Value Analysis

VALUE ANALYSIS
IT ORIGINATED AT G.E.C. USA DURING THE CRISIS IN RESOURCE DISTRIBUTION DURING THE 2ND WORLD WAR. IT IS BASED ON THE FOLLOWING PREMISES: 1. CONVENTIONAL APPROACHES STIFLE IMAGINATION RESTRICTING THINKING TO EXISTING OBJECTS. BY
2. 3.
FUNCTION IS THE KEY AND FUNCTION IS WHAT WE PAY FOR CONCENTRATING ON FUNCTION REQUIREMENTS PRODUCED GREATER MENTAL FREEDOM.
DEFINITION OF VALUE ANALYSIS

1. IT IS AN ORGANIZED, CREATIVE APPROACH THAT HAS FOR ITS PURPOSE THE EFFICIENT IDENTIFICATION OF UNNECESSARY COST THAT PROVIDES NEITHER QUALITY NOR USE, NOR LIFE, NOR APPEARANCE, NOR CUSTOMER FEATURES. V.A. IMPROVES VALUE BY RELATING THE ELEMENTS OF UTILITY TO THEIR CORRESPONDING ELEMENTS OF COST. IT FOCUSES ENGINEERING, MANUFACTURING AND PURCHASING ATTENTION ON BETTER PERFORMANCE AT LOWER COST.
2.
3.
VALUE ENGINEERING
S.A.V.E. V.E. IS THE SYSTEMATIC APPLICATION OF RECOGNIZED TECHNIQUES WHICH IDENTIFY THE FUNCTION OF A PRODUCT, ESTABLISH A MONETARY VALUE FOR THAT FUNCTION AND PROVIDE THE FUNCTION AT THE LOWEST OVERALL COST.
VALUE ANALYSIS
ECONOMIC VALUE: THE LOWEST COST TO RELIABLY PROVIDE THE REQUIRED FUNCTIONS AT THE DESIRED TIME AND PLACE AND WITH ESSENTIAL QUALITY. TYPES OF VALUES: 1. USE VALUE 2. ESTEEM VALUE 3. COST VALUE 4. EXCHANGE VALUE 5. MARKET VALUE
VALUE ANALYSIS
FUNCTIONS: THAT WHICH MAKES A PRODUCT WORK SELL USE VALUE ESTEEM OR PRESTIGE VALUE
OR
CONDITIONS OF ECONOMIC VALUE: UTILITY SCARCITY OR DIFFICULTY
Item Description Basic Cost per Lower Cost Cost of Ratio of Alternative Alternative Cost to Function Unit Worth (Rs.) (Rs.) Tie Clip Fountain Pen Electric Condensor 1 Meter Thick Concrete Wall Auto Flasher Holds Tie 25/Make Mark 20/Paper Clip Piece of Char Coal Leather Belting 0.02/0.02 100/1250:1 1000:1 18:1 20:1 8:1
Transmits 18000/Torque Stops 1 lakh Radiation Links Circuit Covers Body 40/-
Mud Wall 5000/- 2 metres Use Ordinary Switch Plain Cloth Wrapped 5/-
Liberty Terylene Shirt
100/-
10/-
10:1
SOME EXAMPLES ON COST WORTH RATIOS.
HOW V.E. LEADS TO VALUE IMPROVEMENT

1. PART/OPERATION NECESSARY. ELIMINATED/FUNCTION NOT FOUND
2. 3.
LESS COSTLY MATERIAL/PRODUCTION PROCESS USED. STANDARDIZED COMPONENTS USED IN PLACE OF SPECIAL/ NON STANDARD ONES. SPECIFICATIONS FOR CLOSE TOLERANCES, FINE MACHINING CHANGED. DIMENSIONAL SPECIFICATIONS CHANGED FOR ACHIEVING BETTER MATERIAL YIELD. REDUCING NUMBER OF COMBINING FUNCTIONS. MEMBERS IN ASSEMBLY BY
4.
5.
6.
STEPS IN VALUE ANALYSIS

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. GENERAL PHASE INFORMATION PHASE FUNCTION PHASE CREATION PHASE EVALUATION PHASE INVESTIGATION PHASE RECOMMENDATION PHASE IMPLEMENTATION PHASE REVIEW PHASE EXTENSION PHASE
I.

