Value Engineering Ppt

Value Engineering and Value

Analysis

Overview

• What is Value Engineering?

• How is VE Applied?

• When is it used?

Definitions

Value Engineering is a technique applied to

identifying optimum value solutions during

new product development.

Value analysis is a technique applied to

improving existing products, processes or

services. The objective is usually to

reduce cost, but may equally or

simultaneously be to improve

performance or quality.

-LD Miles

The Key Points of VA / VE

• Applying formal work plans.

• A team approach.

• Specific definition of functions.

• The simultaneous look at functions and costs.

• Control of the analysis process.

What is VALUE ?

Value is the relationship between the defined function the customer requires and the costs incurred to provide that function.

– Cost Value – Use Value

– Esteem Value – Exchange Value

Value Engineering

Value Engineering is • Reliability • Maintainability • Producibility • Human Factors • Parts Availability • Cycle Time • Quality • Weight Reduction

Why use Value Engineering?

Save

Time

Save

Money

Build

Teamwork

Improve

Quality

Satisfy

Customer

When is VE used

• Existing part/product cost is high

• Existing technology is complex/old though

simpler means are available

• There is a need to release a cheaper product

by cutting down some of the existing feature

• The existing customer demands a minimal

increment in product features that are in use

• There is a need to cut down the manufacturing

•

Value Engineering is used to determine the best

design alternatives for Projects, Processes,

Products, or Services

•

Value Engineering is used to reduce cost on existing Projects, Processes, Products, or Services.

•

Value Engineering is used to improve quality,

increase reliability and availability, and customer satisfaction .

•

Value Engineering is also used to improve

organizational performance.

•

Value Engineering is a powerful tool used to identify

problems and develop recommended solutions.

Benefits of VE

• Decreasing costs

• Increasing profits

• Improving quality

• Expanding market share

• Saving time

• Solving problems

VE’s Weaknesses

 Successful VE results are dependent on the quality of information brought to the VE workshop for

evaluation.

 VE is not time oriented, but, product oriented. Thus, improvements in production activities are not readily recognized.

 There are many misunderstandings and biases

against VE that have been built up over time due to misuse of the methodology.

“It cheapens the product without improving it.”  “VE is only used for cost reduction.”

Value Engineering Research

Questions and Check Sheet

1. Can it be eliminated without impairing

function or reliability?

2. Does it cost more than its worth?

3. Does it do more than is required? Are there

unnecessary features?

4. Is there something better with which to do

the job?

Value Engineering Research

Questions and Check Sheet

5.Can it be made by a less costly method?

6. Can a standard item or specialty product be

used?

7. Could a less costly manufacturing technique

be used?

8. Should different tooling be used?

9.Can someone else provide it at less cost

without affecting dependability?

Potential Savings from VE

Net Savings from VE

Total Cost of VE Implementation

Concept Design

Engineering &Production

Release Production

Drawings Released Tooling Changes Re-Test/Re-qualification

No engineering

Change Revision Document Revision

VE Implementation beyond this point results in a net loss.

What is value?

VALUE = What we get out of something What we put into it

VALUE = Quality, reliability, appeal, etc = Benefits Cost, time, mass, energy, etc. Resources

VALUE = Worth = Performance Cost Cost

Delivery of necessary project functions while achieving best balance between project performance and project costs.

To Increase Value

F

C

F

C

F

C

F

C

REDUCE INCREASE MAINTAIN

• Value =

Function

Cost

Competitive Advantage

Quality is defined as “conformance to

specification.”

Value is defined as:

Function

Cost

You can’t have one without the other!

Unnecessary Cost

• Any cost that can be removed without impairing the essential

– Quality – Performance – Customer requirements – Reliability – Maintainability – Marketability – Schedule

Criteria for Evaluating Value

• COST • Initial cost • Operations • Maintenance • Return on Investment • Life cycle • Replacement • Cost of capital • PERFORMANCE • Quality • Stakeholder requirements • Safety • Level of service • Environmental Impacts • Schedule Impacts • Operability • Reliability • Maintainability

Generalized Procedure for VA/VE

Information Phase Analysis Phase Decision Phase Speculation Phase Evaluation Phase What is it?

What does it do?

What does it cost? How else can the job

be done?

At what cost? Is the change better?

How much better? Why?

Review with depts and suppliers

Select best alternative Get approval

Prepare specifications Audit effectiveness

Use experience Provide feedback

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.

INFORMATION

PHASE FUNCTION

ANALYSIS PHASE _CREATIVE

PHASE _{EVALUATION} PHASE

 Complete data

package

 Modify scope  Identify functions  Classify functions  Develop function models  Cost functions  Establish value index

 Select functions for

study  Create quantity of ideas by function DEVELOPMENT PHASE _{PRESENTATION} PHASE

 How must each idea

work?

 What is the

feasibility of implementation?

 What will be the

cost?

 When will we

breakeven?

