VALUE ENGINEERING

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

VALUE ENGINEERING

VALUE ENGINEERING
A I M S A T

VALUE TO CUSTOMERS
Prof. Madhavan . P Bangalore T2W Consultants Sep.’09

VALUE ENGINEERING
Which one is high in value ?

1 Kg. Gold

1 Plate meal

Fame

Luxury Car
Prof. Madhavan . P Bangalore

House

Education
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VALUE ENGINEERING
Efficiency Life Wt./Vol. Mft. Cost Business Turnover Plan Cost

Utility

VALUE
Esteem Beauty
Prof. Madhavan . P Bangalore

Time Prestige

Place

Publicity

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VALUE ENGINEERING
Value increases with Respect to needs both Explicit Implicit

- Travel (5 persons)with right power, speed, milage, manovarability etc.,

-

Styling Colour Size Interiors, AC, Stereo To suit to status etc.,
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Prof. Madhavan . P Bangalore

VALUE ENGINEERING
Value Engineering
to is Stepwise, organised, creative team work to

-

Eliminate or minimise Add value in factors contributing relation to cost poor value In order to In order to due to Poor flow of information over/under specification - Provide value to the over specialisation customer compartmentalisation - Catch up the market
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Prof. Madhavan . P Bangalore

VALUE ENGINEERING

Success

VE CAR

. Driver Value Engineering Success Driven by users / beneficiaries

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

Value Engineering
Cost Distribution ( Indicative )

25% Matl. Engg. Process Others

43%

18% 14%

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

Value Engineering
Value / Function

Value Function Performance Reliablity Lowest Cost

= = = = =

Function @ lowest Cost. Performance + Reliability Utility + Esteem + Exchange Perform @ desired place & time without failure. Lowest life cycle cost Cost ( Initial + Install + consumable + maintenance )

Life cycle cost =

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

Value Engineering
FAST ( Function Analysis System Technique )

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

Value Engineering
Value analysis

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

Value engineering
Reason for Poor Value

1. 2. 3. 4. 5. 6. 7. 8.

Lack of Information Poor Communication Lack of Ideas. Time Pressure Temporary Circumstances Wrong Beliefs Habits & Attitudes Lack of perception at higher levels
T2W Consultants Sep.’09

Prof. Madhavan . P Bangalore

Value engineering
Cost Analysis Cost to Customer Sale Price Total Cost Manufacturing cost = = = = = = Sale price + taxes + installation Total Cost + Profit Manufacturing cost + Marketing cost Factory cost = Product cost Material + Labour + Over heads Function costs + Other costs

Does Customer want to pay for the product ? Or for the functions in the product ?
Prof. Madhavan . P Bangalore T2W Consultants Sep.’09

Value engineering
What you want & For what you pay

Does Customer want the product ? Or the functions in the product ?

Is Customer willing to pay for the product ? Or pay for the functions in the product ?

Do Or

you pay for the sugar ? for the sweetness in the sugar ?

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

Value engineering
Determine Cost -Manufacturing cost -Break up of cost elements ( material + labour + overheads ) -Each component / process cost -Each subassembly , assembly , calibration cost -Each function / functional group cost -Proposed changes cost & savings -Pay back period / rate of return -Analyse cost per size/weight/time
Prof. Madhavan . P Bangalore T2W Consultants Sep.’09

Value engineering

Cost is the Objective

Function is the Key .

Value is the Customer.

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

Value Engineering
APPROACH 1. 2. TEAM FORMATION 5 PHASES OF VE INFORMATION CREATION EVALUATION INVESTIGATION RECOMMENDATION What other simple ways it can be done ? How much will it cost ? - What it is / What it does / Cost

3.

