This document discusses value analysis and value engineering techniques. It provides information on value analysis procedures and steps. Key aspects covered include defining value, dividing value into different types, advantages of value analysis, and the implementation process. Value engineering is presented as a management approach to saving costs from a value perspective.

1. OPERATIONS MANAGEMENT

2. Name Roll No.
 Ayush Dixit 2012005
 Steffi Fernandes 2012022
 Seema Popat 2012068
 Mukesh Singh Rajput 2012033

4. Value Analysis
1. Cost reduction technique.
2. Organised creative approach.
3. Main focuses.
4. Birth – Second World War.
5. Recent years -
• Value Engineering.
• Molecular Engineering.
• Vertical Thinking.

5. What is Value
The minimum
money which has
to be expended in
purchasing or
manufacturing a
product to create
the appropriate
use of esteem
factors.

6. Division Of Value
1. Use of functional Value.
2. Esteem Value.
3. Cost Value.
4. Exchange Value.

7. Advantages of Value Analysis
 It leads to improvements in product design so that, most
appropriate products are produced .
 High quality (value) is maintained.
 All-round efficiency is achieved by eliminating waste of various
types.
 Cost savings provide a measure for judging managerial
effectiveness.
 New ideas are generated and incorporated.
 Teams spirit and morale are improved.
 Areas requiring attention and improvement are pin pointed.

8. Procedure of Value Analysis
 There is no standard approach or procedure
 Ascertaining the needs and wants of customers.
 Specifying the function of products and
components.
 Determining the appropriate cost of desired
performance.
 Identifying better alternatives in terms of works
procedures.

9. Implementation of Value
Analysis
Identifying the function:-
Primary.
Secondary.
 Evaluation of the function by comparison :-
 Basic question
 “does the function accomplish reliability at the best cost “
 Develop Alternatives.

10. Value Analysis Steps
1. Gather Information.
2. Measure Performance.
3. Analyse Functions.
4. Generate Ideas.
5. Evaluate and Rank Ideas.
6. Develop and Expand Ideas.
7. Present Ideas.

12. Value Engineering
 Value engineering is a total of management
which approaches the question of saving cost
from the point of view of ‘value’.
 Requires co-operation of all functional
departments.
 In large organisations, there are value
engineering teams having full time jobs.

13. Value Engineering
Value and cost
Value = Function
Cost
 Value: What the product is worth to the customer.
 Function: Properties and qualities of product.
 Cost: Money value of materials used, Labour &
indirect costs.

14. Value Engineering
Suggestion schemes
 Suggestion scheme facilitates the work of
value engineering team.
 The scheme helps in the changes of value
engineering and makes it implementation
easier.

15. Value Engineering
Requirement of a product
 Use.
 Esteem.
It is essential to be considered how much to
be added in order to sell the part.
The reasonable price of a product can be
obtained by comparing with a comparative product.

17. Value Engineering Approach
No standard approach – discuss with team
members.
Subject Basic question Analysis Answer
Function What functions 1) Is there any possibility of elimination?
are performed? 2) What alternative methods are
available?
Material What is the 1) Can alternative material be used?
material 2) Can the specification be amended?
specification?
What quantity of 1) Is the size or weight of material
material should excessive?
be used? 2) Can the quality be reduced?
3) Will a cheaper material serve the same
purpose?
4) Is the cutting done economically
without waste?

18. Value Engineering Approach
Subject Basic question Analysis Answer
Labour Which are the 1) Are all the operations necessary?
direct labour 2) Will alternative operations be cheaper?
costs? 3) Can certain assembly operations be
modified?
Process Are the best 1) Are all the operations necessary?
Processes being 2) Will alternative operations be cheaper?
used? 3) Can certain assembly operations be
modified?
Standardizatio Are the materials 1) Can the materials be standardized?
n or components 2) Can a number of product use standard
standard? (common) parts?
3) Can methods be standardized?

19. Waste Control
 Reasons for wastages in industry
 Obsolescence
 Surplus
 Scrap
 Role of Management in waste control
 Proper inventory control
 Materials management
 Effective Co-ordination among departments

20. Input-Output Analysis
 Systematic study of production structure.
 Predict total production of each year.
 Production structure of all the industries are to
be grouped together.
 Output material of 1 sector becomes input raw-
materials for the other.

23. Original Information Innovation Evaluation Choice Implementation Review
Phase Phase Phase Phase Phase Phase Phase

25. 1. Product Design and
Development
1. Factors considered in product design :-
 Customer’s requirement.
 Operator’s Convenience.
 Types of materials.
 Work methods and equipment.

26. 1. Product Design and
Development
2. Design.
3. Planning.
4. Specialized function.
5. Visible in long run.

27. 2. Application of Value
Engineering
 Overall quality and performance.
 Work together to reduce cost.
 Latest developments.
 Service function.
 Desired objective.

28. 3. Simplification of Product
1. Elimination of undesirable features.
2. The main purpose is to improve quality and to
reduce unit costs.
 Reduce cost and prices.
 Reduction of undesirable materials.
3. Benefits.