VA-VE Presentation.pptx

VA-VE Training presentation

1. Value Engineering

2. History Value Concept What is Value Engineering? Implementation of VE in our project Principle and Purpose of VE Case Study Conclusion O u t l i n e

3. Lawrence D.Miles 1904 - 1985 Shortage of materials during world war II General Electric company found that many of the substitutes have better or equal performance at less cost. Lawrence De Miles Launched an effort to make the concept systematic Establishment of Society of American Value Engineers “SAVE” in 1959 H i story

4. What is Value? Value = = Value is the lowest price you must pay to provide a reliable function or service (L. D. Miles) “The ratio of Function to Cost” Worth Function(Utility) Cost Cost

5. Why do Projects have “Unnecessary” Costs? Low Time for Designing Lack of information Lack of Ideas Negative Prejudice Lack Of Experience Weaknesses in human relations Multi Concept … Waste Cost

6. What is Value Engineering?

7. What is Value Engineering? Value Engineering (VE, or Value Analysis) is a management technique that seeks the best functional balance between cost , reliability and performance of a product, project, process or service.

8. The Key Points of VA / VE Applying formal work plans. A team approach. Specific definition of functions. The simultaneous look at functions and costs. Control of the analysis process. Quantifiable results

9. What is VALUE ? Value is the relationship between the defined function the customer requires and the costs incurred to provide that function. Cost Value Use Value Esteem Value Exchange Value

10. Value Engineering Value Engineering is Reliability Maintainability Producibility Human Factors Parts Availability Cycle Time Quality Weight Reduction

11. Why use Value Engineering? Save Save Build Improve Satisfy Time Money Teamwork Quality Customer

12. When is VE used Existing part/product cost is high Existing technology is complex/old though simpler means are available There is a need to release a cheaper product by cutting down some of the existing feature The existing customer demands a minimal increment in product features that are in use There is a need to cut down the manufacturing cycle time/cost

13. Value Engineering is used to determine the best design alternatives for Projects, Processes, Products, or Services Value Engineering is used to reduce cost on existing Projects, Processes, Products, or Services. Value Engineering is used to improve quality, increase reliability and availability, and customer satisfaction . Value Engineering is also used to improve organizational performance. Value Engineering is a powerful tool used to identify problems and develop recommended solutions . When is VE used

14. Benefits of VE Decreasing costs Increasing profits Improving quality Expanding market share Saving time Solving problems Using resources more effectively

15. VE’s Weaknesses ⮞ Successful VE results are dependent on the quality of information brought to the VE workshop for evaluation. ⮞ VE is not time oriented, but, product oriented. Thus, improvements in production activities are not readily recognized. ⮞ There are many misunderstandings and biases against VE that have been built up over time due to misuse of the methodology.  “It cheapens the product without improving it.”  “VE is only used for cost reduction.”

16. Value Engineering Research Questions and Check Sheet Can it be eliminated without impairing function or reliability? Does it cost more than its worth? Does it do more than is required? Are there unnecessary features? Is there something better with which to do the job?

17. Value Engineering Research Questions and Check Sheet Can it be made by a less costly method? Can a standard item or specialty product be used? Could a less costly manufacturing technique be used? Should different tooling be used? Can someone else provide it at less cost without affecting dependability?

18. Potential Savings from VE Concept Design &Production Release Production Re- Test/Re- qualification Drawings Released Tooling Changes Net Savings from VE Total Cost of VE Implementation No engineering Change Revision Document Revision VE Implementation beyond this point results in a net loss. Engineering

19. What is value? VALUE = What we get out of something What we put into it VALUE = Quality, reliability, appeal, etc = Cost, time, mass, energy, etc. Benefits Resources VALUE = Worth = Cost Performance Cost Delivery of necessary project functions while achieving best balance between project performance and project costs.

