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MB0044 : What is Value Engineering? Give a real life example of application of VE.

Posted on: October 18, 2011

MA0044  : What is Value Engineering? Give a real life example of application of VE.  
Answer : Value Engineering (VE) or Value Analysis is a methodology by which we try to find substitutes for a product or an operation.

The concept of value engineering originated during the Second World War. It was developed by the General Electric Corporations (GEC). Value Engineering has gained popularity due to its potential for gaining high Returns on Investment (ROI). This methodology is widely used in business re-engineering, government projects, automakers, transportation and distribution, industrial equipment, construction, assembling and machining processes, health care and environmental engineering, and many others. Value engineering process calls for a deep study of a product and the purpose for which it is used, such as, the raw materials used; the processes of transformation; the equipment needed, and many others. It also questions whether what is being used is the most appropriate and economical. This applies to all aspects of the product.

Simplification of processes reduces the cost of manufacturing. Every piece of material and the process should add value to the product so as to render the best performance. Thus, there is an opportunity at every stage of the manufacturing and delivery process to find alternatives which will increase the functionality or reduce cost in terms of material, process, and time.

The different aspects of value engineering can be encapsulated into a sequence of steps known as a ‘Job Plan’. Value Engineering in organisations helps to identify:

  • The problem or situation that needs to be changed/improved
  • All that is good about the existing situation
  • The improvements required in the situation
  • The functions to be performed
  • The ways of performing each function
  • The best ways among the selected functions
  • The steps to be followed to implement the function
  • The person who executes the function

It should be remembered that we are not seeking a cost reduction sacrificing quality. It has been found that there will be an improvement in quality when systematic value analysis principles are employed.

Examples of Value Engineering

  • Russian liquid-fuel rocket motors are intentionally designed to permit ugly (though leak-free) welding. This reduces costs by eliminating grinding and finishing operations that do not help the motor function better.
  • Some Japanese disk brakes have parts toleranced to three millimeters, an easy-to-meet precision. When combined with crude statistical process controls, this assures that less than one in a million parts will fail to fit.
  • Many vehicle manufacturers have active programs to reduce the numbers and types of fasteners in their product, to reduce inventory, tooling and assembly costs.
  • Often a premium forming process (like “near net shape” forming) can eliminate hundreds of low-precision machining or drilling steps. Precision transfer stamping can quickly produce hundreds of high quality parts from generic rolls of steel and aluminum. Die casting is used to produce metal parts from aluminum or sturdy tin alloys (they’re often about as strong as mild steels). Plastic injection molding is a powerful technique, especially if the part’s special properties are supplemented with inserts of brass or steel.
  • When a product incorporates a computer, it replaces many parts with software that fits into a single light-weight, low-power memory part or microcontroller. As computers grow faster, digital signal processing software is beginning to replace many analog electronic circuits for audio and sometimes radio frequency processing.
  • On some printed circuit boards (itself a producibility technique), the conductors are intentionally sized to act as delay lines, resistors and inductors to reduce the parts count. An important recent innovation was to eliminate the leads of “surface mounted” components. At one stroke, this eliminated the need to drill most holes in a printed cricuit board, as well as clip off the leads after soldering.
  • In Japan (the land where manufacturing engineers are most valued), it is a standard process to design printed circuit boards of inexpensive phenolic resin and paper, and reduce the number of copper layers to one or two to lower costs without harming specifications.
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