VALUE ANALYSIS/ VALUE ENGINEERING

Value analysis & Value Engineering Value analysis & Value engineering can be defined as an organised approach to provide the required function at the lowest cost consistent with specific performance, quality & reliability Value analysis & Value engineering can be defined as an organised approach to provide the required function at the lowest cost consistent with specific performance, quality & reliability Value analysis pertains to the existing product & services whereas value engineering is concerned to the design of new products Value analysis pertains to the existing product & services whereas value engineering is concerned to the design of new products

Features of value analysis Value analysis team is a cross-functional team Value analysis team is a cross-functional team The value can be increased in three ways The value can be increased in three ways Retain the value but reduce the cost Retain the value but reduce the cost Retain the cost but increase the value Retain the cost but increase the value Increase the cost if necessary, but increase the value much more than the cost Increase the cost if necessary, but increase the value much more than the cost

Concept of value Use value Use value Fitness for use Fitness for use Known as primary or the basic value of the product Known as primary or the basic value of the product Esteem value Esteem value Enhanced value associated with a brand or a product created by smart marketers Enhanced value associated with a brand or a product created by smart marketers Known as secondary value Known as secondary value

Steps in value analysis Collect data about cost function, customer needs, history and likely future developments related to the product & its use Collect data about cost function, customer needs, history and likely future developments related to the product & its use Develop the alternative designs. The selected alternatives should be able to fulfill the functional requirement of the product as detailed above Develop the alternative designs. The selected alternatives should be able to fulfill the functional requirement of the product as detailed above Ascertain the cost of alternatives Ascertain the cost of alternatives Evaluate the alternatives Evaluate the alternatives Recommend and implement the best solution Recommend and implement the best solution

Factors influencing the product design or redesign Customer’s perspectives Customer’s perspectives Functions Functions Aesthetics Aesthetics User friendliness User friendliness Esteem associated with possession Esteem associated with possession Organizational perspective Organizational perspective Intrinsic cost of material Intrinsic cost of material Intrinsic cost of labour Intrinsic cost of labour Replacement, exchange and disposal Replacement, exchange and disposal

Methods of value analysis Eliminate parts in operation Eliminate parts in operation Simplify parts in operation Simplify parts in operation Substitute alternative materials Substitute alternative materials Use standard parts in materials Use standard parts in materials Relax manufacturing tolerances Relax manufacturing tolerances Use standard manufacturing parts Use standard manufacturing parts Eliminate unnecessary design features Eliminate unnecessary design features Change design to suit manufacturing Change design to suit manufacturing Buy if cheap than make Buy if cheap than make

continues Use pre-finished materials Use pre-finished materials Use pre-fabricated parts Use pre-fabricated parts Rationalize product range Rationalize product range Substitute labour cost manufacturing process Substitute labour cost manufacturing process Rationalize and standardize low cost purchased parts Rationalize and standardize low cost purchased parts Eliminate material waste Eliminate material waste

Value analysis-areas of improvement Functions Functions Details of the basic functions Details of the basic functions Details of secondary functions Details of secondary functions Are all the functions necessary? Are all the functions necessary? Substitute the factors Substitute the factors Combination of the factors Combination of the factors Materials Materials What materials are used? What materials are used? Look for alternative materials Look for alternative materials Reduction in waste materials Reduction in waste materials

continues Standardization of materials Standardization of materials Use of cheaper and better substitute materials Use of cheaper and better substitute materials Price of materials Price of materials Make or buy decision Make or buy decision Manufacturing Manufacturing Define operations Define operations Can it be eliminated? Can it be eliminated? Can it be substituted? Can it be substituted? Can it be simplified? Can it be simplified?

continues Can 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 parts Make or buy the parts Specifications Specifications Define specifications Define specifications Can dimensions be reduced Can dimensions be reduced Are 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 engineering Orientation Orientation Information Information Functional Functional Speculation/Creation Speculation/Creation Evaluation/Analysis Evaluation/Analysis Recommendation Recommendation Implementation Implementation Audit/Follow-up Audit/Follow-up

Salient aspects Material substitution Material substitution (DFM) Design For Manufacturing (DFM) Design For Manufacturing Modularity Modularity Product improvement thro QFD Product improvement thro QFD Energy efficiency. Energy efficiency. Cost optimisation Cost optimisation Modern version of VE is Lean manufacturing, BPR TQM Modern version of VE is Lean manufacturing, BPR TQM

examples PCB surface mounted design to avoid drilling PCB surface mounted design to avoid drilling Don’t grind inside metal box Don’t grind inside metal box Japanese Disc brakes.Only required tolerance in specification is given < 3 mm; Not More. Hence with crude SPC, < one in million parts will fail to fit. Japanese Disc brakes.Only required tolerance in specification is given < 3 mm; Not More. Hence with crude SPC, < one in million parts will fail to fit. Reducing fasteners. Use Plastic push fit fastening. Reducing fasteners. Use Plastic push fit fastening.

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

SEVEN WASTES Overproduction Overproduction Waiting Waiting Transporting Transporting Inappropriate processing (poor process capability) Inappropriate processing (poor process capability) Unnecessary inventory Unnecessary inventory Unnecessary motion Unnecessary motion Defects Defects