value analysis and value engineering

ORIGIN

Value Engineering began at General Electric Co during World War II Because of the

war there were shortages of skilled labor raw materials and component parts Lawrence

Miles and Harry Erlicher at GE looked for acceptable substitutes They noticed that

these substitutions often reduced costs improved the product or both What started out as

an accident of necessity was turned into a systematic process They called their technique

as ldquoValue Analysisrdquo

In the year 1954 US Navy Bureau of ships adopted same technique in their effort at

lsquocost avoidancersquo during the design stage and saved millions of dollars They named it as

ldquoValue Engineeringrdquo VE follows thought process that is based exclusively on

ldquofunctionrdquo ie what something lsquodoesrsquo not what it is

Value Engineering

Value Engineering is where the value of all the components used in the construction of a

product from design to final delivery stage are completely analyzed and pursued

VALUE(P) = Desired performance

---------------------------

Overall Costs(C)

Value can be increased by either improving the Performance or reducing the cost

APPLICATIONS OF VALUE ENGINEERING

Automobile Industry

Heavy Electric Equipment Industries

Ship Builders

Railways amp Heavy Vehicles Mfr

Electrical amp Communication Machinery Mfr

Fabrication Industries

Process Industries

Metal Fibre Food Chemical amp Steel

Architectural amp Construction Firms and also

All Service Sectors

DEFINITION

VALUE ENGINEERING

VE is an analytical Step-wise organised creative team-approach designed to examine all

the facets of cost amp functions of a PRODUCTEQUIPMENT SYSTEM to identify and

eliminate unnecessary costs which are incurred in

ldquo QUALITY

ldquo APPEARANCE

ldquo LIFERELIABILITY

ldquo CUSTOMER FEATURE

Some Close Cousins of Value Engineering-

Over a period many other terms or methodologies have evolved based on the same

functional approach but laying emphasis on some specific type of objectives Some of

these terms do not even use the term ldquoValuerdquo For example

Value Management

Value Assurance

Zero Based Budgeting

Business Process Re-engineering etc

VALUE ANALYSIS VS COST REDUCTION

COST REDUCTION VALUE ANALYSIS

Formula Value = Cost (Quality) Worth

Value = -----------

Cost

Questions What is it What is it

How can we make it

for less

What does it do

What must it do

How can its functions

be performed for less

Aims Reduce cost of present product Provide user-required

functions at lowest cost

PRINCIPLES OF VALUE ENGINEERING

lsquoUser-Firstrsquo Attitude

Functional Approach

Team Approach

Creative Approach

VALUE ENGINEERING BASICS

JOB PLANS

The basic framework for conducting a value study is the Job Plan Value Engineering is

a systematic approach and it has a well-considered job plan that needs to be adhered to

maximise the effectiveness of the technique A typical job plan is given below

Selection of the project and the team members

Collection of Information

Function identification and analysis

Creation idea generation

Evaluation of ideas

Investigation of alternative solution

Final recommendations and presentation

The above plans provide a systematic and orderly approach to conducting a study The

plan includes both analytical and creative phases Each phase has its rules that are

designed to increase the effectiveness of the phase

VALUE ENGINEERING JOB PLAN

1 GENERALORIENTATION PHASE

Use good human relations

Inspire team Work

Work on specifics

Overcome roadblocks

Apply good business judgement

2 INFORMATION PHASE

Secure the facts

Determine the costs

Fix costs on specifications and requirements

3 FUNCTION PHASE

Define the functions

Evaluate functional relationships

4 CREATIVE PHASE

Establish positive thinking

Develop Creative ideas

5 EVALUATION PHASE

Refine and combine ideas

Establish costs on all ideas

Develop alternative ideas for functions

Evaluate by comparison

6 INVESTIGATION PHASE

Use company and industry standards

Consults vendors and specialists

Use specialty products processes and procedures

7 RECOMMENDATION PHASE

Present facts

Present costs

Motivate positive action

INFLUENCE OF SELECTION OF TIME ON VALUE ENGINEERING(VE) APPLICATION

PHASE VALUE ENGINEEING EMPHASIS

CONCEPT FORMULATION PHASE

VE studies during this phase are directed at Furnishing inputs needed to ensure the most

economical decisions to achieve the functions sought

achieving low total cost of ownership (rather than just low acquisition cost)

TENTATIVE DESIGN PHASE

VE studies during this phase add value by analysing and developing alternatives for the following

Essential requirements Technical characteristics Design tasks

FINAL DESIGN PHASE VE studies during this phase are limited to

Eliminating unnecessarily restrictive detail and eliminating items not necessary

Redesign effort at this stage cannot be economically accomplished due to the implementation costs involved

CONSTRUCTION MANUFACTURING PHASE

VE studies during this phase result in

Extension of an items life Reduced repair costs Savings in energy and other operating costs Reduction in the number of supply items in stockVE can be performed both internally and by the contractorvendor

