SlideShare a Scribd company logo

Value analysis and value engineering

U
udayravi2

Value Analysis and Value Engineering

1 of 31
Download to read offline
Value Analysis and Value
Engineering
By – Ravishankar K
SRESCOE
Value Analysis and Value Engineering
• Value Analysis is a technique that allows to increase
the value of a product or a service systematically,
eliminating all the functions that do not add any value
or benefit to the product.
• A product or process exists to fulfill a need.
• This need or set of needs is termed as a function, that
the product or process satisfies.
• For instance, knife exists to fulfill the need of cutting
and hence to cut is the function of knife.
2
What is meant by term Value?
• Value is a function of ‘Desired Performance’
and ‘Cost’.
• Expressed as Desired Performance (P) ÷ Overall
Costs (C)
• Desired performance is expressed by the term
worth which is defined as the lowest cost to
achieve the Use (work) function and Aesthetic
(sell) function.
3
How do define VA & VE
• Very often the two terms Value Analysis and Value
Engineering are used synonymously.
• However, difference between them will be clear from
the way they originated.
How VA originated?
• During the Second World War, U.S. government
reserved certain materials from armament industry.
• Therefore, General Electric Company found itself in fix
as many of their regularly used materials suddenly
became unavailable due to reservation.
4
• A purchase executive of the company, Lawrence D.
Miles made many substitutions in place of original
materials.
• Surprisingly, the results showed that substituted
materials did not affect the quality but brought costs
down.
• Later Larry developed a step by step approach for this
exercise and named the technique as Value Analysis.
 Thus it is a step by step approach to identify the
functions of a product, process, system or service; to
establish a monetary value for that function and then
provide the desired function at an overall minimum
cost without affecting any of the existing parameters
like Quality, Maintainability, Productivity, Safety and
other Performance Characteristics.
5
• In the year 1954, U.S. Navy Bureau of Ships adopted
same technique in their effort at ‘cost avoidance’
during the design stage and saved million of dollars .
• They named this technique as Value Engineering.
Value Engineering is where the value of all
components used in construction of a product from
design to final delivery stage are completely analyzed
and pursued.
• Thus, Value Engineering indicates application at
design stage whereas Value Analysis is the
application on the product that is into
manufacturing.
6

Recommended

Value engineering and Analysis
Value engineering and AnalysisValue engineering and Analysis
Value engineering and AnalysisChaitanya Chenna
 
Value analysis and Value Engineering
Value analysis and Value EngineeringValue analysis and Value Engineering
Value analysis and Value EngineeringTushar Lohani
 
Value Engineering And Value Analysis
Value Engineering And Value AnalysisValue Engineering And Value Analysis
Value Engineering And Value Analysisthombremahesh
 
Value analysis and value engineering
Value analysis and value engineeringValue analysis and value engineering
Value analysis and value engineeringAyush dixit
 
Value_Analysis_and_Value_Engineering, A_seminar_by_Mohan_Kumar_G
Value_Analysis_and_Value_Engineering, A_seminar_by_Mohan_Kumar_GValue_Analysis_and_Value_Engineering, A_seminar_by_Mohan_Kumar_G
Value_Analysis_and_Value_Engineering, A_seminar_by_Mohan_Kumar_GMohan Kumar G
 
Value engineering Short Over view ppt
Value engineering Short Over view pptValue engineering Short Over view ppt
Value engineering Short Over view pptMashfiq Albartross
 

More Related Content

What's hot

Value Engineering and Value Analysis.pptx
Value Engineering and Value Analysis.pptxValue Engineering and Value Analysis.pptx
Value Engineering and Value Analysis.pptxvirshit
 
Introduction to value engineering and value analysis
Introduction to value engineering and value analysisIntroduction to value engineering and value analysis
Introduction to value engineering and value analysisPrathamesh Kadam
 
Value Analysis Value Engineering & Business Process Reengineering
Value Analysis Value Engineering  &  Business Process ReengineeringValue Analysis Value Engineering  &  Business Process Reengineering
Value Analysis Value Engineering & Business Process ReengineeringT HARI KUMAR
 
What is VAVE
What is VAVE What is VAVE
What is VAVE Reff Ren
 
Value engineering seminar presentation
Value engineering seminar presentationValue engineering seminar presentation
Value engineering seminar presentationamrutrajbk
 
A Study Report on Value Analysis and Value Engineering (VAVE)
A Study Report on Value Analysis and Value Engineering (VAVE)A Study Report on Value Analysis and Value Engineering (VAVE)
A Study Report on Value Analysis and Value Engineering (VAVE)Avijeet Suryavanshi
 
