Value Analysis Presentation

8/7/2019 Value Analysis Presentation

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Value Analysis & Flexible

Project Appraisal

Presented By

M H Nadeem (F-10)

Sandeep Jadhav (F- )



Cost

Cost control

Cost reduction



Cost

Control

It is preventive

Within specified deviation limit isacceptable.



Cost Reduction

Corrective :

Continuous:

Process, procedures, organization &Methods are continuously challenged.



Value A Product may have different values

(Importance, Worth) for different

customers.

Value : Value is defined as a fair return or

equivalent in goods, services, or moneyfor something exchanged.



Value Analysis Value: basically refers to a high level of

performance, capability, emotional appeal,

style, etc. relative to its cost.

It can also be expressed as maximizingthe function of a product relative to its

cost:Value = Function/Cost



Value Analysis Basic Function

Which makes product sell

Cannot change

Supporting Function

the manner in which the basic functions were

implemented. can be modified or eliminated



Value Analysis Value = Function/Cost

As VA progressed to larger and morecomplex products and systems, it evolvedinto the "Function Analysis SystemTechnique" (FAST)



Functions Use AND Aesthetic

Primary AND Secondary

Higher order (why) AND Lower order(how)



Functions From a product design point of view, products that are

perceived to have high value, first address the basic function'sperformance and stress the achievement of all of the

performance attributes. Once the basic functions are satisfied, the designer's then

address the secondary functions necessary to attract customers.

Secondary functions are incorporated in the product as featuresto support and enhance the basic function and help sell the

product. The elimination of secondary functions that are not very

important to the customer will reduce product cost andincrease value without detracting from the worth of theproduct.



FAST Function Analysis System Technique

- use boxes

- these boxes represent function name

- a function is related to its right functionwith the question ³HOW´

- a function is related to its left functionwith the question ³Why´



Function µWhy¶ this function

µHow¶ this function



Example : A teacher teaching students using

a projector.



FAST flow when



Scope line The right scope line is drawn to the left of a function that is an acceptable

interface to the product or service under consideration-a suitable input tothe system. Left scope line will satisfy partially the fn left to it.



Steps for cost ReductionStep 1: A list of components is created.

Step 2: The cost of each component is determined.

Once the costs have been determined for each component or sub-assembly in relation to the function(s) they support, the total cost of the component or sub-assembly is determined.

The total product cost is calculated by summing the totals for allcomponents. This total is then used to calculate the percentage of the total cost that each part represents.

For example, if a component costs $0.27 and the total cost of theproduct is $4.90, the component represents 5.5% of the total cost.



Steps for cost Reduction

Step 3: The value of functions is considered.

(customer feedback).

If a certain function is not perceived to be valuable to thecustomer and the function is determined not to benecessary for reasons such as performance or reliability,

then that function(s) should be simplified or eliminated.



Steps for cost ReductionStep 4: The value of each component is

determined.

This step is one of the most difficult in the functionalvalue analysis because much of it is subjective and itrequires an estimate of the value as perceived by the

customer . If absolute evaluation is not possible then evaluation

based on comparison can also be employed.



Steps for cost ReductionStep 5: Alternatives that lead to reduced costs and/or

increased value are generated.

Once the existing product has been assessed, the next step is tofind design or component alternatives that serve to reduce costswithout risking value or increase value without adding cost.

The most ideal situation is to find alternatives that reduce costswhile adding value.

Step 6: The best option is selected.



ProjectC

ost Reduction CPM (Critical Path Method).

Time cost Relation ship.

Crash Cost

Crashed time

Cost slope



Time-C

ost Relationship It assumes that the time to perform any project

activity is depending on the amount of effort or

resources applied to it.

The Critical Path Method assumes that theestimated completion time for a project can be

shortened by applying additional resources:equipment, labor and capital to particular keyactivities.



Normal AndC

rashC

onditionNormal Condition

-How long the activity will take under normal workconditions.

-How much the Activity will cost.-This is the minimum cost.

Crash Condition

-Activity is crashed to consume minimum possible time.-Cost consumed to complete the activity in this time.-This is the maximum cost.



C

ost slope The cost slope shows by how much the

cost of the job would change if activities

were sped up or slowed down.



Project Activities



Critical Path

Hgyip



Non critical activities Critical Path: Start-A-B-C-D-E-G-H-I-K-L-

Q-R-S-U-V.

Activities in Non Critical Path Starting withhighest cost slope

T,P,V,F,J,O,N,M



Savings due to stretching non-critical activities

T(2weeks) = 2X50000

P(3weeks)=3X40000

V(2weeks)=2X35000 F(1week)=1X30000

J(2weeks)=2X25000

O(2weeks)=2X15000

N(1week)=1X10000

M(1week)=1X5000

Total Savings=415000



THANK YOU

Value Analysis Presentation

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