Value Methodology (also called Value Engineering Value Analysis or Value

Management) is a powerful problem- solving tool that can reduce costs while

maintaining or improving performance and quality requirements It is a function-oriented

systematic team approach to providing value in a product or service

The value methodology helps organizations compete more effectively in local national

and

international markets by

-Decreasing costs

-Increasing profits

-Improving quality

-Expanding market share

-Saving time

-Solving problems

-Using resources more effectively

VALUE ANALYSIS amp VALUE ENGINEERING

Value analysis is systematic creative and organized approach amp to identify unnecessary

costValue engineering is a technique of application to eliminate unnecessary cost

Generally value analysis is based for cost values Unless otherwise is specified

Value Analysis is an effective tool for cost reduction and the results accomplished are far

greater It improves the effectiveness of work that has been conventionally performed as

it questions and probes into the very purpose design method of manufacture etc of the

product with a view to pinpointing unnecessary costs obvious and hidden which can be

eliminated without adversely affecting quality efficiency safety and other customer

features

VALUE AND VALUE ANALYSIS

Let us consider at this stage what is meant by ldquoValuersquo lsquoValuersquo is itself is some what

difficult to define It means different things to different people

Value Analysis

VA is an step by step approach to identify the functions of a product process system or

service to establish a monetary value for that function and then provide the desired

function

at an overall minimum cost without affecting any of the existing parameters like Quality

Maintainability Productivity Safety and other Performance characteristics

Also it is often confused with the cost and price of a product or service One way of

defining the value of an item is

Worth to you

Value = ------------------

Price you pay

This means that if you feel that you have your moneyrsquos worth then you have received

100 per cent value Which indicates that lsquoValuersquo has a subjective aspect for what is good

value for one person need not necessarily be so far another In general if for any function

or a product or a service you feel you are paying too much or it costs you more than you

think it should there is scope for improving its lsquovaluersquo into it This leads us on to another

useful way of looking at lsquovaluersquo Value is the least cost that can accomplish reliably a

function or a service This implies that in achieving reduced cost the quality and

performance of the item are maintained It follows therefore that value analysis is a

technique which builds ldquoValuersquo into an item Value can also be defined as that

combination of quality efficiency price and service which ensures the ultimate economy

and satisfaction of the purchaser Value Analysis can be understood as a technique which

helps everyone to determine this combination It can be seen therefore that several

components make up lsquoValuersquo There is value arising from the function or end use of an

item and from its ability to perform a useful function reliable There is the subjective

aspect of value in terms of esteem or prestige value or artistic value for example the

extra chrome 63 and styling used to sell automobiles or the neck-tie or diamond ring you

may wear Again there is the cost value made up of the material and labour costs

overheads and any other costs incurred in producing the item However in the popular

mind this is closely associated with esteem value as there is a mistaken belief that

because something costs more it is worth more Finally there is the resale or exchange

value which may be taken as the ability to part with money for possessing a particular

product In addition we have place value with regard to the usefulness of a product at a

particular place

VARIOUS VALUES CONSIDERED BY VALUE ANALYSEE

1) Huge or functional Value-

It is due to the characteristic quality attributes property of the product by virtue of

which the product performs intended function most satisfactorily with minimum

maintenance

2) Aesthetic Value-

It is due to characteristic attributes property quality because of which product becomes

attractive elegant looking creates sales appeal color shade style texture etc

3) Exchange Value-

It is in terms of the amount of any other commodity that can be obtained in exchange of

the commodity under consideration It depends on time and place

4) Esteem Value-

It is due to special characteristics some manufacturers enjoy customer goodwill and

historical prestige

5) Cost Value-

It is the total of all the costs incurred to manufacture a product ie Unnecessary cost due

to

sect Bad product design

sect Inefficient manufacturing method

sect Inefficient manufacturing processes

sect Lack of Standardization

sect Choose of wrong machine and tools

sect Bad Layout

sect Bad working conditions

sect Accidents to the worker

sect Machine breakdown

sect Bad quality Raw material

sect Lack of training to the workers

sect Excessive variety of products

sect Frequent changes in product design

sect Improper material handling

sect Defective packaging of product

sect Waiting

sect Searching

sect Bad house keeping etc

Benefits of Value Analysis

VA is an effective problem solving and quality assurance tool that can facilitate Caltrans

goals to maximize Safety Mobility Delivery Stewardship and Service VA studies

should be considered to

1048707 Meet or exceed standards and safety objectives

1048707 Foster a team approach to problem solving and project development

1048707 Improving a projectrsquos performance while maximizing quality

1048707 Identify and develop strategies to mitigate or avoid risks and the

associated costs

1048707 Identify opportunities which promote Context Sensitive Solutions

1048707 Validate projectrsquos scope need and purpose and baseline design

APPLICATION OF VALUE ANALYSIS

Value analysis can be applied universally ie to everything ndash materials methods

processes services etc where it is intended to bring about economics One should

naturally start with items where the maximum annual saving can be achieved This

immediately suggests that items whose total annual consumption in Rupees is high

should receive top priorities in the application of Value Analysis In the same manner

scarce materials imported materials or those difficult to obtain should also receive the

attention of the value analyst Bearing this in mind Value Analysis can be systematically

applied to categories of items such as those listed below in order to bring about

