Dr.S.Ravikumar, M.

E,MBA, Orientation /Preparation

Ph.D
School of Mechanical Sciences phase
B.S.A.Crescent Institute of Science and
Technology

Information phase
 VALUE
VALUE
ANALYSIS
&
ENGINEERI
NG

Dr .S.Ravikumar, M.E
.MBA, PhD

2
 VALUE
VALUE
ANALYSIS
&
ENGINEERI
NG

Dr .S.Ravikumar, M.E
.MBA, PhD

3
 VALUE
VALUE
ANALYSIS
&
ENGINEERI
NG

Dr .S.Ravikumar, M.E
.MBA, PhD

4
ORIENTATION PHASE
In VA/VE, the preparation phase is concerned with finding
problems and challenges or recognizing opportunities.
Opportunities are strengths we need to exploit
while problems are weaknesses or threats
that must be converted into opportunities for improvement.
 The Preparation Phase is like a
mini-VA/VE or a prefeasibility study
phase. Here are the tasks that we
will perform during this first phase:

Identify project candidates

Select priority project

Define objective and scope

Define project deliverables

Determine project worth

Select project worker(s)

Complete project charter

Approve project start

Schedule the value effort

ORIENTATION PHASE
 VE - TEAM SELECTION
• The VE team usually functions well when the professionals are dedicated to the
• VE process. Recruiting a team is like drafting key players for a professional
sport. Members are selected based on
 Project Charter
A project charter is a document issued by the project initiator or sponsor that formally authorizes the
existence of a project, and provides the project manager with the authority to apply organizational
resources to project activities.
 Spend Analysis
Spend Analysis is the process of aggregating, cleansing, classifying, and analyzing
corporate spending data for the purpose of reducing costs and improving operational
performance.
EIGHT - ACTIVITIES FOR PROBLEM REFINEMENT DURING
ORIENTATION PHASE

1. Identify the Specific Issues To Be Addressed

2. Assess the Potential Gains for Resolving
Each of These Issues
3. Prioritize the Issues
4. Draft a Scope and Objective for
the Value Study
5. Establish Evaluation Factors
6. Determine Team Composition

7. Collect Data
8. Prepare Logistically for the Value Study
 IDEAL VALUE ENGINEERING TEAM

The team members with diverse backgrounds may vary from

5-25 depending on the complexity of the project with larger
projects requiring more specialist members. However, a
value engineering team of 5-7 members with diverse areas of
expertise and wide range of experience has been found to
typically give best results
Qualities of a good VE team leader

A VE team leader needs to be conversant with most of

these areas of expertise.

The VE team leader should control the dynamics of the

multidisciplinary team with the power of effective
communication and creativity.

ASTM E1699-10 provides that the team leader should

be an individual with strong leadership, management,
and communication skills.

The level of communication is expected to be high as

characterized by high levels of trust and better
member cooperation which enhances and activates
maximum idea creation during the creative phase of
VE process.
 Qualities of a good VE team leader

Overall, the VE leader needs to be trained in value engineering

principles and have experience as a team member.

The leader should take care to convert friction among members into
high level of creativity.

When doing this, critical attention should be taken to exercise

functional analysis and Function Analysis System and Technique
(FAST) methods because FAST is the most powerful core technique
for integration and coordination of a value engineering team.

FAST also offers good communication and coordination tools for

use during the functional phase of VE that links client’s or owner’s
requirements and integrates technical know-how from
multidisciplinary team members
 INFORMATION PHASE

The objective of this phase is Collect and analyze

to gain an understanding of data in order to
the project being studied and competently define the
to obtain all essential facts
relating to the project as also
problem
to estimate the potential value
improvement.
ACTIVITIES OF THIS PHASE

1. Establish Workshop Rules of the Road

2. Finalize the Problem and the Associated Facts
3. Refine the Scope
4. Secure facts
5. Cost determination
6. Fix Costs on Specifications and Requirements
 Information Gathering Phase

