Unit of competency details

MSS405031A - Undertake value analysis of product or process costs in terms of customer requirements (Release 1)


Usage recommendation:
Supersedes MSACMT631A - Undertake value analysis of product costs in terms of customer requirementsMany changes to PCs, Prerequisite removed, Alignment corrected 01/May/2012
Is superseded by and equivalent to MSS405031 - Undertake value analysis of product or process costs in terms of customer requirementsSupersedes and is equivalent to MSS405031A Undertake value analysis of product or process costs in terms of customer requirements 21/Jun/2016

ReleaseRelease date
1 1 (this release) 02/May/2012

Training packages that include this unit

CodeSort Table listing Training packages that include this unit by the Code columnTitleSort Table listing Training packages that include this unit by the Title columnRelease
PMA - Chemical, Hydrocarbons and RefiningChemical, Hydrocarbons and Refining 1.0 
PMB07 - Plastics, Rubber and Cablemaking Training PackagePlastics, Rubber and Cablemaking Training Package 2.0 
MSM - Manufacturing Training PackageManufacturing Training Package 2.0 
MSA07 - Manufacturing Training PackageManufacturing Training Package 8.0-8.4 
MSF - Furnishing Training PackageFurnishing Training Package 1.0-2.0 
PMA08 - Chemical, Hydrocarbons and Refining Training PackageChemical, Hydrocarbons and Refining Training Package 4.0 
MEM05 - Metal and Engineering Training PackageMetal and Engineering Training Package 9.0-11.1 
MSS11 - Sustainability Training PackageSustainability Training Package 2.0-3.0 
FWP - Forest and Wood Products Training PackageForest and Wood Products Training Package 3.0 
DEF - Defence Training PackageDefence Training Package 1.0-3.0 
LMT07 - Textiles, Clothing and Footwear Training PackageTextiles, Clothing and Footwear Training Package 4.1 
FDF10 - Food ProcessingFood Processing 4.0-4.1 

Qualifications that include this unit

CodeSort Table listing Qualifications that include this unit by the Code columnTitleSort Table listing Qualifications that include this unit by the Title columnUsage RecommendationRelease
LMT60507 - Advanced Diploma of Fashion and Textiles MerchandisingAdvanced Diploma of Fashion and Textiles MerchandisingSuperseded
MSM50316 - Diploma of Production ManagementDiploma of Production ManagementCurrent
MEM60112 - Advanced Diploma of EngineeringAdvanced Diploma of EngineeringCurrent1-2 
PMA60116 - Advanced Diploma of Process Plant TechnologyAdvanced Diploma of Process Plant TechnologyCurrent
PMB50107 - Diploma of Polymer TechnologyDiploma of Polymer TechnologySuperseded
MSF50313 - Diploma of Furniture Design and TechnologyDiploma of Furniture Design and TechnologyCurrent1-2 
MSS50112 - Diploma of Sustainable OperationsDiploma of Sustainable OperationsSuperseded1-2 
MSS80312 - Graduate Diploma of Competitive Systems and PracticesGraduate Diploma of Competitive Systems and PracticesSuperseded1-2 
MSS60312 - Advanced Diploma of Competitive Systems and PracticesAdvanced Diploma of Competitive Systems and PracticesSuperseded
MSS70312 - Graduate Certificate in Competitive Systems and PracticesGraduate Certificate in Competitive Systems and PracticesSuperseded
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SchemeCodeClassification value
ASCED Module/Unit of Competency Field of Education Identifier 080317 Quality Management  

Classification history

SchemeCodeClassification valueStart dateEnd date
ASCED Module/Unit of Competency Field of Education Identifier 080317 Quality Management  07/Aug/2012 
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Modification History

New unit, superseding MSACMT631A Undertake value analysis of product costs in terms of customer requirements* - Not equivalent

* Prerequisite MSACMT230A Apply cost factors to work practices - removed

Unit Descriptor

This unit of competency covers the skills and knowledge required by an employee who is required to analyse products and processes to determine the value-adding factors, including design and processing costs that most impact on meeting customer requirements and which may also include competitor benchmarking. The unit also includes implementing identified changes that increase cost-efficiency. The unit may be applied individually or in a team environment.

In this unit an employee uses an analysis of the benefits/features which a customer perceives to be in a product or service as a basis for determining appropriate or unnecessary cost and so identifying and reducing waste.

Application of the Unit

This unit applies to an individual who undertakes the value analysis of a product or service, establishing the features/benefits obtained by customers from the cost components relating to those benefits. From this appropriate or waste cost will be determined and actions taken to either reduce waste or improve saleability.

This unit differs from MSS405030A Optimise cost of a product or service, in that it requires costs to be measured against customer features/benefits and is designed to contribute to value stream costing. MSS405030A Optimise cost of a product or service complements this unit by allowing detailed analysis of all costs, including overheads.

This unit primarily requires the application of skills associated with communication in gathering, analysing and applying information. Problem solving, initiative and enterprise, and planning and organising are required to determine cost-efficiencies. This unit also requires aspects of self-management and learning to ensure feedback and new learning is integrated into costing methods.

Licensing/Regulatory Information

Not applicable.


