VE2

Value Engineering the Forgotten Lean Technique
University Of Idaho, Industrial Technology Program, PTTE434, J. R. Wixson, Instructor
Left click to advance slides
University of Idaho, Idaho Falls, ID, Industrial Technology Program, PTTE434, J.R. Wixson - Instructor
Overview
What is Value Engineering? How is VE Applied? When is it used? How can it enhance Lean & Six Sigma? What are the differences and similarities between VE,
Lean and Six Sigma?

What is Function Analysis and FAST?
2
Lean and Six Sigma Are Not Enough

Cost of Goods Sold
Historical focus on touch labor and variable overhead ignores the largest piece of the pie. Sourcing programs fall short
Material cost is embedded in the product design
Variable O.H. 30%
Labor 10%
Materials 60%

Don't look now, but an old discipline (value analysis/value engineering) is on the comeback trail. Originally called merely VA by its inventor, Larry Miles, an engineer in GE's purchasing operation in 1947, VA/VE uses a value equation that says value is equal to function divided by cost. If, for example, the buyer wants to get more item value, he/she needs to either increase the item's functionality at the same time he/she is containing cost; or he/she needs to reduce cost while holding or improving its functionality. Either way, the result is more value for the customer (Excerpt from Purchasing Magazine "Value Analysis makes a comeback," Jim Morgan, November 20, 2003.").

Value Engineering is truly the "Forgotten Lean Technique." However, over 50 years later, it has gained recognition in private industry and governmental agencies as an indispensable tool for cost reduction, improved product development and product re-engineering. It is also used to improve organizational performance and cost effectiveness as well. The heart of VA/VE is function analysis and "Function Analysis Systems Technique" that sets it apart from other lean methodologies by opening the door to creative problem solving that capitalizes on an interdisciplinary teams creative juices to arrive at truly value added, cost effective solutions to problems ranging from design problems, quality and reliability problems, to organizational problems resulting in increased value and performance for the customer and the organization.
Value Engineering the Forgotten Lean Tool

Value Engineering (VE) is an intensive, interdisciplinary problem solving activity that focuses on improving the value of the functions that are required to accomplish the goal, or objective of any product, process, service, or organization. VALUE METHODOLOGY The systematic application of recognized techniques which identify the functions of the product or service, establish the worth of those functions, and provide the necessary functions to meet the required performance at the lowest overall cost.
John M. Bryant, VM Standard, Society of American Value Engineers, Oct. 1998
Concept of Value
FUNCTION
VALUE =
COST
VE Timeline
VE adopted by NASA ofc of facilities. Larry Miles assigned to cost reduction at GE Navy adds VE incentive clause VE included in ASPR for military procurements
Larry Miles takes VE to Japan.
Larry Miles dies.
DOE Order 4010.1
1947
1952 1955 VE a success, training of employees and suppliers begins
1959 1962 1964 SAVE formed in Wash. DC on Oct.22, 1959 Army Corps of Engineers begins VE training Charles Bytheway invents FAST Modeling
1969 1970 First VE incentive clause published in Fed. Register, GSA staffs for VE.
1985
1988 1990 1993
Today
OMB circular A131 published requiring all Federal Agencies to use VE to identify and reduce nonessential costs.
OMB circular A131 passes Sunset Review
Video - The Principles of Value Analysis/Value Engineering
Click here to view video

(Note: For the Fall 2007 class, please contact instructor for new link)
When is VE used
Value Engineering is used to determine the best design alternatives for Projects, Processes, Products, or Services Value Engineering is used to reduce cost on existing Projects, Processes, Products, or Services.
Value Engineering is used to improve quality, increase reliability and availability, and customer satisfaction .
Value Engineering is also used to improve organizational performance. Value Engineering is a powerful tool used to identify problems and develop recommended solutions.
10
Some Thoughts on Lean