substantial cost reduction

1 Capital goods ndash plant equipment machinery tools and appliances

2 Raw and semi-processed material including fuel

3 Sub-contracted parts components sub-assemblies etc

4 Purchased parts components sub-assemblies etc

5 Maintenance repairs and operational items

6 Finishing items such as paints oils varnishes etc

7 Packing materials and packaging

8 Printing and Stationery items

9 Miscellaneous items of regular consumptions

10 Power water supply compressed air steam and other utilities

(services) and

11 Materials handling and transportation costs

As mentioned earlier items where the saving can be substantial should obviously

be taken up first Also items which are imported or difficult to obtain and monopoly

items should receive high priority

However even if no economy can be effected immediately by Value Analysis on any

particular item then usefulness of the technique should not be forgotten altogether The

item should be taken up again for value analysis after six months or a year the period

being dictated by the findings of the investigation New ideas may come to your mind at

some other time Also it should be noted that the conditions in the market keep on

changing fast and new materials new suppliers and new processes come into existence

rapidly as a result of phenomenal technological progress taking place at present A

frequent and systematic review of the items already value analyzed with advantage may

result in further economies

ORGANISATION FOR VALUE ANALYSIS

Value analysis is a staff function like for instance Industrial Engineering and should be

organized as much It should be directly under a high-ranking officer from the Senior

Management of an undertaking This is necessary because Value Analysis concerns all

departments and the analyst must have access to them and to their records performance

costs etc Depending upon the size of the undertaking and its scale of operations there

can be a Central Value Analysis Cell to co-ordinate the work of individual analysts

attached to the design purchase production and engineering departments Where there is

only one Value Analyst he may be attached to the Industrial Engineering Department

or to the Purchase Department

Value Analysis is essentially a team effort What particular items to be taken up for value

analysis and what action is to be taken is usually decided by a small committee

comprising representatives from the Design Production Purchase and Accounts

Departments Any other departmental representative can be coopted if and when

necessary

It is the Purchase Manager (or Material Manager) who has to initiate action convene

meetings at regular intervals and see that substantial results are obtained A large share

of the initial phase of the Value Analysis work will be done by the Purchase Manager or

by other departments at his instance It is his responsibility to seek the maximum value

when a product requirement comes upto the point of purchase It is his duty to challenge

wasteful and avoidable costs inherent in the items he is asked to buy It is therefore

inevitable that a large part of whatever Value Analysis work is done is initiated by the

Purchase Manager

WHEN VALUE ANALYSIS

A product goes through 3 stages (1) Developmental (2) Growth and (3) Maturity before

being out of date Consider now the design efforts put on a product At developmental

stages the design effort is the maximum At the growth stage the effort is much less and is

mainly modifications and changes At maturity stage hardly any design attention is

needed The value of the product slowly increases in development and growth stages as

more features are added and desired changes and modifications are effected At maturity

stage the value increases to peak and then slowly starts reduction because of competition

change of customer tastes and other factors till the product falls out and becomes out of

date It is this stage where value analysis can still enhance the value by cost reduction

and lengthen the Maturity period of a product Thus when the design effort is diverted to

other products it is the time for value analysis to be undertaken The success of value

analysis for one product of course be made use of in the design of other products by

development wing

DIFFERENCE BETWEEN VALUE ANLAYSIS AND VALUE ENGINEERING

VALUE VALUE

ANALYSIS ENGINEERING

Indicates application on the product that is into Indicates application on the product at its

manufacturing design stage

All factors come together including workers It is always done by a specific product

subcontractors engineers to make a team with total design (engineers )team

experience and knowledge

It may change the present stage of the product The changes are executed

at the initial stages only

or operation

It is worked out mostly with help of knowledge It requires specific

technical knowledge

and experience

VALUE ANALYSIS JOB PLAN

Several versions of the VA Job Plan can be found in different literature Some give file

others six and yet many other seven phases It is the systematic approach which is more

important to achieve the desired objectives The phases of VA Job Plan are as follows

SELECTION amp ORIENTATION

ANALYSIS

RECORDING IDEAS

SPECULATION

INVESTIGATION

RECOMMENDATION

IMPLEMENTATION

1) SELECTION amp - to select those problems areas ORIENTATION where a potential for

net higher Savings is expected - use the common paretorsquos ABC analysis - general scope

restrictions and aims of the study is defined

2) ANALYSIS - to examine the data at a coordinated syndicate meeting - to appoint a

secretary to record the minutes - to apply the Tests for Value - to propose further actions

3) RECORDING IDEAS - the secretary writes clearly the minutes of the analysis

meeting

and circulates them to syndicate members - it includes the agenda for the next meeting

