Author: Sarthak Bhalerao
Table of Contents
- What is Value Engineering?
- History of Value Engineering
- Steps in Value Engineering
What is Value Engineering?
Value engineering is a systematic, organized approach to improving the value of a product that a project produces. Value engineering is used to analyse a service, system, or product to determine the best way to manage the important functions while reducing the cost. This encourages the use of alternate methods and materials that are less expensive and do not lower the functionality of the system, service, or product. Value engineering takes place after the completion of the design process, but it is best performed before the design is conducted to allow the experts to incorporate the option of using alternative materials and methods. Most of the engineering projects opt for a team approach, where subject matter experts work together to execute the value methodology.
History of Value Engineering
Value engineering is the review of new or existing products during the design phase to reduce costs and increase functionality. This increases the value of the product. The value of an item is defined as the most cost-effective way of producing an item. Therefore, reducing costs at the expense of quality is simply a cost-cutting strategy. The concept of Value Engineering was first introduced in the 1940s at General Electric, in the midst of World War II. As there was a shortage of components during the war, engineer Lawrence Miles and others sought substitute materials. These substitutes were often found to reduce costs and provide equal or better performance.
Steps in Value Engineering
Value engineering can be broken down into the following steps:
The information phase involves gathering project information and refining the goals of the project. Data is collected and analysed, and the information obtained is used to finalize the priorities of the project and areas of improvement.
- Function Analysis
The function analysis phase involves determining the functions of the project and identifying them with a verb/noun combination for every element under evaluation. The function is defined as the set of targets to be attained through the execution of an element or a set of elements.
This phase involves exploring various ways to perform the function(s). This allows team members to brainstorm alternatives to existing systems or methods that are in use.
The merits and demerits of each solution and alternatives are listed during the evaluation phase. The team should be able to describe each advantage and disadvantage in general terms.
An in-depth analysis is conducted during the development phase. Implementation cost analysis is also involved. The examination of each alternative may involve creating sketches, cost estimates, and other technical analyses.
During the presentation phase, the team meets with the management and other stakeholders to present their final report. The team is required to present their findings to the decision-makers using reports, flow charts, and other presentation materials to convince them that the final ideas from the development phase should be implemented.
Implementation of the project begins after the management’s approval of the team recommendations. If there are changes requested by the management or other decision-makers, these changes should be incorporated into the implementation plan before the implementation begins.