Care should be taken to gather all

the pertinent data,
For a construction project, for
example, you would:
• Secure all the facts

• Obtain latest drawings

• Obtain latest specifications

• Obtain current cost estimate

• Make site visit if appropriate

 Information Gathering Phase

• Obtain data from designer's, geotechnical,

bridge, traffic, and previous studies, and
alternative analyses

• Determine project requirements

• Determine constraints

• Understand previous problems and

attempts to resolve
 VA/VE in Materials Management
Material management is the process of planning,

acquiring,

storing,

moving,

controlling

materials to effectively use facilities, personnel, resources and

capital.
The typical tasks associated with a
material management system are
•
Procurement
and
purchasing
• Inventory
management
• Expediting
/ Receiving/
Warehousing

• Cost • Materials
control planning

• Materials
• Distribution
handling
Dobler and Burt (2009)
classify manufacturing
These categories are:
materials into five
categories.

• Raw materials- materials that the company converts into

processed parts. This might include parts specifically produced for
the company and parts bought directly off the shelf.

• Purchased parts- parts that the company buys from outside

sources (i.e. rubber parts, plastic parts).

• Manufactured parts- parts built by the company

Work in process materials- these are semi-
finished products found at various stages in
the production process (i.e. assembled
motherboard).

• MRO supplies- maintenance, repairing,

and operating supplies used in the
manufacturing process but are not part of
the final products (i.e. soap, lubricating oil.

• Bulk materials- these are materials that are

delivered in mass and are deposited in a
container.
 • Bagged materials- these
are materials delivered in
. bags for ease of handling
and controlled use.

• Packaged materials- these are

• Palleted materials- materials that are packaged
these are bagged together to prevent damage
materials that are placed during transportation and
in pallets for delivery. deterioration when they are
stored.
Among the benefits of VA/VE in material management are:
• Reducing the overall costs of materials
• Better handling of materials
• Reduction in duplicated orders
• Materials will be on site when needed and in the quantities
required
• Improvements in labour productivity
• Improvements in project schedule
• Quality control
• Better field material control
• Better relations with suppliers
• Reduce of materials surplus
• Reduce storage of materials on site
• Labour savings
• Stock reduction
• Purchase savings
• Better cash flow management
Value Analysis related to Management of materials: 5 Stages

Value Analysis of Materials: Stage # 1.

Information Stage:
Information regarding raw materials and the finished product — their cost, manufacturing
method, performance characteristics etc.—are collected and studied.

Functional Analysis:
The functions of the material are listed in terms of basic functions and secondary
functions.

Value Analysis of Materials: Stage # 3.

Brain Storming:

This third step in the value analysis starts with the thinking of various
alternative possibilities for the material.

Value Analysis of Materials: Stage # 4.

Evaluation Phase:
Ideas generated are evaluated. This evaluation is done by finding the various functions
that the substitute can perform for each of those functions at what cost and to what
extent.
Value Analysis of Materials: Stage # 5.
Implementation:

Implement-ability of the selected substitutes or new ideas is discussed with the

appropriate departments. Seeming of substitutes/ ideas is done and only a limited few is
put to implementation.

VALUE-STREAM MAPPING
Value-Stream Mapping (VSM) is a lean thinking methodology used to evaluate company
operations, eliminate waste in its many forms, and substantially streamline business
processes from the customer to the supplier.

ROOT-CAUSE ANALYSIS
In the Information Phase, we collect and analyze data as well as identify root causes and
constraints. Root-Cause Analysis (RCA) is one of the problem-solving methods that is
aimed at identifying the root causes of problems.
VA/ VE in Quality
management
QUALITY MANAGMENT

QA
QC
TQM
 Quality Improvement Techniques
Mistakes and problems that arise provide opportunities for learning and continual improvement. There are
numerous tools that have been used in this context. These range from simple checklists, flowcharts, scatter
diagrams, and pareto analysis, to fishbone diagrams and more sophisticated tools such as benchmarking,
customer needs mapping, and quality functional deployment (QFD). Essentially, they collect data so that the
problem can be identified and aid in finding the cause and developing solutions to improve
the situation.

