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ME 7213

INDUSTRIAL ENGINEERING

Value Engineering
Outline

Introduction
Value approach
Value analysis techniques
Value engineering
Value Control
Value Engineering

Value Engineering developed as a cost reduction


technique in USA in 1947.

Value differs from both price and cost in the sense


that, it is the cost proportionate to the function.

An organized study of functions to satisfy the users


needs with a quality product at the lowest life cycle
cost through applied creativity.
VALUE

Value = Desired Function (F)

Overall Costs (C)


How we can improve the value?
Value = Function
Cost
To Increase Value

F F F F
C C C C

REDUCE INCREASE MAINTAIN


Function
What Is Function?

Categories
Primary 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 means


of identifying and thus eliminating the unnecessary costs.

An unnecessary cost is one which neither adds to quality nor


to life or appearance.

Elements of Value Approach


Value Analysis
Value Engineering
Value Analysis

Introduction
Aims of Value Analysis
Simplify 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 being
made with proper tools?
Does the product has reasonable selling price?
Can the product/component be procured at less cost from else
where?
Is anybody purchasing the product/component at lower rates?
Value Analysis Procedure

Identify the product (1)

BLAST Collect Relevant information (2)

Define different functions (3)

Create different alternatives(4)

CREATE

Critically evaluate the alternatives (5)

Develop the best alternative (6)

REFINE

Implement the alternative (7)


Function Analysis System Technique Diagram
(FAST)
FAST Diagrams are used to prioritize the objectives or
functions 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 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 Diagram

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.

HOW
Eliminate Mice
KILL MICE POISON MICE

Use Cat
Trap Mice Spray Poison
Create Virus
Electrocute Mice Inject Poison
Kill Mice
Shoot Mice Step on Poison
Eliminate Food
Gas Mice Eat Poison
Drown Mice Shoot Poison
Use Snake
Poison Mice
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 or
below the CRITICAL PATH
HOW
Eliminate
Mice
KILL MICE POISON MICE EAT POISON

Use Cat Trap Mice Spray Poison Eat Bait


Create Electrocute Mice Inject Poison Drink Bait
Virus Shoot Mice Step on Poison Smell Bait
Kill Mice Gas Mice Eat Poison
Eliminate Drown Mice Shoot Poison
Food Use Snake
Poison Mice
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 or
below the CRITICAL PATH
HOW WHY
POISON EAT EAT ATTRACT
KILL MICE MICE POISON BAIT MOUSE

Trap Mice Spray Poison Eat Bait Attract Mouse


Electrocute Inject Poison Drink Bait Trap Mouse
Smell Bait
Mice Step on Poison
Shoot Mice Eat Poison
Gas Mice
Shoot Poison
Drown Mice
Use Snake
Poison Mice
FAST Diagram

HOW WHY

ELLIMINATE POISON EAT EAT ATTRACT


KILL MICE
MICE MICE POISON BAIT MOUSE

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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 or


pre-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 Clearly identify the problem(s) to be solved, and
Phase gather information on the background, functions and
requirements of the product, process, or system.

Creativity Brainstorm ideas on how to improve the high cost,


Phase broken, or inadequately performed key functions.

Screen ideas for acceptance, score remaining ideas


Evaluation on a scale and group ideas into categories. Develop
Phase design scenarios, and selection criteria. Rate and
rank ideas.

Planning Plan how to sell ideas to management, identify key


Phase recommendations, plan management presentation.

Reporting Give oral presentation to management, or develop


Phase written report.

Get management approval for go-ahead, make


Implementation
management plan, make assignments, implement,
Phase
follow-up.
VALUE ANALYSIS vs. VALUE ENGINEERING

VALUE ANALYSIS VALUE


Indicates application on ENGINEERING
the product that is into
manufacturing. Indicates application
All factors come on the product at its
together including design stage.
workers, It is always done by a
subcontractors, specific product design
engineers to make a (engineers) team.
team with total
experience and
knowledge
VALUE ANALYSIS vs. VALUE ENGINEERING

VALUE ANALYSIS VALUE


It may change the ENGINEERING
present stage of the the changes are
product or operation executed at the initial
It is worked out stages only.
mostly with help of It requires specific
knowledge and technical knowledge.
experience
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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