VED stands for VITAL, ESSENTIAL and DESIRABLE
VED analysis is a concept often used in the management of industries and companies dealing with production activities or any other activities to classify the items based on their requirement for the industry or company. In that context, VITAL items are those without which the activities of an industry or company would come to a halt or get seriously affected. ESSENTIAL items are those without which the company may have to face risks. However, essential items will have to be provided or replaced by the industry within a timeline. DESIRABLE category includes those items whose absence or shortage may cause minor disturbances , for a shorter period.In the industrial organization context VED analysis is used to understand the functional utility of an item, the effect of non-availability of an item, and to identify the items that are considered as not very important and items whose replacement can be postponed.
VED analysis is very helpful in commercial mediations related to contracts dealing with construction, supply of goods, completion of project etc.
Application of VED Analysis in Mediation
In the process of setting the atmosphere for negotiation the mediator may ask the disputing parties to make a separate list of what do they want to happen. It is a list of one party’s expectations that are expected to be fulfilled by the other party.
STEP 1 - In private caucus, with the list in hand,the mediator may ask the party to identify the vital elements that cannot be compromised . Justifications that may be acceptable to the other side in this regard may be obtained from the party by the mediator along with the permission to disclose the same.
STEP 2 - Mediator may ask the party to identify which of the elements can be postponed.
STEP 3 - Mediator may ask the party to identify the options or expectations not so important and those that the party is willing to waive.
In doing this exercise ,the mediator collects the lists from both the parties while assisting them to take the negotiation forward.
Mediation and VED Analysis in practice- Case Study
A builder agrees to construct fifty apartments for prospective homeowners. The builder fails to handover the possession on time. The dispute between the Builder and the prospective homeowners is referred to mediation. Following the criteria under VED Analysis, the mediator obtains respective lists from both parties. Home owners’ list of expectations categorized according to VED analysis as below:
Builder’s list of expectations categorized according to VED analysis below:
With these two lists in place, the mediator assists the parties in negotiation and helps them enter into a settlement agreement.
Thus, in the context of mediation:
(i) VITAL is that which cannot be compromised at all.
(ii) ESSENTIAL is that which has to be complied with but can be postponed for a reasonable period.
(iii) DESIRABLE is that which can be waived or left to the choice of the person who has to fulfill the same.
Settlement or otherwise in mediation does not depend on this category.
VED analysis is also found to be successful in some matrimonial mediations, where give and take between the parties regarding alimony, monthly maintenance, custody of children, visitation rights etc., are negotiated between the parties with the assistance of a mediator who helps in bringing the parties to a common understanding bearing in mind the vital, essential and desirable elements in the given context.
There application of VED Analysis comes with the risk that prioritization of elements as vital, essential and desirable may not be aligned similarly between the parties. Thus aligning essential with the desirable may be a challenge.
Precaution to be taken by the Mediator
It is desirable to apply and execute VED analysis in private caucus than in a joint session with both parties in attendance.
It is also better to take the options/expectations of one side to the other, along with the justifications for the expectations. It is also advisable for the mediator to cross check with the person/s giving options/expectation as to whether the justifications given for their options/expectations would be acceptable or at least appealing to the other side.