OPERATIONS MANAGEMENT

Name Roll No.

Ayush Dixit 2012005
Steffi Fernandes 2012022
Seema Popat 2012068
Mukesh Singh Rajput 2012033
 Value Analysis
1. Cost reduction technique.
2. Organised creative approach.
3. Main focuses.
4. Birth Second World War.
5. Recent years -
Value Engineering.
Molecular Engineering.
Vertical Thinking.
 What is Value
The minimum
money which has
to be expended in
purchasing or
manufacturing a
product to create
the appropriate
use of esteem
factors.
 Division Of Value
1. Use of functional Value.
2. Esteem Value.
3. Cost Value.
4. Exchange Value.
 Advantages of Value Analysis
It leads to improvements in product design so that, most
appropriate products are produced .
High quality (value) is maintained.
All-round efficiency is achieved by eliminating waste of various
types.
Cost savings provide a measure for judging managerial
effectiveness.
New ideas are generated and incorporated.
Teams spirit and morale are improved.
Areas requiring attention and improvement are pin pointed.
 Procedure of Value Analysis
There is no standard approach or procedure
Ascertaining the needs and wants of customers.
Specifying the function of products and
components.
Determining the appropriate cost of desired
performance.
Identifying better alternatives in terms of works
procedures.
Implementation of Value
Analysis
Identifying the function:-
Primary.
Secondary.
Evaluation of the function by comparison :-
Basic question
does the function accomplish reliability at the best cost
Develop Alternatives.
Value Analysis Steps
1. Gather Information.
2. Measure Performance.
3. Analyse Functions.
4. Generate Ideas.
5. Evaluate and Rank Ideas.
6. Develop and Expand Ideas.
7. Present Ideas.
 Value Engineering
Value engineering is a total of management
which approaches the question of saving cost
from the point of view of value.
Requires co-operation of all functional
departments.
In large organisations, there are value
engineering teams having full time jobs.
 Value Engineering
Value and cost

Value = Function
Cost
Value: What the product is worth to the customer.

Function: Properties and qualities of product.

Cost: Money value of materials used, Labour &

indirect costs.
 Value Engineering
Suggestion schemes
Suggestion scheme facilitates the work of
value engineering team.
The scheme helps in the changes of value
engineering and makes it implementation
easier.
 Value Engineering
Requirement of a product
Use.
Esteem.

It is essential to be considered how much to

be added in order to sell the part.
The reasonable price of a product can be
obtained by comparing with a comparative product.
 Value Engineering Approach
No standard approach discuss with team
members.
Subject Basic question Analysis Answer

Function What functions 1) Is there any possibility of elimination?

are performed? 2) What alternative methods are
available?
Material What is the 1) Can alternative material be used?
material 2) Can the specification be amended?
specification?
What quantity of 1) Is the size or weight of material
material should excessive?
be used? 2) Can the quality be reduced?
3) Will a cheaper material serve the same
purpose?
4) Is the cutting done economically
without waste?
Value Engineering Approach
Subject Basic question Analysis Answer

Labour Which are the 1) Are all the operations necessary?

direct labour 2) Will alternative operations be cheaper?
costs? 3) Can certain assembly operations be
modified?

Process Are the best 1) Are all the operations necessary?

Processes being 2) Will alternative operations be cheaper?
used? 3) Can certain assembly operations be
modified?

Standardizatio Are the materials 1) Can the materials be standardized?

n or components 2) Can a number of product use standard
standard? (common) parts?
3) Can methods be standardized?
Waste Control
Reasons for wastages in industry
Obsolescence
Surplus
Scrap
Role of Management in waste control
Proper inventory control
Materials management
Effective Co-ordination among departments
Input-Output Analysis
Systematic study of production structure.
Predict total production of each year.
Production structure of all the industries are to
be grouped together.
Output material of 1 sector becomes input raw-
materials for the other.
Original Information Innovation Evaluation Choice Implementation Review
Phase Phase Phase Phase Phase Phase Phase
 1. Product Design and
Development
1. Factors considered in product design :-
Customers requirement.

Operators Convenience.

Types of materials.

Work methods and equipment.

1. Product Design and
Development
2. Design.
3. Planning.
4. Specialized function.
5. Visible in long run.
2. Application of Value
Engineering
Overall quality and performance.
Work together to reduce cost.
Latest developments.
Service function.
Desired objective.
3. Simplification of Product
1. Elimination of undesirable features.
2. The main purpose is to improve quality and to
reduce unit costs.
Reduce cost and prices.
Reduction of undesirable materials.

3. Benefits.