PROJECT SELECTION
ITS PURPOSE OR FUNCTIONS SHOULD BE DEFINABLE. THE PROJECT SHOULD BE A LIVE PROJECT. NO MAJOR CHANGES IN THE ITEM SHOULD BE ON THE ANVIL. IT MUST BE SOMETHING ON WHICH CHANGES CAN BE MADE. COMPONENTS MADE UP OF CRITICAL OR EXPENSIVE MATERIAL. MATERIAL THAT IS SCARCE OR HAS QUALITY PROBLEMS. PRODUCT COST HIGHER THAN COMPETITORS. EXCESSIVE NUMBER OF COMPONENTS OR EXCESSIVE TIME/ COST OF ASSEMBLY. EXCESSIVE REJECTIONS OR EXCESSIVE MAINTENANCE. EXCESSIVELY CLOSE TOLERANCES. EXCESSIVE COST OF MACHINING. NON STANDARD FORMS, SIZES OR SPECIFICATIONS. LARGE USAGE VALUE.
II.
SECURE THE FACTS:
INFORMATION PHASE
TECHNICAL DATA/SPECIFICATIONS COST DATA ECONOMIC/MARKETING DATA MANF./PROCUREMENT DETAILS IDENTIFY HIGH COST AREAS:
I. II. III. IV.
VARIABLE COSTS VS. FIXED COSTS BASIC FUNCTIONS VS. SECONDARY FUNCTIONS RULE OF 20-80 FIX COSTS ON SPECIFICATIONS
III.

FUNCTION PHASE
DEFINE FUNCTIONS FUNCTIONAL FAMILY TREE FUNCTION COST MATRIX NUMERICAL EVALUATION OF FUNCTIONAL RELATIONSHIP
RULES OF FUNCTION DEFINITION

1. EXPRESSED IN TWO WORDS - VERB - NOUN A. WORK FUNCTIONS: EXPRESSED IN ACTION VERBS AND MEASURABLE NOUNS B. SELL FUNCTIONS: EXPRESSED IN PASSIVE VERBS AND NON-MEASURABLE NOUNS 3. ALL FUNCTIONS CAN BE DIVIDED INTO I. PRIMARY OR BASICS: AND II. SECONDARY LEVELS
2.
FUNCTIONS
SR.NO. 1. 2. 3. 4. 5. 6. 7. ITEM THE BUILDING PARKING SPACE A.C. EQUIPMENT EXTERIOR WALLS INTERIOR WALLS FLOORING CARPETS VERB HOUSE STORE CONTROL CIRCULATE RESTRAIN DIVIDE BEAR ABSORBS IMPROVED INCREASE NOUN OCCUPANT CARS TEMP. AIR ELEMENTS SPACE LOAD SOUND APPEARANCE FRICTION FIRE DEPT. OCCUPANTS ENERGY USAGE EVENTS
8.
FIRE ALARM SYSTEM ALERT ACTIVATE
9.
10.
SPRINKLER SYSTEM
CENTRAL CONTROL PANEL
EXTINGUISH ENERGY USAGE