8. chapter 7 work study (time and motion study)
8. chapter 7   work study (time and motion study)8. chapter 7   work study (time and motion study)
8. chapter 7 work study (time and motion study)sundar sivam
 
VALUE ANALYSIS,VALUE ENGINEERING, BUSINESS PROCESS REENGINEERING
VALUE ANALYSIS,VALUE ENGINEERING, BUSINESS PROCESS REENGINEERINGVALUE ANALYSIS,VALUE ENGINEERING, BUSINESS PROCESS REENGINEERING
VALUE ANALYSIS,VALUE ENGINEERING, BUSINESS PROCESS REENGINEERINGT HARI KUMAR
 
Fundamentals of value engineering
Fundamentals of value engineering Fundamentals of value engineering
Fundamentals of value engineering Karim Ragab
 
Facility layout ppt
Facility layout pptFacility layout ppt
Facility layout pptAnju Rana
 
Value engineering case study ppt
Value engineering case study pptValue engineering case study ppt
Value engineering case study pptAnuragTewari2
 
Product Design & Development - 1
Product Design & Development - 1Product Design & Development - 1
Product Design & Development - 1QRCE
 
Value Analysis and Value Engineering -Function & Evaluation of Function
Value Analysis and Value Engineering -Function & Evaluation of FunctionValue Analysis and Value Engineering -Function & Evaluation of Function
Value Analysis and Value Engineering -Function & Evaluation of FunctionJayaprakash Manickaraj
 

What's hot (20)

Value engineering
Value engineeringValue engineering
Value engineering
 
Value Engineering and Value Analysis.pptx
Value Engineering and Value Analysis.pptxValue Engineering and Value Analysis.pptx
Value Engineering and Value Analysis.pptx
 
Introduction to value engineering and value analysis
Introduction to value engineering and value analysisIntroduction to value engineering and value analysis
Introduction to value engineering and value analysis
 
Value Analysis Value Engineering & Business Process Reengineering
Value Analysis Value Engineering  &  Business Process ReengineeringValue Analysis Value Engineering  &  Business Process Reengineering
Value Analysis Value Engineering & Business Process Reengineering
 
What is VAVE
What is VAVE What is VAVE
What is VAVE
 
Value engineering seminar presentation
Value engineering seminar presentationValue engineering seminar presentation
Value engineering seminar presentation
 
A Study Report on Value Analysis and Value Engineering (VAVE)
A Study Report on Value Analysis and Value Engineering (VAVE)A Study Report on Value Analysis and Value Engineering (VAVE)
A Study Report on Value Analysis and Value Engineering (VAVE)
 
8. chapter 7 work study (time and motion study)
8. chapter 7   work study (time and motion study)8. chapter 7   work study (time and motion study)
8. chapter 7 work study (time and motion study)
 
VALUE ANALYSIS,VALUE ENGINEERING, BUSINESS PROCESS REENGINEERING
VALUE ANALYSIS,VALUE ENGINEERING, BUSINESS PROCESS REENGINEERINGVALUE ANALYSIS,VALUE ENGINEERING, BUSINESS PROCESS REENGINEERING
VALUE ANALYSIS,VALUE ENGINEERING, BUSINESS PROCESS REENGINEERING
 
Value Engineering
Value EngineeringValue Engineering
Value Engineering
 
Capacity planning
Capacity planning Capacity planning
Capacity planning
 
VALUE ANALYSIS
VALUE ANALYSISVALUE ANALYSIS
VALUE ANALYSIS
 
Line balancing
Line balancingLine balancing
Line balancing
 
CAPACITY PLANNING
CAPACITY PLANNINGCAPACITY PLANNING
CAPACITY PLANNING
 
Fundamentals of value engineering
Fundamentals of value engineering Fundamentals of value engineering
Fundamentals of value engineering
 
Break even analysis
Break even analysisBreak even analysis
Break even analysis
 
Facility layout ppt
Facility layout pptFacility layout ppt
Facility layout ppt
 
Value engineering case study ppt
Value engineering case study pptValue engineering case study ppt
Value engineering case study ppt
 
Product Design & Development - 1
Product Design & Development - 1Product Design & Development - 1
Product Design & Development - 1
 
Value Analysis and Value Engineering -Function & Evaluation of Function
Value Analysis and Value Engineering -Function & Evaluation of FunctionValue Analysis and Value Engineering -Function & Evaluation of Function
Value Analysis and Value Engineering -Function & Evaluation of Function
 

Similar to Value analysis and value engineering

The quest of one-piece-flow in IT by Pierre Masai, Toyota Motor Europe
The quest of one-piece-flow in IT by Pierre Masai, Toyota Motor EuropeThe quest of one-piece-flow in IT by Pierre Masai, Toyota Motor Europe
The quest of one-piece-flow in IT by Pierre Masai, Toyota Motor EuropeInstitut Lean France
 
