INTRODUCTION

Human progress reflects directly the contribution of knowledge and tech-

nology to society. Knowledge is expanding. From the start of recorded
history to date, it has been meteoring upwards exponentially. Dr. J. Robert
Oppenheimer, the famous Atomic Scientist, estimated that the body of
knowledge in science has doubled itself between 1950 and 1956; and has
been redoubling itself again every six to eight years. Eighty to ninety per
cent of the scientists, engineers, etc., who ever lived are alive today. Du
Pont Company points out that today 85 per cent of its production is
devoted to items which were not on the drawing boards or in the form of
experimental hypothesis ten years ago.
Today, we live in an extremely dynamic, fast changing world. Spec-
tacular advances are taking place in science, technology and innovation.
The resultant economic growth and development, social progress and well
being, are the measure of the skills in intelligently adapting knowledge and
technology to secure IMPROVEMENTS. People five decades ago had never
heard of jumbo jets, sound barrier, guided missile, application satellite,
colour television, video, catscan, laser, micro processor, cellular telephones,
xerox or fax, fiber optics and genetically engineered products.
We progress into the future, with escalated endeavours to discover
new truths, new technologies, new inventions, new innovations and so on.
New products, new processes, new methods, new tools, new techniques,
new ways of making current products as well as new products: NEW is the
way of life today.
New means CHANGE. To quote Mr. Charles Kittering, the famous
inventor, “The world hates change, but it is the only thing that brings
progress.” And the challenge of a Century, and so of the Twenty-first
Century, is going to be change: change in products, change in technolo-
gies, change in national and inter-national trade, change of every kind,
every day. To effectively meet this challenge of change, our job will be to
assimilate the scientific discoveries, inventions, technologies and the like, in
such a way that practical VALUES will flow to the user and the customer
in the most orderly and economical way. The future will be in making it
happen. The speed of light is 186,281 miles per second; but that is
nothing compared to the speed at which the future is coming at us. And,
4 Value Engineering

for making the future happen, it will be the industries, and within the
industries, the managements themselves, which will have a vital role to
discharge.
The phenomenon of change is just not limited to any one area. We
find ourselves today at a point where we must educate, train and develop
Managers in what nobody knew yesterday, and prepare them for what
they must know tomorrow, and what one knows not yet. What he or she
has to become is a jack of all means, methods, tools, techniques, functions
and strategies, and master of every one of them. The successful Manager
of the future will have to be a change agent, above all else. This is only
the beginning. The compulsion is not merely to survive, function and exist,
but, more importantly, to grow. GROWTH is about creating and managing
opportunities. Growth is selecting particular customer VALUES and mobi-
lizing the entire organisation to deliver those values, time and again. Growth
comes from EXCELLENCE. To quote Tata’s Chairman, late Mr. J.R.D.
Tata, “always aim at perfection, for only then will you achieve excellence.”
One has to excel at performances. Most measurements of perform-
ances are in terms of IMPROVEMENTS. Therefore, there should be no
question, but that improvement is a desirable goal. Past success has been
closely associated with improvement. Future success will be dependent
upon it. But, improvement does not just happen. It is the result of desire
and pursuit. It should be pursued by organising for it.
Time-distances between points on earth have diminished, causing
escalation of national and inter-national competition in all products and
services. ISO 9000 Standards have made trade and commerce global. The
spectacular advances in means of communication and transport have made
it possible for “more people than ever to collaborate and compete in real
time with more other people on more different kinds of work from more
different corners of the planet and on an equal footing than at any previous
time in the history of the world*.” It is now possible to borrow advanced
ideas and make painstaking improvements on them. Firms with few years
of technical leads today find their products matched (not copied) and bet-
tered in no time. Manufacturing cycle times have declined from years, (3
to 5 years in the past) to months, (3 to 4 months now). Parallel develop-
ment, developing second and third generation products, catalogue design,
high-tech and high-touch have become the key.
There have been many approaches to secure improvements. The
traditional thrust has been, and will continue to be, on raising volume of
output, i.e., production and productivity. Operations needed for the work
are analysed, then synthesised into a process of production; quantities are
sought to be controlled; qualities, assured and maintained; and exceptions,
acted upon to correct deviations from standards or norms. These perform-

* Friedman L. T., p.8

Introduction 5

ance-oriented, efficiency-oriented, incentive-oriented, motivation-oriented

approaches would have been taken from, and concentrated on, already
attained positions of strength and efficiency. Result: marginal improve-
ments, as the law of diminishing returns governs. Important tasks, no
doubt; but, though previously good enough, we need something more.
Global competitors are now a way of life: spectacular examples are
in auto, construction equipment, electronics, rubber products, etc. To beat
competition, improvements have to be at least a shade better than what
competition achieves. But, who are the real competitors? Not only produc-
ers of similar products: they may include some of the allies — or even
customers. So, to really improve and have an edge over competition, one
has to devote painstaking attention to the needs of the customers; analyse
the company’s freedom to respond completely to those needs; re-think on
a fundamental level what the current products are and what they do; and
make improvements in where all the customer finds VALUE.
Doing better what is being done is efficiency. It is a condition for
survival after success has been achieved. What is needed today is EFFEC-
TIVENESS: doing what is right. The need is for performance effective-
ness, cost effectiveness, quality per cost, reliability per cost, etc. Effective-
ness is more than efficiency, or aims, or outputs, or minimum costs,
although it includes all of them. To quote Peter Drucker (1974), “Efficiency
is concerned with doing things right. Effectiveness is doing the right things.”
Once, the key was slick production techniques, matching technical
leads and painstaking improvements. Now, the most effective weapon is
rapid innovation. The successful firm of the future will be an innovation
machine characterised by speed and flexibility. Manufacturing is in the
throes of a technological revolution. In the lead is programmable automa-
tion, or flexible manufacturing systems (FMS) that can turn out a wide
range of products on the same line, shifting instantly from one model to
the next. With FMS, it is claimed that the efficiency of both capital and
labour can be doubled (or even trebled) and defects reduced considerably.
It can reduce the time it takes to introduce new products by as much as
90% which will mean EFFECTIVENESS in EFFICIENTLY MEETING the
CUSTOMER’S NEEDS.
What is needed today is a step beyond cost control and cost reduc-
tion: it is cost prevention and cost avoidance. The target is not merely to
conserve resources; but also, more importantly, to PREVENT UNNECES-
SARY USE OF RESOURCES and UNNECESSARY COSTS.
These are, indeed, a great many new and difficult tasks. The tasks
will be more and more difficult as days progress; and more will be required,
and expected, of the Managers. That is a challenge they should be pre-
pared to take.
To successfully tackle the tasks, from time to time, many new con-
6 Value Engineering

cepts, ideas, tools and techniques are developed. The earliest such devel-
opment came from Frederick Taylor, who suggested scientific manage-
ment, to find the best way to do anything. He concentrated on job content,
job method and fair wages. Then came the Gilbreths, who provided the
tools of time and motion study to measure work. Next, Henry Fayol pos-
tulated the principles of administration. The behavioural scientists followed,
working on the area of human relations, focussing attention on people as
the greatest management resource. Fordism was a template for mass pro-
duction and mass marketing to achieve economies of scale. Peter Drucker
suggested results-oriented approach. Herzberg recommended job enrich-
ment. In this series, Larry Miles concentrated on Functions and Cross-
functional Team Approach.
Of all such developments, perhaps, the most effective, promising and
rewarding modern technique is VALUE ENGINEERING, late Larry Miles’s
contribution.