IMPLEMENTATION

Prof. Madhavan . P Bangalore

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BRAIN STORMING
Creation Intensification

Information Intensification
VALUE

Industrialization

Agriculturization

TIME
Prof. Madhavan . P Bangalore T2W Consultants Sep.’09

BRAIN STORMING What is Brain Storming ?
Ú Storming takes place when there is a sudden release of pressure that is built-up. Ú This release of pressure releases Sound & Light. Ú This is what happened to Archimedes when he shouted ‘Eureka’. Ú Storming drives a person to various possible solutions when the right one is found, there is a big release of pressure. Ú This is one of the Ideas Generation Technique.
Prof. Madhavan . P Bangalore T2W Consultants Sep.’09

BRAIN STORMING Why Brain Storming ?
Ú The world is changing rapidly. Ú One must adapt to this changes and keep pace with Competition, Technology, Quality & Customers whims & fancies. Ú This requires knowledge, attitude and approach. More than that it require ideas, ideas & ideas to be a winner in changing world. Ú Ideas Galore. Ú For this we depend on Brain Storming as one of the Technique for Generation of Ideas.
Prof. Madhavan . P Bangalore T2W Consultants Sep.’09

BRAIN STORMING How to Storm the Brain ?
Rules :
Ú Do not judge Ú Be wild Ú Give plenty Ú Combine & Improve

Prof. Madhavan . P Bangalore

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BRAIN STORMING How to Storm the Brain ?
Conditions :
Ú Committed Group Ú Diverse Skills in the Group Ú Moderate pressure play.

Prof. Madhavan . P Bangalore

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BRAIN STORMING

Value

No Criticism

Free Thoughts

Gather Ideas

1+1= 3

Prepare clear objective Brain Storming Rules

Combine & Improve

Cost

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING 8 Principles of Creativity
1. 2. 3. Every one is creative. Creativity brings in many opportunities & reduces risks 4 faces of creativity - Socialiser - Neat Organiser - Finance figures - Jack of all One does not leave by data alone (Mix feelings, emotions) One picture is worth more than 1000 words. There are no impossible dreams or problems (only limited dreamers and problem solvers. The sub-conscious is a full partner in creative process. Creative Thinking brings win / win situations.
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4. 5. 6. 7. 8.

Prof. Madhavan . P Bangalore

BRAIN STORMING 4 Basic Skills for Creativity Thinking
1. 2. 3. 4. Divergent Thinking Forcing relationships - The Kid and the Judge - Connecting unrelated ideas Wheels + Chair = Wheel Chair

Become the Angle’s advocate - Looking at the good points in bad situation. Dissecting Ideas - Generate ideas within ideas.

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING
Soft - Kid
Metaphor Dream Humour Ambiguity Play Approximate Fantasy Paradox Diffuse Hunch Generalization Child
Prof. Madhavan . P Bangalore

Hard - Judge
Logic Reason Precision Consistency Work Exact Reality Direct Focused Analysis Specific Adult
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BRAIN STORMING How to Storm the Brain ?
Methods :
Ú Ú Ú Ú Ú Ú Ú Ú Ú Ú Set the stage and ambiance of acceptance. Ensure Clarity of goal. Allow free flow of thinking. Mind Map to trigger Ideas. Use flexible thinking. Start collection of Ideas individually & in sub groups. Assign Quotas for Ideas. Call for funniest, stupidest, silliest Ideas. Have humour but no personal criticism. Try Brain writing.
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Prof. Madhavan . P Bangalore

BRAIN STORMING
IDEAS, IDEAS, IDEAS

IDEA
One idea can be a stimulus to generate many ideas.
Hence, the Brain Storming is done in a group.
Prof. Madhavan . P Bangalore T2W Consultants Sep.’09

COST REDUCTION
PURPOSE
N
WHAT ?

A ME

PE RS O

NS

WHO ?

HOW ?

RECORD
E QU SE CE
WHY ? WHEN ?
WHERE ?

REASON

Prof. Madhavan . P Bangalore

PLA

E NC

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COST REDUCTION

RS O N

EA M

WHO ? WHY HE ? WHO ELSE ?

HOW ?

NS

PE

WHY THAT WAY ? HOW ELSE ?

EXAMINE
WHEN ? WHY THEN ? WHERE ? WHY THERE ?

Prof. Madhavan . P Bangalore

PL AC E

Q SE

WHEN ELSE ?

WHERE ELSE ?

CE N UE

T2W Consultants Sep.’09

BRAIN STORMING
Part be eliminated ? Function be eliminated ? Part be Combined Cheaper Spec. Matl. be used ? Other matl. be used ?