4) SPECULATION - to hold additional syndicate 64 meetings in order to discuss the

ideas analysed and any new information obtained - to speculate upon practical measures

for reducing costs and increasing value

5) INVESTIGATION - to investigate suggestions for reducing costs and to make them

practical and acceptable - to obtain definite prices and costs in order to estimate savings

accurately

6) RECOMMENDATION - recommended practical savings to management for

implementing - to present the recommendations as a comprehensive report - to appoint a

member to act as an implementation consultant

7) IMPLEMENTATION - to decide on future plans for the company for which the

authority of the management is needed - to implement the recommendations acceptable to

the management

The value of a function can be increased by four methods

1 Decrease the cost while ensuring the same level of performance

2 Enhance the performance at the same cost

3 Decrease the cost and increase the performance

4 Increase both performance and cost ensuring that performance increases more than

the increment in the cost









only one Value Analyst he may be attached to the Industrial Engineering Department or

to the Purchase Department Value Analysis is essentially a team effort What particular

items to be taken up for value analysis and what action is to be taken is usually decided

by a small committee comprising representatives from the Design Production Purchase

and Accounts Departments Any other departmental representative can be coopted if and

when necessary It is the Purchase Manager (or Material Manager) who has to initiate

action convene meetings at regular intervals and see that substantial results are obtained

A large share of the initial phase of the Value Analysis work will be done by the

Purchase Manager or by other departments at his instance It is his responsibility to seek

the maximum value when a product requirement comes upto the point of purchase It is

his duty to challenge wasteful and avoidable costs inherent in the items he is asked to

buy It is therefore inevitable that a large part of whatever Value Analysis work is done

is initiated by the Purchase Manager

VALUE ENGINEERING

Value engineering is the term applied to value analysis done the design and prototype

stage of a product The potentials of saving are a more in case value analysis is done at

design stage Other advantages is that any changes at this stage are less costly than to

effect the same at a latter stage when the production is in full swing There are a few

limitations however on value engineering work At the design and proto-type stage the

time is rather short since a company wants to put a new product in the market before any

of its competitors can set in and value engineering will have a very short time to apply

their techniques Evaluation of the value at this stage becomes difficult in absence of any

customer reaction and opinion

WHEN VALUE ANALYSIS













development wing

CASE STUDY

ldquoCost Reduction of a product throughValue Analysis amp Value Engineeringrdquo

Introduction

The current business scenario is very demanding with a continuous demand from the

market forces to reduce the product price The pricing as demanded by the market forces

the businesses to reduce product development and manufacturing costs to remain

competitive Manufacturing costs of a product can be broadly categorized in the

following heads

bull Raw material

bull Labor

bull Process that is technology driven

Product engineers are constantly faced with the following challenges

bull Reduce production cost

bull Reduce the material cost

Value Analysis amp Value Engineering (VAVE) methods are very important and useful

in driving down the product cost which helps companies retain market share and sustain

their profitability

At QuEST we uncover those projects of our customer which have a good potential to

improve profits QuEST has a team of engineers who specialize in VAVE to achieve cost

reductions of products

A typical VAVE exercise could reduce the total cost of a product by 5-40 The typical

elements of a VAVE exercise are as follows

bull Information Understand the current state of the project and constraints requirements

bull Function Analysis Understand the project from a functional perspective what must

the project do rather than how the project is currently conceived The function describes

what something does and function analysis is the process where the team reviews the

projects functions to determine those that could be improved Function Analysis can be

enhanced through the use of a graphical mapping tool known as the Function Analysis

System Technique (FAST) FAST applies intuitive logic to test functions create a

common language for a team and test the validity of the functions in the project

bull Creative Generate a quantity of ideas related to other ways to perform the functions

bull Evaluation Reduce the quantity of ideas that have been identified to a short list of

ideas with the greatest potential to improve the project and meet the Value Engineering

study objective

bull Development Further analyze and develop the short list of ideas and develop those

with merit into value alternatives

bull Presentation Phase Implementation Present value alternatives to management team

and other project stakeholders or decision makers

5 Typical Flowchart

An example

The approach to a real life problem and the methodology followed by QuEST to reduce

the product cost is demonstrated through the following example

51 Background and Problem statement

One of the customers of QuEST is a leading manufacturer of industrial components for

control applications This unit is very popular in high end applications

The customer wanted to develop a unit that not only costs 25 less but whose

performance exceeds that of the existing product

52 Challenges

bull Redesign of parts considering minimum impact on existing tooling

bull Redesigned modules should enable field replacement

bull LogicSoftware compatibility with field units

bull Ease of assembly

bull Design must match existing housings and connectors

bull No modification of standardized parts in the product family

54 Value Engineering Study

QuEST team captured the detailed requirements of the project from the Voice of

Customer (VOC) during the kick off meeting It helped to identify areas where cost could

be reduced and which functions needed to be improved to provide competitive advantage

The requirements were listed and prioritized as primary and secondary These prioritized

ldquoNeeds and Wantsrdquo were ranked Quality Function Deployment (QFD) tool was used to

prioritize the ldquoHowrsquosrdquo that affected the ldquoNeeds and Wantsrdquo of the customer The

customer also actively participated in this exercise Vital few options were prioritized

from the trivial many Design requirement ranks were sorted in descending order and

those which addressed 70 of the requirements were selected Thus CTQs or

performance characteristics were identified and agreed upon with the customer The team

then carried out the lsquoABC analysisrsquo on the BOM Components with more than 80 of the

product cost were identified

CTQ (Critical to Quality)