QFD and Value Engineering (VE)

Quality function deployment (QFD) is a structured approach to translating customer requirements into
appropriate technical requirements so that customers’ needs can be better satisfied.
QFD and Value Engineering (VE)
QFD and Value Engineering (VE)
Here are some of the ways QFD can be used to affect cost.
1.Initial product functionality reduced by design with cost
deployment and reverse QFD
2.Reduced initial product performance by design with cost
deployment and reverse QFD
3.Reduced product performance over time by design
4.Reduced reliability and durability of function over time by
design
5.Reduced parts cost, and comparing parts cost vs. system
cost by design, including commonization and reuse of parts,
volume purchases, Value Analysis/Value Engineering
(VA/VE).
6.Reduced assembly cost by design.
7.Managing variation in design and manufacturing
8.Managing variation in customer usage through better
understanding of scenarios, user training, built-in monitoring
(performance, maintenance, service)
 FUNCTION ANALYSIS SYSTEM
TECHNIQUE (FAST)

What is Function Analysis System

Technique (FAST)?

A technique to develop a graphical representation showing

the logical relationships between the functions of a project,
product, process or service based on the questions “How”
and “Why”.
The two techniques of this phase are:
a) Define function
b) Evaluate Function Relationship
 Activities of Function analysis phase
1. Determine the Functions

2. Classify the Functions

The second major activity in the Function Analysis Phase is to group the
functions into two categories, basic and secondary.
3. Develop Function Relationships
Two principal techniques have been developed to create a better understanding of
functional relationships—a Function Hierarchy Logic model and the Function
Analysis
System Technique (FAST).

4. Estimate the Cost of Performing Each Function

5. Determine the Best Opportunities for Improvement

6. Refine Study Scope

The basic customer-oriented FAST steps
are briefly described below.
Step 1—Determine the task function
Step 2—Identify the primary basic functions
Step 3—Identify the primary supporting
functions
Step 4—Expand the FAST diagram to the right:
Step 5—Verify the FAST diagram
 There are two possible
How to Use a Function
Starting Points starting points, which may
Analysis?
be used in a combined form:

A collection of elementary
A process tree, which can be
(general) functions, for
drafted from scratch or
instance the functional basis
based on an existing
developed by the American Expected Outcome
solution of the design
National Institute of
problem (or a comparable
Standards and Technology
problem)
(NIST).

The outcome of the function analysis is a thorough understanding of

the functions and subfunctions that the new product has. From
functions and subfunctions the parts and components for the new
product can be developed, for instance by using them as input for the
creation of a morphological chart.
Goals of Function Analysis Function definition is a fundamental function analysis technique with
four goals:
1) Identify functions of the product or service to be designed or improved. This lessens
miscommunication among sales, design, manufacturing and other departments.
2) Evaluate the relationships between functions and COSTS so the required functions can be
done at the lowest possible cost
3) Create valuable products or services from the viewpoint of the customer and without the
constraint of past assumptions.
4) Evaluate improved or newly designed products or services to determine i f the function s are
adequately done from the customers' perspective.
Gap Analysis
is the comparison of actual performance with potential or desired performance; that is the ‘current
state’ and the 'desired future state’.
An important aspect of Gap Analysis is identifying what needs to be done in a Project.
A set of techniques to examine and describe the gap between current performance and desired future
goals.

Gap analysis can be used in many areas, such as:

• Sales
• Financial performance
• Human resource management
• Productivity
• Quality assurance
• Cost control
• Employee satisfaction
• Energy conservation
• Market competitiveness
• Technical skills
What Can a Gap Analysis Do for You?

A gap analysis is process that compares actual performance or results with what was expected or
desired.

