Friday, March 30, 2012

Value Analysis and Engineering Techniques

13 techniques proposed by L.D. Miles, the founder of value analysis and engineering

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Value Analysis Techniques


Miles provided 13 ideas as value analysis techniques.
 
  1. Avoid generalities
  2. Get all available costs
  3. Use information from the best source
  4. Blast create and refine
  5. Use real creativity
  6. Identify and overcome roadblocks
  7. Use industry experts to extend specialized knowledge
  8. Get a dollar sign on key tolerances
  9. Utilize vendors’ available functional products
  10. Utilize and pay for vendors’ skills and knowledge
  11. Utilize specialty processes
  12. Utilize applicable standards
  13. Use the criterion, “would I spend my money this way?”
The list in above order was given by Miles in his first edition of the book. The order can be changed to study the techniques in a sequential process way.

Value Analysis Techniques of Miles in a different order


Analysis techniques for creating low cost alternatives

1. Blast, Create and Refine
2. Utilize vendors’ available functional products
3. Utilize specialty processes
4. Utilize applicable standards


Information needed to start the activity and to analyze


5. Avoid generalities
6. Get all available costs
7. Use information from the best source 
8. Get a dollar sign on key tolerances


During the value engineering process use creativity and question the existing solutions

9. Use real creativity
10.Use the criterion, “would I spend my money this way?”
This will motivate you to focus on the issue and come with alternatives

Use outside expertise also to come with value enhancing suggestions and their development 


11. Use industry experts to extend specialized knowledge
12. Utilize and pay for vendors’ skills and knowledge

Be ready for roadblocks after you come out with a solution

13. Identify and overcome roadblocks


Brief Explanation of the VE Analytical Techniques 

1. Blast, Create and Refine

Blast
To do blast activity, the basic functions to be accomplished by a product or a component are given the focus and alternative products, materials and processes are brought into the picture. These alternatives need not entirely accomplish all the basic functions completely. These alternatives need to qualify on the basis of accomplishing some important part of the function or functions in a very economical manner. The alternatives are in the consideration list even if they can accomplish important part of the function based on some modifications. During this activity, the amount of the function which would be accomplished by the suggested or identified alternatives and the cost involved are ascertained.

Create
Use real creativity to generate alternatives to  improve the ideas of blast stage, to accomplish large part of the required function with accompanying increase in cost. Increase in functions obtained needs to be accounted by increase in cost.

Refine
The solution obtained in create stage is further sifted and refined by adding features which provide further functions and fully accomplish the desired function. Miles stated that this blast, create and refine technique delivered the total function with the same reliability but at a cost of one-half to one-tenth of the original for many components and products.

2. Utilize vendors’ available functional products

Number of products like special hinges, special rivets, special tapered structural shapes etc. are available to perform various functions from vendors. Available functional products (even though not standard but special) have low costs because the specialty supplier has a sufficient lead in his particular technology and sufficient volume.

But there are interfering factors that prevent engineers from using the available functional products and they design items for their products afresh. Miles identified some of them as lack of knowledge regarding the availability of the items, preference for do-it-ourselves, feeling that boss wants me to design, inhouse design shows our capability thinking, feeling that own designs are proprietary knowledge, problems of search, and feeling that we can improve over a period of time etc.

Miles recommends preparing functional product lists and specially creating lists for items that are not usually bought.


3. Utilize specialty processes and special tools


Miles defines specialty process as an applicable process which would reliably accomplish the needed function for significantly lower cost and which either exists or could, and would be developed by some one who leads in the technology involved if he understood the need for it.

Miles gaves the opinion that even persons engaged in value work take time to recognize specialty processes. In 1961, he gave the delay as three years. Other engineers take around 10 years to recognize specialty processes. The purpose of identifying and emphasizing this point in the list of VE techniques is to reduce this time lag.

Special tools also provide value opportunities. Value engineers have to be on the lookout for appearance of special tools.

4. Utilize applicable standards

Miles has written that including in the list of techniques and highlighting it may look silly, but it is a valuable technique in VE application.

