8/14/2019 Value AnalysisValue Engineering

1/3

O peration M anagement

Assignment-1

Explain:- Value Analysis/Value Engineering

Introduced in the present form after World WarII, in U.S.A.

Credited to Mr.L.D. Miles of General Electric.

Cost reduction Technique.

Aim: To achieve the required function at lowest cost.

Value Analysis( VA) refers to study of an existing product.

Value Engineering(VE) refers to study of a product at designstage i.e. before it is manufactored.

Value Engineering is an organized effort that employs functionalanalysis of systems, sub-systems, equipment, services and supplies toachieve the essential functions at the lowest life-cycle cost consistentwith required performance, reliability, quality and safety.

Value engineering is also referred to as " value management " or"value methodology " (VM), and " value analysis " (VA). VE is above all astructured problem solving process based on function analysisunderstanding something with such clarity that it can be described intwo words.

Value engineering is sometimes taught within the project management or industrial engineering as a technique in which thevalue of a systems outputs is optimized by crafting a mix of

performance (function) and costs. In most cases this practice identifiesand removes unnecessary expenditures, thereby increasing the valuefor the manufacturer and/or their customers .

Steps in VA/VE

1. Product Selection for V.A.

S ubmitted By:- Pratik Jain

{ 078 1563908}

M.B.ASec- AN.I.E

D ate:- 20 .01.2009

Tue sday

http://en.wikipedia.org/wiki/Project_managementhttp://en.wikipedia.org/wiki/Project_managementhttp://en.wikipedia.org/wiki/Industrial_engineeringhttp://en.wikipedia.org/wiki/Optimization_(mathematics)http://en.wikipedia.org/wiki/Project_managementhttp://en.wikipedia.org/wiki/Project_managementhttp://en.wikipedia.org/wiki/Industrial_engineeringhttp://en.wikipedia.org/wiki/Optimization_(mathematics)

8/14/2019 Value AnalysisValue Engineering

2/3

2. Information Gathering3. Defining the function of Product4. Exploring Alternatives5. Recommendations/presentation to top management6. Implementation7. Follow-up

Technique of VA/VE

VA/VE require creative thinking and speculation of new alternatives. This is achieved by:-

BRAINSTORMING SESSIONS OF MULTI-DISCIPLINARY TEAMS:

Where questions similar to following are considered:-

Eliminate?Modify?Use a standard part/product?Is it oversized?Is it over weight?Can an inferior material be used?Can the design be simplified?If you buy it from outside, will it cost less?Can the tolerances be increased?Can the function be performed by cheaper alternative? etc.

Difficulties/Hardwares in implementing VA/VE

Resistance to change

Lack of motivation

Lack of patience

Lack of knowledge about the construction & function of theproduct.

Difficult to get the Team to meet.

Lack of initiative.

Let someone else try it first attitude.

8/14/2019 Value AnalysisValue Engineering

3/3

It will not work in our Organisation. Etc.

Value Engineering Change Proposals (VECPs)

VECPs are formal proposals submitted by suppliers under existingcontracts that meet two basic requirements:

-- The VECPs implementation must be effected via modificationof the contract.-- The VECP must provide an overall cost savings to the federalgovernment

The purpose of the Value Engineering Change Proposal (VECP) Programis to incentivize the contractor to propose contract modifications whichreduce cost without reducing product or process performance. Twoaspects of the VECP make it unique in achieving its purpose: therequirement that the VECP result in a contract modification, and theincentive paid to the contractor for reducing costs.

=======================================================================