The method provides a way to identify suboptimal or missing strategies, structures, capabilities,
processes, practices, technologies or skills, and then recommends steps that will help the
company meet its goals.

By comparing the current state with the target state, companies, business units, or teams can
determine what they need to work on to make their performance or results better and get on the
right path quicker. Companies can also use the gap analysis process to elevate individual or team
performance, and look at attributes such as task competency, performance level, and productivity.
Other names for the process include need-gap analysis, needs analysis, and needs assessment.
 the difference between
the current operation the difference between
of an activity and the actual and theoretical
The gaps can include
activity vision, targets, sometimes
the following:
sometimes referred to referred to as "A delta
as "C delta V" (current T" (actual gap target)
gap vision)
 Four common mental skills that are learned and that can be
applied and further developed:

1. PERCEPTION: the ability to observe and apply attention. It is sensing the

existence and characteristics of anything by seeing, hearing, tasting, smelling, or
feeling.

2. RETENTION: the ability to memorize and recall. It is putting

a bit of information into memory or taking it out, whether
intentionally or not.

3. REASONING: the ability to analyze and to judge. It is relating things, to make

decisions, judgment, or deductions and inductions; going from what is known to
what is desired, according to some learned pattern with measurable, logical criteria.

4. CREATIVITY: the ability to visualize, foresee, and generate

ideas. Putting the pieces together in new ways, or with
something new added, to meet constantly changing needs.
Definition

Webster’s Dictionary: Artistic or

intellectual inventiveness

Creativity involves the generation of

new ideas
Brings into existence something new.

Page 82
What Is Creativity? (1 of 9)
Describable and Satisfying:

✓ Novel: unique, new, innovative, different,

imaginative, non-typical, unusual.

🠶 Useful: responds to a need, has some utility or value, answers a quest

🠶 Understandable: not the result of chance, reproducible.

🠶 Through novel, creativity is describable and satisfying.

Page 83
What Is Creativity? (2 of 9)
Social Factors:
✓ Creativity is fostered by an
environment.
Creativity must be valued by a
community.
Creativity is shaped by those who
evaluate it.

Page 84
What Is Creativity? (3 of 9)
Creativity Needs:
✓ Skill: Learned capacity or talent to
carry out pre-determined results.

✓ Talent: Natural endowments of a

person.

✓ Personality: Patterns of relatively

enduring characteristics of human
behavior.

Page 85
 What Is Creativity? (4 of 8)
Intellectual Skills:
Humans have intellectual skills that
allow them to have creativity . . .

Choosing Translating
Predicting Recalling
Interpreting Manipulating

Page 86
What Is Creativity? (5 of 9)
✓ Choosing: To select from a number of
possibilities and pick by preference.

✓ Predicting: To state, tell about, or

make something known in advance,
on the basis of special knowledge.

✓ Interpreting: To explain and

understand the meaning of
something and to conceive the
significance of it.

Page 87
What Is Creativity? (6 of 9)
✓ Translating: To transform something
from one state to another.

✓ Recalling: To remember and bring back

to mind a previous subject or situation.

✓ Manipulating: To handle, manage, or

use (sometimes with skill) an object in a
process or performance.

Page 88
What Is Creativity? (7 of 9)
Use Your Own Process:
With these skills we are able to . . .
❖ select knowledge and use it toward
a specific goal.
❖ interpret communication and share it.
❖ remember previous knowledge
and use it skillfully.
Use 1 or more of the 6 intellectual
skills to come up with a creative
idea

Page 89
What Is Creativity? (8 of 9)
Creativity can come in different forms . . .

❖ Scientific: inventions or medical cures.

❖ Artistic/Musical: beautiful paintings,

sculptures, or songs.

❖ Creative Writing: novels, short stories,

and poems.

Page 90
 10

Mechanisms for Stimulating

Organizational Creativity

Creative Overloading : When a

Creative Benchmarking: It
system is overloaded it looks
aims to look at various
a lot more for innovative ways
external avenues for creative
for measuring up. Similar to
Bench Marking
stretch targets.