Matches basic function and performance characteristics

One to one module replacement

Same Outer dimensions for the modules

LogicSoftware compatibility with field units

No modification in standardized parts in Product family

Design must match existing housings and connectors

Reduce the cost of direct material by 25 or more

Next the VAVE team laid down the Functions of each item of the product for Value

analysis

This enhanced the understanding of the product functionality This also helped to

understand the Form Fit amp Functions of each of the items amp sub-assemblies With this

study the VAVE team had divided the main project into many sub-projects with respect

to subassemblies to have diversified results for subassemblies and parts This function

diagram threw up many questions to the team which enabled them to come up with a

number of new ideas

bull How the Product is sized What design parameters were employed for this product

bull Focus on high cost components and challenge by asking ldquowhy do we need this part and

what value does it provide to our customerrdquo

bull How else we can designmake it

bull Understand design change impact on subassembly or overall product

bull System level appraisal is desirable to consider different methods or concepts for

delivering the same or better value

bull Component level assessment is lookedfor to consider alternate materials processes and

more efficient designs

bull One of the guiding principles of lean design is to ldquoeliminate or standardizerdquo Can a part

be combined with others and thereby be eliminated If not can it be made common with

other parts in the product

without compromising FFF (Form Fit amp Function) This typically provides quick savings

bull Identify and capture all cost reduction opportunities

The team applied the concept of Pugh Matrix for system amp component level Rankings

were discussed with team collated and analyzed for choosing the optimum concepts

Next FMEA was conducted on the selected concepts to further fine tune the results

Failure modes with high Risk Priority Number (RPN) were identified Failure modes

were prioritized and communicated to the designers to address these risks Alternate

solutions and improvement were discussed and finalized 3D solid modeling was done to

visualize the product It also helped to simulate the active and passive conditions of the

product Components were standardized to reduce the part count Simulation and testing

against the CTQs helped to optimize the product for performances Design calculations

were performed to verify the design for gears springs snaps in the plastic members etc

Also the DFMA was conducted on various aspects of the design amp CTQs A detailed

Differential Cost Analysis was conducted with the customer and their suppliers The

result showed significant cost reduction of each part of the product It was observed that

the costs were reduced mainly due to alternate materials usage the process and by

eliminationreplacement of a part by integrating with the adjacent one

Costs of direct material were compared for the original and new design A significant

38 of savings in direct material cost was realized by this project The team also

achieved a reduction of 34 in the part count This has resulted in many intangible

benefits like savings in procurement costs Inspection costs Inventory cost

transportation reduced variation reduced assembly costs amp Time etc

6 Conclusion

QuEST lsquoValue Engineering teamrsquo achieved 38 of savings in direct material cost and

reduced part count by 34 in this project Having a Paint brush does not make one a

painter While we strive to implement the different VAVE tools we realize that the years

of experience in product design amp development is very essential to achieve the desired

objective VAVE tools and techniques if applied properly with trained amp experienced

resources will provide an extremely powerful suite to improve productivity lower cost

improve quality and also shorten the time-to-market

Acronym

VAVE Value Analysis amp Value Engineering

FAST Function Analysis System Technique

VOC Voice of Customer

QFD Quality Function Deployment

CTQ Critical To Quality

BOM Bill of Material

FFF Form Fit amp Function

FMEA Failure Mode and Effects Analysis

DFMA Design for Manufacturing and Assembly

CONCLUSION

Value analysis is a technique with immense possibilities and systematically employed it

can achieve great economies and increased efficiency Although good results have been

obtained in several individual cases in some industries only a large scale and systematic

application of this technique in all industries and in defence production can result in

substantial economies on a national scale

This valuable technique if systematically employed promises rich dividends and

among other things enables greater use of indigenous raw materials and equipment by

import substitution It is therefore of special significance to a developing country like

India which has adopted a programme of rapid industrialization in the face of paucity of

foreign exchange and other handicaps

No Company can take seriously Total Quality Management without operating a

formalized system of Value Analysis No business that wishes to become lean will ever

succeed if product designs remain unchanged because no amount of continuous

improvement in the manufacturing process can release the costs of a poor design or a

design that has not changed for many years

However poor product reviews or an informal process that is restricted to only to a

review of the design by the design department will yield only limited success in

eliminating lsquoavoidable costsrsquo These efforts will miss the many opportunities to make

manufacturing and assembly easier quicker less complex and less costly Thus margins

will not be improved significantly because only a small part of the total process has been

managed correctly As such this type of superficial activity will not generate increased

profit and the revenue stream that will be needed to finance new products and new

investments in technology A properly managed and effective VA process will easily

repay the time invested by managers over the life of the product and a truly effective

process will yield significant competitive advantage for companies that exploit it For

businesses that supply other organizations the ability to design and redesign products

opens the possibility of true meaningful profitable and long-term partnership with a

customer Each progressive step that secures a greater design responsibility for the

supplier will in parallel make the supplier increasingly more important to the

competitive advantage of the customer organization and will increase the benefits to both

