Value Engineering

By-

Jyoti Sinha (B08011)

Nabendu Kar (B08017)

Agenda

• What is Value engineering?

• Brief History

• What is value?

• Applicability

• Value Methodology• Value Methodology

-Pre-workshop

- Workshop

-Post Workshop

• FAST

• Benefits/Weakness

• What is Value

engineering?

• Value Engineering (VE), also known as Value

Analysis, is a systematic and function-based

approach to improving the value of products,

projects, or processes.engineering?

• It is a function-oriented, systematic team approach

to providing value in a product or service.

• Brief History

• Began at GE early 1940’s

• 1947 - Value Analysis - Lawrence D. Miles- Lawrence D. Miles

- “Father of VM”

• 1954 - Value Engineering

- U. S. Navy

• What is value?

• Value is a personal perspective of your willingness to pay for the performance delivered by a product, process or project.

VALUE = What we get out of something

What we put into it

• To Increase Value• To Increase Value

F

C

F

C

F

C

F

C

REDUCE INCREASE MAINTAIN

• Applicability

• Construction projects.

• Manufactured products.

• Business systems and processes.

• Service organizations.

• How is it

Applied?

• Methodology

– PRE-STUDY

– VALUE STUDY

• Information Phase

• Function Analysis Phase

Pre-

Workshop

• Creative Phase

• Evaluation Phase

• Development Phase

• Presentation Phase

– POST-STUDY

Workshop

Post-

Workshop

• How is it Applied?

• Information Phase

- Review project data

- Prioritize strategic issues

- SWOT Analysis

- Determine Value Study Expectations

- Visit Site or facility

• Function Analysis Phase

Pre-

Workshop

• Function Analysis Phase

- Identify the project functions

- Classify project functions

- Function Analysis System Technique (FAST)

- Value Index

Workshop

Post-

Workshop

• How is it

Applied?• Creativity Phase

- Generate alternate ideas that may improve

value.

- Brainstorming, Check Lists, & Other

Techniques

• Evaluation Phase

Pre-

Workshop

• Evaluation Phase

- Rank & Rate IDEAS

- Select IDEAS for Development

Workshop

Post-

Workshop

• How is it

Applied?• Development Phase

- Create Cost-Benefit Analysis

- Produce Support Material

- Generate Implementation Plan

• Presentation Phase

- Present Study Results

Pre-

Workshop

- Present Study Results

- Compare the study conclusions with

Information and Function Analysis

- Ensure all relevant data available

- Create an anticipated implementation plan

Workshop

Post-

Workshop

• How is it

Applied?

• Complete Changes

• Implement ChangesPre-

Workshop

• Monitor StatusWorkshop

Post-

Workshop

C

• Function Analysis

• Function need be defined as Verbs and

Nouns. eg

Active Verbs Nouns

Generate Signal

Convert Information

Receive Data

• FAST (Function Analysis System Technique) -• Function Analysis • FAST (Function Analysis System Technique) -

A logic diagram to describe how a system

works.

- Classical FAST model

- Hierarchy Function model

- Technical FAST model

- Customer-Oriented FAST model

FAST Example

HOW WHY

KILL MICEPOISON

MICE

EAT

POISON

EAT

BAIT

ATTRACT

MOUSE

Trap Mice

Electrocute Mice

Shoot Mice

Gas Mice

Drown Mice

Use Snake

Poison Mice

•Spray Poison

•Inject Poison

•Step on Poison

•Eat Poison

•Shoot Poison

•Eat Bait

•Drink Bait

•Smell Bait

•Attract Mouse

•Trap Mouse

C

• Benefits

• Weakness

• Decreasing costs• Increasing profits• Improving quality• Expanding market share• Saving time• Solving problems• Using resources more effectively

• Dependent on the quality of information• VE is not time oriented, but, product oriented.• many misunderstandings and biases

-”It cheapens the product without improving -”It cheapens the product without improving it.”

- “VE is only used for cost reduction.”

Potential Savings from VE

�et Savings from VE

Drawings Released Tooling Changes

Re-Test/Re-qualification

�o engineeringChange Revision

Document Revision

Total Cost of VE Implementation

Concept Design

Engineering

&Production

ReleaseProduction

VE Implementation

beyond this point

results in a net loss.

Value Analysis is a continuous process

• Thank you• Thank you