 What is the best

overall alternative? - Conduct benefit analysis  Complete technical data  Create implementation Plan  Prepare final proposals

 Present oral report  Prepare written

report

The Value Methodology Job Plan

- Complete/

implement changes

- Monitor

status - Collect user/ customer attitudes

Complete data files

Determine evaluation factors Scope the study

Build data models

Determine team composition

PRE-STUDY

POST-STUDY

Property of OSC VE Office

What is to be included in the study? Who is best able to study the problem? What are the current and future

requirements of the subject under study? What type of impediments will the team come against? - What is the problem or opportunity?  Why do you consider it a problem or opportunity?  Why is a solution necessary?

 What is the cost?

 Develop a plan to

gather project data

 Investigate the

project

 Verify data

 What is the task

function?

 What are the basic

functions?

 What are the

supporting functions?

 What else can

perform the function?

 Where else can

the function be performed?

 How else can the

function be performed?

 Rank and rate

alternative ideas

 Select ideas for

development

How can

disadvantages be overcome?

 Why is the new way

better?

 Will it meet all the

requirements without compromise of form, fit, or function?

 What are the annual

savings?

 Who should be

sold?

 How should the

ideas be presented?

 What was the

problem?

 What is the new

way, savings, and benefits?

 How will it satisfy

our customers?  What is needed to implement the proposals?  Who is responsible for implementing the change? Did the new way work?

How much did it cost/save?

Did the change meet customer’s expectations? Verify

accomplishments Present results Advertise outcomes

Information Phase-Fact Finding



What do you need to know about the problem

that you don’t know now?



What facts are known?



What are the requirements of the

system?



Are these facts, opinions,

assumptions, or prejudices?

Function Analysis

• Shifts the problem-solving focus away from the items toward the functions

• Function need be defined by two words: an Active Verb and a Measurable Noun

• The verb defines the required action; the noun tells what is being acted on

• The more abstract the function definition, the greater the opportunities for finding creative alternatives

Function Analysis

 FAST (Function Analysis System Technique) - A

logic diagram to describe how a system works.

 Examples of Verbs and Nouns:

Active Verbs Transmit Irradiate Project Dissipate Generate Convert Receive Reflect Provide (passive!) Nouns Signal Information Data Heat Radiation Current Light Image

Functions of a No. 2 Pencil

Description Pencil Eraser Band Body Paint Lead Function Makes Marks Removes Marks Secure Eraser Improve Appearance Support Lead Transmit Force Accommodate Grip Display Information Protect Wood Improve Appearance Makes Marks

FAST Example

Functional Analysis System Technique

(FAST) Diagram

1. List Desired Outcome and Requirements

of Customer in Verb Singular Noun Form

Mouse Free Living Area = Eliminate Mice

FAST Diagram

2. List Products and Services that satisfy

Desired Outcome (Q4). These Products or

services answer WHAT is desired of the

system.

• Use Cat

• Create Virus

• Kill Mice

FAST Diagram

• 3. List all functions in Verb Noun format and

processes that would satisfy or produce each

product or service in the previous step.

• Generate all functions, basic, secondary,

support without regard to relationship.

Kill Mice

• Trap Mice

• Electrocute Mice

• Shoot Mice

• Gas Mice

• Drown Mice

• Use Snake

• Poison Mice

FAST Diagram

4. Select each function from the previous step starting

with what you believe to be the basic function.

Ask HOW this basic function might be accomplished.

KILL MICE POISON MICE

•Spray Poison •Inject Poison •Step on Poison •Eat Poison •Shoot 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

5. Continue to answer the HOW and place the answer • directly to the right.

• Related functions that are at the same level, stack above or below the CRITICAL PATH

KILL MICE POISON MICE

•Spray Poison •Inject Poison •Step on Poison •Eat Poison •Shoot 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 Bait •Drink Bait •Smell Bait

FAST Diagram

6. Continue to answer the HOW and place the answer • directly to the right.

• Related functions that are at the same level, stack above or below the CRITICAL PATH

KILL MICE POISON _MICE

•Spray Poison •Inject Poison •Step on Poison •Eat Poison •Shoot Poison HOW EAT POISON EAT BAIT ATTRACT MOUSE WHY •Attract Mouse •Trap Mouse •Eat Bait •Drink Bait •Smell Bait Trap Mice Electrocute Mice Shoot Mice Gas Mice Drown Mice Use Snake Poison Mice

FAST Questions

• How do we perform the function?

• Why do we perform the function?

• When do we perform the function?

• What is the Desired Outcome?

• Where do we perform the function?

• Who performs the function?

The Technical FAST Model

ACTIVITY 1 INDEPENDENT FUNCTION (SUPPORTING) DEPENDENT FUNCTION INDEPENDEN T FUNCTION HOW ? (concept) (concept) OUTPU T INPUT W H E N OBJECTIVES OR SPECIFICATION S

MINOR CRITICAL PATH

(AND) HIGHER ORDER FUNCTIONS LOWER ORDER FUNCTIONS ACTIVITY 2 MISSION, OBJECTIVE, OR HIGHER ORDER FUNCTION BASIC FUNCTION DEPENDEN T FUNCTION D E A LOWEST ORDER FUNCTION B C WHY?