Production Planning and Process Planning
Production Planning and Process PlanningProduction Planning and Process Planning
Production Planning and Process PlanningPraveenManickam2
 
Lean Tools and resulting ROI 2015
Lean Tools and resulting ROI 2015Lean Tools and resulting ROI 2015
Lean Tools and resulting ROI 2015Bill Bearnson
 
Performance Testing in the Agile Lifecycle
Performance Testing in the Agile LifecyclePerformance Testing in the Agile Lifecycle
Performance Testing in the Agile LifecycleLee Barnes
 
Day 4 - Turning Waste Into Worth
Day 4 - Turning Waste Into WorthDay 4 - Turning Waste Into Worth
Day 4 - Turning Waste Into WorthFrancesco Ruberto
 
Value analysis -2
Value analysis -2Value analysis -2
Value analysis -2Nitin Jain
 
Life cycle costing and customer life cycle costing (cost accounting)
Life cycle costing and customer life cycle costing (cost accounting)Life cycle costing and customer life cycle costing (cost accounting)
Life cycle costing and customer life cycle costing (cost accounting)Ro'ya Abd Elhafez
 
VA-VE Presentation.pptx
VA-VE Presentation.pptxVA-VE Presentation.pptx
VA-VE Presentation.pptxDevenJally1
 
ANG_AFSO21_Awareness_Training_(DULUTH)
ANG_AFSO21_Awareness_Training_(DULUTH)ANG_AFSO21_Awareness_Training_(DULUTH)
ANG_AFSO21_Awareness_Training_(DULUTH)Leanleaders.org
 
Chpter 2 manufacturing environment
Chpter 2 manufacturing environmentChpter 2 manufacturing environment
Chpter 2 manufacturing environmentshibasunar
 
26 story slicing techniques for any scrum team
26 story slicing techniques for any scrum team26 story slicing techniques for any scrum team
26 story slicing techniques for any scrum teamagilebin
 
High-Performance Agile Testing in Software Development
High-Performance Agile Testing in Software DevelopmentHigh-Performance Agile Testing in Software Development
High-Performance Agile Testing in Software DevelopmentTechWell
 
Internship Report honda
Internship Report hondaInternship Report honda
Internship Report hondaZain Agha
 
Complete five problems in which you analyze common approaches to
Complete five problems in which you analyze common approaches toComplete five problems in which you analyze common approaches to
Complete five problems in which you analyze common approaches toChantellPantoja184
 
Products and Value: An Agile Perspective BY Matt Nudelmann (GUEST PRESENTER)
Products and Value: An Agile Perspective BY Matt Nudelmann (GUEST PRESENTER)Products and Value: An Agile Perspective BY Matt Nudelmann (GUEST PRESENTER)
Products and Value: An Agile Perspective BY Matt Nudelmann (GUEST PRESENTER)Samuel Chin, PMP, CSM
 

Similar to Value analysis and value engineering (20)

The quest of one-piece-flow in IT by Pierre Masai, Toyota Motor Europe
The quest of one-piece-flow in IT by Pierre Masai, Toyota Motor EuropeThe quest of one-piece-flow in IT by Pierre Masai, Toyota Motor Europe
The quest of one-piece-flow in IT by Pierre Masai, Toyota Motor Europe
 
Production Planning and Process Planning
Production Planning and Process PlanningProduction Planning and Process Planning
Production Planning and Process Planning
 
Lean Tools and resulting ROI 2015
Lean Tools and resulting ROI 2015Lean Tools and resulting ROI 2015
Lean Tools and resulting ROI 2015
 
Lean principles taster
Lean principles tasterLean principles taster
Lean principles taster
 
Performance Testing in the Agile Lifecycle
Performance Testing in the Agile LifecyclePerformance Testing in the Agile Lifecycle
Performance Testing in the Agile Lifecycle
 
Day 4 - Turning Waste Into Worth
Day 4 - Turning Waste Into WorthDay 4 - Turning Waste Into Worth
Day 4 - Turning Waste Into Worth
 
Value analysis
Value analysisValue analysis
Value analysis
 
Value analysis -2
Value analysis -2Value analysis -2
Value analysis -2
 
Value analysis
Value analysisValue analysis
Value analysis
 
Life cycle costing and customer life cycle costing (cost accounting)
Life cycle costing and customer life cycle costing (cost accounting)Life cycle costing and customer life cycle costing (cost accounting)
Life cycle costing and customer life cycle costing (cost accounting)
 
VA-VE Presentation.pptx
VA-VE Presentation.pptxVA-VE Presentation.pptx
VA-VE Presentation.pptx
 