The full meaning includes utilization of standard parts, parts of standard products, engineering concepts, manufacturing concepts, manufacturing processes and materials. He also emphasized that where not applicable standard items should not be used.


5. Use information from the best source


This point is relevant to the issue of overcoming roadblocks to various value suggestions. In one example, a component, a cover of an item was judged to be redundant. The designer said it was required by the customers. When the value engineer approached the sales person, he was told that only one customer uses the item with the cover and all others actually remove the cover and use it. Hence the initial idea that the cover was redundant was right. So the suggestion is that information from the best and ultimate source is to be only used for decision making in value work.

6. Get a dollar sign on key tolerances

Tolerances are required to obtain necessary fit or to allow assembly.
But many times tolerances are specified as standard practice and to give the impression of a complete drawing. Tolerances have cost.
For efficient use in value work each tolerance is to subjected to the following questions.
i) What does it cost?
ii) What function does it provide?
If the cost of tolerance is trifling, it did not be analyzed further. But if it is substantial in the process cost, it is to be analyzed.

7. Use real creativity

Creativity is generating alternatives.  Creative people believe that there are many ways of doing a thing. Miles made the observation that many creative people believe there are at least eight ways of doing a thing. They are not satisfied when they find one way.

In value analysis, creativity is to be applied as soon as the function desired is brought out in specifics. The most common obstacle to creative thinking is natural tendency to let judicial thinking work along. It interferes.  What is required is to suspend judicial thinking and let the ideas flow. Creativity is not associated with only complex problems. Even simple things can have creative alternatives. Creativity can be sustained and more alternatives can be generated in a group brainstorming.

8. Identify and overcome roadblocks

A roadblock is a decision that prevents value alternatives. The decisions could be due to lack of information, acceptance of wrong information and wrong belief on the part of the decision maker.  The value engineers have to recognize the roadblocks, and provide more correct information with proper timing and presentation so that the decision maker will use it.

9. Avoid generalities

Many times general statements are used to stop value alternatives from proceeding further. Examples given by Miles include:
* It's not practical to build dies for drop forging when quantities are less than 25,000 per order.
* It's not practical to build molds for casting in quantities of less than 5,000.
But a value engineer needs to make inquiries. Parts vary in complexity and material may make a difference.  There will be advancements in diemaking and as well as in diemaking machines. Instead stopping with general statements, value engineer needs to make specific inquiries.

10. Get all available costs

Cost data are produced in companies to support financial statements and tax statements. Hence a value engineer has to get all available costs and assess their utility for his decision making purpose. When costs are utilized for decision making they have to make economic sense. An example was given by Miles, wherein inappropriate cost allocations and decision report higher cost figures for an item.

11. Use industry experts to extend specialized knowledge

The quality of answers to value problems is dependent upon the depth of penetration of the subject matter brought to bear on the problem. It has to be noted that knowledge, techniques and processes are continually being developed in each technology and that only the specialists know of those which have become practical with the last year or two. Value engineers have to bring these experts into their value projects and try and get best answers to the attainment of functions desired.

12. Utilize and pay for vendors’ skills and knowledge

There are suppliers with skills to develop special products at low prices. They continuously upgrade their skills and are looking out for opportunities applying their technology. Users benefit by contacting them and posing their function fulfillment problems.  These suppliers spend time and come out with solutions. Whenever they come up with good value solutions, they need to be rewarded with orders. There have to fair relations between suppliers and company.

13. Use the criterion, “would I spend my money this way?”

Miles documents that an average person evaluates his personal expenditures in the following steps.
A limited amount is allocated for the purpose.
Effort is done to secure maximum use function and appearance function from the expenditure. For this, he generates number of alternatives or considers number of alternatives. He will make a comparison of relative use values, esteem values and cost to make a decision.

Design engineers, manufacturing engineers, purchasing personnel and management have to follow similar procedure for organizational decision making also.

Extension of
     
Original knol - http://knol.google.com/k/narayana-rao/value-analysis-and-engineering/2utb2lsm2k7a/ 3887

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