The cause of poor performance is wasteful activity. Lean is a time-based strategy and uses a narrow definition of waste (nonvalue-adding work) as any task or activity that does not produce value from the perspective of the end customer. [1] Increased competitive advantage comes from assuring every task is focused on rapid transformation of raw materials into finished product.
11
[1] James
P. Womack, Daniel T. Jones. "Lean Thinking," Simon & Schuster; 1st
Lean Strengths
Provides a strategic approach to integrated improvements through value stream mapping and the focus on maximizing the value-adding-to-waste ratio. Directly promotes and advocates radical breakthrough innovation. Emphasis on fast response to obvious opportunities. (just go do it) Addresses workplace culture and resistance to change through direct team involvement at all levels of the organization.
Stephen W. Thompson - Lean, TOC or Six Sigma: Which tune should a company dance to?, Lean Directions, Society of Manufacturing Engineers, Aug. 11, 2003
12
Lean Weaknesses
May promote risk taking without reasonable balance to consequence. May not provide sufficient evidence of business benefit for traditional management accounting. Has a limitation when dealing with complex interactive and recurring problems (uses trial and error problem solving).
13
Some Thoughts on 6s
Six sigma:The cause of poor performance is variation in process and product quality. Random variations result in inefficient operations causing dissatisfaction of customers from unreliable products and services. [2] Increased competitive advantage comes from stable and predictable process allowing increased yields, improved forecasting and reliable product performance.
[2]
George Eckes. "General Electric's Six Sigma Revolution: How General Electric and Others Turned Process Into Profits," John Wiley & Sons; 1 edition (2000)
14
6s Strengths
The rigor and discipline of the statistical approach resolves complex problems that cannot be solved by simple intuition or trial and error. The data gathering provides strong business cases to get management support for resources. The focus on reduction of variation drives down risk and improves predictability.
15
6s Weaknesses
Statistical methods are not well suited for analysis of systems integration problems. (sigma can be calculated for a product specification, but how is sigma established for process interactions and faults. The heavy reliance on statistical methods by its very nature is reactive, as it requires a repetition of the process to develop trends and confidence levels. The strong focus on stable processes can lead to total risk aversion and may penalize innovative approaches that by their nature will be unstable and variable.
16
Some Thoughts on VE
VE uses a interdisciplinary approach to problem solving. VE takes a systems approach to problem identification and problem solving. VE uses function analysis to improve communication among team members The function analysis systems technique (FAST) promotes a synergistic approach to problem solving that develops solutions far beyond that which only an individual could produce.
17
Value Engineering Strengths

VE relies on a rigorous interdisciplinary approach to problem solving. VE uses a systems approach to problem identification and solution. VE is function oriented and promotes a clean-sheet approach that supports innovative solutions. Creativity is a key component to the VE problem solving activities that promotes breakthrough thinking. VE uses a structured job plan that promotes consistency in application and helps assure results. Increased competitive advantage comes from the identification of innovative ways to accomplish key functions at a lower cost with improved quality and reliability.
18
VEs Weaknesses
Successful VE results are dependent on the quality of information brought to the VE workshop for evaluation. Many times, VE is used too late in the product development cycle to impact the design, and when changes would be too costly to implement. There are many misunderstandings and biases against VE that have been built up over time due to misuse of the methodology.

It cheapens the product without improving it. Im an engineer. We do VE all the time. VE is only used for cost reduction.
19
VE Weaknesses Addressed by Lean Six Sigma

VE weaknesses are addressed by Lean Six Sigma Six sigma can provide the statistical evaluation necessary to support VE solutions. Lean can provide Value Stream information that can lead to improved quality and throughput. In combination with VE, Lean and Six Sigma provide a suite of tools that can lead to superior value through innovative solutions to problems in design, quality, and productivity.
20
Comparing VE to Lean
VE is not limited to areas of high volume or high dollar value (e.g., aircraft). VE can be used by organizations with great effect in a variety of situations, including VE analysis of product/item design, packaging, industrial and logistical processes, and other areas of high cost. Lean principles and practices offer no direct method of addressing product design. Up to 80% of a products final cost could set at the time of concept approval. This leaves Lean with only 20% of vehicle cost available for Lean to improve.
21
Comparing VE to Lean (Contd)

Lean is a strategic decision, while organizations can choose to use VE successfully and effectively in a tactical manner. VE can work well as an isolated study event it does not require the encompassing and pervasive level of support that an effective Lean effort requires. Lean will reduce waste over time. VE, on the other hand, will find and fix wasteful effort very quickly, but it will generally (not necessarily) do so on an episodic basis, not a continuous or systematic basis. VEs value approach and tools help teams focus on the high payoff areas first and will generate larger savings sooner than you might otherwise get in Lean.
22
Lean and VE Similarities

