Value Engineering and Value Analysis
Value Engineering and Value Analysis
Use Value Analysis to analyze and understand the detail of specific situations.
Use it to find a focus on key areas for innovation.
Quick
Use it in reverse (called Value Engineering) to identify specific Logical
X
solutions to detail problems.
Individual X
Long
Psychological
Group
It is particularly suited to physical and mechanical problems, but can also be used in other areas.
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Action
Gather information
Measure
3
4
Analyze
Generate
Evaluate
Sub action
Who is doing it?
What could it do?
What must it not do?
What are the alternate ways of meeting
requirements?
What else can perform the desired function?
What does it cost?
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A "basic function"
It is anything that makes the product work or sells. A function that is defined as "basic" cannot
change.
Secondary functions
It is also called "supporting functions", described the manner in which the basic function(s)
were implemented. Secondary functions could be modified or eliminated to reduce product cost.
Identify the item to be analysed and the customers for whom it is produced.
List the basic functions (the things for which the customer is paying). Note that there are usually very
few basic functions.
Identify the secondary functions by asking How is this achieved? or What other functions support
the basic functions?.
Determine the relative importance of each function, preferably by asking a representative sample of
customers (who will always surprise you with what they prefer).
Find the components of the item being analyzed that are used to provide the key functions. Again, the
question How can come in very useful here.
Measure the cost of each component as accurately as possible, including all material and production
costs.
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Seek improvements
Eliminate or reduce the cost of components that add little value, especially high-cost components.
Enhance the value added by components that contribute significantly to functions that are particularly
important to customers.
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Importance of cost
As important as the basic function is to the success of any product, the cost to perform that function is inversely
proportional to its importance. This is not an absolute rule, but rather an observation of the consumer products
market.
Few people purchase consumer products based on performance or the lowest cost of basic functions alone. When
purchasing a product it is assumed that the basic function is operative. The customer's attention is then directed
to those visible secondary support functions, or product features, which determine the worth of the product.
From a product design point of view, products that are perceived to have high value first address the basic
function's performance and stress the achievement of all of the performance attributes. Once the basic functions
are satisfied, the designer's then address the secondary functions necessary to attract customers. Secondary
functions are incorporated in the product as features to support and enhance the basic function and help sell the
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product. The elimination of secondary functions that are not very important to the customer will reduce product
cost and increase value without detracting from the worth of the product.
The cost contribution of the basic function does not, by itself, establish the value of the product. Few products
are sold on the basis of their basic function alone. If this were so, the market for "no name" brands would be
more popular than it is today. Although the cost contribution of the basic function is relatively small, its loss will
cause the loss of the market value of the product.
Define the problem and its scope as the first step in the value analysis process.
Then, derive the functions of the product and its items. These functions are classified into "basic" and
"secondary" functions.
Prepare a Cost Function Matrix or Value Analysis Matrix to identify the cost of providing each function
by associating the function with a mechanism or component part of a product.
o Identify Product functions with a high cost-function ratio as opportunities for further investigation and
improvement. Improvement opportunities are then brainstormed, analyzed, and selected.
o Use the objective of the Function Cost Matrix approach to draw the attention of the analysts away from
the cost of components and focus their attention on the cost contribution of the functions.
o The Function Cost Matrix displays the components of the product, and the cost of those components,
along the left vertical side of the graph. The top horizontal legend contains the functions performed by
those components. Each component is then examined to determine how many functions that
component performs, and the cost contributions of those functions.
o Estimate detailed cost as it becomes more important following function analysis, when evaluating
value improvement proposals. The total cost and percent contribution of the functions of the item under
study will guide the team, or analyst, in selecting which functions to select for value improvement
analysis.
A variation of the Function-Cost Matrix is the Value Analysis Matrix. This matrix was derived from the
Quality Function Deployment (QFD) methodology. It is more powerful in two ways.
o First, it associates functions back to customer needs or requirements. In doing this, it carries
forward an importance rating to associate with these functions based on the original customer needs or
requirements.
o Functions are then related to mechanisms, the same as with the Function-Cost Matrix. Mechanisms are
related to functions as either strongly, moderately or weakly supporting the given function. This
relationship is noted with the standard QFD relationship symbols. The associated weighting factor is
multiplied by customer or function importance and each columns value is added. These totals are
normalized to calculate each mechanism's relative weight in satisfying the designated functions.
o This is where the second difference with the Function-Cost Matrix arises. This mechanism weight can
then be used as the basis to allocate the overall item or product cost. The mechanism target costs
can be compared with the actual or estimated costs to see where costs are out of line with the value of
that mechanism as derived from customer requirements and function analysis.
