Value Research or Benefit Engineering 1 . Explain, how does value sequence approach assists an organisation to assess the competitive benefits Answer: A lot of the firms define value sequence as quest of creating item or companies. For these firms, the products or services produced are more significant than virtually any single step within their value chain.
These firms use the value sequence approach to better understand and identify which in turn segment, circulation channel, price point, product difference, selling idea and benefit chain settings will produce them the greatest competitive benefit.
The way the value chain strategy helps these kinds of firms to assess competitive advantage includes the use of following actions of analysis: (i)Internal cost analysis , to look for the sources of earnings and the comparable cost location if internal value creating processes. (ii)Internal differentiation analysis ” to know the causes of differentiation (including the cost) within inside value creating processes, and iii)Vertical linkage analysis ” to understand the relationships and associated costs among exterior suppliers and customer in order to maximize the worth delivered to customers and to lower cost. These kind of analysis aren’t mutually exclusive. In fact , firm start by focussing on the internal operations and steadily widening their particular focus to consider all their competitive placement within their market. The value string approach employed for assessing competitive advantage is usually an integral part of the strategic planning process. 2 . Write a short notes about value examination
Answer Benefit analysis (also known as worth engineering) is a systematic interdisciplinary examination of elements affecting the expense of a product or perhaps service to be able to devise method of achieving the specified purpose with the required common of top quality and stability at the concentrate on cost. The purpose of value executive is to obtain the assigned target expense by (i) identifying superior product patterns that reduce the product’s cost without sacrificing features and/or (ii) eliminating unneeded functions that increase the product’s costs and then for which buyers are not able to pay extra for.
Benefit analysis or value engineering is one of the most in-demand cost lowering techniques. It is usually defined as a method that yields value improvement. It investigates into the economic attributes of benefit. It endeavors to reduce price through a. design change, b. modification of fabric specification, c. change in the cause of source and so on. That emphasises on finding innovative ways of getting equal or better performance from a product at a lesser cost with out affecting its quality, function, utility and reliability.
For instance , the function of a fastener is to sign up for two or more parts. Value examination examines the cost of this function in terms of alternate methods including welding, taping stapling, and so forth in view of the tension and vibrations involved in a specific application. In value examination each and every merchandise or element of a product is subjected to a crucial examination so as to ascertain the utility in the product, the expense, cost profit ratio, and better replacement etc . If the benefits will be lower than the cost, advantage may be gained by providing up the activity concerned or replacing in the event that for enhancement.
The best method one that will perform satisfactorily at the lowest cost. The various measures involved in worth analysis happen to be: 1 . recognition of the issue, 2 . collecting information about function, design, materials, labour overhead costs, etc ., with the product and finding out the of the competitive products in the market, and 3. exploring and evaluating alternatives and expanding them. Put simply value analysis brings out plainly the areas the place that the cost of a product or service can be decreased by pointing out: 1 . Unneeded items, elements in a product to be removed.. Possibility of substitution with lower cost without affecting its quality. 3. Chance of overall simplification in design and style manufacture and so forth of a merchandise. 3Value Architectural is more effective than any other price reduction technique like Work Study, Motorisation etc . ” Discuss this statement in the Indian context. Answer. Benefit engineering or perhaps value evaluation is one of the most favored cost lowering technique in the purchasing and production areas. It is aimed at reducing expense through transform, modification of material specification, enhancements made on the source of supply of material and so on.
That emphasis’s upon finding innovative ways of getting equal or excellent performance from a product at a minimum cost with no affecting it is quality, function and reliability. It is the means of subjecting each and every component of a product to a crucial examination so as to ascertain: (i) Its energy in the product, (ii) The expense, (iii) Whether is expense commensurate using its utility, (iv) Whether it can be replaced with a cheaper components, (v) If it can be eliminates the, (vi) The particular competitors are using in place of it, and (vii) Whether anybody is shopping for it in cheaper price.
Utility means usefulness, this is easily and naturally measured if the concerned component or the services can be obtained form outside ” the price actions it usefulness. In some cases in which an outside industry does not can be found, utility will be measured simply subjectively. Even now one would possess a fair concept of whether the gain obtained, declare in terms of better appearance, is worth the costs incurred. Usually it could be profitable mary tap exterior sources in case the price is less than the cost.
Yet this decision needs to be made out of great proper care as the question of fixed and sunk costs is very important. Value executive bring plainly the areas where the cost of merchandise can be lowered by showing that: (i) Unnecessary items/components in a which might have had once a few utility but now are repetitive and, therefore , dispensable, (ii) the possibilities of component ” substitution with reduced cost with out affecting the caliber of the product, and (iii) the options of overall simplification in design / manufacture and so forth f an item. The relationship between value engineering and cost reduction a. Value executive is done expecting to to reduce the price and expense reduction looks upon value engineering as one of its perfect tools. w. Cost-reduction provides always followed a critical examination of the benefit incurred. Value executive is a cautious and as far possible, volumes appraisal with the benefit produced at each level of work.
The place that the benefits are lower than the cost, advantage might be gained by giving up the activity concerned or replacing this by another thing. c. Function study software etc, perform reduce expense but in most cases, they save only labour cost simply by improving efficiency, etc . However, value executive relates the worth of the product, it is value towards the function it can be intended to perform and makes a sizeable inside the cost of the materials by simply design improvements, substitution etc .