Both VE and Lean rely extensively on transforming operations into alternative forms of visual information. In Lean, a Kaizen team will consider using a variety of visual analytical tools to identify waste. Spaghetti diagrams, flow diagrams, bar charts, standard work sheets, and production control boards, are all part of the Lean analytical lexicon. VE uses function analysis and FAST diagramming to describe the functional relationship of the product, process, or service and identify functions where the team should focus on improving value. Creating by function is the high-octane fuel generating VE performance and success.
23
Formula for Superior Continuous Improvement

3= (CI)
Lean
Six Sigma
Value Engineering
x
24
Six Sigma Process Define the Problem Measure

Click Here
A) Identify what the customer wants. B) Organize an improvement team. C) Create a process flow chart - (SIPOC) A) Select Critical to Quality Characteristic metrics. B) Define Performance Standards. C) Validate the measurement System. D) Establish baseline performance in terms of Sigma Capability - Defects per Million Opportunities.
Analyze
A) Identify significant characteristics and establish process capability. B) Define performance targets for significant characteristics. C) Identify root cause of process variation.
A) Identify and evaluate potential solutions. Improve

B) Implement short-term countermeasures. C) Implement long term corrective actions. D) Identify systemic indirect effects and unintended consequences of improvement ideas. E) Establish operating tolerances for new process. A) Verify corrective actions and validate new measurement systems. B) Determine process capability. C) Establish and implement control plan. Move on to next highest priority process.
25
Control
End
Value Engineering/Value Analysis - Why is it important?

Last 3 years (FY2000 2003), 2.7 million manufacturing jobs left the U.S. The U.S. is loosing the battle to foreign competition. Labor costs $12 to $30 per hour in U.S., less than $1 elsewhere. Fewer and fewer people will be required to produce the worlds goods. Lean and Six Sigma alone are not enough!
26
Competitive Advantage
Quality is defined as conformance to specification.
Value is defined as:
Function
Cost
You cant have one without the other!
Competitive Advantage = Quality + Value
27
Six Step Value Engineering Job Plan

Information Phase Creativity Phase Evaluation Phase Clearly identify the problem(s) to be solved, and gather information on the background, functions and requirements of the product, process, or system. Brainstorm ideas on how to improve the high cost, broken, or inadequately performed key functions. Screen ideas for acceptance, score remaining ideas on a scale and group ideas into categories. Develop design scenarios, and selection criteria. Rate and rank ideas.
Planning Phase Reporting Phase

Implementation Phase
Plan how to sell ideas to management, identify key recommendations, plan management presentation.
Give oral presentation to management, or develop written report. Get management approval for go-ahead, make management plan, make assignments, implement,28 follow-up.
Mapping VE to 6s
VA/VE
Information Phase
6s
Value-based decision process Uses functional approach
Define the Problem
Value-based decision process
Creativity Phase
Measure
Uses statistical approach
Follows a very structured, organized plan
Evaluation Phase Planning Phase
Analyze
Follows a very structured, organized plan
Focus on maximum Reporting Phase possible solution based on creativity techniques. Implementation
Phase
Improve
Focus on maximum possible solution based on analytical optimization techniques.

29
Control
Michael Mladjenovic - Intier Automotive Interiors, Toronto, CA
Application of 6s Tools
6s 5s 4s 3s 2s 0% 20% 40% 60% 80% 100%
% Usage
Basic Tools Statistical Tools Design for 6s and Innovation w/VE
30
VE Job Plan with 6s
31
How and When is Value Engineering Applied?

How
Interdisciplinary Team Formal Job Plan Trained Facilitators Function Analysis/FAST Documentation
When
Problem Solving/Decision
Analysis Strategic Planning New Product Development Re-engineering efforts
32
Potential Savings from VE

No engineering Change Revision Document Revision
Re-Test/Re-qualification Drawings Released

Net Savings from VE
Tooling Changes
Total Cost of VE Implementation
VE Implementation beyond this point results in a net loss.

Engineering &Production Release
Concept
Design
Production
33
Why use Value Engineering?

