Value Engineering
- 1. Value Engineering By Edwin Jacob Y
- 2. What Value Engineering Is! An organized study of FUNCTIONS to satisfy the USER’S NEEDS with a QUALITY PRODUCT at the LOWEST LIFE CYCLE COST through APPLIED CREATIVITY
- 3. Definition of Value Engineering Value Engineering (VE, or Value Analysis) is a management technique that seeks the best functional balance between cost , reliability and performance of a product, project, process or service. What is Value? • Value is the lowest price you must pay to provide a reliable function or service “Good” Value is the lowest cost to reliably provide the required function with essential performance. Value is always increased by decreasing costs while maintaining essential performance. Value may also be increased if the customer needs, wants, and is willing to pay for greater performance.
- 4. Range of Application VE applies to everything because every project or process has a function. VE can be applied at any point of the design or process. VE is a problem solving technique. VE can be used as a technique for developing design criteria.
- 5. How is a Value Engineering Study Conducted? The Job Plan Value engineering is often done by systematically following a multi-stage job plan. Larry Miles' original system was a six- step procedure which he called the "value analysis job plan."
- 6. The Job Plan The modern version It has the following eight steps: 1. Orientation 2. Information 3. Functional Creative 4. Evaluation 5. Development 6. Presentation 7. Implementation and Follow-up
- 7. The Job Plan - Orientation Phase 1. Identify issues 2. Prioritize Issues 3. Drafts scopes and objective 4. Establish evaluation factors 5. Determine Study Team 6. Collect Data 7. Prepare for value study
- 8. The Job Plan - Information Phase 1. Further familiarization of the project by the team; all team members participate in determine the true needs of the project. 2. Areas of high cost or low worth are identified.
- 9. The Job Plan - Functional Phase Functional analysis outlines the basic function of a product using a verb and a noun such as ‘boil water’ as in the case of our kettle. What is the Function? “ Boil Water ” Verb Noun
- 10. The Job Plan - Creative Phase This step requires a certain amount of creative thinking by the team. A technique that is useful for this type of analysis is brainstorming. This stage is concerned with developing alternative.
- 11. The Job Plan - Evaluation Phase In this phase of the workshop, the VA team judges the ideas developed during the creative phase. The VA team ranks the ideas. Ideas found to be irrelevant or not worthy of additional study are disregarded. Those ideas that represent the greatest potential for cost savings and improvements are selected for development.
- 12. The Job Plan - Development Phase The team develops the selected ideas into alternatives (or proposals) with a sufficient level of documentation to allow decision makers to determine if the alternative should be implemented.
- 13. The Job Plan - Presentation Phase The presentation phase is actually presenting the best alternative (or alternatives) to those who have the authority to implement the proposed solutions that are acceptable.
- 14. The Job Plan - Implementation And Follow Up 1. Develop an implementation plan 2. Execute the plan 3. Monitor the plan to completion Objective: During the implementation and follow-up phase, management must assure that approved recommendations are converted into actions.
- 15. Purpose of value engineering 1. Determine the best design alternatives 2. Reduce cost 3. Improve quality 4. Increase reliability and availability 5. Enhance customer satisfaction 6. Improve organizational performance 7. Identify problems 8. Develop recommended solutions
- 16. Potential Saving From VE Early changes are naturally less expensive than later ones, as shown in the diagram below.
- 17. Conclusion Three goals that we're looking at value engineering: 1. Identify additional functions that aren’t attractive to customers. 2. Add attractive functions for customers. 3. Saving because of the elimination of redundant functions.