1. Value Analysis and
Value Engineering
Presented by:
Tushar Lohani
Mechanical 3rd year(ME-2)
1316240122
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2. Contents
Concept of Value Analysis
Scope of Value Analysis
Benefits of Value Analysis
Concept of Value Engineering(VE)
When is it used ?
Phases of VE
Benefits of VE
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3. Concept of Value Analysis
Value analysis originated from second world war due to the shortage of
essential material.
Lawrence D Miles was the first to develop the technique and name it.
Value analysis is defined as an organized creative approach which has , as its
objective, the efficient identification of unnecessary cost (cost which provides
neither quality nor use nor appearance nor attention).
Value can be in terms of -
Use or Functional Value
Esteem Value
Cost Value
Exchange Value
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4. Based on these classifications, value is defined as "the minimum money which
has to be expended in purchasing or manufacturing a product to create the
appropriate use or esteem factors".
We could now define value analysis as "an organized creative approach which
has as its objective—the achievement of the value of the product". Value
analysis aims at reducing the cost value to the value of the product.
It should be borne in mind that:
Value is not inherent in a product, it is a relative term, and value can change with
time and place.
It can be measured only by comparison with other products which perform the same
function.
Value is the relationship between what someone wants and what he is willing to pay
for it.
In fact, the heart of value analysis technique is the functional approach. It relates to
cost of function whereas others relate cost to product.
Function
Value =
Cost
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5. Scope of Value Analysis
Organized cost reduction analysis
Development as practiced in many firms
Purchasing analysis
Method study
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6. Benefits of Value Analysis
It leads to improvements in product design so that, most appropriate
products are produced .
High quality (value) is maintained.
New ideas are generated and incorporated.
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7. Concept of Value Engineering
Value Engineering (VE) is an intensive, interdisciplinary problem solving activity
that focuses on improving the value of the functions that are required to
accomplish the goal, or objective of any product, process, service, or organization.
VALUE METHODOLOGY
“The systematic application of recognized techniques which identify the
functions of the product or service, establish the worth of those functions,
and provide the necessary functions to meet the required performance at the
lowest overall cost.”
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8. Value engineering is the process by which a company analyses the individual
components of cost within a product or service in order to determine whether it
can re-engineer the product's cost base in order to improve the value to the
customer.
The start point for value engineering is to understand the relationship between
each individual cost component and the value to the customer associated with
each individual component of cost.
It is a systematic method to improve the "value" of goods or products and
services by using an examination of function.
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9. When is VE used?
Value Engineering is used to reduce cost on existing Projects, Processes,
Products, or Services.
Value Engineering is used to improve quality, increase reliability and
availability, and customer satisfaction .
Value Engineering is a powerful tool used to identify problems and develop
recommended solutions.
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11. Benefits of VE
Value engineering helps achieve an improved product design and quality.
Value engineering suggests eliminating the unnecessary functions in the
organization that increase costs and have complex ties.
Value engineering enhances the customers' satisfaction and sales by
determining the exact need and expectation of customers.
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