Lean Production
Lean ProductionLean Production
Lean Production
 
ANG_AFSO21_Awareness_Training_(DULUTH)
ANG_AFSO21_Awareness_Training_(DULUTH)ANG_AFSO21_Awareness_Training_(DULUTH)
ANG_AFSO21_Awareness_Training_(DULUTH)
 
Chpter 2 manufacturing environment
Chpter 2 manufacturing environmentChpter 2 manufacturing environment
Chpter 2 manufacturing environment
 
26 story slicing techniques for any scrum team
26 story slicing techniques for any scrum team26 story slicing techniques for any scrum team
26 story slicing techniques for any scrum team
 
High-Performance Agile Testing in Software Development
High-Performance Agile Testing in Software DevelopmentHigh-Performance Agile Testing in Software Development
High-Performance Agile Testing in Software Development
 
Internship Report honda
Internship Report hondaInternship Report honda
Internship Report honda
 
Complete five problems in which you analyze common approaches to
Complete five problems in which you analyze common approaches toComplete five problems in which you analyze common approaches to
Complete five problems in which you analyze common approaches to
 
Products and Value: An Agile Perspective BY Matt Nudelmann (GUEST PRESENTER)
Products and Value: An Agile Perspective BY Matt Nudelmann (GUEST PRESENTER)Products and Value: An Agile Perspective BY Matt Nudelmann (GUEST PRESENTER)
Products and Value: An Agile Perspective BY Matt Nudelmann (GUEST PRESENTER)
 
Introducing SCRUM
Introducing SCRUM Introducing SCRUM
Introducing SCRUM
 

Recently uploaded

chap. 3. lipid deterioration oil and fat processign
chap. 3. lipid deterioration oil and fat processignchap. 3. lipid deterioration oil and fat processign
chap. 3. lipid deterioration oil and fat processignteddymebratie
 
Basic Instrumentation Symbols | P&ID | PFD | Gaurav Singh Rajput
Basic Instrumentation Symbols | P&ID | PFD | Gaurav Singh RajputBasic Instrumentation Symbols | P&ID | PFD | Gaurav Singh Rajput
Basic Instrumentation Symbols | P&ID | PFD | Gaurav Singh RajputGaurav Singh Rajput
 
Center Enamel is the leading fire water tanks manufacturer in China.docx
Center Enamel is the leading fire water tanks manufacturer in China.docxCenter Enamel is the leading fire water tanks manufacturer in China.docx
Center Enamel is the leading fire water tanks manufacturer in China.docxsjzzztc
 
Paper Machine Troubleshooting manual for paper makers
Paper Machine Troubleshooting manual for paper makersPaper Machine Troubleshooting manual for paper makers
Paper Machine Troubleshooting manual for paper makersNomanKhan691800
 
Introduction to Machine Learning Unit-1 Notes for II-II Mechanical Engineerin...
Introduction to Machine Learning Unit-1 Notes for II-II Mechanical Engineerin...Introduction to Machine Learning Unit-1 Notes for II-II Mechanical Engineerin...
Introduction to Machine Learning Unit-1 Notes for II-II Mechanical Engineerin...C Sai Kiran
 
Lesson2 Stoichiometry and mass balance.pdf
Lesson2 Stoichiometry and mass balance.pdfLesson2 Stoichiometry and mass balance.pdf
Lesson2 Stoichiometry and mass balance.pdff1002753214
 
Introduction to Binary Tree and Conersion of General tree to Binary Tree
Introduction to Binary Tree  and Conersion of General tree to Binary TreeIntroduction to Binary Tree  and Conersion of General tree to Binary Tree
Introduction to Binary Tree and Conersion of General tree to Binary TreeSwarupaDeshpande4
 
Checklist to troubleshoot CD moisture profiles.docx
Checklist to troubleshoot CD moisture profiles.docxChecklist to troubleshoot CD moisture profiles.docx
Checklist to troubleshoot CD moisture profiles.docxNomanKhan691800
 
S. Kim, NeurIPS 2023, MLILAB, KAISTAI
S. Kim,  NeurIPS 2023,  MLILAB,  KAISTAIS. Kim,  NeurIPS 2023,  MLILAB,  KAISTAI
S. Kim, NeurIPS 2023, MLILAB, KAISTAIMLILAB
 
Chapter 1 - Drilling Fluid Functions GR.ppt
Chapter 1 - Drilling Fluid Functions GR.pptChapter 1 - Drilling Fluid Functions GR.ppt
Chapter 1 - Drilling Fluid Functions GR.pptzeidali3
 
streelmaking technology for the last 100 years.pdf
streelmaking technology for the last 100 years.pdfstreelmaking technology for the last 100 years.pdf
streelmaking technology for the last 100 years.pdfAlbertoConejoPadre1
 
