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
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