Process Value Analysis - PVA

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DEFINITION

A strategy that businesses use to determine whether all of their operational expenses are necessary and if they could be operating more efficiently. Process value analysis looks at what the customer wants and then asks if each aspect of operations is necessary to achieve that result. The goal of process value analysis is to eliminate unnecessary expenses incurred in the process of creating a good or service without sacrificing customer satisfaction.

INVESTOPEDIA EXPLAINS

In conducting PVA, managers must look at whether any activities could be eliminated or streamlined to decrease operational costs while still delivering what customers want without sacrificing quality. Managers will consider whether any new technologies could be profitably implemented, whether errors are being made that could be avoided, whether there are extra steps in the process that are unnecessary and so on. Any steps in the value chain process that are identified as not adding economic value may be changed or thrown out.


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