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OPERATIONS MANAGEMENT

Value Analysis
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Cost reduction technique.
Organised creative approach.
Main focuses.
Birth – Second World War.
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.

Esteem Value. 2. 3.Division Of Value 1. 4. Use of functional Value. Cost Value. . Exchange Value.

 Areas requiring attention and improvement are pin pointed. provide a measure for judging managerial .Advantages of Value Analysis  It leads to improvements in product design so that.  High quality (value) is maintained.  Teams spirit and morale are improved.  Cost savings effectiveness.  All-round efficiency is achieved by eliminating waste of various types. most appropriate products are produced .  New ideas are generated and incorporated.

Identifying better alternatives in terms of works procedures. Specifying the function of products and components. Determining the appropriate cost of desired performance.Procedure of Value Analysis      There is no standard approach or procedure Ascertaining the needs and wants of customers. .

Secondary. . Evaluation of the function by comparison : Basic question  “does the function accomplish reliability at the best cost “ Develop Alternatives.Implementation of Value Analysis Identifying the function:Primary.

2. 6. Analyse Functions. Present Ideas. 5. 4. Measure Performance. Develop and Expand Ideas. 3. 7. Gather Information. . Generate Ideas. Evaluate and Rank Ideas.Value Analysis Steps 1.

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Value Engineering    Value engineering is a total of management which approaches the question of saving cost from the point of view of ‘value’. there are value engineering teams having full time jobs. Requires co-operation of all functional departments. In large organisations. .

Function: Properties and qualities of product. Labour & indirect costs.Value Engineering Value and cost Value = Function Cost Value: What the product is worth to the customer. . Cost: Money value of materials used.

.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.

. Esteem.Value Engineering Requirement of a product Use. The reasonable price of a product can be obtained by comparing with a comparative product.  It is essential to be considered how much to be added in order to sell the part.

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question Function What functions are performed? Material What is the material specification? What quantity of material should be used?   1) Is there any possibility of elimination? 2) What alternative methods are available? 1) Can alternative material be used? 2) Can the specification be amended? 1) Is the size or weight of material excessive? 2) Can the quality be reduced? 3) Will a cheaper material serve the same purpose? 4) Is the cutting done economically       .Value Engineering Approach No standard approach – discuss with team Subject Basic Analysis Answer members.

Value Engineering Approach Subject Labour   Basic question Which are the direct labour costs? Analysis 1) 2) 3) Answer Are all the operations necessary? Will alternative operations be cheaper? Can certain assembly operations be modified?   Process Are the best Processes being used? 1) 2) 3) Are all the operations necessary? Will alternative operations be cheaper? Can certain assembly operations be modified?   Standardiza tion Are the materials or components standard? 1) 2) Can the materials be standardized? Can a number of product use standard (common) parts? Can methods be standardized?   3) .

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 .

Production structure of all the industries are to be grouped together.Input-Output Analysis     Systematic study of production structure. Predict total production of each year. Output material of 1 sector becomes input raw-materials for the other. .

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Comparison :lue Questions asked under va analysis ::is s ly a n A e lu a V h g u ro h Saving T :is s ly a n A e lu a V in re u d Proce :is s ly a n A e lu a V f o s e g Advanta .

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    Factors considered in product design :Customer’s requirement.1. Types of materials. Work methods and equipment. Operator’s Convenience. . Product Design and Development 1.

4. Specialized function. . Design. Product Design and Development 2.1. Planning. Visible in long run. 5. 3.

Desired objective. Service function. Application of Value Engineering      Overall quality and performance. Latest developments. Work together to reduce cost. .2.

The main purpose is to improve quality and to reduce unit costs. 2. Reduce cost and prices.3. Simplification of Product 1. Reduction of undesirable materials. .   3. Benefits. Elimination of undesirable features.