Save Save Build Improve Satisfy Time Money Teamwork Quality
Customer
34
FEDERAL DEPARTMENT OR AGENCY DOLLARS SAVAD BY VALUE ENGINEERING -- FY 95

Agency FY-95 VE Savings $734,385,000.00 Defense Department $686,373,874.00 Department of Transportation $109,608,453.00 General Services Administration $59,554,000.00 Army Corps of Engineers $22,427,840.00 Department of the Interior $8,764,155.00 Department of Agriculture $5,990,387.00 Justice Department $2,270,800.00 Veterans Affairs $1,884,464.00 Health & Human Services $800,000.00 Agency for International Development $91,721.00 State Department TOTAL $1,632,150,694.00
35
SUMMARY OF PAST VE SAVINGS Federal-Aid Highway Program

FY 2003 344 8.45 Mil FY 2002 377 $9.02 Mil. FY 2001 378 $7.29 Mil. FY 2000 388 $7.78 Mil. $16,240 Mil. 2,017 $3,483 Mil. 1057 $1,128 Mil. 145:1
Number of VE Studies Cost of VE Studies Plus Administrative Costs Estimated Construction Cost of Projects Studied Total No. of Recommendations Total Value of Recommendations No. of Approved Recommendations Value of Approved Recommendations Return on Investment
19,241 Mil $20,607 Mil. $18,882 Mil. 2144 3,163 Mil 914 1,016 Mil 120:1 2344 2,013
$3,050 Mil. $2,375 Mil. 969 $1,043 Mil. 116:1 1017 $865 Mil. 119:1
http://www.fhwa.dot.gov/ve/index.htm
36
A Failure to Communicate
37
Sacred Cow
A non-functional constraint or perceived restriction
SACRED COWS MAKE GREAT STEAKS

38
VE Task Team/Quality Process Improvement Team

Core Team
Support Support
Support
Support
Support
Support
5 to 8 PARTICIPANTS OPTIMAL
39
The Synergistic Effect of Value Analysis/Value Engineering

INFORMATION HELD BY ONE MEMBER ONLY
INFORMATION HELD BY TWO OR MORE MEMBERS
INFORMATION OR EXPERIENCE COMMON TO ALL
40
Concepts of Value - Desirable

Ideal Good Acceptable Passable
Value =
Function
Cost
Function Cost
41
Concepts of Value - Undesirable
Undesirable but Passable (cheapening the product) Function Cost Function Cost
42
Value =
Information Phase
43
Fact Finding
What do you need to know about the problem that you dont know now?
What facts are known? What are the requirements of the system? Are these facts, opinions, assumptions, or prejudices?
Where or how can information be obtained?
44
Function Analysis
Function Analysis is the key to understanding
the problem.
Start with defining the mission of the product,

process, service, or organization.
Then, brainstorm all possible functions

necessary to accomplish the mission.
Next, build a FAST Model to help identify any

missing functions and show dependencies.
45
Function Analysis
Functions - Describe what something does Functions - Use active verb and measurable noun FAST (Function Analysis System Technique) - A logic diagram to describe how a system works. Examples of Verbs and Nouns:
Active Verbs Transmit Irradiate Project Dissipate Generate Convert Receive Reflect Provide (passive!) Nouns Signal Information Data Heat Radiation Current Light Image
46
The Technical FAST Model

HOW?
INDEPENDENT FUNCTION (SUPPORTING) DEPENDENT FUNCTION
WHY?
OBJECTIVES OR SPECIFICATIONS OUTPUT (concept) MISSION, OBJECTIVE, OR HIGHER ORDER FUNCTION
MINOR CRITICAL PATH

INDEPENDENT FUNCTION B
INPUT
BASIC FUNCTION
DEPENDENT FUNCTION
(AND)
LOWEST ORDER FUNCTION
(concept)
ACTIVITY 1
ACTIVITY 2
W H E N
MAJOR CRITICAL PATH SCOPE OF THE PROBLEM UNDER STUDY LOWER ORDER FUNCTIONS HIGHER ORDER FUNCTIONS
47
FAST Example - Overhead Projector

HOW?
F.A.S.T MODEL OVERHEAD PROJECTOR

FACILITATE PORTABILITY
OBJECTIVES OR SPECIFICATIONS
WHY?
ALLOW SAFETY OUTPUT (concept) PROJECT IMAGE GENERATE LIGHT CONVERT ENERGY GENERATE HEAT RECEIVE CURRENT INPUT
W H E N
CONVEY Information
TRANSMIT CURRENT
FOCUS IMAGE SUPPORT IMAGE
(concept)
DISSIPATE HEAT
AMPLIFY IMAGE
GENERATE NOISE 48
Customer Oriented FAST Model Vacuum Cleaner

