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Elements and Performance Criteria

1. Analyse customer benefits to determine appropriate or muda (waste) costs
   • Analyse product or service to determine features/benefits perceived by customer in product.
   • Analyse cost components of product or service and determine those which deliver customer features/benefits and those which are either appropriate or muda.
   • Determine any additional features that may be added to improve saleability.
   • Analyse muda cost components and allocate to direct and indirect cost categories.
   • Determine options for reducing direct and indirect muda costs.
   • Select cost-related actions which maximise customer benefits and minimise costs.
   • Where required, undertake competitor benchmarking to provide reference points.
2. Analyse performance variance
   • Identify muda processing or operational steps for product or service following completion of customer benefit analysis.
   • Analyse all costs and determine methods of reducing costs and muda.
   • Develop plan and recommendations for actions required to achieve cost improvement or added customer benefits to improve saleability.
   • Submit plan and recommendations to stakeholders.

Range Statement

This field allows for different work environments and conditions that may affect performance. Essential operating conditions that may be present (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) are included.
Competitive systems and practices include one or more of:	lean operations agile operations preventative and predictive maintenance approaches statistical process control systems, including six sigma and three sigma Just in Time (JIT), kanban and other pull-related operations control systems supply, value, and demand chain monitoring and analysis 5S continuous improvement (kaizen) breakthrough improvement (kaizen blitz) cause/effect diagrams overall equipment effectiveness (OEE) takt time process mapping problem solving run charts standard procedures current reality tree.
Muda includes all of:	excess production and early production delays movement and transport poor process design inventory inefficient performance of a process making defective items activities which do not yield any benefit to the organisation or any benefit to the organisations customers.
Cost includes all of:	the monetary value of expenditures able to be directly identified for supplies, services, direct labour, components, cost of inventory, faults and reworks, rejects/scrap, equipment and other items used in the production of the product allocations and estimates for indirect costs (e.g. indirect labour, rent, power and water) where a direct monetary value cannot be identified.

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Performance Evidence

Evidence required to demonstrate competence in this unit must be relevant to and satisfy the requirements of the elements and performance criteria and include the ability to undertake value analysis on one (1) or more products or processes and to:

distinguish between appropriate costs and muda

distinguish between direct and indirect costs

determine methods of reducing both appropriate costs and muda

develop a plan to increase customer perceived benefits/ saleability and/or reduce costs and muda.

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Knowledge Evidence

Must provide evidence that demonstrates sufficient knowledge to interact with relevant personnel and be able to undertake value analysis, including knowledge of:

cost components, direct and indirect costs

customer perceived benefits

factors influencing saleability

impact of customer features/benefits on sales, market share and firms profitability

major costs which are controllable (and how to control them)

types of muda

methods of reducing muda.

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