Not applicable.

Employability Skills Information

This unit contains employability skills.

Elements and Performance Criteria Pre-Content

Elements describe the essential outcomes of a unit of competency.

Performance criteria describe the performance needed to demonstrate achievement of the element. Where bold italicised text is used, further information is detailed in the required skills and knowledge section and the range statement. Assessment of performance is to be consistent with the evidence guide.

Elements and Performance Criteria


Analyse customer benefits to determine appropriate or 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 waste


Determine any additional features that may be added to improve saleability


Analyse waste cost components and allocate to direct and indirect cost categories


Determine options for reducing direct and indirect waste costs


Select cost-related actions which maximise customer benefits and minimise costs


Where required, undertake competitor benchmarking to provide reference points


Analyse performance variance


Identify waste processing or operational steps for product or service following completion of customer benefit analysis


Analyse all costs and determine methods of reducing costs/waste


Develop plan and recommendations for actions required to achieve cost improvement or added customer benefits to improve saleability


Submit plan and recommendations to stakeholders

Required Skills and Knowledge

This section describes the skills and knowledge required for this unit.

Required skills 

Required skills include:

  • undertaking self-directed problem solving and decision-making on issues of a broad and/or highly specialised nature and in a wide variety of contexts
  • communicating at all levels in the organisation and value chain and to audiences of different levels of literacy and numeracy
  • determining customer features/benefits added to products at each operational step
  • relating cost components to customer features/benefits
  • distinguishing between direct and indirect costs
  • identifying relevant cost component categories for product
  • determining application scope of cost reduction plan, including products, areas, employees and suppliers included in plan
  • undertaking competitor benchmarking for reference in cost analysis

Required knowledge 

Required knowledge includes:

  • customer features/benefits from products
  • impact of customer features/benefits on sales, market share and firms profitability
  • performance and cycle times for products made or service provided
  • major costs which are controllable (and how to control them)
  • types of waste (muda)
  • methods of reducing waste
  • methods of reducing cycle time
  • desirability of improving performance and methods of reducing cycle time

Evidence Guide

The evidence guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Critical aspects for assessment and evidence required to demonstrate competency in this unit 

A person who demonstrates competency in this unit must be able to provide evidence of their ability to:

  • identify customer features/benefits for a product and their impact on market share or saleability of the product
  • determine direct/indirect costs in a product
  • determine which costs are waste
  • analyse cycle times and make suggestions for reduction in cycle time
  • develop a cost/waste reduction plan.

Context of and specific resources for assessment 

Assessment of performance must be undertaken in a workplace using or implementing one or more competitive systems and practices.

Access may be required to:

  • workplace procedures and plans relevant to work area
  • specifications and documentation relating to planned, currently being implemented. or implemented changes to work processes and procedures relevant to the assessee
  • documentation and information in relation to production, waste, overheads and hazard control/management
  • reports from supervisors/managers
  • case studies and scenarios to assess responses to contingencies.

Method of assessment 

A holistic approach should be taken to the assessment.

Competence in this unit may be assessed by using a combination of the following to generate evidence:

  • demonstration in the workplace
  • workplace projects
  • suitable simulation
  • case studies/scenarios (particularly for assessment of contingencies, improvement scenarios, and so on)
  • targeted questioning
  • reports from supervisors, peers and colleagues (third-party reports)
  • portfolio of evidence

In all cases it is expected that practical assessment will be combined with targeted questioning to assess underpinning knowledge.

Where applicable, reasonable adjustment must be made to work environments and training situations to accommodate ethnicity, age, gender, demographics and disability.

Guidance information for assessment 

Assessment processes and techniques must be culturally appropriate and appropriate to the oracy, language and literacy capacity of the candidate and the work being performed.

Range Statement

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.

Competitive systems and practices 

Competitive systems and practices may include, but are not limited to:

  • lean operations
  • agile operations
  • preventative and predictive maintenance approaches
  • monitoring and data gathering systems, such as Systems Control and Data Acquisition (SCADA) software, Enterprise Resource Planning (ERP) systems, Materials Resource Planning (MRP) and proprietary systems
  • 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

Competitive systems and practices should be interpreted so as to take into account:

  • the stage of implementation of competitive systems and practices
  • the size of the enterprise
  • the work organisation, culture, regulatory environment and the industry sector


Waste (also known as muda in the Toyota Production System and its derivatives) is any activity which does not contribute to customer benefit/features in the product.

Within operations, categories of waste include:

  • 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:

  • 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

Determine customer feature/benefits 

This unit does not require that customer features/benefits must be obtained by the person undertaking the unit directly contacting customers. The features/benefits may have already been determined by sales and marketing personnel and passed on to operations. However, the unit requires that the product or process must be analysed to determine how the product or process supplies the features/benefits and by which step/feature of the product or process


Performance is may be thought of as the rate of output or delivery of the performance or service compared to the rate required to meet demand for the product or service

Cycle time 

Cycle time includes:

  • the normal time to complete an operation on a product


Pull is the concept of producing to demand, rather than for stock or some forecast

Unit Sector(s)

Unit sector

Competitive systems and practices

Custom Content Section

Not applicable.