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This document provides an overview of value analysis and value engineering. It discusses the brief history of value analysis starting at General Electric during World War II. It defines value analysis as a technique to analyze product functions to enhance value without compromising quality. Value analysis is applied to existing products, while value engineering is applied during design of new products. The document discusses how to determine and increase value by improving functions or reducing costs. It provides examples of value engineering and outlines the benefits. Finally, it presents a case problem to think through applying value analysis to reduce costs of ceiling fan production.
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In this seminar, Mohan Kumar introduces Value Analysis and Engineering, outlining key topics and providing an overview.
Value Analysis started in WWII at General Electric to reduce costs. It is defined as a creative cost search technique to enhance value without compromising quality.
VA analyzes existing products to enhance value post-factum; VE applies techniques in the design stage to prevent costs, informing differences between the two.
Value is defined as the lowest price for reliable function. VA increases value through function improvement or cost reduction.
The slides discuss how to increase value while maintaining function. A case of a bolt is used to demonstrate that value is tied to reliable performance.
Basic and secondary functions of a product are explained using a pencil to illustrate the concept of function within Value Analysis.
Value Engineering is clarified as a comprehensive process, defined through questions challenging common misconceptions about cost reduction.
The Value Analysis Cycle is introduced, detailing steps like gathering information, measuring, analyzing, generating ideas and presenting solutions.
Real-world examples show how vehicle manufacturers and rocket engineers implement value engineering to reduce costs without compromising function.
Benefits of Value Analysis include time savings, profit increase, teamwork enhancement, quality improvement, and customer satisfaction.
A case problem for Air Cool Electrics is presented, prompting application of VA principles. Highlights that Value Analysis is a continuous process.
References for further reading are provided along with a closing 'Thank You' note from the presenter.
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- 1. A Seminar by MohanKumar G. 1st Sem., M.Tech. (M.E.M.), S.J.C.E., Mysore. 14-12-2015
- 2. Overview Brief History Definition Difference b/w Value Analysis & Value Engg. What is Value? What is Function? Value Analysis Cycle Examples of Value Engineering Benefits of Value Analysis Case Problem for you References
- 3. Brief History Value Analysisbegan at General Electric Co., in U.S.A., during World War II (1939-1945). Because of the war, there were shortages of skilled labour, raw materials, and component parts. Lawrence D. Miles, Jerry Leftow, and Harry Erlicher at G.E. looked for acceptable substitutes. They noticed that these substitutions often reduced costs, improved the product, or both. What started out as an accident of necessity was turned into a systematic process. They called their technique “Value Analysis". Lawrence D. Miles, is known as the father of the Value Analysis / Value Engineering concept.
- 4. Definition Value Analysis is“An Organized, Creative, Cost Search technique for Analyzing the Function of a Product with the purpose of Value Enhancement without compromising with it's Quality, Reliability, Performance and Efficiency." "Value analysis is a philosophy implemented by the use of specific set of techniques, and a group of learned skills. It is an organized creative approach which has as it's purpose the efficient identification of unnecessary cost, i.e., cost which provides neither quality, nor use, nor appearance, nor customer features." - L.D. Miles
- 5. Value Analysis (VA)is the application of creative techniques for increasing the Value and Functions to an already Existing Product / Services to minimize the Cost of that Product. This is like a Post-mortem analysis, done after the fact, so a Remedial Process. Value Engineering (VE) is the application of creative techniques for increasing the Value and Functions for New Products at the design stage itself, to minimize the Cost of the Product. This is done before the fact at pre-manufacturing stages such as concept development and design, so a Preventive Process. Difference between VA and VE
- 6. What is VALUE? "Value is the lowest price you must pay to provide a reliable function or service." - Lawrence D. Miles "Money is of no Value; It cannot spend itself. All depends on the skill of the spender.” - Ralph Waldo Emerson Use Value, Esteem Value and Market Value Ex:- 1) Tie Clip (holds tie, keeps tie out of soup while having dinner) 2) Car (travelling is the primary function)
- 7. How to IncreaseValue ? Value Analysis is a systematic method to improve the “Value" of goods or products and services by using an examination of Function. Value is the ratio of Function to Cost. Value can therefore be increased by either improving the Function or reducing the Cost. It is a primary tenet of value engineering that basic functions be preserved and not be reduced as a consequence of pursuing value improvements.
- 8. How to IncreaseValue and Decrease Cost? F C F C F C F C REDUCE INCREASE MAINTAIN Value =
- 9. Let us godeeper into “Value” Let us take an example of a hypothetical bolt, used to fasten wing of a passenger aeroplane. What if the bolt fails to perform its function???
- 10. Now tell me,what is the value of that Bolt? NO. The Value of that Bolt is ZERO. Why? Because that bolt was designed and manufactured to function reliably. It had to perform the function of holding the wing, but it has not performed its function reliably. So we can say the Value of that bolt is zero. So, Value is the performance of the designed Function at the minimal possible cost.
- 11. What is FUNCTION? Basic Function and Secondary Function Example of a Pencil. Why do we use a pencil? What are its Basic Functions and Secondary Functions? To get the answers, let us do brainstorming and ask WHY and HOW type of questions, so that we will be identifying many Functions of a Pencil.
- 12. Functions of Pencil ChangeAttitudes Communicate Ideas Transmit Thoughts Write Words Make Marks Spread Lead
- 13. Then, What isValue Engineering ? Is it cost reduction? Is it item elimination? Is it function deletion? Is it use of cheaper material? Is it use of lower cost process? Answer to all these questions are NO!!! Value Engineering is much more than this...
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- 15. How it works? ValueAnalysis follows a structured thought process to evaluate options as follows. 1. Gather information What is being done now? Who is doing it? What could it do? What must it not do? 2. Measure How will the alternatives be measured? What are the alternate ways of meeting requirements? What else can perform the desired function?
- 16. 3. Analyze What mustbe done? What does it cost? 4. Generate What else will do the job? 5. Evaluate Which Ideas are the best? 6. Develop and expand ideas What are the impacts? What is the cost? What is the performance? 7. Present ideas Sell alternatives
- 17. Examples of ValueEngineering Russian liquid-fuel rocket motors are intentionally designed to permit ugly (though leak-free) welding. This reduces costs by eliminating grinding and finishing operations that do not help the motor function better. Many vehicle manufacturers have active programs to reduce the numbers and types of fasteners in their product, to reduce inventory, tooling and assembly costs.
- 18. Benefits of ValueAnalysis Save Time Increase Profits Build Teamwork Improve Quality Satisfy Customer Improve Quality Save Money
- 19. Case Problem forYou to Think… Air Cool Electrics Ltd., manufactures ceiling fans. Since this is a standardized product and also faces hectic competition, the company aims to reduce the price of the product, by Value Analysis approach. Think and help them to carry out Value Analysis. Clue:- Motor housing Blades Supporting Rod Bolt and Nut as fasteners Top & Bottom cups as cover
- 20. REMEMBER ! Value Analysisis a continuous process...
- 21. References 1. www.google.com 2. www.wikipedia.com 3.www. nptel.ac.in 4. Prof. Inderdeep Singh, Mechanical & Industrial Engg. Dept., I.I.T., Roorkee. 5. ‘Production & Operations Management’ text book, 3rd edition, by R. Panneerselvam.
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