Collaborative Value Analysis: Experiences from the Automotive Industry

SUMMARY As the nature of competition shifts to a supply chain focus, effectively leveraging suppliers' technical expertise is becoming essential to market success in many industries. Some organizations are using a time‐proven technique, value analysis (VA), to leverage their suppliers' technical expertise. This study reports the benefits and challenges of supplier involvement in VA based on the experiences of four first‐tier automotive suppliers. When suppliers are involved in VA, many ideas can be developed and trust can increase, both of which strengthen buyer‐supplier partnerships. Unfortunately, reluctance to share cost data, lack of engineering resources, and failure to obtain customer approval are barriers to VA implementation. Several practices can be used to overcome these barriers.