Value Management

Value Management is an analytical process used by 3o to identify improvement opportunities in the supply of steady state materials for our customers.  It is fundamentally important for 3o to be able to offer our customers sustainable competitive advantage by producing positive price variance and improving supply chain effectiveness.  In today’s challenging economic environment detailed cost management is vitally important to achieve this.  Value management complements and supports both strategic and tactical procurement processes.

The process starts when any new item is first quoted by our suppliers.  We require our suppliers to provide detailed cost breakdowns of all costs incurred in the manufacture and supply of products.  Other of our analytical processes include:

Processes

  • Cost breakdown
  • Total cost of supply
  • Cost driver analysis
  • Indexation
  • Manufacturing flow process analysis
  • SMED
  • Product and process value analysis/ engineering

Frequently buyers experience an erosion of negotiated price positions caused by changing circumstances in the manufacture and supply of products. The Value Management processes enable us to conduct a detailed and analytical review of all of the manufacturing and supply processes. The processes can also be extended to include analysis of the product specifications and how they associate to customer requirements and cost. Employing these processes enables 3o to identify improvement opportunities and establish continuous improvement programmes.

Value Management Helps Avoid Supply Pitfalls

  • Price erosion
  • Input cost escalation
  • Specification assumptions
  • Errant suppliers
  • Process inefficiencies
  • Schedule failure
  • Defective supply

3o’s approach to value management supports our ongoing delivery of sustainable competitive advantage to our customers.