value engineering ppt
TRANSCRIPT
Value Engineering and Value Analysis
Overview
• What is Value Engineering?
• How is VE Applied?
• When is it used?
• What is Function Analysis and FAST?
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.
• Quantifiable results
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 TimeSave Money
Build TeamworkImprove 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
cycle time/cost
• 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.
When is VE used
Benefits of VE
• Decreasing costs
• Increasing profits
• Improving quality
• Expanding market share
• Saving time
• Solving problems
• Using resources more effectively
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 ResearchQuestions 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 ResearchQuestions 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 engineeringChange 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!
Competitive Advantage = Quality + Value
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 suppliersSelect best alternativeGet approvalPrepare specifications
Audit effectivenessUse experienceProvide feedback
Six Step Value Engineering Job PlanInformation
PhaseInformation
Phase
Creativity Phase
Creativity Phase
Evaluation Phase
Evaluation Phase
Planning PhasePlanning Phase
Reporting Phase
Reporting Phase
Implementation 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.
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.
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.
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.
Plan how to sell ideas to management, identify key recommendations, plan management presentation.
Give oral presentation to management, or develop written report.
Give oral presentation to management, or develop written report.
Get management approval for go-ahead, make management plan, make assignments, implement, follow-up.
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?
Where or how can information be obtained?
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 VerbsTransmitIrradiateProject
DissipateGenerateConvertReceiveReflectProvide
(passive!)
NounsSignal
InformationDataHeat
RadiationCurrent
LightImage
Functions of a No. 2 PencilDescription
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 Diagram2. 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• Eliminate Food
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 Diagram4. 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 CatCreate VirusKill MiceEliminate Food
Trap MiceElectrocute MiceShoot MiceGas MiceDrown MiceUse SnakePoison Mice
Eliminate Mice
FAST Diagram5. 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 CatCreate VirusKill MiceEliminate Food
Trap MiceElectrocute MiceShoot MiceGas MiceDrown MiceUse SnakePoison Mice
Eliminate Mice
•Eat Bait•Drink Bait•Smell Bait
FAST Diagram6. 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 MICEPOISON
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 MiceElectrocute MiceShoot MiceGas MiceDrown MiceUse SnakePoison 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
INDEPENDENT FUNCTION
HOW?
(concept)
(concept)
OUTPUT
INPUT
WHEN
OBJECTIVES OR
SPECIFICATIONS
MINOR CRITICAL PATH
(AND)
HIGHER ORDER FUNCTIONS
LOWER ORDER FUNCTIONS
ACTIVITY2
MISSION, OBJECTIVE, OR HIGHER
ORDER FUNCTION
BASIC FUNCTION
DEPENDENT FUNCTION
D EA
LOWEST ORDER
FUNCTION
B
C
WHY?
SCOPE OF THE PROBLEM UNDER STUDY
MAJOR CRITICAL PATH
Critical Path
CONVEY Information
PROJECT IMAGE
GENERATE LIGHT
RECEIVE CURRENT
TRANSMIT CURRENT
CONVERT ENERGY
HOW WHY
F.A.S.T MODELOVERHEAD
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 HEATFOCUS
IMAGE
HOW WHY
F.A.S.T MODELOVERHEAD PROJECTOR
(concept)
(concept)
WHEN
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 MODELOVERHEAD PROJECTOR
(concept)
(concept)
WHEN
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 HEATFOCUS
IMAGE
HOW WHY
F.A.S.T MODELOVERHEAD PROJECTOR
(concept)
(concept)
OUTPUT INPUT
WHEN
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
WHEN
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. Select an appropriate meeting place
Function Analysis Function Analysis is the key to key to
understandingunderstanding the problem.
BrainstormBrainstorm all possible functions
Next, build a FAST Modelbuild 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 system perspective.
• PlanningWhat 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?
The Planning & Reporting Phases
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.Anticipate 4-6 weeks to complete the actions.
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
• ReportingGive oral presentation.Support it with written executive brief.Be clear, concise, and positive.Anticipate roadblocks
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 Checklist1. 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 !Value Analysis is a continuous process