What Were They Thinking?
I just viewed a slide show from a national GPO on their concept of value analysis where they stated that “value is a relative thing”, which to me means, that value represents different things to different people.
While there is some truth to this definition of value analysis this GPO never once mentioned that value analysis is the study of FUNCTION and the SEARCH for alternatives to meet those functions reliably. This is the “holy grail” of value analysis and the time-tested methodology taught by Larry Miles (the Father of Value Analysis) for defining value in our customers’ eyes. This thereby isolates the functions (primary, secondary and aesthetic) that are most important to our customers that are then ranked and weighted by their order of importance and cost.
Why did this GPO get it wrong? Because it didn’t fit into their world view of value analysis or they don’t really understand the classic tenets of value analysis — but think they do.
This convoluted or self serving thinking about value analysis is promoting half-truths that will only lead value analysis leaders and practitioners along a path of confusion, frustration, missteps and ultimate failure.
Let’s get it right! As an industry that has embraced value analysis as a best practice to manage and control our supply expenses shouldn’t we start to actually understand and then apply the system of beliefs that Larry Miles taught us vs. listening to false prophets that are leading us down the wrong path?
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