CHAPTER 1_ HTML and CSS Introduction Module
CHAPTER 1_ HTML and CSS Introduction ModuleCHAPTER 1_ HTML and CSS Introduction Module
CHAPTER 1_ HTML and CSS Introduction Modulessusera4f8281
 
Introduction and replication to DragonflyDB
Introduction and replication to DragonflyDBIntroduction and replication to DragonflyDB
Introduction and replication to DragonflyDBMarian Marinov
 
HB Self-Body characteristics UHV understanding
HB Self-Body characteristics UHV understandingHB Self-Body characteristics UHV understanding
HB Self-Body characteristics UHV understandingLeoRaju4
 
Basic Concepts of Material Science for Electrical and Electronic Materials ...
Basic Concepts of Material Science for  Electrical and Electronic Materials  ...Basic Concepts of Material Science for  Electrical and Electronic Materials  ...
Basic Concepts of Material Science for Electrical and Electronic Materials ...PeopleFinder
 
B111_FTS_2011.06.01 Fuel Tank Safety.pdf
B111_FTS_2011.06.01 Fuel Tank Safety.pdfB111_FTS_2011.06.01 Fuel Tank Safety.pdf
B111_FTS_2011.06.01 Fuel Tank Safety.pdfKhoiTruong19
 
python presentation lists,strings,operation
python presentation lists,strings,operationpython presentation lists,strings,operation
python presentation lists,strings,operationManjuRaghavan1
 
Microservices: Benefits, drawbacks and are they for me?
Microservices: Benefits, drawbacks and are they for me?Microservices: Benefits, drawbacks and are they for me?
Microservices: Benefits, drawbacks and are they for me?Marian Marinov
 
PM24_Oral_Presentation_Template_Guidelines.pptx
PM24_Oral_Presentation_Template_Guidelines.pptxPM24_Oral_Presentation_Template_Guidelines.pptx
PM24_Oral_Presentation_Template_Guidelines.pptxnissamant
 
Microstructure of Hadfield Steels (Robert Hadfield)
Microstructure of Hadfield Steels (Robert Hadfield)Microstructure of Hadfield Steels (Robert Hadfield)
Microstructure of Hadfield Steels (Robert Hadfield)MANICKAVASAHAM G
 

Recently uploaded (20)

chap. 3. lipid deterioration oil and fat processign
chap. 3. lipid deterioration oil and fat processignchap. 3. lipid deterioration oil and fat processign
chap. 3. lipid deterioration oil and fat processign
 
Basic Instrumentation Symbols | P&ID | PFD | Gaurav Singh Rajput
Basic Instrumentation Symbols | P&ID | PFD | Gaurav Singh RajputBasic Instrumentation Symbols | P&ID | PFD | Gaurav Singh Rajput
Basic Instrumentation Symbols | P&ID | PFD | Gaurav Singh Rajput
 
Center Enamel is the leading fire water tanks manufacturer in China.docx
Center Enamel is the leading fire water tanks manufacturer in China.docxCenter Enamel is the leading fire water tanks manufacturer in China.docx
Center Enamel is the leading fire water tanks manufacturer in China.docx
 
Paper Machine Troubleshooting manual for paper makers
Paper Machine Troubleshooting manual for paper makersPaper Machine Troubleshooting manual for paper makers
Paper Machine Troubleshooting manual for paper makers
 
Introduction to Machine Learning Unit-1 Notes for II-II Mechanical Engineerin...
Introduction to Machine Learning Unit-1 Notes for II-II Mechanical Engineerin...Introduction to Machine Learning Unit-1 Notes for II-II Mechanical Engineerin...
Introduction to Machine Learning Unit-1 Notes for II-II Mechanical Engineerin...
 
Lesson2 Stoichiometry and mass balance.pdf
Lesson2 Stoichiometry and mass balance.pdfLesson2 Stoichiometry and mass balance.pdf
Lesson2 Stoichiometry and mass balance.pdf
 
Introduction to Binary Tree and Conersion of General tree to Binary Tree
Introduction to Binary Tree  and Conersion of General tree to Binary TreeIntroduction to Binary Tree  and Conersion of General tree to Binary Tree
Introduction to Binary Tree and Conersion of General tree to Binary Tree
 
Checklist to troubleshoot CD moisture profiles.docx
Checklist to troubleshoot CD moisture profiles.docxChecklist to troubleshoot CD moisture profiles.docx
Checklist to troubleshoot CD moisture profiles.docx
 