Parallel Groups : Used to

Knowledge Discovery :it is the
develop radically alternate
process of searching for links
creative approaches. It
in data available with the
strengthens winning efforts
organization to locate
with the strengths of the losing
previously unknown patterns.
teams.
 11

Mechanisms for Stimulating

Creative Thinking Network : OZ Creative Thinking
Network started in DuPont’s Industrial Fibers Division
was initiated by employees to expand the company’s
knowledge base of global concepts and technologies
related to creativity and innovations and promote
entrepreneurship, risk taking, quality leadership that
facilitated commercial success.

• Mind Mapping :It is way of going from big picture to concrete

innovations. It is a display of concepts and activities that clarifies
the connections among them related to complex issues.
 11

Mechanisms for Stimulating

Mind Mapping :It is way of going from big picture to
concrete innovations. It is a display of concepts and
activities that clarifies the connections among them
related to complex issues.
 11

Mechanisms for Stimulating

Mind Mapping :It is way of going from big picture to
concrete innovations. It is a display of concepts and
activities that clarifies the connections among them
related to complex issues.
 12

Mechanisms for Stimulating

7. Organizational Experiments: These are creative
efforts when undertaken in diverse areas so that reliable
information is generated for management interventions in
unknown areas.

8. Stakeholders Councils: Encourages voice of

stakeholders other than management to decide on
future directions based on the suggestions .
9. Creative Surveys : Professional organizations
frequently survey their employees to measure the
morale, job satisfaction and also to solicit
infrequently tapped information for innovative
purposes.
 13

Mechanisms for Stimulating

Organizational Creativity(Contd…..)

10. Reverse Brainstorming : In this mechanism the

winning strategy is attacked from competitor’s point of
view. This will make the winning team to look at their
strategy from various angles to unearth deficiencies.

11. Intrapreneurship : It is an encouragement to an

employee by offering the proposed novel idea a nominal
budget and facilities to work on the idea. It tries to marry
the advantages of small dynamic charged up teams with
resources so as not to stifle creativity but increase the
probability of commercial success.
 14

Mechanisms for Stimulating

12. Kaizen : It is Japanese in origin and looks at
continuous improvement in operations- 5S , ‘Q’
circles , Scanlon Plan , TQM etc are some of the tools.
13. Multiplication of Change Agents : Change agents
bring in a culture of innovations in a company and is
a very successful strategy to increase their numbers.
14. Creative Scenario Building : Delphi technique is
used to build different scenarios by experts looking
into the future and the best are analyzed , modified
and finally accepted.
 15

Mechanisms for Stimulating

15. Creative Training : It works to enhance the
capacity for divergent or lateral thinking. Organization
wide results would improve by creative training . Ex:
Brainstorming , Attributes Changing etc.

16. Exnovation : Yesterday’s innovation may be

today’s Albatross . Review of policies, rules and
regulations are required to overhaul old innovations
and replace with new and efficient ones.
Barriers

🠶 Historical
🠶 Biological
🠶 Physiological
🠶 Sociological
🠶 psychological
historical

🠶 History repeat itself

🠶 Circles of civilization
🠶 futile any attempt to change
🠶 Plato’s concept
fatalistic individual
fatalistic society
🠶 Little control over the life
Biological barrier

🠶 Creative ability is a hereditary trait

🠶 Environment is the major factor
Physiological barriers

🠶 Brain damage
🠶 Disease
🠶 Accident

Beethoven was deaf

Sociological barriers

🠶 Social environment affects our creative expression

🠶 Creative expression involves personal risk
🠶 Negative reaction to creative expression
🠶 Retreat to feel accepted
Psychological barriers

🠶 Self-imposed barriers
🠶 Conformity or giving the answer expected
🠶 Lack of effort in challenging the obvious
🠶 Evaluating too quickly
🠶 Fear of looking like a fool
Self-imposed barrier

