Value Engineering

By-
Jyoti Sinha (B08011)
Nabendu Kar (B08017)
 • What is Value engineering?
• Brief History
• What is value?
Agenda • Applicability
• Value Methodology
-Pre-workshop
- Workshop
-Post Workshop
• FAST
• Benefits/Weakness
 • Value Engineering (VE), also known as Value
Analysis, is a systematic and function-based
approach to improving the value of products,
• What is Value projects, or processes.
engineering?
• It is a function-oriented, systematic team approach
to providing value in a product or service.
 • Began at GE early 1940’s

• Brief History • 1947 - Value Analysis

- Lawrence D. Miles
- “Father of VM”

• 1954 - Value Engineering

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

• What is value? VALUE = What we get out of something

What we put into it
• To Increase Value

F F F F
C C C C

REDUCE INCREASE MAINTAIN

 • Construction projects.

• Applicability • Manufactured products.

• Business systems and processes.

• Service organizations.
• How is it
Applied?
• Methodology
Pre- – PRE-STUDY
Workshop – VALUE STUDY
• Information Phase
• Function Analysis Phase
• Creative Phase
Workshop • Evaluation Phase
• Development Phase
• Presentation Phase

Post- – POST-STUDY
Workshop
• How is it • Information Phase
Applied? - Review project data
- Prioritize strategic issues
Pre- - SWOT Analysis
Workshop - Determine Value Study Expectations
- Visit Site or facility

• Function Analysis Phase

Workshop
- Identify the project functions
- Classify project functions
- Function Analysis System Technique
Post- (FAST)
Workshop - Value Index
• How is it • Creativity Phase
Applied? - Generate alternate ideas that may improve
value.
Pre- - Brainstorming, Check Lists, & Other
Workshop Techniques

• Evaluation Phase
Workshop
- Rank & Rate IDEAS
- Select IDEAS for Development

Post-
Workshop
• How is it • Development Phase
Applied? - Create Cost-Benefit Analysis
- Produce Support Material
Pre- - Generate Implementation Plan
Workshop
• Presentation Phase
- Present Study Results
Workshop - Compare the study conclusions with
Information and Function Analysis
- Ensure all relevant data available
- Create an anticipated implementation plan
Post-
Workshop
• How is it • Complete Changes
Applied?

Pre-
Workshop • Implement Changes

Workshop • Monitor Status

Post-
Workshop
 • Function need be defined as Verbs and
Nouns. eg
C
Active Verbs Nouns
Generate Signal
Convert Information
Receive Data

• 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

POISON EAT EAT ATTRACT

KILL MICE MICE POISON BAIT MOUSE

Trap Mice •Spray Poison •Eat Bait •Attract Mouse

Electrocute Mice •Inject Poison •Drink Bait •Trap Mouse
Shoot Mice •Step on Poison •Smell Bait
Gas Mice •Eat Poison
Drown Mice •Shoot Poison
Use Snake
Poison Mice
• Benefits • Decreasing costs
• Increasing profits
• Improving quality
C
• Expanding market share
• Saving time
• Solving problems
• Using resources more effectively

• Weakness • 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.”
- “VE is only used for cost reduction.”
 Potential Savings from VE

o engineering Document Revision
Change Revision
Re-Test/Re-qualification
Drawings Released Tooling Changes

et Savings from VE

Total Cost of VE Implementation

VE Implementation
beyond this point
results in a net loss.
Engineering
&Production
Concept Design Release Production
Value Analysis is a continuous process

• Thank you