A presentation on Value engineering

1. Value Engineering
By Edwin Jacob Y

2. What Value Engineering Is!
An organized study of FUNCTIONS to
satisfy the USER’S NEEDS with a
QUALITY PRODUCT at the LOWEST LIFE
CYCLE COST through APPLIED
CREATIVITY

3. Definition of Value Engineering
 Value Engineering (VE, or Value Analysis) is a management technique that
seeks the best functional balance between cost , reliability and performance
of a product, project, process or service.
 What is Value? • Value is the lowest price you must pay to provide a reliable
function or service
 “Good” Value is the lowest cost to reliably provide the required function with
essential performance.
 Value is always increased by decreasing costs while maintaining essential
performance.
 Value may also be increased if the customer needs, wants, and is willing to
pay for greater performance.

4. Range of Application
 VE applies to everything because every project or
process has a function.
 VE can be applied at any point of the design or
process.
 VE is a problem solving technique.
 VE can be used as a technique for developing
design criteria.

5. How is a Value Engineering Study
Conducted?
The Job Plan Value engineering is often done
by systematically following a multi-stage job
plan. Larry Miles' original system was a six-
step procedure which he called the "value
analysis job plan."

6. The Job Plan The modern version
It has the following eight steps:
1. Orientation
2. Information
3. Functional Creative
4. Evaluation
5. Development
6. Presentation
7. Implementation and Follow-up

7. The Job Plan - Orientation Phase
1. Identify issues
2. Prioritize Issues
3. Drafts scopes and objective
4. Establish evaluation factors
5. Determine Study Team
6. Collect Data
7. Prepare for value study

8. The Job Plan - Information Phase
1. Further familiarization of the project by the
team; all team members participate in determine
the true needs of the project.
2. Areas of high cost or low worth are identified.

9. The Job Plan - Functional Phase
Functional analysis outlines the basic
function of a product using a verb and a noun
such as ‘boil water’ as in the case of our
kettle. What is the Function? “ Boil Water ”
Verb Noun

10. The Job Plan - Creative Phase
This step requires a certain amount of creative
thinking by the team. A technique that is useful for
this type of analysis is brainstorming. This stage is
concerned with developing alternative.

11. The Job Plan - Evaluation Phase
 In this phase of the workshop, the VA team judges the
ideas developed during the creative phase.
 The VA team ranks the ideas.
 Ideas found to be irrelevant or not worthy of additional
study are disregarded.
 Those ideas that represent the greatest potential for cost
savings and improvements are selected for development.

12. The Job Plan - Development Phase
The team develops the selected ideas into
alternatives (or proposals) with a sufficient
level of documentation to allow decision
makers to determine if the alternative should
be implemented.

13. The Job Plan - Presentation Phase
The presentation phase is actually
presenting the best alternative (or
alternatives) to those who have the
authority to implement the proposed
solutions that are acceptable.

14. The Job Plan - Implementation And
Follow Up
1. Develop an implementation plan
2. Execute the plan
3. Monitor the plan to completion Objective: During
the implementation and follow-up phase,
management must assure that approved
recommendations are converted into actions.

15. Purpose of value engineering
1. Determine the best design alternatives
2. Reduce cost
3. Improve quality
4. Increase reliability and availability
5. Enhance customer satisfaction
6. Improve organizational performance
7. Identify problems
8. Develop recommended solutions

16. Potential Saving From VE Early changes are naturally less
expensive than later ones, as shown in the diagram below.

17. Conclusion
Three goals that we're looking at value engineering:
1. Identify additional functions that aren’t attractive
to customers.
2. Add attractive functions for customers.
3. Saving because of the elimination of redundant
functions.