What is Value Engineering?
Value engineering is a systematic method to improve the value of products or services
By focussing on their functions.
Value Engineering focuses on what a product / service does and not on what it actually is. For example, if one places a business card in a book to note a particular page, then the business card does the function of a bookmark.
Value is the ratio of function to cost. Value = Performance / Cost.
So value can be increased by either increasing the performance or by reducing the cost.
Value engineering is also referred to as “value management”, “value methodology” and “value analysis”.
Value Engineering or VE understands the function of a product/service so well that it can be described in just two words. For example, the function of a piece of chalk is to “make marks”.
This enables us to consider other products which can do a similar function, say, a pen or a pencil and decide upon the best alternative.
Continuous improvement is an integral part of VE.
History of Value Engineering
Larry Miles, an engineer working for General Electric during World War II, is considered the father of Value Engineering. During that time, he and his team faced shortages of skilled labour, raw materials etc. They tried acceptable substitutes which improved the product or reduced the cost. Sometimes both were achieved.
Value Engineering Approaches
VE uses Functional Analysis Systems Technique (FAST) as a tool.
This is based on two approaches.
Technical FAST focuses on technology
Customer FAST focuses on the customer
VE follows a job plan which has the following 8 phases
- Selection Phase
- Information Phase
- Creativity Phase
- Analysis Phase
- Development Phase
- Presentation Phase
- Implementation Phase
- Verification Phase
Examples of VE
- An engineer in a motor manufacturer does a Value Analysis on the motor casing and the process used to build it. He finds three different sizes of nuts and bolts used, with significant time taken to insert and tighten them. A redesign of the casing changes this to use one size of bolt with threaded bolt holes, which removes the need for nuts. The result is a savings in both material costs and assembly time.
- A receptionist, aiming to improve the process of welcoming guests, first determines the basic functions of relaxing guests and finding the objective of their visit. She then identifies her process for achieving these and brainstorms possible improvements. By experimenting with several approaches over two months, she finds the manner and questioning technique that best achieves her objective.
Indian Value Engineering Society, INVEST, is a professional society established in October, 1977 and dedicated to the advancement of Value Engineering through education. This provides a better understanding of the principles, methods and concepts of value technology. It maintains a network of chapters throughout the country. INVEST is affiliated to the Society of American value Engineers (SAVE).
Price is what the customer gives and value is what he gets.