companies In an environment where budgets are often reduced the market determines

the selling price of a product and consumers demand a greater variety of products VA is

one technique that companies cannot afford to ignore because for every day that the

technique is not employed is money that will leave the business forever Money that

cannot be recovered once the product has been sold

The benefits of a formalized and effective VA process are therefore many and include

some key sources of competitive advantage for any business including

bull Speed of getting an effective design into the market without problems and through

error-free manufacturing and assembly processes

bull Reliability and durability of the product in the market which enhances the reputation

of the product and the company

bull Low overall cost which enhances product margin and also releases finances within the

business as well as allowing the ability to engage in price competition

bull Enhanced quality and compliance with minimal costs of warranty that allows a

company to differentiate its products based this perceived quality (of use and esteem)

bull Differentiation by creating product designs as platforms which facilitate lsquolast

minutersquo or late configuration of the product to meet customer orders regional preferences

or any other geographical constraint (such as product laws of a certain region)

bull Finally the VA process satisfies the primary goal of any business ndash to make a profit

and survive

As a process VA is very robust and offers tangible financial and people-based benefits

The process eliminates unnecessary weight it removes unnecessary costs and importantly

it allows people to understand products processes and continuous improvement Very

few modern management techniques allow this form of participation and involvement

and even fewer have such a profound impact on the bottom line of the businessrsquos trading

accounts For companies that do not employ this technique there is one very frightening

thought that for every product that the company makes one or two may be bought by

competitors and subjected to value analysis Therefore these competitors can easily

recover the ground lost to any lsquobreakthroughrsquo new product with half the effort and half

the expense of starting from the beginning These competitors can also take the new

product and lsquostreamlinersquo it to offer maximum value at minimum cost thereby creating a

new product without any real expense This is perhaps the most frightening though of all

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip


Value Management

Value Assurance




JOB PLANS


INFLUENCE OF SELECTION OF TIME ON

Ship Builders

Railways amp Heavy Vehicles Mfr

Electrical amp Communication Machinery Mfr

Fabrication Industries

Process Industries

Metal Fibre Food Chemical amp Steel

Architectural amp Construction Firms and also

All Service Sectors

DEFINITION

VALUE ENGINEERING

VE is an analytical Step-wise organised creative team-approach designed to examine all

the facets of cost amp functions of a PRODUCTEQUIPMENT SYSTEM to identify and

eliminate unnecessary costs which are incurred in

ldquo QUALITY

ldquo APPEARANCE

ldquo LIFERELIABILITY

ldquo CUSTOMER FEATURE


Over a period many other terms or methodologies have evolved based on the same

functional approach but laying emphasis on some specific type of objectives Some of