S. Kim, NeurIPS 2023, MLILAB, KAISTAI
S. Kim,  NeurIPS 2023,  MLILAB,  KAISTAIS. Kim,  NeurIPS 2023,  MLILAB,  KAISTAI
S. Kim, NeurIPS 2023, MLILAB, KAISTAI
 
Chapter 1 - Drilling Fluid Functions GR.ppt
Chapter 1 - Drilling Fluid Functions GR.pptChapter 1 - Drilling Fluid Functions GR.ppt
Chapter 1 - Drilling Fluid Functions GR.ppt
 
streelmaking technology for the last 100 years.pdf
streelmaking technology for the last 100 years.pdfstreelmaking technology for the last 100 years.pdf
streelmaking technology for the last 100 years.pdf
 
CHAPTER 1_ HTML and CSS Introduction Module
CHAPTER 1_ HTML and CSS Introduction ModuleCHAPTER 1_ HTML and CSS Introduction Module
CHAPTER 1_ HTML and CSS Introduction Module
 
Introduction and replication to DragonflyDB
Introduction and replication to DragonflyDBIntroduction and replication to DragonflyDB
Introduction and replication to DragonflyDB
 
HB Self-Body characteristics UHV understanding
HB Self-Body characteristics UHV understandingHB Self-Body characteristics UHV understanding
HB Self-Body characteristics UHV understanding
 
Basic Concepts of Material Science for Electrical and Electronic Materials ...
Basic Concepts of Material Science for  Electrical and Electronic Materials  ...Basic Concepts of Material Science for  Electrical and Electronic Materials  ...
Basic Concepts of Material Science for Electrical and Electronic Materials ...
 
B111_FTS_2011.06.01 Fuel Tank Safety.pdf
B111_FTS_2011.06.01 Fuel Tank Safety.pdfB111_FTS_2011.06.01 Fuel Tank Safety.pdf
B111_FTS_2011.06.01 Fuel Tank Safety.pdf
 
python presentation lists,strings,operation
python presentation lists,strings,operationpython presentation lists,strings,operation
python presentation lists,strings,operation
 
Microservices: Benefits, drawbacks and are they for me?
Microservices: Benefits, drawbacks and are they for me?Microservices: Benefits, drawbacks and are they for me?
Microservices: Benefits, drawbacks and are they for me?
 
PM24_Oral_Presentation_Template_Guidelines.pptx
PM24_Oral_Presentation_Template_Guidelines.pptxPM24_Oral_Presentation_Template_Guidelines.pptx
PM24_Oral_Presentation_Template_Guidelines.pptx
 
Microstructure of Hadfield Steels (Robert Hadfield)
Microstructure of Hadfield Steels (Robert Hadfield)Microstructure of Hadfield Steels (Robert Hadfield)
Microstructure of Hadfield Steels (Robert Hadfield)
 

