VAVE, or Value Analysis and Value Engineering, is a systematic creative approach to reduce unnecessary costs in goods and services while maintaining or improving quality, performance, and customer satisfaction. It examines the functions of a product or service rather than how it is currently conceived. Value Engineering began at GE during WWII to find cost-saving substitutes out of necessity and has since become a systematic process. A typical VAVE exercise can reduce total costs by 5-40% through information gathering, function analysis, idea generation, evaluation, development, and presentation of value alternatives to decision makers. Creativity is key to discovering alternative designs or processes that maintain basic functions at lower costs.

3. VAVE can be defined as “An organized creative approach, which
has for its purpose the efficient identification of unnecessary
cost i.e., cost which provided neither quality nor use , life,
appearance or customer features”
VAVE can also be defined as a systematic method to improve the
"value" of goods or products and services by using an examination
of function.

4. Value Engineering began at General Electric Co. during World War II.
Because of the war, there were shortages of skilled labour, raw materials,
and component parts. Lawrence Miles 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 as “Value Analysis”.
In the year 1954, US Navy Bureau of ships adopted same technique in their
effort at ‘cost avoidance’ during the design stage and saved millions of
dollars. They named it as “Value Engineering”. VE follows thought process
that is based exclusively on “function”, i.e. what something ‘does’ not what
it is

6. A product or service is generally considered to have good value if that product or
service has appropriate performance and cost, or, by reverse definition , a product
is considered not to have good value, if it lacks either appropriate performance or
cost . It can almost be said without any hesitation that, by this definition, value
can be increased by either increasing the performance or decreasing the cost .
More precisely :
1. Value is always increased by decreasing cost ( while maintaining the
performance)
2. Value is increased by increasing performance , if the customer has needs and
wants, and is willing to pay for more performance.
Value can be defined as

7. • Maximum value is probably never achieved . The degree of value of any product
depends on the effectiveness with which every usable idea, process material and
approach to the problem have been identified , studied and utilized.
•The purpose of the special technique and knowledge of value analysis is to bring
with less expenditure of time and money , more of the better value combination
into focus.

8. A typical VAVE exercise could reduce the total cost of a product by 5-
40%. The typical elements of a VAVE exercise are as follows :
Information: Understand the current state of the project and
constraints / requirements.
Function Analysis: Understand the project from a functional perspective;
what must the project do, rather than how the project is currently conceived.
The function describes what something does and function analysis is the
process where the team reviews the project's functions to determine those that
could be improved. Function Analysis can be enhanced through the use of a
graphical mapping tool known as the Function Analysis System Technique
(FAST). FAST applies intuitive logic to test functions, create a common
language for a team, and test the validity of the functions in the project.

9. Creative: Generate a quantity of ideas related to other ways to perform the
functions.
Evaluation: Reduce the quantity of ideas that have been identified to a
short list of ideas with the greatest potential to improve the project and
meet the Value Engineering study objective.
Development: Further analyze and develop the short list of ideas and
develop those with merit into value alternatives.
Presentation Phase / Implementation: Present value alternatives
to management team and other project stakeholders or decision
makers.

11. There are two general approaches to problem solving:
1. Analytical approach
2. Creative approach
Analytical approach is to arrive at the final solution through a standard step – by-
step procedure.
Creative approach banks on the idea – generating ability of the problem solver
and his ability to embark on the best out of a number of possible solutions.

12. Analysis of function thorough use of creativity is the root of VE. Creativity phase in a
value analysis program is most important.
Creativity is the development of ideas , new to an individual , not necessarily new to
someone else. It is creativity that leads to the discovery of alternative designs,
methods, systems or process that will accomplish the basic function of basic cost.
Creativity techniques:-
1. Brainstorming
2. Gordon technique
3. Check listing
4. Synectics technique
5. Morphological analysis
6. Attribute listing technique
7. Evaluation comparison technique.