🠶 Difficult to recognize
🠶 Conscious or unconscious
Conformity or giving the answer
expected

🠶 Follows self-imposed barrier

🠶 Conform to established pattern
Lack of effort in challenging the
obvious

🠶 Any new idea is rejected automatically

🠶 New idea come from a junior, a peer or even someone
out of department
🠶 The rejecter has feeling of anger or jealousy at not
thinking of the idea himself
Evaluating too quickly

🠶 Not easy to remove

🠶 Automatic no response
🠶 So the idea is buried and chance is lost
🠶 Suspended judjment
Paired Comparison AND
Evaluation technique
 Paired Comparison

A technique for evaluating a small range of options by

comparing them against each other
 Paired
Comparison
A useful tool for analyzing the relative importance of
different options to determine which is the
most appropriate to select

www.citoolkit.com
 Paired
Comparison
Uses . . .

To select the alternative that will be the most effective

To choose the most compelling problem to solve

 Paired
Comparison
When to Use?

When alternatives are completely different

When comparing different subjective options

Where there is little objective data to base our decision on

 Paired
Comparison
Examples of Use

Selecting the concept design for a new product before

marketing
 Paired
Comparison
Examples of Use

Deciding which skills, qualifications and experience are essential

when hiring people for a new role
 Paired
Comparison
The Paired Comparison Matrix

Option 1 Option 2 Option 3 Option 4

Option 1 1 vs. 2

Option 2

Option 3

Option 4

The matrix will ensure that each comparison is made only once to
avoid duplicating a comparison

It is also not allowed to compare an option with itself

 Paired
Comparison
The Paired Comparison Matrix

Option 1 Option 2 Option 3 Option 4

Option 1
Option 2
Option 3
Option 4

Count
Rank

The highest ranking alternative is not necessary the most important

It provides however a basis for further thoughts and discussion

 Paired
Comparison
How to Implement a Paired Comparison Analysis
Identify the alternatives to be evaluated

Identify the evaluation criteria

(e.g. the most important or the easiest to implement)
 Paired
Comparison
How to Implement a Paired Comparison Analysis

List all alternatives on the left hand column and on

the top row of the matrix
 Paired
Comparison
How to Implement a Paired Comparison Analysis

In each blank cell, compare the option in the row with

the option in the column, then write in the cell the
option that better meets the criteria
 Paired
Comparison
How to Implement a Paired Comparison Analysis

Count the number of times each option has been chosen

Rank the options based on their count

Consider the options with the highest ranking

Count
Rank
 Paired
Comparison
Example – How to spend your coming summer holidays:

A: Write a book B: Take a course C: With family D: Long walks

A: Write a book B C D
B: Take a course C B
C: With family C
D: Long walks

Count 0 2 3 1
Rank 4 2 1 3
 Paired
Comparison
Example – How to spend your coming summer holidays:

A: Write a book B: Take a course C: With family D: Long walks

A: Write a book B,3 C,1 D,2
B: Take a course C,1 B,1
C: With family C,1
D: Long walks

Count 0 2 3 1
Weight 0 4 3 2
Score 0 8 9 2
Rank 4 2 1 3

You may give a weighted score to each comparison where:

0 means no difference, and 3 means major difference
 Paired
Comparison
Example – Asking a team about their biggest motivators:
A B C D E F G H I
A: Appreciation A A A A A A A A
B: Achievement C B B B G B B
C: Work conditions C C C G C C
D: Power / influence D D G D I
E: Creativity F F E I
F: Interest G F I
G: Financial benefits G G
H: Relationships I
I: Self development

Count 9 5 6 3 1 3 5 0 4
Rank 1 6 2 3 8 3 6 9 5
 Paired
Comparison
🠶 Further Information

🠶 If it’s a team exercise, the selection of people should be based on

their knowledge of the subject matter
 Paired
Comparison
Further Information
Further solutions can be developed by mixing the positive
aspects of a number of solutions
Use common sense, and manually adjust the results if necessary
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