Transcript for EO403 - What is VA VE.PDF

Graduate Apprenticeship - Engineering Design and Manufacture Class: EO403 - Design for X What is VA VE In this video, we'll be looking at value analysis and value engineering, known as VA and VE. Value analysis and value engineering is about identifying and removing unnecessary costs in a product, h...

Graduate Apprenticeship - Engineering Design and Manufacture Class: EO403 - Design for X What is VA VE In this video, we'll be looking at value analysis and value engineering, known as VA and VE. Value analysis and value engineering is about identifying and removing unnecessary costs in a product, however, maintaining the quality and reliability of the design. The aim is to increase or maintain the value of a product to its purchaser while reducing the cost to its producer. The more highly-valued functions or features should account for the highest proportion of your product cost. It's important to know that these methods are not the same as cost reduction. You're not simply looking to reduce the overall cost of the product. You're looking to do it in a way but still maintain the value to the customer. So what the customer expects the product to do and what the customer values should be the same regardless of the cost that you've removed. So let's think about cost and value and what we mean by each. Cost relates to how much effort is required to obtain a particular commodity. It's a very fixed number. Value is dependent on circumstances in which it's used. And it's also very dependent on the individual user. As an example, if you think about the cost to manufacture a Lamborghini, but then think about how much customers value owning a Lamborghini, the cost is very fixed. The value may differ between different customers, but the value also takes into account things like the overall brand, the image created by driving a Lamborghini. It's important to remember there's a difference between cost and value. Another example is to think about ice cream. Let's just say you've got an ice cream here, and it costs 4 pounds to buy. On a warm summer's day when you're at the beach, you might be willing to pay that 4 pounds for that ice cream. But on a wet, cold, rainy day, are you really going to be willing to pay the 4 pounds for the ice cream? The value changes depending on the circumstances surrounding the overall product. Value analysis tends to refer to the detailed analysis of components in existing products. It involves looking at the functionality with the aim of reducing unnecessary costs. So, for example, if you think about a hole punch, you would identify what does the customer actually value. And in this case, it might be the ability to punch holes in a sheet of paper. What you would do is look to minimise or reduce costs of components associated with any other functionality that the product serves that the customer doesn't actually need or care about. Value engineering is much broader in scope. And it tends to focus on new designs or the substantial redesign of a product. It involves looking at the high-valued functions with the aim of enhancing them. So, for example, with a torch. We've got the torch here. We've got the torch body. We've got the reflected bulb. These are the highly-valued functions of the overall product. So we might look to try and improve on battery storage, its stability when put down, its ease to carry. Page 1/2 We may also look at redirecting the beam, the energy efficiency of the light bulb. We look at what the customer values as being highly-valued functions and look at ways to enhance them but without adding on any extra cost. In order to successfully carry out a value analysis and value engineering activity, you need to understand the value the customer has for each function and feature. And you do that through market research. So you go out there. You speak to your customers. You find out what the customers value as being actually the most valuable functions in the overall product design. You also need to have a really good understanding of the individual component costs. And you can get this through speaking to stock control, consulting financial reports, speaking to other people within your organisation. The third information needs is manufacturing and assembly costs. And something like process and value stream mapping can help you to identify these costs associated with producing each individual component. Overall, value analysis and value engineering requires effective communication as you are required to gather quite a lot of information about the individual product in order to successfully execute this activity. In summary, value analysis and value engineering are designed for manufacture and assembly methods. Their aim is to increase and maintain the value of a product to the customer while reducing the cost to its producer. But it's important to remember, it's not the same as cost reduction. It requires information in relation to value of functions as perceived by the customer and also requires detailed component and assembly costs. Teamwork and effective communication are crucial in this method. Page 2/2