VA/VE is an approach to productivity improvement that attempts to increase the value obtained by a customer of a product by offering the same level of functionality at a lower cost. Value engineering is sometimes used to apply to this process of cost reduction prior to manufacture, while value analysis applies the process to products currently being manufactured. The terms are interchangeable; both attempt to eliminate costs that do not contribute to the value and performance of the product.
VE/VA originated in General Electric (under Lawrence Miles) during the Second World War. GE were seeking ways to make the most efficient use of war-limited funds and raw materials. They found in most cases alternative materials and processes performed at least as well and often better in terms of both specification and cost. This led them to formalise the approach and devise a team-oriented technique that determines the ‘value’ of each part and each product. Value engineering, thus, critically examines the contribution made to product value by each feature of a design. It then looks to deliver the same contribution at lower cost.
Value engineering programs are best delivered by multi-skilled teams consisting of designers, purchasing specialists, operations personnel, and financial analysts. Pareto analysis is often used to prioritise those parts of the total design that are most worthy of attention. These are then subject to rigorous scrutiny. The team analyses the function and cost of those elements and tries to find any similar components that could do the same job at lower cost.
Common results are a reduction in the number of components, the use of cheaper materials, or a simplification of the process.
Several characteristics differentiate the Value Method from other techniques. These help ensure that the customer obtains the kind of product they need and want.
Comparisons of worth and value as opposed to Life-Cycle Costs. Different types of value are recognised by the approach:
Use value relates to the attributes of a product that enable it to perform its function.
Cost value is the total cost of producing the product.
Esteem value is the additional premium price that a product can attract because of its intrinsic attractiveness to purchasers.
Exchange value is the sum of the attributes that enable the product to be exchanged or sold.
Although the relative magnitude of these different types of value will vary between products, and perhaps over the life of a product, VA/VE attempts to identify the contribution of each feature to each type of value through systematic analysis and structured creativity enhancing techniques.
Function analysis is concerned with locating unnecessary costs and specific requirements (or other project driven characteristics) and determining the value of the project selected for study. A function is that which makes an item or service work or sell – in other words, an item’s function is why the customer buys the product or service. An item, including structures and services, is a means to the end of providing a function, not the end itself. In using the function approach, the value study team constantly returns to the primary reason for design and build cycles –the ultimate use of the item. Customers buy a product or service because it will provide a function that satisfies their need at a cost they are willing to incur. If, as is almost always the case, they wish to minimize their total cost they must look beyond price and consider other costs – operational, maintenance and usage.
The Job Plan consists of five phases:
Product failures through design or manufacturing faults are costly both in monetary terms and in the customer’s perception of the product and manufacturer. Therefore a multifunctional approach to product system analysis, done in a timely manner, provides a valuable guard against the introduction of poor products. FMEA is a structured approach to the identification and evaluation through a ‘risk priority number’ (RPN) of possible modes of failure in a product or process design. The RPN delivers a list of prioritised failure modes to be considered during design. Failure is taken in its broadest sense, not as a catastrophic breakdown but as a consequence of not meeting a customer’s requirements. The aim is to anticipate and design out all possible failures before they occur, removing the cost to manufacture, warranties, and customer satisfaction. It can be used from design through to production.
The purpose of FMEA is to:
Design FMEA: uncovers potential failures associated with a product that could cause product malfunction, shortened life or potential safety hazards.
Production FMEA: uncovers potential failures that can impact on product quality, reduce process reliability, create safety hazards and ultimately cause customer dissatisfaction
It should go without saying that a design team needs to consider the manufacture of a product, but, all too often, products enter manufacturing with problems that are expensive to put right and could have been avoided if the manufacture of the product had been considered at an early stage. Areas for consideration might include:
Careful consideration of these issues, in conjunction with manufacturing engineers, at an early stage in development can pay great dividends when the product enters manufacturing. It will reduce manufacturing time and costs by reducing or eliminating problems generated by a design that has not been assessed for manufacturability during the design stage.
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