VALUE_ENGINEERING ppt for Industrial engineering ad management

VALUE_ENGINEERING ppt for Industrial engineering ad management

1. VALUE ENGINEERING 1

2. FOUR BASIC KINDS OF VALUE 1.USE VALUE : The properties, features and qualities which accomplish the use, the work or the service-causing the item to perform or serve an end. 2.ESTEEM VALUE : The properties, features or attractiveness which cause us to yearn to possess it -causing the item to sell . 3.EXCHANGE VALUE : The properties or qualities which enable us to exchange an item for something else we want 4.COST VALUE :The total of material, labor and other costs that have to be incurred to produce an item. 2

3. BASIC FUNCTION PRIMARY FUNCTION USE FUNCTION : Those for which the customer or user buys the item or service ; the primary purpose, the utilitarian characteristic, or the feature that fulfils the need of the customer or user. Its the most i mportant action performed by a product or service. SECONDARY FUNCTION SUPPORT FUNCTION : Those functions required to cause or allow the designer's choice of means for accomplishing the primary purpose. Other functions not directly accomplishing that primary purpose, but supporting it, or resulting from the design approach chosen. An additional function for helping the item to work or sell better. 3

4. NECESSARY FUNCTION : That which must be performed by the item to accomplish the user need. UN-NECESSARY FUNCTION : That which is superfluous or additional to the primary need of the user. AESTHETIC FUNCTION : That which is for the purpose of pleasing the buyer through colour , shape, or feature, causing the person to buy VALUE INDEX : The ratio of WORTH over COST. WORTH : The least cost that is required to perform a function or a group of functions. The value of a function is often referred to as worth. 4

5. VALUE GAP : The difference between Cost and Worth . VALUE MISMATCH : Value Mismatch is when function cost does not match user / customer function needs and attitudes. high cost - low worth: high worth - low cost. COST : The total cost of material, labour, design and over-heads allocated to the product or services LIFE CYCLE COST : LCC is the cost of the product or service over the life of the item minus a trade-in value at the completion. 5

6. DESIGN TO COSTS/VALUE CONTROL : Value control is a cost avoidance procedure which establishes an estimated total cost objective for each new product or service, then designs and manufactures to this cost objective a functional and reliable product or service. FUNCTION ANALYSIS SYSTEM TECHNIQUE (FAST) : FAST is a diagramming technique which shows graphically the relationships and inter-relationships of all functions . It is a method of analyzing, organizing and recording the function of a system product, plan, process, procedure, etc., to stimulate thinking and creativity. PERFORMANCE: Performance is the relationship between cost and price . 6

7. Difference between value Engineering and Cost reduction: Value Engineering Conventional Cost Reduction It is function oriented. It is item oriented It applies innovative approach & ideas It follows past practices There could be divergent – Convergent ideas. There could be Convergent ideas. There is cost visibility on the following functional basic. (a.) Basic function (b.) Secondary Function There is cost visibility on the following aspect (a.) Component wise (b.) material (c.) Process wise (d.) Labour (e.) Transport (f.) Maintenance It optimizes overall design It plays around local design . There is team work approach. Usually there is individual approach The V.E approach does not compromise with performance, quality and reliability. There is a tendency towards compromising quality and reliability. It is systematic and sequential approach. Its approach is arbitrary and ad-hoc. 7

8. VALUE ENGINEERING Value Analysis, Value Engineering, Value management, Value Control, Value Assurance, it is by any name, it is a highly potent and powerful Management Technique created to effect IMPROVEMENTS . L. D. Miles - “ Value Analysis, is a problem solving system implemented by the use of a specific set of techniques, a body of knowledge, and a group of learned skills. It is an organized creative approach that has for its purpose the efficient identification of unnecessary cost” . SAVE - “The Systematic application of recognized techniques which identify the function of a product or service, establish a monetary value for that function, and provide the necessary function reliably at the lowest overall cost ”. 8

9. VALUE ENGINEERING (cont.) The systematic effort directed at analyzing the functional requirements of systems, equipment, facilities, procedures, and supplies for the purpose of achieving the essential function at the lowest total (life-cycle) cost, consistent with meeting needed performance, reliability, quality, maintainability, aesthetics, safety, and fire resistance. Value Engineering is ENGINEERING FOR VALUE. 9

10. Value analysis Value analysis is a set of techniques, knowledge, and skills used to improve the value of a product by eliminating unnecessary costs or improving its functions without compromising its quality, reliability, and performance. It involves understanding the components of a product and related costs 10

11. Make-or-buy decision A make-or-buy decision is a strategic planning and supply chain management decision that involves choosing whether to manufacture a product in-house or buy it from an external supplier. It's also known as an outsourcing decision 11