Friday, December 13, 2013

Value Analysis: Approach and Job Plan





Basic Steps of value Analysis


The three basic steps are:

1. Identify the function.
2. Evaluate the function by comparison
3. Cause value alternatives to be developed.

The value analysis approach requires development of valid answers for five questions for value analysis of any item:

1. What is the item?
2. What does it cost?
3. What does it do?
4. What else would do the job?
5. What would that alternative cost?

Number of alternatives have to developed in the value analysis exercise. Value analysis approach developed by Miles, aims at identifying very low cost base alternatives early in the exercise and then creatively improving them to deliver the set of functions desired.



Job Plan for Value Engineering

 
Phase 1. Orientation: Understand the customers’ needs and wants. Understand the functions performed by the product and the contribution of each part and each feature of the part and the complete product to the functions to be performed by the product.
Value engineer has to make sure that he does not diminish the contribution of the product to the customers' needs and wants.
 
Phase 2. Information: Collection of information on quantities, vendors, drawings, materials, manufacturing methods, and costs.

Phase 3. Speculation: Using all the techniques of value analysis to come out with alternative low cost materials and methods to produce components and the product. Creativity is to be employed here. Value engineer has to involve experts from various disciplines to help with ideas.
Phase 4. Analysis:  Technical and cost analysis of the alternative proposed.
Phase 5. Program planning: Approach the specialists to further refine the selected alternatives. Inform the specialists the accepted suggestions and give mandate to them to take steps to implement the suggestions.
 
Phase 6. Program execution: Pursue regularly the specialists and vendors to get their inputs on various tasks assigned to them. The output of this phase is a detailed design, successful trail  pilot  run of a manufacturing process or  a confirmed estimate from a vendor for supplying a component, material or sub assembly.
 
Phase 7. Status summary and conclusion. The results of the value engineering study are to be presented to decision makers. The reports needs to have a summary sheet as well as the full supporting documentation.  The value engineering project is concluded when the product is manufactured and distributed at the lowered cost as per the value engineering study.


Value Analysis Techniques



1. Blast, Create and Refine
2. Utilize vendors’ available functional products
3. Utilize specialty processes
4. Utilize applicable standards
5. Use information from the best source 
6. Get a dollar sign on key tolerances
7. Use real creativity
8. Identify and overcome roadblocks
9. Avoid generalities
10. Get all available costs
11. Use industry experts to extend specialized knowledge
12. Utilize and pay for vendors’ skills and knowledge
13. Use the criterion, “would I spend my money this way?”

Detailed description of techniques is in Value Analysis and Engineering Techniques


Job Plan for Value Engineering and Use of techniques
 
Phase 1. Orientation: Understand the customers’ needs and wants. Understand the functions performed by the product and the contribution of each part and each feature of the part and the complete product to the functions to be performed by the product.
Value engineer has to make sure that he does not diminish the contribution of the product to the customers' needs and wants.
 
Phase 2. Information: Collection of information on quantities, vendors, drawings, materials, manufacturing methods, and costs.
Techniques to be used:

Get all available costs
Get a dollar sign on key tolerances


Phase 3. Speculation: Using all the techniques of value analysis to come out with alternative low cost materials and methods to produce components and the product. Creativity is to be employed here. Value engineer has to involve experts from various disciplines to help with ideas.
Techniques to be used:

Blast, create and refine

Blast
For each function to be performed by a product or a component, find alternative products, materials or processes that serve the function to a great extent but at a less cost. These alternative ideas do not satisfy the specified or required function completely but they do to a significant extent. Identify they function they perform and the cost involved,

During the blast activity use these techniques.
Utilize vendors’ available functional products

  • Utilize and pay for vendors’ skills and knowledge
  • Utilize specialty processes
  • Utilize applicable standards
  • Use the criterion, “would I spend my money this way?”

  • All the five techniques have the potential to suggest lower cost alternatives

    Create

    In create phase, the technique of "Use real creativity" needs to be employed to come out with ways by which the low cost alternatives identified during the blast stage can be modified to accomplish the specified function to a much greater extent with pertinent increase in cost. During this stage also the improvement in function and the increase in cost are to be clearly identified.

    Refine

    In this step, much more creativity is used and also the techniques "Use industry experts to extend specialized knowledge" and  "Utilize and pay for vendors’ skills and knowledge" are used to refine the ideas developed during the create step to come out with a refined alternative that fully accomplishes the specified function at a lower cost. During refine step, some more functionality is added as well as some additional cost.

     
    Phase 4. Analysis:  Technical and cost analysis of the alternative proposed.
    The techniques to keep in mind and use during this stage are:
    Avoid generalities
    Use information from the best source
    Identify and overcome roadblocks

    Phase 5. Program planning: Approach the specialists to further refine the selected alternatives. Inform the specialists the accepted suggestions and give mandate to them to take steps to implement the suggestions.
     
    Phase 6. Program execution: Pursue regularly the specialists and vendors to get their inputs on various tasks assigned to them. The output of this phase is a detailed design, successful trail  pilot  run of a manufacturing process or  a confirmed estimate from a vendor for supplying a component, material or sub assembly.
    Phase 7. Status summary and conclusion. The results of the value engineering study are to be presented to decision makers. The reports needs to have a summary sheet as well as the full supporting documentation.  The value engineering project is concluded when the product is manufactured and distributed at the lowered cost as per the value engineering study.

    References
    L.D. Miles, Techniques of Value Analysis and Engineering, First Edition, McGraw-Hill Book Company Inc., New York, 1961

    Original knol - http://knol.google.com/k/narayana-rao/value-analysis-approach-and-job-plan/2utb2lsm2k7a/3900

    1 comment:


    1. Great thoughts you got there, believe I may possibly try just some of it throughout my daily life.
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      ReplyDelete