and cost but maintain the existing level of quality.
Choose who will join the function analysis team. We recommend inviting a representative from every department.
Collect all the information you need. Make sure to gather information from inside your business (for example, design, manufacturing, and marketing information) and outside the organisation (for example, information about new technologies).
Define the functions of the product or process. Think about functions in terms of verbs and nouns. The noun should be something that can be described and quantified.
Let’s use the example of a pencil—you can use a pencil to write a letter, draw a picture, or make a shopping list, but the basic function of the pencil can be expressed as a verb and noun:
Write on — a page
Verb noun combinations allow the team to clearly understand the requirements of the product without having to think about a specific solution. Verbs and nouns allow all functions to be simply understood.
Once you have described the main function, start working on secondary functions.
Draw a diagram listing the functions—and the relationships between them—you worked on in the previous step. This will give you a visual representation of how important they are for the product and allow you to make future decisions. At this point, you can start thinking about any relevant associated costs.
Evaluate each function. What is the value of each function to the overall product and the customer experience? Each team member should be encouraged to give their honest opinion, and the whole team should reach a consensus as to whether the function is worth including.
Assign a target cost to each function, and anything that falls outside this range should be flagged for potential removal.
Encourage the team to make suggestions. If anyone can see an alternative solution that makes the product better or makes a saving, now is the time to speak up.
Different manufacturing ideas might even arise—or maybe new products altogether.
Make decisions. Now is the time to finalise what you are going to include and what you want to leave out.
Review your achievements. What changes have you made, and how has this helped the final product? Does anyone have feedback to help future Function Analysis?
Carrying out a function analysis for a product or process will lead to cost-effective and improved results. Ultimately, this will give your business a competitive edge.
Working out the product’s primary and secondary functions means the design team controls what is essential and what can be left out. This means they also have control over cost.
Carrying out Function Analysis is part of the spirit of value engineering—an intelligent cost reduction strategy that looks to increase the value of products for end-users and profitability for manufacturers. The essence of Function Analysis is trimming the fat and not doing what is unnecessary. If we had to reduce the technique to three simple rules, they would be:
- Do not produce an unwanted product.
- Do not include unnecessary product features.
- Do not make a product hoping someone will buy it.