HOW Basic Functions Receive Air WHY
Move Air
Accelerate Air Clean Air Loosen Dirt
Clean Surface
Remove Dirt
Entrain Dirt Convey Dirt Entrap Dirt Collect Dirt

Display Directions Furnish Instructions
Store Dirt
Supporting Functions Simplify Directions
Clean Exterior Clean filter Dispose Dirt Signal Bag Change
Assure Convenience
Facilitate Upkeep
Aid Service Minimize Storage Enhance Portability
Assure Dependability Satisfy User
49
FAST Model of 737/757 Autopilot
50
Pit 9 FAST Model
51
Other tools that can work with VE

Activity Based Costing (ABC) Cost Function Matrix Failure Modes and Effects Analysis (FMEA) Risk Analysis Tools Other traditional quality tools such as pareto analysis, ishakawa diagrams, scatter diagrams, etc.
Function analysis is the key to understanding the system and what it does. Function analysis enables you to analyze the problem from a system perspective.
52
Cost/Function Matrix
Position critical path functions on the top of the matrix. Use costed activities that relate to the functions. Allocate cost to each function.
53
54
Creativity Phase
55
CREATIVITY DEFINITION
Creativity is the art of
bringing something new into existence. It has the art of making, inventing, or producing something new and different.
56
CREATIVITY & INNOVATION RELATIONSHIP

You must blast before you can create. Blow apart the misconceptions, skeptics, and naysayers. Blow-up the preconceived ideas and common theories of how things should be done. Rather, focus on possibilities.
J. R. Wixson - 2004
57
IMAGINATION
Imagination is more important than knowledge, for knowledge is limited, while imagination embraces the entire world.
Albert Einstein
58
Thought for the day:

When you always do what you have always done - you always get what you have always gotten.
Socrates
59
IDEA vs. SOLUTION

A solution requires justification & validation, and idea needs no justification. A solution is an end point, an idea is just the beginning. A solution is solid and self supporting, an idea is tender and must be built upon.
DONT KILL IDEAS WITH ROADBLOCKS!!
60
PROBLEM SOLVING
An organized effort for developing UNIQUE and RELEVANT resolutions for opportunities or undesirable situations
61
Creative and Judicial Ability Development
Predominately creative
Predominately judicial
12 56
17 24
Age
62
What do you see?
63
What is the next symbol in sequence?
64
What is the next symbol in sequence?
65
To Creative Thinking and Action

FEAR of making mistakes FEAR of the risk of pioneering Latching onto the first idea Desire to conform . . . To belong Belief that fantasizing . . . (imagining) . . . Is a waste of time, and childish Difficulty in defining the problem Inflexibility The erroneous belief, I am not a creative person
66
INFORMATION FOR SKEPTICS

What is believed to be "common knowledge" is NOT ALWAYS truly "correct" in the long run.
Consider the following quotes denying the existence of, or impact of, innovations and discoveries of their time.
67
INFORMATION FOR SKEPTICS

INNOVATION
"... after a few more flashes in the pan, we shall hear very little more of Edison or his electric lamp. Every claim he makes has been tested and proved impracticable."
[New York Times, January 16, 1880]
AEROSPACE Professor Goddard ... does not know the relation of action to reaction ... he only seems to lack the knowledge ladled out daily in our high schools"
[New York Times, January 13, 1920]
"Heavier-than-air flying machines are impossible."

[Lord Kelvin, president, Royal Society, 1895]
"Airplanes are interesting toys but of no military value."

[Marechal Ferdinand Foch, Professor of Strategy, Ecole Superieure de Guerre]
68
COMPUTATIONAL SYSTEMS
"I think there is a world market for maybe five computers." [Thomas Watson, chairman IBM, 1943] "There is no reason anyone would want a computer in their home." [Ken Olson, Chairman and founder Digital Equipment Corp., 1977] "640K ought to be enough for anybody."
[Bill Gates, 1981]
69
ENERGY
"Fooling around with alternating current is just a waste of time.
Nobody will use it, ever." [Thomas Edison, 1889]
"There is not the slightest indication that nuclear energy will ever be obtainable. It would mean that the atom would have to be shattered at will."
[Albert Einstein, 1932]
"The energy produced by the atom is a very poor kind of thing. Anyone who expects a source of power from the transformation of these atoms is talking Moonshine."
[Ernst Rutherford, 1933]
70
MUSIC
"We don't like their sound, and guitar music is on the way out."
[Decca Recording Co. turning down the Beatles, 1962]
ASTRONOMY "I would sooner believe that two Yankee professors lied, than that stones fell from the sky"
[Thomas Jefferson, on hearing the report of a meteorite fall]
71
MEDICINE
"Louis Pasteur's theory of germs is ridiculous fiction."
[Pierre Pachet, Professor of Physiology at Toulouse, 1872]
72
CREATIVITY TECHNIQUES
Brainstorming Synectics Morphological Analysis Force Fit/Forced Relationships Brainwriting
73
CREATIVITY TECHNIQUES (continued)
Visualization/Visual Brainstorming Listing Lateral Thinking Divergent Thinking For more information on creativity, click here.
74
Rules for Brainstorming

