Expert Manufacturing Advice tailored for step-by-step implementation in the workplace. Small Manufacturers, Machine Shops and CAD Engineers improve and thrive with our hands-on help. Value Analysis (VA) and Value Engineering (VE): Definitions and Benefits Essential Product Development for Engineers
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Value Engineering (VE) is concerned with new products. It is applied during product development. The focus is on reducing costs, improving function or both, by way of teamwork-based product evaluation and analysis. This takes place before any capital is invested in tooling, plant or equipment.
This is very significant, because according to many reports, up to 80% of a product’s costs (throughout the rest of its life-cycle), are locked in at the design development stage. This is understandable when you consider the design of any product determines many factors, such as tooling, plant and equipment, labour and skills, training costs, materials, shipping, installation, maintenance, as well as decommissioning and recycle costs. Therefore value engineering should be considered a crucial activity late on in the product development process and is certainly a wise commercial investment, with regard to the time it takes. It is strongly recommended you build value engineering into your new product development process, to make it more robust and for sound commercial reasons.
Value Analysis (VA) is concerned with existing products. It involves a current product being analysed and evaluated by a team, to reduce costs, improve product function or both. Value Analysis exercises use a plan which step-by-step, methodically evaluates the product in a range of areas. These include costs, function, alternative components and design aspects such as ease of manufacture and assembly.
A significant part of VA is a technique called Functional Analysis, where the product is broken down and reviewed as a number of assemblies. Here, the function is identified and defined for each product assembly. Costs are also assigned to each one. This is assisted by designing and viewing products as assemblies (or modules). As with VE, VA is a group activity that involves brainstorming improvements and alternatives to improve the value of the product, particular to the customer.
Note: Many refer to Value Management as an umbrella term, which encompasses value engineering and value analysis.
Reducing Costs by Using Value Engineering in Conjunction with other World Class Manufacturing Techniques
Before we move on and examine the specifics of value analysis, it is worth pointing out some of the best performers in industry often use value analysis, in conjunction with other world class manufacturing techniques, such as Lean Manufacturing. They do this in order to reduce their costs not only in product development, but in all areas of the business, particularly production. Please see the Lean Manufacturing Essentials section for specific details about production-based cost reduction.
Functional Analysis Explained: A Key Part of VA
Reasons for Value Analysing Existing Products
The majority of the information here is geared towards New Product Development and New Product Introduction. In contrast to this, as stated above, VA is based upon products you already sell. On the face of it, the reasons for value analysing existing products may seem obvious. However you may find yourself in a situation where you need to convince others and make the case for undertaking a VA exercise. Senior managers may require justification as to why it’s worth the investment of time and effort. Below are some points that may help. Consider applying them to your specific situation.
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