20. To Increase Value F F C C F C F C REDUCE INCREASE MAINTAIN Value = Function Cost

21. Competitive Advantage Quality is defined as “conformance to specification.” Function Value is defined as: Cost You can’t have one without the other! Competitive Advantage = Quality + Value

22. Unnecessary Cost Any cost that can be removed without impairing the essential Quality Performance Customer requirements Reliability Maintainability Marketability Schedule

23. Implementation How is a Value Engineering Study Conducted?

24. The Job Plan V alue engineering is often done by systematically following a multi-stage job plan . Larry Miles' original system was a six-step procedure which he called the "value analysis job plan."

25. The modern version has the following eight steps: Orientation Information Functional Creative Evaluation Development Presentation Implementation and Follow-up The Job Plan

26. Orientation Phase Identify issues Prioritize Issues Drafts scopes and objective Establish evaluation factors Determine Study Team Collect Data Prepare for value study ... The Job Plan

27. 2. Information Phase F u rt h e r f am il ia r i zat i o n of the p r o j ec t by the tea m ; a ll team members participate in determine the true needs of the project. Areas of high cost or low worth are identified. The Job Plan

28. Information Phase Checklist General What is the item? How does it work? What does it do or accomplish? Why does it work? What must it do or accomplish? How does it relate to other systems, units, or components? Has it been determined why it is needed? Specifications Have the specifications and requirements been reviewed? Are the specifications realistic? (That is, are all specified characteristics both necessary and sufficient?) Can specification requirements be modified or eliminated? Will a modification of the specification simplify design and construction? Are the specifications required, or are they guidelines only? What is it we really want? Are all performance and environmental requirements necessary and sufficient? Have the specifications been interpreted correctly by the planner and the designer? What are the desirable characteristics in respect to width, thickness, appearance, durability, installation, maintenance, testing, safety, etc.? Is a severe environmental issue involved? What special performance or operating characteristics are required? Have State and Federal policies, procedures and regulations been reviewed?

29. Information Phase Checklist Engineering and Design Has the background history been collected? Who designed it? When? Who determined the requirements? Who must review a change? Who must approve a change? Who must approve implementation funding? Who must implement the change? Is the change procedure known? Does the design do more than required? What alternates were considered during design? Why were alternates rejected? Are any changes to the design planned? Do drawings reflect latest state-of-the art? How long is it designed to last with normal use (design life)? What is its normal use? What is the measure of life (time, cycles)? What are the life cycle costs? Methods and Processes Can functions be combined, simplified, or eliminated? Are any nonfunctional or “nice to have”-only items required? How is construction performed? Why is it performed that way? Are there high direct labor costs? Are high-cost areas or items identified? What is the schedule?

30. Information Phase Checklist Materials and Procurement Are special, hard-to-get, or costly materials specified? What alternate materials were considered? Why were they rejected? Are the materials used hazardous or difficult to handle? When was the material specified? Have new materials been developed that would perform the function for less cost? Have the present suppliers been interviewed to ascertain any problems which contribute to high costs? Have there been any delivery or quality problems? Is this a single source item? Maintenance Has the item been observed in use? Have the people who use or maintain it been solicited for ideas? What is normal maintenance? What is frequency of maintenance? What is level of maintenance? Can the asset be easily accessed for maintenance activities?

31. 3. Functional Phase Functional analysis outlines the basic function of a product using a verb and a noun such as ‘boil water’ as in the case of our kettle. The Job Plan What is the Function? “ Boil Verb W ater ” Noun

32. Function Analysis Shifts the problem- solving focus away from the items toward the functions Function need be defined by two words: an Active Verb and a Measurable Noun The verb defines the required action; the noun tells what is being acted on The more abstract the function definition, the greater the opportunities for finding creative alternatives

33. Function Analysis FAST (Function Analysis System Technique) - A logic diagram to describe how a system works. Examples of Verbs and Nouns: Active Verbs Transmit Irradiate Project Dissipate Generate Convert Receive Reflect Provide (passive!) Nouns Signal Information Data Heat Radiation Current Light Image