these terms do not even use the term ldquoValuerdquo For example

Value Management

Value Assurance






Value = -----------

Cost


How can we make it

for less

What does it do

What must it do







Functional Approach

Team Approach

Creative Approach


JOB PLANS








Evaluation of ideas









Inspire team Work

Work on specifics

Overcome roadblocks


2 INFORMATION PHASE

Secure the facts

Determine the costs


3 FUNCTION PHASE



4 CREATIVE PHASE



5 EVALUATION PHASE










Present facts

Present costs






















and


-Decreasing costs

-Increasing profits

-Improving quality


-Saving time

-Solving problems











features




Value Analysis



function





Worth to you

Value = ------------------

Price you pay























particular place





maintenance

2) Aesthetic Value-



3) Exchange Value-



4) Esteem Value-


historical prestige

5) Cost Value-


to






sect Bad Layout










sect Waiting

sect Searching










associated costs























(services) and




























necessary








Purchase Manager

WHEN VALUE ANALYSIS













development wing


VALUE VALUE









or operation


technical knowledge

and experience






ANALYSIS

RECORDING IDEAS

SPECULATION

INVESTIGATION

RECOMMENDATION

IMPLEMENTATION







meeting







accurately






the management




























VALUE ENGINEERING










WHEN VALUE ANALYSIS













development wing

CASE STUDY


Introduction





following heads

bull Raw material

bull Labor







their profitability

















study objective





5 Typical Flowchart

An example








52 Challenges





























analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS








Value = -----------

Cost


How can we make it

for less

What does it do

What must it do







Functional Approach

Team Approach

Creative Approach


JOB PLANS








Evaluation of ideas









Inspire team Work

Work on specifics

Overcome roadblocks


2 INFORMATION PHASE

Secure the facts

Determine the costs


3 FUNCTION PHASE



4 CREATIVE PHASE



5 EVALUATION PHASE










Present facts

Present costs






















and


-Decreasing costs

-Increasing profits

-Improving quality


-Saving time

-Solving problems











features




Value Analysis



function





Worth to you

Value = ------------------

Price you pay























particular place





maintenance

2) Aesthetic Value-



3) Exchange Value-



4) Esteem Value-


historical prestige

5) Cost Value-


to






sect Bad Layout










sect Waiting

sect Searching










associated costs























(services) and




























necessary








Purchase Manager

WHEN VALUE ANALYSIS













development wing


VALUE VALUE









or operation


technical knowledge

and experience






ANALYSIS

RECORDING IDEAS

SPECULATION

INVESTIGATION

RECOMMENDATION

IMPLEMENTATION







meeting







accurately






the management




























VALUE ENGINEERING










WHEN VALUE ANALYSIS













development wing

CASE STUDY


Introduction





following heads

bull Raw material

bull Labor







their profitability

















study objective





5 Typical Flowchart

An example








52 Challenges





























analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS




JOB PLANS








Evaluation of ideas









Inspire team Work

Work on specifics

Overcome roadblocks


2 INFORMATION PHASE

Secure the facts

Determine the costs


3 FUNCTION PHASE



4 CREATIVE PHASE



5 EVALUATION PHASE










Present facts

Present costs






















and


-Decreasing costs

-Increasing profits

-Improving quality


-Saving time

-Solving problems











features




Value Analysis



function





Worth to you

Value = ------------------

Price you pay























particular place





maintenance

2) Aesthetic Value-



3) Exchange Value-



4) Esteem Value-


historical prestige

5) Cost Value-


to






sect Bad Layout










sect Waiting

sect Searching










associated costs























(services) and




























necessary








Purchase Manager

WHEN VALUE ANALYSIS













development wing


VALUE VALUE









or operation


technical knowledge

and experience






ANALYSIS

RECORDING IDEAS

SPECULATION

INVESTIGATION

RECOMMENDATION

IMPLEMENTATION







meeting







accurately






the management




























VALUE ENGINEERING










WHEN VALUE ANALYSIS













development wing

CASE STUDY


Introduction





following heads

bull Raw material

bull Labor







their profitability

















study objective





5 Typical Flowchart

An example








52 Challenges





























analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS



2 INFORMATION PHASE

Secure the facts

Determine the costs


3 FUNCTION PHASE



4 CREATIVE PHASE



5 EVALUATION PHASE










Present facts

Present costs






















and


-Decreasing costs

-Increasing profits

-Improving quality


-Saving time

-Solving problems











features




Value Analysis



function





Worth to you

Value = ------------------

Price you pay























particular place





maintenance

2) Aesthetic Value-



3) Exchange Value-



4) Esteem Value-


historical prestige

5) Cost Value-


to






sect Bad Layout










sect Waiting

sect Searching










associated costs























(services) and




























necessary








Purchase Manager

WHEN VALUE ANALYSIS













development wing


VALUE VALUE









or operation


technical knowledge

and experience






ANALYSIS

RECORDING IDEAS

SPECULATION

INVESTIGATION

RECOMMENDATION

IMPLEMENTATION







meeting







accurately






the management




























VALUE ENGINEERING










WHEN VALUE ANALYSIS













development wing

CASE STUDY


Introduction





following heads

bull Raw material

bull Labor







their profitability

















study objective





5 Typical Flowchart

An example








52 Challenges





























analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS























and


-Decreasing costs

-Increasing profits

-Improving quality


-Saving time

-Solving problems











features




Value Analysis



function





Worth to you

Value = ------------------

Price you pay























particular place





maintenance

2) Aesthetic Value-



3) Exchange Value-



4) Esteem Value-


historical prestige

5) Cost Value-


to






sect Bad Layout










sect Waiting

sect Searching










associated costs























(services) and




























necessary








Purchase Manager

WHEN VALUE ANALYSIS













development wing


VALUE VALUE









or operation


technical knowledge

and experience






ANALYSIS

RECORDING IDEAS

SPECULATION

INVESTIGATION

RECOMMENDATION

IMPLEMENTATION







meeting







accurately






the management




























VALUE ENGINEERING










WHEN VALUE ANALYSIS













development wing

CASE STUDY


Introduction





following heads

bull Raw material

bull Labor







their profitability

















study objective





5 Typical Flowchart

An example








52 Challenges





























analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS






Value Analysis



function





Worth to you

Value = ------------------

Price you pay























particular place





maintenance

2) Aesthetic Value-



3) Exchange Value-



4) Esteem Value-


historical prestige

5) Cost Value-


to






sect Bad Layout










sect Waiting

sect Searching










associated costs























(services) and




























necessary








Purchase Manager

WHEN VALUE ANALYSIS













development wing


VALUE VALUE









or operation


technical knowledge

and experience






ANALYSIS

RECORDING IDEAS

SPECULATION

INVESTIGATION

