VALUE ANALYSIS/VALUE ANALYSIS/

VALUE ENGINEERINGVALUE ENGINEERING

Value analysis & Value Value analysis & Value EngineeringEngineeringValue analysis & Value engineering can Value analysis & Value engineering can

be defined as an organised approach to be defined as an organised approach to provide the required function at the provide the required function at the lowest cost consistent with specific lowest cost consistent with specific performance, quality & reliabilityperformance, quality & reliability

Value analysis pertains to the existing Value analysis pertains to the existing product & services whereas value product & services whereas value engineering is concerned to the design of engineering is concerned to the design of new products new products

Features of value analysisFeatures of value analysisValue analysis team is a cross-functional Value analysis team is a cross-functional

teamteamThe value can be increased in three waysThe value can be increased in three ways

Retain the value but reduce the costRetain the value but reduce the costRetain the cost but increase the valueRetain the cost but increase the valueIncrease the cost if necessary, but increase Increase the cost if necessary, but increase

the value much more than the cost the value much more than the cost

Concept of valueConcept of valueUse valueUse value

Fitness for useFitness for useKnown as primary or the basic value of the Known as primary or the basic value of the

productproductEsteem valueEsteem value

Enhanced value associated with a brand or Enhanced value associated with a brand or a product created by smart marketersa product created by smart marketers

Known as secondary valueKnown as secondary value

Steps in value analysisSteps in value analysisCollect data about cost function, customer Collect data about cost function, customer

needs, history and likely future developments needs, history and likely future developments related to the product & its userelated to the product & its use

Develop the alternative designs. The selected Develop the alternative designs. The selected alternatives should be able to fulfill the alternatives should be able to fulfill the functional requirement of the product as functional requirement of the product as detailed abovedetailed above

Ascertain the cost of alternativesAscertain the cost of alternativesEvaluate the alternativesEvaluate the alternativesRecommend and implement the best solutionRecommend and implement the best solution

Factors influencing the product Factors influencing the product design or redesigndesign or redesignCustomer’s perspectivesCustomer’s perspectives

FunctionsFunctionsAestheticsAestheticsUser friendlinessUser friendlinessEsteem associated with possessionEsteem associated with possession

Organizational perspectiveOrganizational perspectiveIntrinsic cost of materialIntrinsic cost of materialIntrinsic cost of labourIntrinsic cost of labourReplacement, exchange and disposalReplacement, exchange and disposal

Methods of value analysisEliminate parts in operationEliminate parts in operationSimplify parts in operationSimplify parts in operationSubstitute alternative materialsSubstitute alternative materialsUse standard parts in materialsUse standard parts in materialsRelax manufacturing tolerancesRelax manufacturing tolerancesUse standard manufacturing partsUse standard manufacturing partsEliminate unnecessary design featuresEliminate unnecessary design featuresChange design to suit manufacturingChange design to suit manufacturingBuy if cheap than makeBuy if cheap than make

continuescontinuesUse pre-finished materialsUse pre-finished materialsUse pre-fabricated partsUse pre-fabricated partsRationalize product rangeRationalize product rangeSubstitute labour cost manufacturing Substitute labour cost manufacturing

processprocessRationalize and standardize low cost Rationalize and standardize low cost

purchased partspurchased partsEliminate material wasteEliminate material waste

Value analysis-areas of Value analysis-areas of improvementimprovementFunctionsFunctions

Details of the basic functionsDetails of the basic functionsDetails of secondary functionsDetails of secondary functionsAre all the functions necessary?Are all the functions necessary?Substitute the factorsSubstitute the factorsCombination of the factorsCombination of the factors

MaterialsMaterialsWhat materials are used?What materials are used?Look for alternative materialsLook for alternative materialsReduction in waste materialsReduction in waste materials

continuesStandardization of materialsStandardization of materialsUse of cheaper and better substitute Use of cheaper and better substitute

materialsmaterialsPrice of materialsPrice of materialsMake or buy decisionMake or buy decision

ManufacturingManufacturingDefine operationsDefine operationsCan it be eliminated?Can it be eliminated?Can it be substituted?Can it be substituted?Can it be simplified?Can it be simplified?

continuesCan it be standardized?Can it be standardized?Can standard tools be used?Can standard tools be used?Can pre-fabricated parts be used?Can pre-fabricated parts be used?Make or buy the partsMake or buy the parts

SpecificationsSpecificationsDefine specificationsDefine specificationsCan dimensions be reducedCan dimensions be reducedAre the parts oversized?Are the parts oversized?Are tolerances very close?Are tolerances very close?Can tolerances be increased?Can tolerances be increased?What type of finish is required?What type of finish is required?Are finish standards essential?Are finish standards essential?

Phases of value engineeringPhases of value engineeringOrientationOrientationInformationInformationFunctionalFunctionalSpeculation/CreationSpeculation/CreationEvaluation/AnalysisEvaluation/AnalysisRecommendationRecommendationImplementationImplementationAudit/Follow-upAudit/Follow-up

Salient aspectsSalient aspectsMaterial substitutionMaterial substitution(DFM) Design For Manufacturing(DFM) Design For ManufacturingModularityModularityProduct improvement thro QFDProduct improvement thro QFDEnergy efficiency.Energy efficiency.Cost optimisationCost optimisationModern version of VE is Lean Modern version of VE is Lean

manufacturing, BPR TQM manufacturing, BPR TQM

examplesPCB surface mounted design to avoid PCB surface mounted design to avoid

drilling drilling Don’t grind inside metal boxDon’t grind inside metal box Japanese Disc brakes .Only required Japanese Disc brakes .Only required

tolerance in specification is given < 3 tolerance in specification is given < 3 mm; Not More. Hence with crude SPC, < mm; Not More. Hence with crude SPC, < one in million parts will fail to fit.one in million parts will fail to fit.

Reducing fasteners. Use Plastic push fit Reducing fasteners. Use Plastic push fit fastening.fastening.

Replacing metal castings/pressed items Replacing metal castings/pressed items with plastic injection moulded parts. Ex: with plastic injection moulded parts. Ex: dash board in a car made of plastic dash board in a car made of plastic material .material .

SEVEN WASTESSEVEN WASTESOverproductionOverproductionWaitingWaitingTransportingTransportingInappropriate processing (poor process Inappropriate processing (poor process

capability) capability) Unnecessary inventoryUnnecessary inventoryUnnecessary motionUnnecessary motionDefectsDefects