gmp_pom - session 26

8/8/2019 Gmp_pom - Session 26

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Production and Operations ManagementSession 26 VA/VE


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Dipankar Bose - XLRI

POM_GMP SyllabusForecasting (14-15)

Capacity Planning/ Layout/Location (16-18)

Medium-term Short-termong-term

Aggregate ProductionPlanning (19-20) Material RequirementsPlanning (21)

Production ProcessQuality (23-25)

QFD(22)

FMEA(22)

VA/VE(26)


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What is Value?

According to Aristotle (350 BC) Political/ Social/ Economic/ Religious/ Ethical/

Aesthetic/ Judicial

Types of Economic Values

Cost value

Use value

Esteem value Exchange value


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Economic Value Examples

For a particular raw material used in your productionprocess, on an average it takes 20 days to receive raw

material after an order is placed (procurement lead time).

A new supplier has promised that they will reduce this

lead time to 15 days so that you can reduce your rawmaterial inventory.

In a peak season, when you outsource some of your

production, the manufacturer charges you 15% above his

production cost. One real estate company said in their advertisement, If

you buy a flat from us, you may find some famous people

as your neighbor.


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Economic Value Examples Continued

When a construction company was bidding for highwayproject, during proposal submission they also mentioned,

We are ISO 9001:2008 certified, as relevant

information.

The Benjamin Franklin Z Grill", is a 1-cent postage stamp

issued by the United States Postal Service in February 1868

depicting Benjamin Franklin. One of these rarest stamps

was sold for $935,000 in 1998.


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What is Value Analysis?

Value analysis is an organized creative approach whichhas for its purpose the efficient identification of

unnecessary cost i.e., cost which provides neither quality,

nor use, nor life, nor appearance, nor customer features.

L. D. Miles


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VE Job Plan Mudge (1971) Phases

Covered General phase

Information phase

Function phase

Not covered Creation phase

Evaluation phase

Investigation phase

Recommendation phase Implementation phase

Next


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Job Plan General Phase

Inspire team work Work on specifics

Overcome mental roadblocks

Apply good business judgment

Back


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Job Plan Information Phase

Specifications and Requirements Difference?

Imposed by customer or producer

Real or Imaginary?

Secure facts on specifications and requirements

Determine costs related to product

Fix costs on specifications and requirements


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Generalized Cost Structure

Selling Price

ProfitSelling Cost

Cost ofGoods Sold

General Administrative CostsField Service andMiscellaneousCosts OverheadCosts ConversionCosts Cost of GoodsManufacturingIndirect LaborIndirect MaterialDirect Labor Prime CostsDirect Material

Back


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Job Plan Function Phase

Define the functions that a product actually performs Evaluate functional relationships

Subjective evaluation

Function Analysis System Technique (FAST)

Technical oriented FAST Diagram Customer oriented FAST Diagram

Numerical evaluation

Back


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Rules of Function Definition Rule 1: Expression of functions must be

A verb and a noun

Rule 2: Types of Functions

Work function/ Sell function/ Constraint

Rule 3: Divide into two levels of importance

Basic function/ Secondary function

Back


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Example ScrewdriverComponents FunctionsVerb Noun

Handle Facilitate GripReceive Torque

Prevent Rotation

VarnishProtect Wood

Improve Appearance

Name Plate Identify Manufacturer

Shank

Suit Slot

Deliver Torque

Transmit Torque

Provide Approach

Facilitate ApplicationPrevent Rotation

Sleeve Prevent Cracking

PinJoin Components

Withstand ForceBack

Technical FASTCustomer FAST


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Function Analysis System Technique(FAST) How to differentiate between Basic Function and

Secondary Function?

