Methods and Techniques


Tightening Budgets

Rising Inflation rates Spiraling Costs

Still need to make a profit???

“Engineering as a management technique using a systematized approach to seek out the best functional balance between the cost, reliability and performance of a product or a project”

Value Engineering was developed in 1947 just after World War II at the General Electric Company by Lawrence Miles. He was asked to find ways to produce products using fewer available materials and resources.

Simple Smart Design
Is the process of redesign to reduce part count either by combining different parts of an assembly into one, or combine the functions of several parts.

 Current Method: Machine Hog Out, Gun Drilled, Welded Fabrication from 316L SST Current Cost: $10,700

 New Method: Investment Cast, Machined, Ceramic Core for cooling channel Est Cost: $6,500 Est Tooling: $50,000

Material Substitution
“For every material of a part, there can always be found a less expensive substitute”. • Metal with plastic • Plastic with EPS • ABS with Polycarbonate



$1.27 million saved

Supplier Change
Move from One supplier to another for a reduced cost. e.g. Embraco to Danfoss, Samsung and LG ECI Mexico to ECI China

Price Compensation

Get quotes from suppliers and ask the current supplier to reduce his cost to meet the quote.

Low Cost Country Suppliers
Move parts from high cost to low cost coutries e.g., China, India, South Korea or Brazil

Long Term Contracts
Create a long term, EoS contract with supplier to bring down the price. GE Appliance’s contract with SAABIC to sell HIPS is an example

Part Standardisation
Several parts made one. Economies of Scale

Brain Storming: Sit in a room and throw ideas to reduce the cost of a specific product Teardown: Break a product down into component parts and give ideas on each. Like Grade Quality Comparison: Tear several products down of the same price range of your product and generate ideas based on cost, material, and design.

Yield for a project is the cost reduced the project for that product in one year. Investment is the amount of resources such as time, money and manpower required to take the project from idea generation to its implementation.

Payback > 0.5

Benefits of Value Engineering Value Engineering •Reduces the total life cycle cost of the part or process, •Optimises the Quality and Performance, •Minimises the waste in manufacturing or design by reducing the unnecessary parts or actions, •Simplifies and Improves Reliability and System performance and •Identifies potential risks and solutions.

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