RECOMMENDATION

IMPLEMENTATION







meeting







accurately






the management




























VALUE ENGINEERING










WHEN VALUE ANALYSIS













development wing

CASE STUDY


Introduction





following heads

bull Raw material

bull Labor







their profitability

















study objective





5 Typical Flowchart

An example








52 Challenges





























analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS












particular place





maintenance

2) Aesthetic Value-



3) Exchange Value-



4) Esteem Value-


historical prestige

5) Cost Value-


to






sect Bad Layout










sect Waiting

sect Searching










associated costs























(services) and




























necessary








Purchase Manager

WHEN VALUE ANALYSIS













development wing


VALUE VALUE









or operation


technical knowledge

and experience






ANALYSIS

RECORDING IDEAS

SPECULATION

INVESTIGATION

RECOMMENDATION

IMPLEMENTATION







meeting







accurately






the management




























VALUE ENGINEERING










WHEN VALUE ANALYSIS













development wing

CASE STUDY


Introduction





following heads

bull Raw material

bull Labor







their profitability

















study objective





5 Typical Flowchart

An example








52 Challenges





























analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS




to






sect Bad Layout










sect Waiting

sect Searching










associated costs























(services) and




























necessary








Purchase Manager

WHEN VALUE ANALYSIS













development wing


VALUE VALUE









or operation


technical knowledge

and experience






ANALYSIS

RECORDING IDEAS

SPECULATION

INVESTIGATION

RECOMMENDATION

IMPLEMENTATION







meeting







accurately






the management




























VALUE ENGINEERING










WHEN VALUE ANALYSIS













development wing

CASE STUDY


Introduction





following heads

bull Raw material

bull Labor







their profitability

















study objective





5 Typical Flowchart

An example








52 Challenges





























analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS





associated costs























(services) and




























necessary








Purchase Manager

WHEN VALUE ANALYSIS













development wing


VALUE VALUE









or operation


technical knowledge

and experience






ANALYSIS

RECORDING IDEAS

SPECULATION

INVESTIGATION

RECOMMENDATION

IMPLEMENTATION







meeting







accurately






the management




























VALUE ENGINEERING










WHEN VALUE ANALYSIS













development wing

CASE STUDY


Introduction





following heads

bull Raw material

bull Labor







their profitability

















study objective





5 Typical Flowchart

An example








52 Challenges





























analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS





























necessary








Purchase Manager

WHEN VALUE ANALYSIS













development wing


VALUE VALUE









or operation


technical knowledge

and experience






ANALYSIS

RECORDING IDEAS

SPECULATION

INVESTIGATION

RECOMMENDATION

IMPLEMENTATION







meeting







accurately






the management




























VALUE ENGINEERING










WHEN VALUE ANALYSIS













development wing

CASE STUDY


Introduction





following heads

bull Raw material

bull Labor







their profitability

















study objective





5 Typical Flowchart

An example








52 Challenges





























analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS










Purchase Manager

WHEN VALUE ANALYSIS













development wing


VALUE VALUE









or operation


technical knowledge

and experience






ANALYSIS

RECORDING IDEAS

SPECULATION

INVESTIGATION

RECOMMENDATION

IMPLEMENTATION







meeting







accurately






the management




























VALUE ENGINEERING










WHEN VALUE ANALYSIS













development wing

CASE STUDY


Introduction





following heads

bull Raw material

bull Labor







their profitability

















study objective





5 Typical Flowchart

An example








52 Challenges





























analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS




VALUE VALUE









or operation


technical knowledge

and experience






ANALYSIS

RECORDING IDEAS

SPECULATION

INVESTIGATION

RECOMMENDATION

IMPLEMENTATION







meeting







accurately






the management




























VALUE ENGINEERING










WHEN VALUE ANALYSIS













development wing

CASE STUDY


Introduction





following heads

bull Raw material

bull Labor







their profitability

















study objective





5 Typical Flowchart

An example








52 Challenges





























analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS








ANALYSIS

RECORDING IDEAS

SPECULATION

INVESTIGATION

RECOMMENDATION

IMPLEMENTATION







meeting







accurately






the management




























VALUE ENGINEERING










WHEN VALUE ANALYSIS













development wing

CASE STUDY


Introduction





following heads

bull Raw material

bull Labor







their profitability

















study objective





5 Typical Flowchart

An example








52 Challenges





























analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS








the management




























VALUE ENGINEERING










WHEN VALUE ANALYSIS













development wing

CASE STUDY


Introduction





following heads

bull Raw material

bull Labor







their profitability

















study objective





5 Typical Flowchart

An example








52 Challenges





























analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS











VALUE ENGINEERING










WHEN VALUE ANALYSIS













development wing

CASE STUDY


Introduction





following heads

bull Raw material

bull Labor







their profitability

















study objective





5 Typical Flowchart

An example








52 Challenges





























analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS








development wing

CASE STUDY


Introduction





following heads

bull Raw material

bull Labor







their profitability

















study objective





5 Typical Flowchart

An example








52 Challenges





























analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS



CASE STUDY


Introduction





following heads

bull Raw material

bull Labor







their profitability

















study objective





5 Typical Flowchart

An example








52 Challenges





























analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS














study objective





5 Typical Flowchart

An example








52 Challenges





























analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS



5 Typical Flowchart

An example








52 Challenges





























analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS



52 Challenges





























analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS





analysis






number of new ideas



































6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS





















6 Conclusion








Acronym










CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS











CONCLUSION


















































and survive















Value Management

Value Assurance




JOB PLANS




















































and survive















Value Management

Value Assurance




JOB PLANS










Value Management

Value Assurance




JOB PLANS



value analysis and value engineering

Documents

match existing

slowly starts

va job plan

avoidable

individual

effective

direct material

design efforts