Proposed by Mudge A Trial-and-error method

Divide the product into components For each component

Find basic function

Using numerical evaluation

Find weights of all basic functions The basic function with highest weight

Becomes basic function of the product


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FAST Developed by Charles V. Bytheway

Incorporating dimension When Richard J. Park

Technical oriented FAST Wayne Ruggles

Customer oriented FAST Thomas Snodgrass & Theodore

Fowler

Work Function An active verb + A measurable noun

Sell Function A passive verb + A non-measurable noun


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Technical oriented FAST Some Terms Scope line

Higher order function

Basic function

Required secondary function

Causative function or Lower order function Functions At the same time and/or Are caused by

some other functions

All the time functions

One time function Design objectives

Critical path


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Technical Oriented FAST

Screwdriver


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Customer Oriented FAST SomeTerms Task

Basic function

Supporting functions

Assure convenience

Assure dependability Satisfy user

Attract user

Scope line


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Customer Oriented FAST

Backcrewdriver


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POM_GMP Syllabus At a GlanceForecasting (14-15)

Capacity Planning/ Layout/Location (16-18)

Medium-term Short-termong-term

Aggregate ProductionPlanning (19-20) Material RequirementsPlanning (21)

Production ProcessQuality (23-25)

QFD(22)

FMEA(22)

VA/VE(26)


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VA/VE Continued(Out of End-term Syllabus)


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Numerical Evaluation Techniques Weighted evaluation method

Equal importance method

Descending order of importance method

Paired comparison method

Forced decision techniqueQuantitative method

Predetermined minimum method

Breakeven analysis

Life cycle costing (Not covered)

Back


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Job Plan Creation Phase Deal with predominantly creative mind and set aside

judgment

First steps to try answering question What else will do?

Steps Establish positive thinking

Develop creative ideas

Back


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Job Plan Evaluation Phase Select the promising ideas of the creative phase for further

analysis Will it work? Is it less costly than the present design? Is it feasible to implement?

Refine and combine ideas Establish cost on all ideas

An estimated cost should be calculated Other questions

What are the potential costs of implementing the idea?

What are the resultant savings implied? Develop function alternatives Evaluate by comparison

Function-Cost-Worth analysis


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Function-Cost-Worth Analysis(FCWA) Value Gap = Difference between Worth and Cost

Indicates scope of possible value improvement

Value Index = Cost per unit worth

More than 1 Potential for value improvement


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Cost Allocation Procedure1. Split the product into components and service/system into

activities

2. Define functions of components/activities

3. Divide the total cost of product/service/system into

components/activities cost4. Processes performed to achieve particular function

Cost allocated to that function

5. Component provided to achieve particular function

Cost allocated to that function6. Component accomplishes more than one function

Allocate based on weight/volume/surface area/length

7. Hold each function in isolation of the others to do this


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Worth Allocation Procedure First list all functions and costs in descending order.

Then ask the following questions:

Will you pay if it is your money?

If not, what do you consider reasonable?

By whom or where a similar function is available atlower cost?

What should you do to obtain the function within that

cost?

Back


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Job Plan Investigation Phase Three techniques are used to

Further refine the selected ideas into workable and

acceptable solutions

Providing lower cost methods for performing the

desired function

Techniques

Use company and industrial standards

Consult vendors and specialists Use specialty products, processes and procedures

Back


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Job Plan Recommendation Phase Finally selected value alternative is recommended for

acceptance and implementation

Techniques

Present facts Motivate positive action

Team recommendation

Back


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Job Plan Implementation Phase Addresses following issues

Factors governing acceptance Requirements for acceptance Mechanism for implementation: who will monitor the

implementation, who will do it, who provides the fund,

who reports the progress, etc.? Determine the areas that are affected Determine time and sequence of effort and quantity at

break-even point

Follow up Measure results of gain in money and time. Compare

net gains with the full cost of the value effortBack


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Benefits of Value Engineering Helps to pinpoint areas that need attention and

improvement

Helps in generating ideas and alternatives for possible

solution to a problem

Provides a method to evaluate alternatives Provides a platform for dialogue

Records the logic behind the decisions

Improves the value of goods and services significantly


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Case Isuzu Motors DevelopmentStages and VE Aspects

Conceptproposal Planning Developmentand Productpreparation

Development andProduction-salespreparation

Production-salespreparation

Target valueZeroth look VE

First look VESecond look VE

Manufacturing VE

Mini VEWave methodVE reliability program


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Relationship Job Plan and Isuzu Case General phase

Prepare Cost Deployment Flowchart/Strategy Map

Information phase

Tear-down programs

Function phase Creation phase

Developing functional alternatives

Zeroth look VE

First look VE


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Relationship Job Plan and Isuzu Case Continued Evaluation phase

Second look VE

Manufacturing VE

Mini VE

Investigation phase Value target

Recommendation phase

Implementation phase

gmp_pom - session 26

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