34. A LL C OST IS FOR F UNCTION The customer wants a function!  Wants something done – enclosed, held, moved, cleaned, heated, cooled, etc.  Wants someone (perhaps himself) pleased • Shape, color, aroma, sound, texture, “precious” material, etc. Use functions  Serve needs  Entail some action that he wants performed Aesthetic functions  Please the user/owner

35. W HAT IS F UNCTION ?  “A product or process must do to make it work and sell,”  It is the original intent or purpose that a product, process or service is expected to perform.  In FAST Diagrams, the description of a function is restricted to a two word format – an Active Verb+ Measurable Noun.  Ex. :- Carry Load; Transmit Light; Project Image.

36. F UNCTIONS  Products may require use functions, aesthetic functions or both  Refrigerator, automobile, clothing, etc. require both use and aesthetic functions  Concealed wire in a building, oil in an engine, etc. require only use functions  Perfumes, artistic paintings, etc. have aesthetic function

37. A NALYSIS OF F UNCTION  State the function in exact sentences  Is that exactly what it does for the customer?  Is that exactly what the customer wants it to do?  Is that exactly what the customer believes he’s paying for? Improve and clarify sentences until they say what the function exactly is Name the function with a verb-noun combination  E.g. support contact, enclose housing, radiate heat, etc.

38. D EFINING F UNCTION  All functions can be defined in Two words:  An Active Verb and a Measurable Noun  Examples of function foe various types of Studies: Item:  -Automobile  -Refrigerator  -Foundation  -Road Function: -Transport People -Cools Air -Support Structure -Routes Vehicles

39. N AMING F UNCTIONS Some Verbs Contain Secure Move Locate Shorten Space Support Rotate Protect Fasten Prevent Close Control Reduce Modulate Limit Mount Filter Ignite Some Noun Piston Vibration Volumes Contacts Torque Panel Switch Paint Volume Rust Current Noise

40.  By constraining the description to just two words, it forces participants to clearly and concisely capture WHAT task needs to be performed, not HOW it is performed.  This eliminates the physical constraints of the product from our thinking and allows us to explore alternatives more easily. It is a way of overcoming “functional fixedness” which is what Charles Bytheway was trying to accomplish.

41. F AST  Fast diagrams provide a graphical representation of how functions are linked or work together in a system to deliver the intended goods or services.  Functions may be performed by the process, product or system, into a How?/why? relationship.  The FAST diagram presents the whole technical system with the inter-relationship of its various functions.

42.  Use of a FAST diagram based on the Why-How-When logic Why?  Leads back to the higher level function How?  Leads ahead to the specific function that must be performed in order to When?  W h i ch fu n c ti on s m u st be pe r f or m ed s i m u lt aneou s l y and sequential relationship with others.

43. B ASIC S TEP  Prepare a list of all the functions by assembly or system using the verb and noun technique of identification of function  Write each function on a small card.  Select a card with the function that you consider to be the basic function. Determine the position of the next higher and lower function cards by specifically answering the questions:  How?  Why?  When?

44.  Basics of FAST diagrams:

45.  You will note in the figure that there are several different classifications of functions.  The two major categories are:  1. Basic Function  2. secondary Functions Basic Functions : describe the characteristics or task which is the primary reason for the existence of an item.  It is what the product or process was actually designed to. Secondary Functions : are those designed-in functions which are required to cause or allow the basic function to occur.  It is any function that directly contributes to accomplishing the basic function.  It can be further divided into several other categories which are known as sub-groups.

46. Dependent Function  A function that depends on another function for its existence.  Comes in to existence when a specific method is selected. Independent Function  Does not depend upon one other functions for its existence or on the method selected to perform those functions. Support Function  A function, which assists a critical function in doing its job so that it may be done in a reliable and acceptable manner.

