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- 3. Value Analysis 1. Cost reduction technique. 2. Organised creative approach. 3. Main focuses. 4. Birth – Second World War. 5. Recent years - • Value Engineering. • Molecular Engineering. • Vertical Thinking.
- 4. What is Value The minimum money which has to be expended in purchasing or manufacturing a product to create the appropriate use of esteem factors.
- 5. Division Of Value 1. Use of functional Value. 2. Esteem Value. 3. Cost Value. 4. Exchange Value.
- 6. Advantages of Value Analysis • It leads to improvements in product design so that, most appropriate products are produced . • High quality (value) is maintained. • All-round efficiency is achieved by eliminating waste of various types. • Cost savings provide a measure for judging managerial effectiveness. • New ideas are generated and incorporated. • Teams spirit and morale are improved. • Areas requiring attention and improvement are pin pointed.
- 7. Procedure of Value Analysis There is no standard approach or procedure Ascertaining the needs and wants of customers. Specifying the function of products and components. Determining the appropriate cost of desired performance. Identifying better alternatives in terms of works procedures.
- 8. Implementation of Value Analysis Identifying the function:- Primary. Secondary. Evaluation of the function by comparison :- Basic question “does the function accomplish reliability at the best cost “ Develop Alternatives.
- 9. Value Analysis Steps 1. Gather Information. 2. Measure Performance. 3. Analyse Functions. 4. Generate Ideas. 5. Evaluate and Rank Ideas. 6. Develop and Expand Ideas. 7. Present Ideas.
- 11. Value Engineering • Value engineering is a total of management which approaches the question of saving cost from the point of view of ‘value’. • Requires co-operation of all functional departments. • In large organisations, there are value engineering teams having full time jobs.
- 12. Value Engineering Value and cost Value = Function Cost Value: What the product is worth to the customer. Function: Properties and qualities of product. Cost: Money value of materials used, Labour & indirect costs.
- 13. Value Engineering Suggestion schemes Suggestion scheme facilitates the work of value engineering team. The scheme helps in the changes of value engineering and makes it implementation easier.
- 14. Value Engineering Requirement of a product Use. Esteem. It is essential to be considered how much to be added in order to sell the part. The reasonable price of a product can be obtained by comparing with a comparative product.
- 16. Value Engineering Approach No standard approach – discuss with team members. Subject Basic question Analysis Answer Function What functions are performed? 1) Is there any possibility of elimination? 2) What alternative methods are available? Material What is the material specification? 1) Can alternative material be used? 2) Can the specification be amended? What quantity of material should be used? 1) Is the size or weight of material excessive? 2) Can the quality be reduced? 3) Will a cheaper material serve the same purpose? 4) Is the cutting done economically without waste?
- 17. Value Engineering Approach Subject Basic question Analysis Answer Labour Which are the direct labour costs? 1) Are all the operations necessary? 2) Will alternative operations be cheaper? 3) Can certain assembly operations be modified? Process Are the best Processes being used? 1) Are all the operations necessary? 2) Will alternative operations be cheaper? 3) Can certain assembly operations be modified? Standardization Are the materials or components standard? 1) Can the materials be standardized? 2) Can a number of product use standard (common) parts? 3) Can methods be standardized?
- 18. Waste Control Reasons for wastages in industry Obsolescence Surplus Scrap Role of Management in waste control Proper inventory control Materials management Effective Co-ordination among departments
- 19. Input-Output Analysis • Systematic study of production structure. • Predict total production of each year. • Production structure of all the industries are to be grouped together. • Output material of 1 sector becomes input raw-materials for the other.
- 21. Comparison :- Questions asked under value analysis :- Saving Through Value Analysis :- Procedure in Value Analysis :- Advantages of Value Analysis :- VALUE ANALYSIS AND VALUE ENGINEERING
- 22. Original Phase Inform ation Phase Innova tion Phase Evaluati on Phase Choice Phase Implem entatio n Phase Review Phase PHASES OF VALUE ANALYSIS EXERCISE
- 24. References 1. Text book Industrial engineering and management by O.P.Khanna.