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There are normally two types of FAST diagrams, the technical FAST diagram and the customer FAST diagram.
A technical FAST diagram is used to understand the technical aspects of a specific portion of a total product. A
customer FAST diagram focuses on the aspects of a product that the customer cares about and does not delve
into the technicalities, mechanics or physics of the product. A customer FAST diagram is usually applied to a
total product.
CREATING A FAST MODEL
Start with a function, and ask HOW that function is performed to develop a more specific approach. This
line of questioning and thinking is read from left to right.
Abstract the problem to a higher level, and ask WHY that function is performed. This line of logic is read
from right to left.
The essential logic associated with the FAST HOW-WHY directional orientation when undertaking any task is:
Start with the goals of the task, and then
Explore methods to achieve the goals.
Addressing any function on the FAST model can be as follow:
The question WHY is answered by the function on the left which expresses the goal of that function.
The question HOW is answered by the function on the right, which is a method to perform that function
being addressed.
A systems diagram starts at the beginning of the system and ends with its goal. A FAST model, reading from left
to right, starts with the goal, and ends at the beginning of the "system" that will achieve that goal.
Second, changing a function on the HOW-WHY path affects all of the functions to the right of that function.
This is a domino effect that only goes one way, from left to right. Starting with any place on the FAST model, if
a function is changed the goals are still valid (functions to the left), but the method to accomplish that function,
and all other functions on the right, are affected.
Finally, building the model in the HOW direction, or function justification, will focus the team's attention on
each function element of the model. Whereas, reversing the FAST model and building it in its system orientation
will cause the team to leap over individual functions and focus on the system, leaving function "gaps" in the
system. A good rule to remember in constructing a FAST Model is to build in the HOW direction and test the
logic in the WHY direction.
The vertical orientation of the FAST model is described as the WHEN direction. This is not part of the intuitive
logic process, but it supplements intuitive thinking. (WHEN) is not a time orientation, but indicates cause and
effect.
Scope lines represent the boundaries of the study and are shown as two vertical lines on the FAST model. The
scope lines bound the "scope of the study", or that aspect of the problem with which the study team is concerned.
The left scope line determines the basic function(s) of the study. The basic functions will always be the first
function(s) to the immediate right of the left scope line.
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The right scope line identifies the beginning of the study and separates the input function(s) from the scope
of the study.
The objective or goal of the study is called the "Highest Order Function", located to the left of the basic
function(s) and outside of the left scope line. Any function to the left of another function is a "higher order
function". Functions to the right and outside of the right scope line represent the input side that "turn on" or
initiate the subject under study and are known as lowest order functions. Any function to the right of another
function is a "lower order" function and represents a method selected to carry out the function being addressed.
Those function(s) to the immediate right of the left scope line represent the purpose or mission of the product or
process under study and are called Basic Function(s). Once determined, the basic function will not change. If the
basic function fails, the product or process will lose its market value.
All functions to the right of the basic function(s) portray the conceptual approach selected to satisfy the basic
function. The concept describes the method being considered, or elected, to achieve the basic function(s). The
concept can represent either the current conditions (as is) or proposed approach (to be). As a general rule, it is
best to create a "to be" rather than an "as is" FAST Model, even if the assignment is to improve an existing
product. This approach will give the product development team members an opportunity to compare the "ideal"
to the "current" and help resolve how to implement the differences. Working from an "as is" model will restrict
the team's attention to incremental improvement opportunities. An "as is" model is useful for tracing the
symptoms of a problem to its root cause, and exploring ways to resolve the problem, because of the dependent
relationship of functions that form the FAST model.
Any function on the HOW-WHY logic path is a logic path function. If the functions along the WHY direction
lead into the basic function(s), than they are located on the major logic path. If the WHY path does not lead
directly to the basic function, it is a minor logic path. Changing a function on the major logic path will alter or
destroy the way the basic function is performed. Changing a function on a minor logic path will disturb an
independent (supporting) function that enhances the basic function. Supporting functions are usually secondary
and exist to achieve the performance levels specified in the objectives or specifications of the basic functions or
because a particular approach was chosen to implement the basic function(s).