47. Critical Path Functions  Any functions which describe specifically how or why another functions are performed. Higher Order Functions  Higher order functions are reasons for the lower order functions to exist.  In the FAST diagram they appear in the left-hand portion of the diagram Lower Order functions  Lower order Functions serve the higher order functions. Their existence depends on the relevance of higher order functions.  In the FAST diagram they appear in the right-hand portion of the diagram.

48.  A few things that to be pointed out about FAST Diagrams: --- There is no single “correct” FAST Diagram for a product, process, service or system. They can very depending on:  Focus of the analysis.  Technology or customer focused;  Objectives of the study in which it is used – cost reduction, process improvement or technical problem solving.

49. CASE STUDY  PC PROJECTOR.  HARDWARE & OPERATING SYS.  MOUSE TRAP.

50.  We can see that there is a logical How/Why connection across the critical path, as well as the secondary path.  In addition to this left-right logic path, there is the “When?” logical connection moving from top to bottom.  “When” the projector “Generate Light” it also must “Minimize Heat” generate.

51. A DVANTAGES O F FAST  Easy to analyze.  All functions under one flow chart/ diagram.  Helps to figure out critical path.  Helps to find function for where we can optimize the process.

52. 4. Creative Phase This step requires a certain amount of creative thinking by the team. A technique that is useful for this type of analysis is brainstorming . This stage is concerned with developing alternative. The Job Plan

53. Job Plan Creative Phase Checklist Have creative thinking techniques been used? Has an atmosphere been provided that encourages and welcomes new ideas? Has there been cross-inspiration? Have all members of the team participated? Has an output goal been set? Have all the ideas been recorded? Have negative responses been discouraged? Has the team reached for a large quantity of ideas? Have ideas been generated without all the constraints of specifications and system requirements Has a thorough search been conducted for other items which are similar in at least one significant characteristic to the study item? Have all basic functions been identified for this project? Is a separate Creative Phase worksheet available to be filled out for each basic function description? Have you dismissed from your thoughts the present way the basic function is accomplished? For group brainstorming, have the techniques, method of approach, and "ground rules" been explained before proceeding? Have you provided for a sufficient incubation period to permit later addition of more ideas? Have you made provisions for a later follow-up session to evaluate and refine the ideas? Have all of the basic functions of the project team been subjected to the complete Creative Phase?

54. 5. Evaluation Phase In this phase of the workshop, the VA team judges the ideas developed during the creative phase. The VA team ranks the ideas. Ideas found to be irrelevant or not worthy of additional study are disregarded. Those ideas that represent the greatest potential for cost savings and improvements are selected for development. The Job Plan

55. Evaluation Paired Comparison Analysis Follow these steps to use the technique:  List the options you will compare. Assign a letter to each option.  Mark the options as row and column headings on the worksheet.  Note that the cells on the table where you will be comparing an option with itself have been blocked out - there will never be a difference in these cells  The cells on the table where you will be duplicating a comparison are also blocked out. Within the remaining cells compare the option in the row with the one in the column. i.e where “A” and “B” intersect. For each intersect cell, decide which of the two options is more important. Write down the letter of the more important option in the cell. Finally, consolidate the results by adding up the total of all the values for each of the options. You will convert these values into a percentage of the total score. (all scores totaled should equal 100% In the example below, an entrepreneur is looking at ways in which they can expand their business. They have limited resources, and have determined a set of the best options:

56. Evaluation A- Expand in International market B- Expand in Domestic market C- Improve customer service D- Improve Quality Then they compare these options, In the intersect cell, the letter of the most important option between the 2 is entered, Once all options have been evaluated and scored for importance, a total and percent of overall performance is calculated. An example is shown in the figure below. A B C D Total Adj Total Weightage Expand in International Market A A C A 2 3 30% Expand in Domestic Market B C B 1 2 20% Improve Customer service C C 3 4 40% Improve Quality D 1 10% In this example, it is most important to improve customer service (C) and then to tackle Overseas markets (A). Quality is not a high priority - perhaps it is good already. Paired Comparison Analysis is a good way of weighing up the relative importance of different courses of action. It is useful where priorities are not clear, or are competing in importance. The tool provides a framework for comparing each course of action against all others, and helps to show the difference in importance between factors.

