The Value Method was originally developed by Larry Mills (General Electric) in 1943. It has been highly refined and honed by many over the years. It’s designed to use highly efficient procedures that are consistent with sound management techniques and is tuned to achieve maximum performance, in the minimum amount of time required. As a complete and mature process with more than 50-years of successful application, it has been used in almost any endeavor contemplated.
Applications of the Value Method are known by several common names.Value Engineering (VE), Value Analysis (VA), Value Management (VM), and Value Planning (VP) are some of the most common names used. These names describe small variations in the general Value Method process related to the timing, selection, type of activity, or other specific application. Application of the Method is usually referred to as value studies. Each year companies save billions of dollars in expenditures; improve quality, service while improving customer satisfaction; and increasing revenue, market share, and profits.
The true value of a activity or product is its relationship to its perceived worth as opposed to its life-cycle costs. In Value Method terms: Value = Worth / Cost. When an item has a Value greater than 1.0, the item is perceived to be a fair or good value. When an item has a Value is less than 1.0, the item is perceived to be a poor value or bad value. When the perceived worth far exceeds the life-cycle cost, we usually consider purchasing the item.