Independent functions describe an enhancement or control of a function located on the logic path. They do not
depend on another function or method selected to perform that function. Independent functions are located above
the logic path function(s), and are considered secondary, with respect to the scope, nature, level of the problem,
and its logic path. An example of a FAST Diagram for a pencil is shown below.
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In other words, the concept of decomposition is applied to a FAST model. The initial FAST model will stay at a
high level of abstraction. Starting at a higher level of abstraction allows for uncluttered macro analysis of the
overall problem until those key functions can be found, isolated, and the key issues identified. If a function is
identified for further study, we note that with a "^" below the function box. A supporting FAST diagram is then
created for that subsystem function. This process of decomposition or moving to lower levels of abstraction
could be carried down several levels if appropriate.
Once high cost to value mechanisms is identified in the initial system value analysis matrix, the next step is to
focus more attention on those mechanisms and associated functions. Dimensioning groups the functions together
into those associated with a particular subsystem, assembly or part. The FAST diagram can be expanded into a
lower level of abstraction in the area under investigation. The steps involved are as follows:
1. Use QFD to translate higher-level customer needs to subsystem technical characteristics.
2. Create FAST diagram at lower level of abstraction for targeted mechanism/subsystem.
3. Prepare a FAST diagram & develop the product concept in conjunction with the QFD concept selection
matrix
4. Dimension the system in the FAST diagram into assemblies/parts or identify the assemblies/parts needed
to perform the given function.
5. Develop value analysis matrix at a lower level of abstraction for the targeted subsystem. The "what's" or
system requirements/function in the value analysis matrix are derived from either a customer (vs.
technical) FAST diagram or by selecting those function statements that correspond to the customer
needs or technical characteristics in the subsystem planning matrix.
6. Complete the value analysis matrix and identify high cost to value mechanisms by comparing the
mechanism target costs to the mechanism estimated/actual costs
The QFD Concept Selection Matrix is a powerful tool to evaluate various concept and design
alternatives based on a set of weighted criteria that ultimately tie back to customer needs.
Benchmarking competitors and other similar products helps to see new ways functions can be
performed and breaks down some of the not-invented-here paradigms.
Product cost and life cycle cost models support the estimating of cost for the Function-Cost
and Value Analysis Matrices and aid in the evaluation of various product concepts.
Technology evaluation is leads us to new ways that basic functions can be performed in a
better or less costly way. Concept development should involve people with a knowledge of new
technology development and an open mind to identify how this technology might relate to
product functions that need to be performed. Methods such as the theory of inventive problem
solving or TRIZ are useful in this regard.
Design for Manufacturability/Assembly principles provide guidance on how to better design
components and assemblies that are more manufacturable and, as a result, are lower in cost.
Value Analysis or Function Analysis provide the methods to identify the problem and to begin to define the
functions that need to be performed. As we proceed in developing a FAST model, implicit in this process is
developing a concept of operation for the product which is represented by all of the lower order functions in a
FAST diagram.
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Concept alternatives will be developed through brainstorming, benchmarking other products performing similar
functions, and surveying and applying new technology. Since multiple concepts need to be evaluated, we want to
use a higher level of abstraction for the FAST model to provide us with the greatest flexibility and a minimum
level of effort. Trade studies and technical analysis will be performed to evaluate various product concepts. A
concept selection matrix is a good tool to summarize a variety of different data and support making a decision
about the preferred concept.
All of these steps may be iterative as a preferred concept evolves and gets more fully developed. In addition,
there should be a thorough evaluation of whether all functions are needed or if there is a different way of
accomplishing a function as the concept is developed to a lower level of abstraction. When a Function Cost or
Value Analysis Matrix is prepared, functions that are out of balance with their worth are identified, further
challenging the team to explore different approaches.
SUMMARY
Value analysis and its more robust cousin, Function Analysis System Technique, are important analysis tools.
These methodologies lead to improved product designs and lower costs by:
Providing a method of communication within a product development team and achieving team
consensus
Facilitating flexibility in thinking and exploring multiple concepts
Focusing on essential functions to fulfill product requirements
Identifying high cost functions to explore improvements
References
1. ^ Value Methodology Standard
2. ^ Text of Law Requiring Value Engineering in Executive Agencies
3. ^
The
Value
Methodology
Standard.
SAVE
International.
http://www.valueeng.org/catalog_monographs.php.
4. ^ SAVE International - Value Engineering, Value Analysis, Value Management and Value
Methodology
Further reading
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"Value Optimization for Project and Performance Management by Robert B. Stewart, CVSLife, FSAVE, PMP"
External links
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