57. 6. Development Phase The team develops the selected ideas into alternatives (or proposals) with a sufficient level of documentation to allow decision makers to determine if the alternative should be implemented. The Job Plan

58. 7. Presentation Phase 1. The presentation phase is actually presenting the best alternative (or alternatives) to those who have the authority to implement the proposed solutions that are acceptable. The Job Plan

59. 8. Implementation And Follow Up Develop an implementation plan Execute the plan Monitor the plan to completion Objective : During the implementation and follow-up phase, management must assure that approved recommendations are converted into actions. The Job Plan

60. Determine the best design alternatives Reduce cost Improve quality Increase reliability and availability Enhance customer satisfaction Improve organizational performance Identify problems Develop recommended solutions P ur po s e

61. Potential Saving From VE Early changes are naturally less expensive than later ones, as shown in the diagram below.

62. Value Engineering principles: P ri n c i p l e s Systematic method for evaluating product performance and value The use of multi-functional teams Focus on a simplified product 1 2 3

63. Focus Adjustment Knob for Slit Lamp Case Study

64. Introduce the Product In this presentation we have considered a medical instrument manufacturing company, Aadarsh Instruments, located in Ambala. This firm is producing different types of microscopes which they export to various countries around the globe. One of their model SL250 have a component named Focus Adjustment Knob for Slit Lamp in microscope. This microscope has found application in the field of eye inspection. Case Study

65. The steps used for this purpose are as follows: Product selection plan Gather information of product Functional analysis Creativity Worksheet Evaluation sheet Cost analysis Result Case Study

66. 1. Plan For Product Selection This Product is used to adjust the focus of lens for magnification purpose. The present specifications of this part and its material used are costlier than the average industry cost. Value of this product can be increased by maintaining its functions and reducing its cost or keeping the cost constant and increasing the functionality of the product. Case Study

67. 2. Obtain Product Information Material – Aluminum Bronze Alloy Diameter of base plate –30 mm Thickness of plate--3 mm Cost of the material is – 293 rupee/Kg Pieces Produced annually – 8000 Process used – C.N.C. indexing milling Cycle time—2.5 min Anodizing—2/min Material wt —65 gm Total Present cost – 29.99 rupee /piece Case Study

68. 3. Functional Analysis of Present Functions Case Study

69. 4. Develop Alternate Design Or Methods During brainstorming these ideas were listed: Change design Change material Use plastic Make it lighter Change the production process Use nylon indexing unit Case Study

70. Evaluation Phase For judging the ideas, the following designs were considered: Function Cost Maintainability Quality Space each of the above criteria was compared with others , and depending on their relative importance, three categories were formed, major, medium, and minor. Case Study

71. Comparing this criteria according to relative importance : Case Study

72. From the paired comparison we get the following result: Case Study T h e a b ov e i d e a s w e re d i scus s e d a n d the b e st fea s i b l e i deas were separated which were: Change the material to steel Use Nylon unit Use existing material

73. 6. Cost Analysis Case Study 7.44 0.50 3.65

74. Result The total savings after the implementation of value engineering are given below: Cost before analysis – 29.99 rupee Total Cost of nylon knob – 18.40 rupee Saving per product – 11.59 rupee Percentage saving per product – 38.64 % Annual Demand of the product – 8000 Total Annual Saving – 92,720 rupee Value Improvement - 62.98 % Case Study

75. Three goals that we're looking at value engineering: Identify additional functions that aren’t attractive to customers. Add attractive functions for customers. Saving because of the elimination of redundant functions. Conclusion

76. Elemental LED