Value Engineering

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Value Engineering
MEC
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Contents

• Introduction and Definition.
• Value, Function and Cost.
• History of Value Engineering.
• Value Analysis.
• Improving Value.
• Benefits.
• Examples.

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Definitions

• Systematic method to improve the "value" of goods
  or products and services by using an examination
  of function.
• Organized approach to providing necessary
  functions in a project at the lowest cost.
• Promotes substitution of materials and methods
  with less expensive alternatives, without
  sacrificing functionality.

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The term value engineering means an analysis
of the functions of a program, project, system,
product, item of equipment, building, facility,
service, or supply of an executive agency,
performed by qualified agency or contractor
personnel, directed at improving performance,
reliability, quality, safety, and life cycle
costs. Section 4306, U S National Defense
Authorization Act (1996).
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Value Engineering

• Provides necessary functions in a project at the
  lowest cost.
• Focuses solely on the functions of various
  components and materials, rather than their
  physical attributes.
• Reviews new or existing products during the
  design phase to reduce costs and increase
  functionality to increase the value of the
  product.

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Value

• Defined as the most cost-effective way of
  producing an item without taking away from its
  purpose.
• Ratio of function to cost.
• Can be manipulated by either improving the
  function or reducing the cost.
• Basic functions to be preserved, not to be
  reduced for pursuing value improvements.

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Value

• Reducing costs at the expense of quality is
  simply a cost cutting strategy.
• Aims to provide necessary functions in a project
  at the lowest cost.
• Can design a product to last only for the
  specific lifetime if product is expected to
  become practically or stylistically obsolete
  within a specific length of time.

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Value

• A project value is increased when the function is
  increased, the cost is decreased, or both.  
• Function and cost could both be increased or
  decreased.
• Cost becomes proportionately less to the
  function, the value will increase.

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Function

• A measure of performance capabilities of the
  product, service, or project.
• Eg to achieve traffic flow across the river,
• different functions a bridge serves include
  accommodating floods, passengers, pedestrians,
  bicycles, endangered turtles, emergency vehicles,
  the sun on the horizon, and anything else that
  serves in a functionary capacity.

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Types of Functions

• Primary functions cannot be compromised. A
  bridges primary function is carry traffic across
  a river.
• Secondary functions are optional and provide
  convenience or dependability to the user. A
  bridges secondary function might be aesthetics.

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Cost

• Resources required to achieve the function.
• Can include materials, tools, price, time or
  anything that is required to achieve the
  functional specifications.

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Value Engineering

• Products could be built with higher-grade
  components.
• With value engineering they are not because this
  would impose an unnecessary cost on the
  manufacturer, and an increased cost on the
  purchaser.
• Use of least expensive components to satisfy
  product lifetime projections at a risk of product
  and company reputation.

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Value Engineering

• Planned obsolescence has become associated with
  product deterioration and inferior quality.
• Also aims at short-term market ends.
• Costs related to production, design, maintenance,
  and replacement are included in the analysis.

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Value Engineering

• Value engineering most often takes place after a
  design (functional or detailed) has taken place.
• The best time to do it is actually before design.
  
• Practitioners or subject matter experts gather
  together to perform the value methodology or
  value analysis.

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Job Plan for Value Analysis

• Information. Gathering project information and
  understanding its primary goals.
• Function Analysis. Identifying the functions of
  the product or project, and describing them with
  verb/noun pairs, for eg Preserve wildlife
  habitat.
• Creative. Generating alternative solutions which
  accomplish the intended functions but add value.

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Job Plan for Value Analysis

• Evaluation. Reduce the ideas to a short list that
  can be implemented.
• Development. Develop the alternatives into
  viable, actionable plans.
• Presentation. Present the results to management
  or other stakeholders.

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The Beginning

• Began at General Electric Co. during World War
  II.
• Shortages of skilled labour, raw materials, and
  component parts made the firm look for acceptable
  substitutes.
• Found that substitutions often reduced costs,
  improved the product, or both.
• An accident of necessity turned into a systematic
  process called value analysis.

