Key Management Models, 3rd Edition

22

Overhead value analysis

The big picture

Overhead value analysis (OVA) is a technique used to find opportunities to reduce overhead costs. The model focuses on the reduction and optimisation of indirect activities and services in organisations. An OVA makes improvement opportunities explicit, and compares the costs of indirect activities with the output of the primary processes, for which it uses Porter’s value chain model (see Figure 22.1; see also Chapter 24).

Figure 22.1 Overhead depicted in the value chainSource: after Competitive Advantage: ...