MONITOR
INFORMATION PHASE
ITEM USAGE PER YEAR PRICE PAID TO SUPPLIER TOTAL COST P.A. WEIGHT PER TYRE SPECIFICATION OF STEEL COST OF THE STEEL CHEMICAL COMPOSITION : : : : : : : : WHEELS OF PASSENGER COACHES 6000 NOS. RS.4,000/each RS.240 LAKHS 250 KGS. IRS-R.54 RS.6,000/TONNE SUPLHUR < 0.05% PHOSPHOROUS < 0.05% CHROMIUM < 0.15% NICKEL < 0.20% MOLYBOENUM < 0.06%
INFORMATION PHASE
PHYSICAL STRENGTH A. B. :
110 125 KG/SQ.M.M. FOR SPECIAL APPLICATIONS 78 90 KG/SQ.M.M. FOR NORMAL APPLICATIONS : RS.1,000/- PER TONNE
DIFFERENCE IN COST OF STEEL IN A & B
HEAT TREATMENT DETAILS : MANUFACTURING DETAILS TESTING DETAILS : :
FUNCTIONAL DEFINITION
ITEM : EXHAUST FAN WHEEL QTY. PART 1 HUB FUNCTIONS FUNCTIONAL LEVEL
VERB
NOUN
BASIC
SECONDARY

Transmit Force Provide Support Provide Location
12
36
BLADES
CAP SCREWS
Convert Energy Transmit Force

Transmit Allow Provide Provide Force Disassembly Location Support
ITEM : EXHAUST FAN WHEEL QTY. PART 1 1 KEY LOCK WASHER SHROUD FUNCTIONS FUNCTIONAL LEVEL
VERB
NOUN
BASIC
SECONDARY
Transmit Force Provide Location Induce Friction Transmit Force Provide Location Direct Provide Provide Provide Air Support Location Protection
FUNCTIONAL/COST ANALYSIS
ITEM : CARD BOARD BOXES Sr. Item Cost Functions
No.
1. 2. Outer Hard Board Carton Partition 2.50 0.60
Contain Separate Bind Cans Carton Cans

2.50 0.60 -
Absorb Assemble Shock Parts

-
3.
4. 5.
Top & Bottom Pieces

MS Strap Clip
0.60
0.50 0.10
0.50 0.10
0.60
-
6.
7.
Assembly Charges
Total Cost
0.15
0.60
0.60
0.60
0.15
0.15
4.45 2.50
ESTABLISH COST WORTH RATIOS

DESIGNED A. B. C. D. E. F. INTERIOR CONSTRUCTION ROOFING FOUNDATION CONVEYING SYSTEM AIR CONDITIONING ELECTRICALS Rs.60/sq.ft WORTH Rs.50/sq.ft SAVINGS Rs.20 lakhs
FLOORING BEAR LOAD BASIC
CARPETS
IMPROVED INCREASE ABSORB
APPEARANCE FRICTION SOUND
SECONDARY SECONDARY SUPPORTING
BRAIN STORMING:
REPLACE CARPETS BY VINYL AESBESTOS TILES.
FUNCTIONS OF A FLASH LIGHT & COMPONENTS

ITEMS AND COMPONENTS FLASH LIGHT LENS REAR CAP THREADS ON REAR CAP & BODY FUNCTION PROVIDE LIGHT BE PORTABLE PROTECT BULB RETAIN SPRING PERMIT ACCESS BASIC SECONDARY X X X X X
BULB
FRONT CAP THREADS ON FRONT CAP & BODY BATTERY
PROVIDE LIGHT
HOLD LENS PERMIT ACCESS PROVIDE ENERGY
X
X X X X
FUNCTION COST ANALYSIS OF SAFETY PIN

Description of Assemblies, Parts or Elements Basic Function Secondary Functions
Join Matl. WIRE & PLATING HEAD & PLATING FORM POINT BEND WIRE FIT HEAD 5 5 -
Provide Safety 6 8 4 6
Resist corrosion, look nice 8 4 -
Provide tension, restrict movement 4 2 11 -
Cost
23 14 5 15 6
TOTAL COST OF EACH FUNCTION

% OF TOTAL COST OF PIN
10
16
24
38
12
19
17
27
63
FUNCTION ANALYSIS CLUTCH ASSEMBLY (BASE)

