ME 7213INDUSTRIAL ENGINEERING

Value Engineering

Outline

Introduction

Value approach

Value analysis techniques

Value engineering

Value Control

Value Engineering

Value Engineering developed as a cost reductiontechnique in USA in 1947.

Value differs from both price and cost in the sensethat, it is the cost proportionate to the function.

An organized study of functions to satisfy the usersneeds with a quality product at the lowest life cyclecost through applied creativity.

Value = Desired Function (F)

Overall Costs (C)

VALUE

How we can improve the value?

To Increase Value

F

C

F

C

F

C

F

C

REDUCE INCREASE MAINTAIN

Value = Function

Cost

Function

What Is Function?

CategoriesPrimary Function

Secondary Function

Tertiary Function

Types of Values

Cost of Value

Use Value

Esteem Value

Exchange Value

Value Approach

It is an organized system dedicated to every effective meansof identifying and thus eliminating the unnecessary costs.

An unnecessary cost is one which neither adds to quality norto life or appearance.

Elements of Value Approach

Value Analysis

Value Engineering

Value Analysis

Introduction

Aims of Value AnalysisSimplify the product

Use new ,cheaper, better materials

Modify and improve the product design

Use efficient process

Reduce product cost

Increase the utility of the product by economical means

Save money or increase profit

Value Analysis Technique

Does it contribute value to the end product?

Is its cost proportionate to its function?

Can some of its features be combined or eliminated?

Would there be a better product?

Can a component be produced by less costly process?

Can one go for an available standard product/component?

Taking into account the quantity required, is the product beingmade with proper tools?

Does the product has reasonable selling price?

Can the product/component be procured at less cost from elsewhere?

Is anybody purchasing the product/component at lower rates?

Value Analysis Procedure

Identify the product (1)

Collect Relevant information (2)

Define different functions (3)

BLAST

Create different alternatives(4)

Critically evaluate the alternatives (5)

CREATE

Develop the best alternative (6)

Implement the alternative (7)

REFINE

Function Analysis System Technique Diagram

(FAST)

FAST Diagrams are used to prioritize the objectives orfunctions of the product. Once the objectives are prioritized we

can evaluate the options that would return the most value

based on predetermined value criteria

FAST Diagram

Desired Outcome: Creating a Mouse Free Living Area

Solution: Eliminate Mice

1. List Products and Services that satisfy Desired Outcome.

Create Virus

Use Cats

Kill Mice

Eliminate Food

FAST Diagram

List all functions in Verb Noun format and processes thatwould satisfy or produce each product or service in the

previous step.

Generate all functions, basic, secondary, support withoutregard to relationship.

Kill Mice

Trap Mice

Electrocute Mice

Shoot Mice

Gas Mice

Drown Mice

Use Snake

Poison Mice

FAST Diagram

Select each function from the previous step starting with whatyou believe to be the basic function.

Ask HOW this basic function might be accomplished.

KILL MICE POISON MICE

Spray PoisonInject PoisonStep on PoisonEat PoisonShoot Poison

HOW

Use Cat

Create Virus

Kill Mice

Eliminate Food

Trap Mice

Electrocute Mice

Shoot Mice

Gas Mice

Drown Mice

Use Snake

Poison Mice

Eliminate Mice

FAST Diagram

Continue to answer the HOW and place the answer directlyto the right.

Related functions that are at the same level, stack above orbelow the CRITICAL PATH

KILL MICE POISON MICE

Spray PoisonInject PoisonStep on PoisonEat PoisonShoot Poison

HOW

EAT POISON

Use Cat

Create

Virus

Kill Mice

Eliminate

Food

Trap Mice

Electrocute Mice

Shoot Mice

Gas Mice

Drown Mice

Use Snake

Poison Mice

Eliminate

Mice

Eat BaitDrink BaitSmell Bait

FAST Diagram

Continue to answer the HOW and place the answer

directly to the right.

Related functions that are at the same level, stack above orbelow the CRITICAL PATH

KILL MICEPOISON

MICE

Spray PoisonInject PoisonStep on PoisonEat PoisonShoot Poison

HOW

EAT

POISON

EAT

BAIT

ATTRACT

MOUSE

WHY

Attract MouseTrap Mouse

Eat BaitDrink BaitSmell Bait

Trap Mice

Electrocute

Mice

Shoot Mice

Gas Mice

Drown Mice

Use Snake

Poison Mice

FAST Diagram

18

KILL MICEPOISON

MICE

HOW

EAT

POISON

EAT

BAIT

ATTRACT

MOUSE

WHY

ELLIMINATE

MICE

Advantages

Faster cost reduction techniques

Requires little expenditure

Reduces production cost

Adds sales income of the product

Value Engineering

Application of the concept of value analysis at the design orpre-manufacture stage of the component part with a view to

cut down the unnecessary costs with out impairing the

function or utility of the product.

Six Step Value Engineering Job Plan

Information

Phase

Creativity

Phase

Evaluation

Phase

Planning

Phase

Reporting

Phase

Implementation

Phase

Clearly identify the problem(s) to be solved, and gather information on the background, functions and

requirements of the product, process, or system.

Brainstorm ideas on how to improve the high cost, broken, or inadequately performed key functions.

Screen ideas for acceptance, score remaining ideas on a scale and group ideas into categories. Develop

design scenarios, and selection criteria. Rate and

rank ideas.

Plan how to sell ideas to management, identify key recommendations, plan management presentation.

Give oral presentation to management, or develop written report.

Get management approval for go-ahead, make management plan, make assignments, implement,

follow-up.

VALUE ANALYSIS vs. VALUE ENGINEERING

VALUE ANALYSIS

Indicates application on the product that is into manufacturing.

All factors come together including workers, subcontractors, engineers to make a team with total experience and knowledge

VALUE ENGINEERING

Indicates application on the product at its design stage.

It is always done by a specific product design (engineers) team.

VALUE ANALYSIS vs. VALUE ENGINEERING

VALUE ANALYSIS

It may change the present stage of the product or operation

It is worked out mostly with help of knowledge and experience

VALUE ENGINEERING

the changes are executed at the initial stages only.

It requires specific technical knowledge.

Value Control Controlling value of a. product, either by reducing

its cost for the given function or by increasing its

utility for the given cost