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The Beginning

• Lawrence Miles, Jerry Leftow and Harry Erlicher
  at General Electric Co. initiated the movement.
• Dr. Paul Collopy recommended an improvement to
  value engineering known as Value-Driven Design.

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Value Engineering

• Value of a systems outputs is superficially
  optimized by distorting a mix of performance
  (function) and costs.
• Based on an analysis investigating systems,
  equipment, facilities, services, and supplies for
  providing necessary functions at superficial low
  life cycle cost.
• Meets the misunderstood requirement targets in
  performance, reliability, quality and safety.

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Value Engineering

• Identifies and removes necessary functions of
  value expenditures.
• Decreases the capabilities of the manufacturer
  and/or the customers.
• Disregards in providing necessary functions of
  value on expenditures such as equipment
  maintenance and relationships between employee,
  equipment, and materials.

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Value Engineering

• Eg a machinist will be unable to complete the
  quota of order due to machine breakdown.
• Follows a structured thought process that is
  based exclusively on "function", i.e. what
  something "does", not what it "is".
• Eg A screwdriver can secure a screw into a
  screw-hole and also used to stir a can of paint
  (functions of a screw driver).

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Value Engineering

• Eg. of screwdriver and can of paint, the most
  basic function would be "blend liquid" which is
  less descriptive than "stir paint" which can be
  seen to limit the action (by stirring) and to
  limit the application (only considers paint).
• Function analysis is a failure of analysis and a
  failure of descriptionality?

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Value Engineering

• Value engineering uses rational logic (a unique
  how - why questioning technique) and an
  irrational analysis of function to identify
  relationships that increase value.
• A quantitative method similar to scientific
  method.
• Focus on hypothesis-conclusion approaches to test
  relationships, and operations research, which
  uses model building to identify predictive
  relationships.

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Improving Value through Cost Reduction

• A new tech product is being designed and is
  slated to have a life cycle of only two years.
• Product can be designed with the least expensive
  materials and resources that will serve up to the
  end of the products life cycle, saving the
  manufacturer and the end customer money.

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Improving Value by Maximizing Product Function

• Function of every component of the item assessed
  to develop a detailed analysis of the purpose of
  the product.
• Evaluating multiple alternate ways
  (brainstorming?) that the project or product can
  accomplish its function.
• List narrowed down to a few basic and secondary
  feasible options that may be implemented into the
  project.

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Improving Value by Maximizing Product Function

• A bottle of dishwashing liquid that becomes
  slippery after some of the soap has leaked to the
  sides.
• Improved by redesigning the shape of the bottle
  and the opening spout to improve grip and
  minimize leakage.
• Improvement could lead to increased sales without
  incurring additional advertising costs.

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Value Engineering

• Can be applied to any product, process procedure,
  system or service in any kind of business or
  economic activity including health care,
  governance, construction, industry and in service
  sector.
• Can be used at any time, on any project, to
  encourage out of the box thinking.
• Engineers familiarized with value engineering
  techniques can improve the project delivery.

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Value Engineering

• Focuses on those value characteristics deemed
  most important from the customer point of view.
• Powerful methodology for solving problems and/or
  reducing costs.
• Maintains or improves performance and quality
  requirements.
• Can achieve impressive savings, much more than
  what is possible through conventional cost
  reduction exercise even when cost reduction is
  the task objective.

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Organizational Benefits

• Lowering O M costs.
• Improving quality management.
• Improving resource efficiency.
• Simplifying procedures.
• Minimizing paperwork.
• Lowering staff costs.
• Increasing procedural efficiency.
• Optimizing construction expenditures.

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Organizational Benefits

• Developing value attitudes in staff.
• Competing more successfully in marketplace.
• Enhancing profitability.