SCOPE OF THE PROBLEM UNDER STUDY

MAJOR CRITICAL PATH

Critical Path

CONVEY Information PROJECT IMAGE GENERATE

LIGHT _CURRENT RECEIVE TRANSMIT _CURRENT

CONVERT ENERGY HOW WHY F.A.S.T MODEL OVERHEAD PROJECTOR (concept) (concept)

Supporting Functions

CONVEY Information PROJECT IMAGE GENERATE LIGHT RECEIVE

CURRENT TRANSMIT _CURRENT CONVERT ENERGY SUPPORT IMAGE GENERATE NOISE AMPLIFY IMAGE DISSIPATE HEAT GENERATE HEAT FOCUS IMAGE HOW WHY F.A.S.T MODEL OVERHEAD PROJECTOR (concept) (concept) W H E N

Objectives or Specifications

CONVEY Information PROJECT IMAGE GENERATE LIGHT ALLOW SAFETY RECEIVE CURRENT TRANSMIT CURRENT CONVERT ENERGY FACILITATE PORTABILITY SUPPORT IMAGE GENERATE NOISE AMPLIFY IMAGE DISSIPATE HEAT FOCUS IMAGE HOW _WHY F.A.S.T MODEL OVERHEAD PROJECTOR (concept) (concept) W H E N OBJECTIVES OR SPECIFICATIONS GENERATE HEAT

Add Scope Lines

CONVEY Information PROJECT IMAGE GENERATE LIGHT ALLOW SAFETY RECEIVE CURRENT TRANSMIT CURRENT CONVERT ENERGY FACILITATE PORTABILITY SUPPORT IMAGE GENERATE NOISE AMPLIFY IMAGE DISSIPATE HEAT GENERATE HEAT FOCUS IMAGE HOW WHY F.A.S.T MODEL OVERHEAD PROJECTOR (concept) (concept) OUTPUT INPUT W H E N OBJECTIVES OR SPECIFICATIONS

ALLOW SAFETY FACILITATE PORTABILITY OBJECTIVES OR SPECIFICATIONS

FAST Example - Overhead Projector

GENERATE NOISE DISSIPATE HEAT GENERATE HEAT SUPPORT IMAGE AMPLIFY IMAGE FOCUS IMAGE HOW? F.A.S.T MODEL OVERHEAD PROJECTOR CONVEY Information PROJECT IMAGE GENERATE LIGHT RECEIVE CURRENT TRANSMIT CURRENT CONVERT ENERGY (concept) (concept) OUTPUT INPUT W H E N WHY?

Creativity Techniques- Brainstorming

 Generate a large number of ideas - quantity, not quality.

 Free-wheeling is encouraged - Listen and improve on the ideas of others.

 Don’t criticize - No evaluation of ideas

 Encourage everyone to participate

 Record all ideas presented

 Time to let ideas “incubate” should be allowed.

Function Analysis



Function Analysis is the key to

understanding the problem.



Brainstorm all possible functions



Next, build a FAST Model to help

identify any missing functions.

Other tools that can work with VE

 Activity Based Costing (ABC)

 Cost Function Matrix

 Failure Modes and Effects Analysis (FMEA)

 Risk Analysis Tools

 Other traditional quality tools such as pareto

analysis, ishakawa diagrams, scatter diagrams, etc.

Function analysis is the key to understanding the system and what it does. Function analysis enables you to analyze the problem from a

•

Planning

What is recommended?

Who has to approve it?

What is the implementation plan?

Are mockups or prototypes required to verify

final decisions?

What are the cost, schedule, and deliverables?

ROI?

ACTION PLAN GUIDELINES



“What needs to be done?”

 Identify the actions needed to “solidify” the

proposals.



“Who should be assigned the action?”

 Assign a team member.

 Assign a completion date for the action.



“When should the task be completed?”

 Plan regular team status meetings.

Implementation Planning

 Ideas must be planned and managed to ensure

implementation.

 Proposed actions should be managed like a

project with specific end products, defined start and end dates, and funding limits.

The Planning & Reporting Phase

•

Reporting



Give oral presentation.



Support it with written executive brief.



Be clear, concise, and positive.

Analysis of Each Component

• Can any part be eliminated without impairing the operation of the complete unit?

• Can the design of the part be simplified to reduce its basic cost?

• Can the design of the part be changed to permit the use of simplified or less costly production

methods?

• Can less expensive but equally satisfactory

materials be used in the part?

• Design simplifications frequently are more apparent than is possible under the original design

The Value Engineering Checklist

1. Can the item be eliminated?

2. If the item is not standard, can a standard item be used?

3. If it is a standard item, does it completely fit the application, or is it a misfit?

4. Does the item have greater capacity than required?

5. Can the weight be reduced?

6. Is there a similar item in inventory that could be substituted?

7. Are closer tolerances specified than are necessary?

The Value Engineering Checklist

8. Can you make the item less expensively in your plant? If you are making it now, can you buy it for less?

9. Can cost of packaging be reduced?

10. Are suppliers contributing suggestions to reduce cost?

Concluding Remarks

• The design stage provides the greatest

opportunity to reduce costs

REMEMBER !