Functionality Assessment
How many of the functions offered by a mobile telephone does the typical user actually use? Or the functions available in computer programs such as Microsoft Excel? Which of these functions provide genuine benefit for the typical user? What could the typical user do without, and what would he or she be prepared to pay for if they were not already included in the cell phone or computer program? In many cases, far too many functions are offered. Since this also creates excess costs, it makes sense to assess each function in detail.
Functionality assessment calls for an interdisciplinary team, consisting not just of procurement staff but also of specialists from engineering, production, and sales. The process takes place in five steps:
Identification of functions: First, the product has to be broken down into its various subsystems and components, and their respective functions identified.
Naming of the functions: Next, all the functions identified need to be given a meaningful name. This should consist of two expressive words: an active verb and a measurable noun, which together clearly illustrate and define the significance of the individual components. Examples would be “Prevents corrosion,” “Positions parts,” or “Absorbs vibration.”
Classification of functions: The functions are assigned to one of four classes: basic, critical, supporting, and non-supporting.
Valuation of cost-function ratios: This step is essential for identifying potential improvements. The information is listed on an evaluation sheet along with all components and their functions. On each individual line, the relationship between part, function, and cost is valued. Adding up all the columns produces total costs.
Identification of potential improvements: The following are general rules for identifying components to optimize:
The product can be viewed as cost effective if the costs predominantly occur in the area of basic or critical functions
If significant costs are found in supporting functions, savings can be achieved without changing the basic concept
The highest savings can be realized in non-supporting functions
The above process enables potential to be identified, with a list of possible improvement measures as the outcome. However, the basic and critical functions should be reviewed as well in order to find alternative solutions, if appropriate.