SR. NO. 1. 2. 3. 4. 5. FUNCTIONS VERB ABSORB SUPPORT FACILITATE RESIST PROVIDE NOUN THRUST WEIGHT DRIVE BENDING LOCATION BASIC LEVEL SECONDARY FROM PLATE CLUTCH REMARKS
OF REDUCTION ASSEMBLY TO PINION
FOR DRIVE PINS
FUNCTIONAL EVALUATION
PROJECT : ROOF EXHAUST FAN WHEEL NUMERICAL EVALUATION : B C D E F G
A-2
B
A-2
B-2 C
A-3
B-3 C-1 D
A-3
B-2 C-2 D-2 E
F-2
B-2 F-3 F-3 F-3 F
G-3
G-3 G-2 G-2 G-3 G-2 G
H
EVALUATION WEIGHT FACTORS 1 MINOR DIFFERENCE 2 MEDIUM DIFFERENCE 3 MAJOR DIFFERENCE
FUNCTIONAL EVALUATION
PROJECT : ROOF EXHAUST FAN WHEEL
EVALUATION SUMMARY :
KEY LETTER A B C FUNCTIONS PROVIDE CONNECTION TRANSMIT FORCE INDUCE FRICTION WEIGHT 10 9 3
D
E F G
PROVIDE SUPPORT
PROVIDE LOCATION DIRECT AIR CONVERT ENERGY
2
0 11 15
CREATIVE PHASE
CREATIVE ACTS WHICH ENCOURAGE DIVERGENT THINKING. WHAT CAN WE ADD TO AN OBJECT ? WHAT CAN WE SUBTRACT ? WHAT CAN WE ALTER ? CAN WE REARRANGE ? HOW CAN WE ADAPT ? CAN WE MAGNIFY ? MINIFY ? MINIATURISE ? WHAT COULD BE THE OPPOSITE OF THE OBJECT ? WHAT OTHER USES ? ALTERNATIVE WAYS OF PRODUCING ?
KNOW THE RIGHT QUESTIONS TO ASK ? WHY? WHAT? HOW? WHERE? WHEN? WHO?
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. DOES ITS USE CONTRIBUTE VALUE ? WHAT DOES IT ACHIEVE ? IS ITS COST PROPORTIONATE TO ITS USEFULNESS ? DOES IT NEED ALL ITS FEATURES ? CAN ANY FEATURE BE ELIMINATED ? IS THERE ANYTHING BETTER FOR THE INTENDED USE ? IS ANYONE BUYING IT FOR LESS ? CAN IT BE MADE BY A LOWER COST METHOD ? WILL IT BE CHEAPER TO BUY ? WILL ANOTHER SUPPLIER PROVIDE IT FOR LESS ? CAN A STANDARD PRODUCT BE FOUND TO REPLACE IT ? IS THE PROCESS/MACHINE APPROPRIATE CONSIDERING THE QUANTITIES USED ?
KNOW THE RIGHT QUESTIONS TO ASK ? WHY? WHAT? HOW? WHERE? WHEN? WHO?
13. 14. 15. 16. 17. 18. 19. 20. HOW ELSE COULD THE BASIC FUNCTION BE DONE ? WHAT IS SIMILAR TO THIS BUT COSTS LESS ? WHAT OTHER MATERIALS WOULD DO THE JOB ? HOW CAN IT BE CHANGED FOR QUICKER ASSEMBLY ? HOW CAN IT BE MADE MORE COMPACT OR LIGHTER ? WHAT OTHER FORMS COULD THIS BE ? POWDER, PASTE, GRANULES, LIQUID, SOLID, GAS, COMPRESSOR ? WHAT ELSE CAN IT BE MADE TO DO ? WHY SO MANY PARTS OR FEATURES ?
RESULTS ACCELERATORS
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. AVOID GENERALITIES. GET ACCURATE COSTS. USE INFORMATION FROM THE BEST SOURCE. BLAST, CREATE AND REFINE. IDENTIFY AND OVERCOME ROAD BLOCKS. USE INDUSTRY SPECIALISTS. LINK COSTS TO SPECIFICATIONS AND FUNCTIONS. UTILISE AVAILABLE STANDARDS. UTILISE SPECIALITY PROCESSES. UTILISE VENDORS SKILLS AND KNOWLEDGE.
EVALUATION PHASE
SELECTED ALTERNATIVES I II CHARACTERISTICS OR CRITERIA III IV V VI SCORE DECISION
I
II III
2
8 8
10
8 10
10
4 8
10
8 10
8
6 10
2
4 8
42
38 54
REJECT
REJECT ACCEPT
IV
SCORES: VERY GOOD GOOD FAIR MARGINAL POOR
10
10
48
HOLD
10 8 6 4 2
CRITERIA: I - RELIABILITY II - PERFORMANCE III - INITIAL COST IV - MAINTENANCE COST V - SAFETY VI - WEIGHT
VALUE ENGINEERING JOB PLAN

