Value engineering is used to increase the value
of products. Value is a ratio of function to
cost. The value of a product can be increased by
reducing its cost or increasing the function.
Value engineering is an organized technique to
reduce the cost of a product without
compromising with its quality, reliability,
performance, appearance, safety, utility etc.
The possible functions by which the cost of a
product can be reduced are
Modification in design of product
By adopting the most efficient manufacturing process
By changing the source of supply of material
Possible elimination or addition in the related system
aim of value engineering is to systematic identification and elimination
of unnecessary costs. It is applied for existing products rather than
Objectives of value engineering/value analysis:
Increased profits –
With the cost reduction of a product,
the profits of an organization increased. This results in time
reduction. It also ensures greater returns on invested capital. The
competitive position of company also improves.
Improved product Design
– With the modification in design, the customer will get a new and more
Efficiency – It increases the efficiency of employees
as it motivates them to come forward with their creative ideas. It also
makes contributions to improve human factors such as creativity, team
work and positive attitude among employees. The team approach also
improves the decision making.
Time consideration – A product has value for the
customer if it is available to him on time. So time element has great
importance in value engineering. It may have no value if it arrives
Improvement in quality
– This results in improvement in quality, reliability, performance and
maintainability of a product.
Steps for value analysis:
Establish the objectives –
Example - cost reduction, function improvement
Make a team for design, marketing, purchasing etc and fix a proper
Information gathering –
Information of cost, physical parameters, schedule etc
A brainstorming session can be held to explore all possible
Option evaluation –
Evaluate all possible solutions and select the best
Implementation and monitoring – Make a plan for implementation of change.