2. v a & v a m
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Value Analysis
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Value Analysis
Historical perspective, the genesis Military background
Shortages, to find alternatives
No option but to win
From warfare to business
1950s - OR techniques, logistics, VA
L D Miles, father of VA
Initiative of US Navy-1950s
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Customer satisfaction
Customer delight-the Minolta camera!Why the above?
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Challenges of competitive business
to stay alive and prosper in business
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Some VA examples
Refrigerator VIP bag
Folding umbrellas!
Fountain pens, ball pens.!
Cotton and artificial fibers, Metals and
plastic material substitution
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Why poor value exists?Lack of review, Weak PDCA
Designed under urgency
Lack of awareness New materials
Technology
Attitude, reluctance to change
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Value tests to identify poor value areas
1.Does the product perform intendedfunction? Pen should write, mirror andimage, cigarette lighter and music!
2.Can the design be changed to eliminate a
part?- door handle3.Can you purchase it at a lower cost? bolts
& nuts (bought out parts)
4. Does it need all its features?- lock
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Value tests to identify.
5. Is there anything better for intended use? Paper cups/plates in place of crockery
Aluminum in place of copper Velcro in place of buckle Chain in place of buttons
6. Can a usable part be made by a lower costmethod?
Change of process Welding and extrusion, 3 piece cans and 2
piece cans (cola cans)
machining & cold forging (bearing rollers)
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Value tests to identify poor value
areas..
7. Is it made on proper tooling considering thequantities involved? - HSS, Carbide, Ceramic
tools?
8. Are there any newly developed materialsthat can be used? e.g. special alloys, plastics
(artificial fibers and cotton)
9. Can two or more parts be combined intoone?-ball pen top, 3 piece cans and 2 piece
cans
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10. Can any specifications be changed to
effect cost reduction?
glass wool/poly urethane
copper/aluminum
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People in research, design, sales, and
production must work as a team, to foresee
problems of production, and in use, that may
be encountered with the product or serviceUse feedback from producer, user and
service provider
Reduce costMake usage easier
Make product safe
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Who is the user (customer) of materials?
The internal customer, operations
The producer and service provider?
The vendors (processors)
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Value Added Management
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What is Value Added Management?Managing the process that creates value-
added products is VAMWhat isValue?
Value is in the eyes of the customer, like
beauty is in the eyes of the beholder!Value attracts the customer
Value propels the customer to buy the
productWhat is management?Effectiveness & efficiency
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Why Value Added Management?
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CompetitionInternal as well as external
Changed customerGrowth for survival
Challenges of the competitive business
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What is value added?
Adding value to a raw product at its present
stage of production
What creates a value-added product?
Improvements in every stage of value
creation process (production process) to
enhance value
To enhance value we should know
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Does the product or service meet or exceed
customer expectations?Quality
Functionality Does the product or
service provide the function needed of it?
Form Is the product in a useful form?
Ease of use is it easy to use?
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Cost
Cost of makingCost of delivering
Can we reduce the cost?
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Delivery
Place Is the product in the right place?
Time Is the product in the right place at
the right time?Lead time can we cut down on the lead
time? Waiting time for customer
Ease of possession Is the product easyfor the customer to obtain? ATMs
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Know your customers Juran
Who are our customers?Retailers?Agents?
Manufacturers?Consumers?
Who are the end users of our products?
Categorize the customersABCKnow their expectations
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Process of VAM1.Prioritize customer categories or customers
2.Establish their expectations3.Map the process that produces theproducts map the entire value stream
4.Map value stream for material flow andinformation flow separately5.At the end of the value stream fix current
customer satisfaction levels andexpectation levels
What is the gap in Q C D?
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INV
OPN I
INV
Q C D
INSPOPN II OPN III OPN IV
Q C D
?? ? ? ? ?
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(Process of VAM..)
6.At every stage of value stream establishparameters influencing customer
expectations like lead time, quality level,
inventory level etc.7.Prioritize the parameters for improvementor value addition in order to deliver better
Q C D to customer
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Q C D
Q C D
Q C D
Q C D
Q C D
Rollers
Inners
Outers
Cages
Roller bearings
Q C D
?
?
?
?
?
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Q C D
Q C D
Q C DQ C D
COLD FORGING
HEAT TREATMENT
SUPERFINISH
EN31 STEEL COIL
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(Process of VAM..)
Prioritize the area for improvementSet objectives and chalk out an action plan
PDCA
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VAM in Materials Management
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???
?
?
?
SourcingOrder
placement
& expediting
Vendor
(Supplier)
TransportationReceiving
Material
Handling
Storage,
Retrieval
& Issue
Internal customer
(Operations)
QCD
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Opportunities in Materials Management
Lead time reduction, procurement lead time
Inventory reduction, speed up flow
(inventory turns)
Vendor Development, QCD enablement
One item one vendor
Customer/supplier proximity
Alternate material
Variety reduction in parts
Standardize size and shape of material
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RESOURCE UTILIZATION
LEVEL I- WHAT IS THE PRODUCTIVITY? LEVEL II- WHAT IS THE PRODUCTIVITY?
LEVELIII- WHAT IS THE PRODUCTIVITY?
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