Value analysis and value engineering

  • 1. Value Analysis and Value Engineering By – Ravishankar K SRESCOE
  • 2. Value Analysis and Value Engineering • Value Analysis is a technique that allows to increase the value of a product or a service systematically, eliminating all the functions that do not add any value or benefit to the product. • A product or process exists to fulfill a need. • This need or set of needs is termed as a function, that the product or process satisfies. • For instance, knife exists to fulfill the need of cutting and hence to cut is the function of knife. 2
  • 3. What is meant by term Value? • Value is a function of ‘Desired Performance’ and ‘Cost’. • Expressed as Desired Performance (P) ÷ Overall Costs (C) • Desired performance is expressed by the term worth which is defined as the lowest cost to achieve the Use (work) function and Aesthetic (sell) function. 3
  • 4. How do define VA & VE • Very often the two terms Value Analysis and Value Engineering are used synonymously. • However, difference between them will be clear from the way they originated. How VA originated? • During the Second World War, U.S. government reserved certain materials from armament industry. • Therefore, General Electric Company found itself in fix as many of their regularly used materials suddenly became unavailable due to reservation. 4
  • 5. • A purchase executive of the company, Lawrence D. Miles made many substitutions in place of original materials. • Surprisingly, the results showed that substituted materials did not affect the quality but brought costs down. • Later Larry developed a step by step approach for this exercise and named the technique as Value Analysis.  Thus it is a step by step approach to identify the functions of a product, process, system or service; to establish a monetary value for that function and then provide the desired function at an overall minimum cost without affecting any of the existing parameters like Quality, Maintainability, Productivity, Safety and other Performance Characteristics. 5
  • 6. • In the year 1954, U.S. Navy Bureau of Ships adopted same technique in their effort at ‘cost avoidance’ during the design stage and saved million of dollars . • They named this technique as Value Engineering. Value Engineering is where the value of all components used in construction of a product from design to final delivery stage are completely analyzed and pursued. • Thus, Value Engineering indicates application at design stage whereas Value Analysis is the application on the product that is into manufacturing. 6
  • 7. Difference between Value Analysis and Value Engineering 7 Value Analysis Value Engineering Indicates application on the product that is into manufacturing. Indicates application on the product at its design stage Workers, subcontractors and engineers come together to make a team with experience and knowledge Done by a specific product design team (Engineers) May change the present stage of the product or operation Changes are executed at the initial stages only. Worked out mostly with the help of knowledge and experience Requires specific technical knowledge
  • 8. What is the meaning of overall costs? For a manufacturer/ producer • Overall cost is summation of all elements of the costs required to produce or service such as labour, material, overhead etc. For a consumer • Overall cost is the monetary sum (price) for which the product or service is purchased in the market. 8
  • 9. The Value of the a function V= P/C can be increased by four methods. (1) Decrease the cost while ensuring the same level of performance. • Reduce the thickness of wooden drums in case of packing of telephone cables. • Earlier CDs and DVDs were sold at above Rs 100/- Moser Baer introduced the same at almost half the price. (2) Enhance the performance at the same cost • Providing a supplement of Mumbai Mirror along with the copy of The Times of India at no extra cost. 9
  • 10. (3) Decrease the cost and increase the performance • Intel’s Pentium chip is cheaper and has much more processing power than all its earlier chips. (4) Increase both performance and cost ensuring that performance increases more than the increase in cost. • American cola giant increased quantity of soft drink from 250 ml to 300 ml (20% more) but increased price just by 10%  In all the above cases ‘cost’ is viewed at from customer’s point of view. 10
  • 11. Value Analysis Tests ►Each product or component is subjected to the following tests: • Does its use contribute value? • Is its cost proportional to its usefulness? • Does it need all its features? • Is there anything better for the intended use? • Can a usable part be made by lower cost method? • Can a standard product be found which will be usable? • Is it made on proper tooling, considering quantities used? • Do materials, reasonable labour, overhead, and profit total its cost? • Will another dependable supplier provide it for less? • Is anyone buying it for less? 11
  • 12. Functions-Use and Aesthetics A. Use function - Prashant wants to go for a trek to a place 15 kms from Karjat. He wants to purchase shoes that will protect his feet from stones and thorns etc. Therefore he opts for ‘Hunter shoes’. - To protect feet is called as the Use Function of the shoes. B. Aesthetic function - Parag is preparing for prize distribution ceremony of his college. Dressed in blazer he will be putting on black leather shoes with good appearance. - To give good appearance is called as the Aesthetic Function of shoes.  Use and Aesthetic functions are always present in all the products. Depending on the user and the need, one function assumes predominance over other. 12
  • 13. Primary Function & Secondary Function • AR Dairies is a Mumbai based milk and dairy products company. They used to supply milk (cow and buffalo) in 500 ml glass bottles. Lately they have introduced Masala Milk in 200 ml bottles, which became an instant success. While Masala Milk is supplied throughout the day, other type of milk is supplied only in the morning. While going through the audit reports, Shalini found that there is a transit loss of 2% due to breakage of bottles. To overcome that Shalini introduced polythene bags in place of 500 ml bottles. However Masala Milk continued to be sold in glass bottles. • Why did Shalini not introduce polythene bags for Masala Milk? 13