Generate a large number of ideas - quantity, not quality. Free-wheeling is encouraged - Listen and improve on the ideas of others. Dont criticize - No evaluation of ideas Encourage everyone to participate Record all ideas presented Time to let ideas incubate should be allowed. Select an appropriate meeting place
75
Brainstorming Concept
Best Solutions combination of ideas 100 +
75 - 80 Off - the - wall ideas 15 - 20 Traditional Answers
TIME
76
Evaluation Phase
77
Evaluation Phase - Idea Screening

1 st GO, NO-GO
CHAMPION 2 nd GFI (Killer Trade)
3 rd
FORMAL TRADE-OFF STUDY (NGT, PAIRWISE COMPARISON, ETC.) MOCKUP AND PROTO TYPES IF NECESSARY
4 th
5 th
CUSTOMER ACCEPTANCE
78
Evaluating Ideas
GO - NO GO CHAMPION GFI
Scratch ideas that hold no interest.

Who will speak for the ideas and support them? Discuss pro/con and vote. GFI is team average. Combine ideas; add new ideas. Record all assumptions when voting.
79
Evaluating Ideas
Trade Study
Record all assumptions when voting.

Customer Acceptance
Quantify performance characteristics. Select top candidates using NGT, Pair-wise Comparison, etc. Could use software such as Expert Choice, or Criterium Decision Plus
Determine & quantify customer acceptance criteria.

Rate surviving ideas against norm & risk. Develop proposal scenarios.
80
Criteria Weighting - Paired Comparison

CRITERIA A. Safety B. Reliability C. Portability D. Machineabilty E. Constructabilty F. Frangability G. Maintainability H. Serviceability I. Ergonomic Compatibility A B
B 4 B 5 C 2 E 5 F 3 F 5 H 0 I 3 A 5 D 4 E 4 D 4 E 1 F 4 H 1
C
A
D
A 5 B
E
F 5 B 4 C
F
A 3 G 4 G 3 G
G
A 5 B 4 C 3 D 3 E
H
I 5 B 5 I 3 D 4 I 0 I
I
2 5 5 4 2 0
CRITERIA A B C D E F G H I TOTAL
The team arrives at consensus on the scores for each criteria. For example, the team decides which is better, A - Safety, or B - Reliability. In this case, B Reliability wins by 4 points. Next, which is better A, or C- Portability. Winner - A by 5,
SCORING
scale - 0 to 5 0 = No Difference in Importance 5 = Major Difference in Importance
81
RATE AND RANK OF ALTERNATIVES ALTERNATIVES CRITERIA WEIGHT 20.3 22.0 6.5 13.0 7.3 12.2 8.1 0.8 9.8 29.3 100 $ 404.9 1,450.00 0.28 best value $ 327.6 1,711.00 0.19 $ 9.8 5 101.6 4 87.8 A 4 81.3 5 109.8 4 13.0 26.0 2 39.0 26.0 1 29.3 7.3 2 61.0 24.4 5 40.7 40.7 3 3.3 2.4 1 2 19.5 252.8 1,000.00 0.25 $ 2 1.6 3 29.3 330.9 1,250.00 0.26 $ 3 24.4 3 2.4 4 39.0 415.4 2,100.00 0.20 5 61.0 4 32.5 5 4.1 4 29.3 3 36.6 2 16.3 2 26.0 4 29.3 3 36.6 1 6.5 3 39.0 5 36.6 2 43.9 2 13.0 4 52.0 B 2 40.7 4 87.8 3 19.5 C 3 61.0 D 5 5 109.8 E
A. Safety B. Reliability C. Portability D. Machineabilty E. Constructabilty F. Frangability G. Maintainability H. Serviceability I. Ergonomic Compatibility
TOTAL COST Value Index
101.6
2 3 4
5 5 4 3
Each alternative is scored against how well it satisfies the various criteria. Once the scores are assigned, they are multiplied by the weight of the criteria and summed for a total score. Then, a value Index is calculated by dividing the total score by the implementation cost.
82
Planning and Reporting Phases

