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What is Value Analysis / Value Engineering

by Caterina Tosca April 23, 2018

In this post we are going to explain what Value Analysis / Value Engineering is, starting from its history up to why it is so important for manufacturers today.

Value analysis / Value Engineering


VA/VE Analysis History

In 1961, in his book “Techniques of Value Analysis and Engineering”, American engineer Lawrence D. Miles stated: 

 “Value analysis is a problem-solving system implemented by the use of a specific set of techniques, a body of knowledge, and a group of learned skills. It is an organized creative approach whose purpose is the efficient identification of unnecessary costs, i.e. cost that provides neither quality nor use nor tool life nor appearance nor customer features.”

The term Value Analysis / Value Engineering originated in the early days of technique development and its first approach was to increase value, rather than to reduce costs. Therefore there was a need to analyze value.

Lawrence D. Miles continues: 

Value analysis approaches may assist all branches of an enterprise-engineering - manufacturing, procurement, marketing, and management – by securing better answers to their specific problems in supplying what the customer wants at lower production costs. Quite commonly, 15 to 25 per cent and often more of manufacturing costs can be made unnecessary without any reduction in customer values by the use of this problem-solving system in significant decisional areas.”

VA/VE is an extremely powerful approach with over a century of worldwide application and it can be applied to any cost generating areas with equal success.

Il VA/VE è un approccio estremamente efficace con oltre un secolo di applicazioni in tutto il mondo e può essere applicato ad ogni area che genera costi con lo stesso successo.



Value Analysis / Value Engineering Definitions


Value Analysis - VA

What is value? 

Different customers will answer to that question in different ways. The value of a product can be the performance of its functions or its aesthetic beauty, when applicable and needed. As a general statement high level performances, capabilities, emotional appeal, style, all compared to cost is commonly what we consider as value.

Therefore Value = Function / Cost

Value Analysis is a standardized, multi-skilled team approach which aims at identifying the lowest cost way and ensuring the highest worth to accomplish the functions of a product, process or service. Value analysis means to assess product functions and value-to-cost ratios, and to find opportunities for costs reduction.


Value Engineering – VE

As we said above, Value Analysis is the application of several techniques to identify the functions of a product (or service) and provide them at the lowest cost.

Value Engineering refers instead to the design stage. This approach is generally used for new products, therefore the same principles and techniques to pre-manufacturing stages such as concept development, design and prototyping are applied.

To sum up, VA / VE is an orderly and systemic method to increase the value of an item, which can be a product, system, process, procedure, plan, machine, equipment , tool, service or working method. Function analysis is part of VA as its purpose is to identify product functions compared to cost and price; design and construction assessment is done through VE with the goal of  eliminating elements which are not contributing to function.

Product's function should not be conceived solely as its application and practical uses: it can also include aesthetic factors, or the union of the two following dictates of functional beauty philosophy: this theory is based on the coexistence of aesthetics and performance. What matters the most in drafting a VA / VE is that the function is clearly defined, so that it can be analyzed in detail and sub-segmented to make the analysis easier.

If you are interested in functional beauty, Bruschi is going to give a lecture on the topic: click here to learn more.

 In VA/VE the function of a product or service, defined by customers to meet their requirements, is identified, the monetary value for that function is established, the specified performance and requested reliability provided at the lowest Iife-cycle cost.

Following a VA/VE approach it is possible to increase customer satisfaction and add value to the investment.

Even the best and most innovative designs can age and become uncompetitive: in these cases VA/VE can support both customers and suppliers in finding and optimizing any value mismatches in products, components, processes, projects or low performing functions.

A correct segregation between necessary and unnecessary functions of products leads to a creative development of alternative ways of accomplishing them - as requested by customers - at lower cost.

VA/VE enables a company to highlight areas that need to be analyzed and improved, with a standardized method which generates ideas and alternatives, considerably increasing the value of goods and services.

A project completed with VA/VE technology is more successful and efficient than a project developed without that approach, because goals and requirements are pursued in a customer centric way. VA/VE is almost unlimited in identifying area of potential savings, as it can be used to reach quality, improve efficiency and reduce risks, in a cost saving way.



VA/VE Approach & Main Steps

According to the principles of “Techniques of Value Analysis Engineering” there are different phases of VA/VE:

  • Exhaustive accumulation of information and identification and improvement of assumptions.
  • Penetrating analysis. What senses of direction does this informative provide us with? What specific problems will, when solved, bring important cost benefits?
  • Creative mental activity, in which all judgement is temporarily deferred to form the roots of a variety of different solutions to each of the specific problems developed in the preceding analysis.
  • Judgment-type mental activity, in which what results from creative thought is searched for ideas roots to minimize disadvantages and maximize advantages sufficiently to meet the need for cost and/or operation improvement.

During the information phase, the project and its requirements are analyzed, and then the function analysis studies the possible room for improvement. In the creative stage ideas to increase performances are developed: from the resulting list of ideas only a short set is evaluated in order to find the ones with best potential to reach the goal. The following step is development of alternatives and their presentation to decision makers and, eventually, implementation.

VA/VE tools are extremely powerful and fundamental to reach objectives such as decreasing costs, improving quality and shortening time-to-market.

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