Can any
Developing Alternatives

Waste matl. Be reduced ? Waste matl. be used ?
Prof. Madhavan . P Bangalore

Can any

Finish be reduced ? Finish be cheaper ?
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Dimn. be reduced ?

Limit to relaxed ?

BRAIN STORMING
Standard part any spl. part ? Std. Spec. matl. replace any spl. spec. matl. Other supplier supply the part cheaper ? Other process be cheaper ?

Std. inferior matl. replace std. superior matl. ?

Can any
Developing Alternatives

Cheaper matl/part be indigenised/ imported ?

Other execution be cheaper ? Change in make/ buy decision result in cost redn. ?
Prof. Madhavan . P Bangalore

Can any

Tapping be replaced by other fastening ?

Curves/bends be eliminated ?
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BRAIN STORMING

Constructive Dis-satisfaction

Internal Urge

Experience

Active Knowledge

Techniques for Creativity

Understanding the problems at their roots

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING THINKING
Specific Use Focus Challenge Alternatives Random Input Structure Basic types of Thinking Achievement Thinking (reach) Improvement Thinking (change) Green field Thinking (start) Organised Thinking (arrange)

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING THINKING
Wear 6 different Thinking Hats of Edward De Bano
White Black Red Yellow Green Blue : For collecting Information : Be a critical Judge : Spontaneous opinion / feeling : Look for benefits : Think ideas / alternatives : Think process - conclusion
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Prof. Madhavan . P Bangalore

BRAIN STORMING
Five figures are shown below. Select the one that is different form all the others.

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING Brain Storming Preparations
1. Number of people in the group - 6 to 8 < 6 Limits variety > 6 Not enough air time Disturb inter-personal Power balance. 2. Select forceful imaginative participants - Power people divergent view people The idea users Free flexible Thinkers Positive tangential Thinkers PAC, HRM, RC.., CLP
Prof. Madhavan . P Bangalore T2W Consultants Sep.’09

BRAIN STORMING Brain Storming Preparations
3. Preparation - Create a stage / attitude, hunger for ideas - Invite individually and tell them why their participation is valuable and provide them support data in advance. - Give alternative dates to choose and fix it personally (Personal touch is very important than the office track). - Check physical environment. (Quite place, no telephones) - Fresh air atmosphere. - Large room. - Coffee / Tea, Biscuits availability. - Semi-circle meetings. - Use of Metaplan boards, templates and flip charts.
T2W Consultants Sep.’09

Prof. Madhavan . P Bangalore

BRAIN STORMING Brain Storming Preparations
4. Methodology - Brain Storming Intuitive, associative, unpredictable, spontaneous, like a games play, generating plenty of ideas. - Card Method Pull out a card or set of cards from the bunch and use the pictures in them to trigger ideas. - Method 635 6 participants write 3 ideas in 5 minutes and continue the game. - Delphi Method Listening to the views of groups and then working independently of each other generating ideas. - Synetics Deliberate stimulation of creative process which goes on un-consciously.
T2W Consultants Sep.’09

Prof. Madhavan . P Bangalore

BRAIN STORMING Brain Storming Preparations
Bionics Examines solutions of nature and their convertibility to the set of problems. SCAMPER Technique. Substitute, Combine, Adapt, Modify, Put to other users, Eleminate Reverse.

5.

Rules for Group Work - Clear definition of problem / objectives. - No criticism in the stage of ideas collection. - Free unfolding of ideas. - One idea can generate many ideas. - Combine and improve ideas. - Do not conclude on ideas, even if it is the best one.

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING
6. Watch out obstacle for creativity and neutralize them Perception blocks due to operating blindness, thinking habits and specialization. Cultural blocks due to style of working, guidelines and procedures And adopting to superiors culture. Emotional blocks due to fear, mis-trust and antipathy

-

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING

THANKING YOU & GOOD DAY
Contact : Prof. Madhavan .P # 55, 8th B main, 4th C block Koramangala Bangalore – 560 034 Ph: 080 - 5531595

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

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