PHASES :
I. II.
ORIENTATION PHASE INFORMATION PHASE
III. IV. V. VI. VII.
SPECULATION PHASE
SELECTION AVOID GENERALITIES ACCURACY ASSIGN COSTS TO SPECFN. IDENTIFY FUNCTIONS POSITIVE THINKING USE REAL CREATIVITY
EVALUATION INVESTIGATION AND PLANNING IMPLEMENTATION SUMMARY, EXTENSION
LESS ENGG. AT YAMAHA MOTOR CO.

AIR LESS: DONT CARRY OR STORE AIR. AIR CUT LESS BOLT LESS BURR LESS BOTTLE NECK LESS CONVEYOR LESS BUILDING BLOCK LESS PAPER LESS WALK LESS WEIGHHT LESS . LESS: THINK OUT SOME SAYINGS YOUR SELF

Value Analysis

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VALUE ANALYSIS

DEFINITION OF VALUE ANALYSIS

CONDITIONS OF ECONOMIC VALUE: UTILITY SCARCITY OR DIFFICULTY

Liberty Terylene Shirt

SOME EXAMPLES ON COST WORTH RATIOS.

HOW V.E. LEADS TO VALUE IMPROVEMENT

STEPS IN VALUE ANALYSIS

I. II. III. IV.

RULES OF FUNCTION DEFINITION

FIRE ALARM SYSTEM ALERT ACTIVATE

EXTINGUISH ENERGY USAGE

DIFFERENCE IN COST OF STEEL IN A & B

HEAT TREATMENT DETAILS : MANUFACTURING DETAILS TESTING DETAILS : :

Transmit Force Provide Support Provide Location

Convert Energy Transmit Force

Contain Separate Bind Cans Carton Cans

Absorb Assemble Shock Parts

Top & Bottom Pieces

ESTABLISH COST WORTH RATIOS

IMPROVED INCREASE ABSORB

APPEARANCE FRICTION SOUND

SECONDARY SECONDARY SUPPORTING

REPLACE CARPETS BY VINYL AESBESTOS TILES.

FUNCTIONS OF A FLASH LIGHT & COMPONENTS

FUNCTION COST ANALYSIS OF SAFETY PIN

Resist corrosion, look nice 8 4 -

Provide tension, restrict movement 4 2 11 -

TOTAL COST OF EACH FUNCTION

FUNCTION ANALYSIS CLUTCH ASSEMBLY (BASE)

OF REDUCTION ASSEMBLY TO PINION

FOR DRIVE PINS

VALUE ENGINEERING JOB PLAN

ORIENTATION PHASE INFORMATION PHASE

III. IV. V. VI. VII.

EVALUATION INVESTIGATION AND PLANNING IMPLEMENTATION SUMMARY, EXTENSION

LESS ENGG. AT YAMAHA MOTOR CO.

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