  • 14. • The Primary Function of bottle is ‘to hold the liquid’ and Secondary Function is ‘to facilitate drinking’. • In this case, shape of the bottle facilitates drinking; however when primary function is achieved by some other means i.e. polyethylene bag then secondary function ceases to exist. • As a consumer drinks Masala Milk on the spot, secondary function of facilitation of drinking is very important whereas cow milk or buffalo milk is never drunk without heating it. • Therefore Shalini could sacrifice secondary function in case of cow & buffalo milk but not in case of Masala Milk. 14
  • 15. Higher Order & Lower Order Function • The basic function of a Torch is ‘To Give Light’ • Let us analyze order of functions. • Give Light (why)  Facilitates Viewing (How)  Light the Bulb (How) Supply Current (How)  Insert Battery • When we ask question ‘Why’ to the basic function; then the answer we get is called as ‘Higher Order function’. • And when we put question ‘How’ to the Higher Order Function we get ‘Lower Order Function’. • Thus ‘Facilitate Viewing’ is higher order function and ‘Light the Bulb’ is a lower order function. • As we continue asking questions ‘How’ we will get functions still lower in order. • Therefore ‘Insert Battery’ is lower than ‘Supply Current’ which in turn is lower than ‘Light the Bulb’. 15
  • 16. • Incidentally if we take any part or function and put the question ‘Why’ , then we will get functions higher in order. • Insert Battery (Why)Supply Current (Why)Light the Bulb (Why)Facilitate Viewing. 16
  • 17. Summary of Functions Type of Function Meaning Use Function Perform some action, expresses in active tone. Aesthetic Function Pleases customer, expressed in passive or non-measurable tone. Primary Function Basic purpose for which a product exists Secondary Function Arises out of specific design chosen to fulfill the Primary Function. Higher Order Needs Reasons of satisfying the Basic Function Lower Order Needs Means of achieving the Basic Function. 17
  • 18. A product can have more than one primary function • For example, LPG cylinder apart from holding the LPG must also withstand high pressure and must prevent leakage of gas. Therefore any cylinder design must address all these factors. Many times some of the secondary functions are unnecessary or even undesirable. • For example, Lamp used for producing image in OHP also produces heat that calls for fan. The fan is quite unnecessary but with present level of technology we have not been able to produce light without heat. • Therefore, a customer has to pay for fan even though it does not add any direct value to him. 18
  • 19. Function Analysis System Technique • Helps in a thorough understanding of the scope and intricacies of the problem under study. • Provides a determinate logic for testing the functions. • Assists in identifying the basic, required secondary and unwanted functions, and establishes their inter- linking in a logical sequence. • Highlights the missing links or functions which might have been overlooked. • Demonstrates that the problem has been thoroughly analyzed by the team and helps in persuading the decision makers to accept the VE team recommendations 19
  • 20. FAST Diagramme for Pen Part Function Remark Head Position Refill Locate Refill Cylinder Provide Grip Protect Refill Improve Aesthetic Show ink-level Serration on cylinder Carry Name & Logo Transparency Tail Support Refill Rings (Front & Back) Help Location Cap Protect Tip Facilitate Carrying Projection on the Cap Refill Contain Ink Control Flow Ink in Refill Make Marks 20
  • 21. The alternatives can be (1) Eliminate head and make it part of Cylinder (2) Eliminate Tail and make it part of Cylinder (3) Eliminate Rings  Financials & Operational Report (1) Design change suggested (2) Reason for change (3) Additional expenditure required for new die, advertising expenses etc. (4) Savings (cost of rings, elimination of one process etc.) 21
  • 22. Principles of Value Analysis • Do not use a part that does not contribute to the value of the product. • Do not use a part whose cost is not proportional to its function/ usefulness. • Do not provide any features to the component or finished product that are not absolutely required. • Accept change if part of required quality is made by a process costing less than the alternative process. • Use standardized parts wherever possible. • Use proper manufacturing methods taking into account the quantities. • Use the material best suited for the purpose. • Purchase the part instead of in-house manufacturing if suitable supplier can provide the part of good quality at a reasonable price. 22
  • 23. When to Apply Value Analysis? • Products are losing their market share and there is a decline in sales. • Products are priced higher than competition in a price sensitive market or product cost is > sales price of competition. • New designs to be undertaken. • Rising manufacturing costs. 23
  • 24. Reasons for Unnecessary Costs • Lack of relevant information leads to wrong decisions which increase costs. • Wrong beliefs in accepting opinions. • Lack of ideas. 24
  • 25. Strategic Steps In Value Analysis • Determine function and cost of each element in finished product. • Consider alternatives that fulfill functions. • Select best alternative which includes standardized materials and standardized dimensions. • Strategic choice of make products or subcontract. • Modify design to reduce costs. 25
  • 26. Value Analysis Procedure • Identify items to be analyzed. • Differentiate whether item or process. • Identify internal and external customers. • Identify basic functions. • Identify secondary functions which support basic. • To prioritize determine value or importance to customer of each function. • Break item/process into constituent components by using flow chart. • Associate components with functions. • Look for components which can be modified or eliminated. 26
  • 27. Options in Value Analyses/Value Engineering • Modify • Integrate • Substitute • Simplify 27
  • 28. When to Use Value Analysis/Value Engineering • Aim is to evaluate real value of Product/process • Focus is on saving costs • Aim is on increasing value of process/product. 28
  • 29. Benefits of Value Engineering • Cost reduction /elimination techniques. • Balances costs and performance • Prevents overdesign of product (Customer Function Deployment) • Increases profits and reduces costs. • Increases customer satisfaction 29
  • 30. Examples of Value Analysis • Modify-Motor car engines have been modified to run on LPG/CNG • Integrate-Air conditioner and heater integrated into one unit. • Substitute-In-house wiring has been changed from copper to aluminum or coke bottles changed from Glass to Plastic. • Simplify-Application software simplified by being made modular. Earlier all modules were bundled or an equipment made modular which simplifies transportation and maintenance 30