Industrial Engineering Knowledge Center: Value Engineering at the Design and Development Stage

Sunday, March 27, 2022

Value Engineering at the Design and Development Stage - Examples: Tata Nano

Value Engineering

Value Engineering (VE) can be applied during product development to reduce costs maintaining the quality designed in by form and strength designers. Value analysis is a systematic analysis with a series of questions answered by utilizing existing engineering knowledge and knowledge of suppliers' capabilities by engineers training to collect relevant engineering knowledge for value analysis as well as by all engineers inside the company and invited engineering consultants and supplier personnel. This takes place before any capital is invested in tooling, plant or equipment.

Up to 80% of a product’s costs (throughout the rest of its life-cycle), are locked in at the design development stage according to some scientific studies, The design and development of any product determines and develops many factors, such as tooling, plant and equipment, labor and skills, training required, materials, shipping, installation, maintenance, as well as decommissioning and recycle procedures. Thus it designs many cost related factors right at the beginning. Value engineering has the ability to modify some of these factors in the beneficial direction. Value engineering should be considered an important activity in the product development process and it is certainly a value increasing investment. Value engineering section in new product development process has to be created and used for sound commercial reasons.

http://www.advice-manufacturing.com/Value-Analysis.html

Technical Paper

Value Engineering Factors with an Impact on Design Management Performance of Construction Projects

Murat Gunduz, Ph.D., A.M.ASCE; Aly A. Aly; and Tarek El Mekkawy, Ph.D.

Journal of Management in Engineering

Vol. 38, Issue 3 (May 2022)

American Society of Civil Engineers

https://ascelibrary.org/doi/abs/10.1061/%28ASCE%29ME.1943-5479.0001026

Value to the customer, through of benefits to the customer, is initially created in the product/project or service concept phase of a project when the product case is first produced and the direction of a project is agreed. The project design should be tested to ensure it will create value for the organisation andother stakeholders apart from the customer. The engineering options chosen to deliver the benefits need to be tested to ensure they give the best value for money: There are generally a number of different ways of delivering the benefits and one is likely to provide better value than another. Benefits delivered or to be delivered should be stated with clarity in a measureable form so that other alternative options to deliver the benefit can be identified or developed by value analysis team.

VALUE ENGINEERING

January 29, 2017

Vijay Sharma

Independent Consultant

https://www.linkedin.com/pulse/value-engineering-vijay-sharma/

August 6, 2018

Use Value Improvement Methods and Reduce Capital Costs of Projects and Products Produced Using Projects.

Project value improvement (PVI) rigorously identifies tools, management practices, and capabilities that optimize a project’s financial value. PVI integration could recover trillions over time for the world.

McKinsey analysis estimates that global capital spending will total $77 trillion between 2018 and 2023, which places the annual value of that spending at more than $10 trillion. Historically, owners that rigorously integrate PVI have realized in excess of 10 percent of project value in savings.

PVI’s origins and evolution

PVI began in the 1950s as “value engineering,” where an engineering department’s technical solution aligned seamlessly with the cost data of the input markets. With both working in concert, efficiencies were achieved.

https://www.mckinsey.com/business-functions/operations/our-insights/capital-project-value-improvement-in-the-21st-century-trillions-of-dollars-in-the-offing

Design to cost and target costing are applied in a good manner in the development of Tata Nano car. Value engineering states that designers and managers of design do not make use of all value opportunities or low cost opportunities in the early stages of product life cycle. Design to cost and target costing force design department to make greater use of value opportunities in the early stages. Value engineers are being associated with design teams to incorporate value opportunities. Tata Nano is a good example of use of target costing and value engineering.

Number of authors and journalists have contributed to document the cost reduction activities undertaken in Nano development. This article highlights some of them.

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Overdrive Team, Network 18, 19th March 2009

ECU

The ECU, or engine control unit is a small computer that controls all aspects of engine operation. It is expensive, but, it is needed because an engine today must satisfy emissions norms, sound norms, produce an acceptable spread of power, return an acceptable level of economy and still more. Tata worked with Bosch to take the ECU down to an unprecedented price by reducing the sensors used by the ECU to govern the engine down to half the usual number.

Wiper

Only one wiper is provided

Small wheels and mounting

Small wheels are lighter, which positively impacts economy. Further, these wheels were mounted with only three lugs resulting in lower costs but it is modification done to a feature which became automatic in car design to improve economy. There is no power steering in the car. Further, the design team split the tyre sizes to give the front a slightly thinner spec, while keeping the driven wheels fatter. This balances the impact of the wider track at the front, and in driving terms should endow the car with mild understeer at the limit - which is a safety feature. The engineered understeer helpsin developoing a balanced, neutral car. But smaller tyres mean less rubber, so they should be cheaper as well.

The non-opening hatch also provides cost reduction. It means no costs in terms of beading, hinges and locks, and that the whole panel can be a relatively cheap addition to the monocoque which will add to the strength of the chassis without adding cost.

Light body

Nano uses a light gauge metal body and the production process will aim for minimum wastage.

Engine format/placement

The four-stroke parallel twin 624cc engine has number of patented invention of Tata company. The single-counterbalancer equipped motor is being labelled as a world first for a car application. The engine is fuel-injected and it is a two-valve single overhead cam design.

Placement of engine at the rear

The rear-engine, rear-wheel drive format eliminates the driveshaft and saves some money. The engine is packaged in a stunning way. The motor is behind and under the rear seats. The hatch does not open. The engine is accessed by flipping the rear seats forward. The engine could be pretty reliable. The engine's non-intrusion into the passenger cabin liberates interior space - 21 per cent more interior space than the Maruti 800.

Central instruments and dashboard

The central meters and the dash on the Nano eliminates the need to adapt that large plastic assembly for right- and left-hand drive markets. Tata will offer a speedometer, odometer and a digital fuel gauge plus lights that are spartan, but complete instrumentation. There is no glove box.

Filler cap and single mirror

The filler cap is actually located under the nose. On the cost front, this means that body does not need to a hole in it at someplace for the filler cap. There will be only right side mirror and left side mirror may be an optional extra.

Source:

http://ibnlive.in.com/news/tata-nano-the-innovations-by-the-team/88126-25.html

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Rediff Article on 12.1.2008

The 623 cc two-cylinder petrol engine from aluminum. Conventional engines are made from cast iron, adding weight as well as cost to the car. Being smaller and lighter, the cost was lower.

The engine being lighter and placed at the rear of the car put less pressure on the steering systems, which allowed for more cost savings. As a result, there was no requirement for a link between the engine and the rear wheels.

The tubular design of the car instead of the conventional 'rod' design definitely helped cut costs, particularly the processes involved.

Costs were cut by using regular bulbs that meet the regulations instead of long life bulbs.

Source

http://www.rediff.com/money/2008/jan/12tata.htm

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Cost-effective emission reduction solutions

For example, BASF Catalysts has developed a catalytic converter for the Nano to meet India’s current emission standards. BASF local experts in India are supported by colleagues from the USA to achieve this cost-effective regulatory compliance. BASF operates a catalyst manufacturing plant in Chennai, India.

Weight savings for better fuel efficiency- Plastic air intake manifold

The Nano’s plastic air intake manifold will be produced by Tata Visteon and employs BASF’s Ultramid® glass-fiber reinforced engineering plastic. Generally, air intake manifolds supply the engine with the air it needs for combustion and was traditionally made from aluminium. By replacing it with Ultramid leads to 40% weight saving which in turn leads to better fuel efficiency and lesser emission, essential features for the Nano.

Source:

http://basf.com/group/pressrelease/P-09-192

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