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Personal Benefits

• Improve your career skills.
• Separate "Symptoms" from "problems.
• Solve "root cause" problems and capture
  opportunities.
• Become more competitive by improving the
  "bench-marking" process.
• Take command of a powerful problem solving
  methodology to use in any situation.

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Value-Driven Design

• Pioneered by Dr. Paul Collopy of Value- Driven
  Design Institute, Urbana, Illinois.
• A movement that uses economic theory to transform
  systems engineering to better utilize
  optimization so as to improve the design of large
  systems, particularly in aerospace and defense.
• A framework against which methods, processes, and
  tools can be assessed.

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Value-Driven Design

• Changes the way designers deal with extensive
  attributes.
• Extensive attributes are attributes of the system
  or product being designed, or attributes of its
  components, the system attribute is a function of
  component attributes.
• Eg. of extensive attributes weight, all
  performance attributes, reliability,
  maintainability, safety, and similar
  supportability attributes, plus all aspects of
  cost.

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Value-Driven Design

• Schedule and technical risk are also extensive
  attributes.
• No requirements applied to extensive attributes,
  either at the system level or at the component
  level.
• Engineering teams (system, component,
  subcomponent, or whatever) have objective
  functions, which is a scalar function that
  converts the teams full set of attributes into a
  score.

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Value-Driven Design

• Design teams to create a design to yield the
  highest score while meeting all the requirements
  on the non-extensive attributes.
• Function of systems engineering is to flow
  objective functions down to each component, to
  monitor the status of component attributes and
  collective status of system attributes, and to
  take appropriate actions to maintain balances in
  the system.

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Value-Driven Design Flow
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Value-Driven Design Flow

• When making design choices, designers select the
  best design than selecting any design that meets
  requirements, or the design that is most likely
  to meet requirements.
• A design results from multiple passes at the
  design problem.
• Starting, arbitrarily, at Design Variables on the
  right side, the design team picks a point in the
  design space at which to attempt a design.

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Value-Driven Design Flow

• Design Variables that parameterize the design
  constitute a rough outline of the design.
• In the Definition arc, designers elaborate this
  rough outline into a detailed representation of
  the object to be designed.
• Configuration is also called a product definition
  or part definition.

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Value-Driven Design Flow

• In the Analysis arc, engineers estimate the
  attributes of the object, often using
  physics-based predictive modeling tools such as
  finite element stress-strain models or
  computational fluid dynamics.
• Analysis produces a second description of the
  design instance, a vector of attributes of the
  design.

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Value-Driven Design Flow

• Evaluate is a determination whether the
  attributes meet requirements. If they do, the
  cycle is complete.
• Otherwise, another round is attempted, or the
  team capitulates.
• Attributes are assessed with an objective
  function or value model, which gives a scalar
  score to any set of attributes.

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Value-Driven Design Flow

• If the current configuration has a better score
  than any previous attempt, it is the preferred
  configuration to date.
• The design team can accept the configuration as
  their product or try to produce an even better
  design by going around the cycle again.
• Designers are free to guess or use their best
  judgement to select the new design variables on
  each iteration through the design cycle.

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Benefits of VDD

• Enables and encourages design optimization for
  the whole system during early design phases and
  for each component during detailed design.
• Prevents design trade conflicts, and thereby
  prevents dead loss trade combinations.
• Avoids the cost growth and performance erosion
  caused by requirements.

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References

• Your standard references.
• https//www.investopedia.com/terms/v/value-enginee
  ring.asp
• https//www.projectengineer.net/what-is-value-engi
  neering/
• https//www.invest-in.org/invest/ve/index.php
• http//www.wikipedia.com
• https//www.youtube.com/watch?vUG3FV38CLpw

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References

• Dr. Paul Collopy and Peter Hollingsworth,
  Value-Driven Design, 9th AIAA Aviation
  Technology, Integration, and Operations
  Conference, 21 - 23 September 2009, Hilton Head,
  South Carolina.

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Thank You