Value engineering
Value Engineering (VE) is Focused on innovative goods. It is used during product development. The goal is to reduce costs, improve functionality, or both via teamwork-based product review and analysis. This occurs before any funds are invested in tooling, plant, or equipment.
This is crucial because, according to various sources, up to 80% of a product’s expenses (during its whole life cycle) are locked in during the design development stage. This is logical given that the design of any product influences a variety of aspects, including tooling, plant and equipment, labor and skills, training expenses, materials, shipping, installation, maintenance, and decommissioning and recycling costs.
As a result, value engineering should be seen as a critical activity late in the product development phase, and it is unquestionably a good commercial investment given the time involved. It is highly advised that you use value engineering into your new product development process to improve its robustness and commercial viability.
The Society of American Value Engineers defines Value Engineering as the systematic use of recognized procedures to determine the function of a product or service, set a monetary value for that function, and supply the essential function reliably at the lowest total cost.
Value engineering may be described simply as a methodical, step-by-step strategy to achieving the intended functions of a system, service, process, or product at the lowest total cost while maintaining quality, performance, reliability, safety, and the environment.
Effectiveness of Value Engineering:
It assures cost effectiveness:
- It is cost avoidance instead of cost reduction.
- It locates all frills and gold plating’s.
- It segregates the necessary from unnecessary.
- It is an organised study of functions and cost.
- It is hot a crash cost reduction method.
- It is a combined effort of several departments.
- It is not a sacrifice of quality
- It is not a mere criticism of existing system, method, design or process but an appraisal of practical alternatives.
Qualitative Advantages of V.E.:
(i) Better understanding between department and individuals and so better co-operation.
(ii) Continuous updating of data base management.
(iii) For techno-economic excellence, introspection by individuals and departments possible.
(iv) Tendency to think functions rather than parts i.e. the hardware,
(v) Improved capability and preparedness to cope with changes in demand and quality.
(vi) Since value management involves individual’s participation in decision making, there is improvement in morale and commitment of the individuals.
(vii) Atmosphere of creativity in the organisation. Individuals are encouraged to put forward suggestion which lead to ultimate cost reduction and better functioning.
(viii) It leads to job satisfaction as there is professional autonomy to face technical challenges.
(ix) It gives opportunities to individuals to prove their skill, ingenuity, and creativity.
(x) It acts as a motivator towards higher productivity of the organisation.
(xi) It encourages joint decision making so shouldering of responsibility by all.
(xii) Improved system, procedures, and communications.
Qualitative Advantages of V.E.:
(i) Higher productivity.
(ii) Simplified manufacturing process
(iii) Overall cost reduction.
(iv) Better performance
(v) Higher reliability
(vi) Reduction in lead time
(vii) Better quality
(viii) Easy maintainability
(ix) Improved appearance.
(x) Simplified design.
(xi) Reduced rejections.
(xii) Less close and rigid tolerance.
(xiii) Higher market share.
(xiv) Higher profit.
(xv) Less after-sales service requirements.
(xvi) Reduced down time of machine or process.
(xvii) Decision on to-make-or-to-buy, easy and correct.
(xviii) Better packaging.
(xix) Improved logistics.
(xx) Application of group technology possible.
(xxi) Accommodating customer’s various requirements possible, hence greater customer’s satisfaction.
(xxii) Export probability enhances.
(xxiii) Enhanced value of product/service.
(xxiv) Optimum utilisation of resources, materials, machines, facilities manpower and money.