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Value Analysis and Engineering Guide

Value analysis and value engineering are systematic techniques to identify the function of a product or service and provide that function at the lowest cost. Value analysis is applied to existing products, while value engineering is applied during the design stage of new products. The techniques aim to simplify products, use better materials, modify designs, make processes more efficient, reduce costs, and increase product utility in an economical way. Value analysis should be considered when a company's sales are declining, prices are too high, costs are rising disproportionately, or profits are falling. It evaluates performance and value as a ratio of utility to cost.

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206 views8 pages

Value Analysis and Engineering Guide

Value analysis and value engineering are systematic techniques to identify the function of a product or service and provide that function at the lowest cost. Value analysis is applied to existing products, while value engineering is applied during the design stage of new products. The techniques aim to simplify products, use better materials, modify designs, make processes more efficient, reduce costs, and increase product utility in an economical way. Value analysis should be considered when a company's sales are declining, prices are too high, costs are rising disproportionately, or profits are falling. It evaluates performance and value as a ratio of utility to cost.

Uploaded by

Anonymous DQGLUZxH
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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  • Value Analysis / Value Engineering
  • DFM: An Example
  • Aims
  • When to Apply Value Analysis
  • Value Definition
  • Types of Value
  • Value Engineering Procedure

VALUE ANALYSIS / VALUE ENGINEERING

Value

Analysis is the systematic

application
of recognized techniques which identify the
function of a
product or service, establish a monetary value for
the
function and provide the necessary function
reliability at
the lowest cost
Value Engineering is the application of
exactly the same set of techniques to a new
product at the design stage

DFM: An Example
(a) The original design

Assembly using
common fasteners

(b) Revised design

(c) Final design

One-piece base &


Design for push-and-snap
elimination of fasteners
assembly

AIMS
Simplify the product
Use (new) cheaper and better
materials
Modify and improve product design
Use efficient process
Reduce the product cost
Increase the utility of the product by
economical means
Save money or increase the profits

WHEN TO APPLY VALUE ANALYSIS

Companys products show decline in sale


Companys prices are higher than those of

its competitors
Raw materials cost has gone up suddenly
New designs are being introduced
The cost of manufacturing is rising
disproportionate to the volume of
production
Rate of return on investment has a falling
trend
The firm is unable to meet its delivery
commitments

PERFORMANCE (Utility)

VALUE

= --------------------COST

VALUE:
The designer equates the value with Reliability;
Purchase person with price paid for the item;
Production person with what it costs to
manufacture and
Sales personnel with what the customer is willing
to pay.
Types of Value:
Cost Value
Exchange Value
Use Value
Esteem Value

Cost Value
It is the summation of labour, material, overhead
and all other elements of cost required to
produce an item or provide service.
Exchange Value
Exchange value refers to the price that a
purchaser will offer for the product, the price
being dependent upon satisfaction (value) which
he derives from the product.
Use Value
It is also known as the function value. The use
value is equal to the value of the functions
performed.
Esteem Value
It involves the qualities and appearance of a
product which attract persons and create in them
a desire to posses the product.

Value Engineering Procedure


1. Blast (i) Identify the product
(ii) Collect relevant information
(iii) Define different functions
2. Create
(i) Different alternatives
(ii) Critically evaluate the
alternatives
3. Refine
(i) Develop the best
alternatives
(ii) Implement the alternatives

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