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Value
Engineering
Involving people and process. Positively Impacting performance and
profit
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General Introduction
The Value Method was originally developed by Larry
Mills (General Electric) in 1943. It has been highly refined
and honed by many over the years. It's designed to use highly
efficient procedures that are consistent with sound management
techniques and is tuned to achieve maximum performance, in the
minimum amount of time required. As a complete and mature
process with more than 50-years of successful application, it
has been used in almost any endeavor contemplated.
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Key Characteristics
Several characteristics differentiate the Value
Method from other techniques. These help ensure that the
customer obtains the kind of product they need and
want.
It is Success Oriented
Good results are produced by taking the appropriate
action at the appropriate time. Unfortunately, the
appropriate action and timing are rarely sufficiently clear.
Also, there are natural organizational and human limitations
that must be contended with by everyone. The Value Method
takes human and organizational limitations into account in
the key characteristic of its processes. When the
fundamental "requirements" of the Value Method are adhered
to by those making use of it, success
is virtually guaranteed. |
Doing a "good job"
In general, all organizations and people want to do a
good job. They want to meet the needs of their customers.
When an organization or person consistently fails to meet
the needs of the customers well, they eventually fail: few
plan to fail. Unfortunately, the best direction is not
always clear. The limitations of time, money, expertise, and
other resources require us to take shortcuts or make
decisions that may not be based as well as we would like.
Each person must also contend with our own human
limitations such as how many items we can keep in the
forefront of our mind at the same time, the number of times
it takes us to develop understanding and comfort in any new
item, and the limited experiences that we have been exposed
to in our lifetime.
When people decide they want to do something
optimally, the results are astonishing. To decide to do
something better is the first step. To use good techniques
to do it is the second step. The third step is acquiring
those skills. As people acquire those skills, they and their
employer benefit. Whether applied by the individual, team,
or organizationally, the Value Method is one of those skills
that produces great benefits without having to endure hard
lessons through the "school of hard knocks."
You may have heard of it.
Applications of the Value Method are known by several
common names. Value Engineering (VE), Value Analysis (VA),
Value Management (VM), and Value Planning (VP) are some of
the most common names used. These names describe small
variations in the general Value Method process related to
the timing, selection, type of activity, or other specific
application. Application of the Method is usually referred
to as value studies. Each year companies save billions of
dollars in expenditures; improve quality, service while
improving customer satisfaction; and increasing revenue,
market share, and profits.
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 Keywords
Systematic and organized
The
Value Method process uses tested and successful procedures
that are directed toward achieving success in meeting the
purposes for the "project" by all involved. The process
instills "common understanding", generates high production
and high performing team activities, reduces the time
necessary to obtain a product, and focuses the efforts on
the purposes behind the project or activity being studied. A
standard "job
plan" is used to guide the entire process. |
Alternatives
The Value Method generates,
examines, and refines creative alternatives toward the
concept of producing an end product that produces high
customer acceptance. The process endeavors to widen the
number and scope of the available alternatives. This is done
to increase the potential for enhanced satisfaction, and
take advantage of the added expertise brought into the
studied activity through the value study process.
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Functions and
FAST
One of the most unique and useful
qualities of the Value Method is its use of functions to
describe the activity or product being studied. The value
study breaks the "project" into components so as to avoid
misunderstanding of the planned intents for the project.
Then a Functional Analysis is conducted on each component.
In the Value Method process, functions are limited to the
shortest sentence possible. Just two words are usually
allowed: a verb (active preferred) and a noun (measurable
preferred). The main functional purpose for the component
being studied is the primary function. Of course, things
often happen as a result of the choice of a component, or
something must be done to make the selected component work
as needed. These functions are called supporting or
secondary functions. The results of the functional analysis
are placed into a function-logic diagram called a FAST (a
short term for Functional Analysis System Technique). |
Value
The true value of a activity or
product is its relationship to its perceived worth as
opposed to its life-cycle costs. In Value Method terms:
Value = Worth / Cost. When an item has a Value greater than
1.0, the item is perceived to be a fair or good value. When
an item has a Value is less than 1.0, the item is perceived
to be a poor value or bad value. When the perceived worth
far exceeds the life-cycle cost, we usually consider
purchasing the item. |
Worth
The worth of a
product involves many features. The most common cited are:
benefits received, services obtained, satisfaction of the
product performance, quality, safety, and convenience. The
worth of the product is a measure of what is in it for the
customers involved. It is a measure of how well the end
product meets the involved essential needs and the added
desires of those that have a voice in the product selection
or its use. An end product must always supply the essential
need, or its worth will be poor |
Life-Cycle
Costs
The true cost of an item is not just the
amount of money that you pay when you buy it. Much more is
involved. When you buy something, you also buy its long-term
effects. The initial costs plus these long-term costs are
called life-cycle costs. This includes things like the time
involved to get the project done, the people needed (number,
expertise and so on), the degree of difficulty involved,
availability of money or other resources, the amount of
maintenance needed, and the money that must be expended and
kept in reserve.
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