Left Click to advance to next slide
83
The Planning & Reporting Phases

Planning
What
is recommended? Who has to approve it? What is the implementation plan? Are mockups or prototypes required to verify final decisions? What are the cost, schedule, and deliverables? ROI?
84
ACTION PLAN GUIDELINES

What needs to be done?
Identify the actions needed to solidify the proposals.
Who should be assigned the action?
Assign a team member. Assign a completion date for the action. Plan regular team status meetings. Anticipate 4-6 weeks to complete the actions.
85
When should the task be completed?
Anticipate Roadblocks And Plan For Them
86
Implementation Planning
Ideas must be planned and managed to ensure implementation. Proposed actions should be managed like a project with specific end products, defined start and end dates, and funding limits.
87
The Planning & Reporting Phase

Reporting Give oral presentation. Support it with written executive brief. Be clear, concise, and positive. Anticipate roadblocks Use good human relations.
88
Ve Workshop Follow-up Activities

Recognize the participants. Publicize the results. Audit the performance of the implemented actions. Close out the project.
89
Lean, Six Sigma and VE Synergy Final Thoughts

VE is a powerful design methodology that harnesses existing organizational creativity and knowledge resulting in superior innovative products with unique customer benefits Together, Lean, Six Sigma, and VE Increase customer value by optimizing costs, quality and delivery. Lean dramatically reduces time to market execution.
90

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Value Engineering the Forgotten Lean Technique

University Of Idaho, Industrial Technology Program, PTTE434, J. R. Wixson, Instructor

Left click to advance slides

Lean and Six Sigma?

Lean and Six Sigma Are Not Enough

Variable O.H. 30%

Value Engineering the Forgotten Lean Technique

Value Engineering the Forgotten Lean Technique

Value Engineering the Forgotten Lean Tool

Larry Miles takes VE to Japan.

Larry Miles dies.

DOE Order 4010.1

1952 1955 VE a success, training of employees and suppliers begins

1988 1990 1993

OMB circular A131 passes Sunset Review

Video - The Principles of Value Analysis/Value Engineering

Click here to view video

Some Thoughts on Lean

P. Womack, Daniel T. Jones. "Lean Thinking," Simon & Schuster; 1st

Value Engineering Strengths

VE Weaknesses Addressed by Lean Six Sigma

Comparing VE to Lean (Contd)

Lean and VE Similarities

Formula for Superior Continuous Improvement

Six Sigma Process Define the Problem Measure

A) Identify and evaluate potential solutions. Improve

Value Engineering/Value Analysis - Why is it important?

You cant have one without the other!

Competitive Advantage = Quality + Value

Six Step Value Engineering Job Plan

Planning Phase Reporting Phase

Value-based decision process Uses functional approach

Define the Problem

Value-based decision process

Uses statistical approach

Follows a very structured, organized plan

Evaluation Phase Planning Phase

Follows a very structured, organized plan

Focus on maximum possible solution based on analytical optimization techniques.

VE Job Plan with 6s

Michael Mladjenovic - Intier Automotive Interiors, Toronto, CA

How and When is Value Engineering Applied?

Potential Savings from VE

Re-Test/Re-qualification Drawings Released

Total Cost of VE Implementation

VE Implementation beyond this point results in a net loss.

Why use Value Engineering?

FEDERAL DEPARTMENT OR AGENCY DOLLARS SAVAD BY VALUE ENGINEERING -- FY 95

SUMMARY OF PAST VE SAVINGS Federal-Aid Highway Program

SACRED COWS MAKE GREAT STEAKS

VE Task Team/Quality Process Improvement Team

The Synergistic Effect of Value Analysis/Value Engineering

INFORMATION HELD BY TWO OR MORE MEMBERS

INFORMATION OR EXPERIENCE COMMON TO ALL

Concepts of Value - Desirable

Concepts of Value - Undesirable

Where or how can information be obtained?

Start with defining the mission of the product,

Then, brainstorm all possible functions

Next, build a FAST Model to help identify any