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Page 2 L. D. Miles

Step I
P r e c i s e l y what a r e the functions required from the system o r a s s e m b l y ?

Under what conditions of life, vibration, corrosive environment, weight,

noise, shock, p r e s s u r e , and so on, must each function and each supporting
function be performed?

What departures f r o m o r improvements upon past performance a r e d e s i r e d ?

What other performance factors ?

Step I1
P r e c i s e l y what over -all cost i s r e q u i r e d ?

What maximum installation cost ? operation cost ? maintenance cost ?

and other costs ?

Step I11
The designer p r e p a r e s to reject approaches which do not meet these cost
factors a s quickly a s he will those which do not meet the performance and
reliability factors.

With the advent of the special "search" and rejection" techniques of

the value engineering technology, a high o r d e r of results is being secured
through the use of the "cost - f i r s t t f approach.

The designer i s faced at the beginning stage with an entire field of choice- -
choice which will govern how t i m e and r e s o u r c e s will be committed in the
design p r o c e s s . Prompt rejection of approaches is vital. P r o p e r choice of
design approach o r direction may mandate either succesr, o r failure of the
product, o r system, o r enterprise.

My young son, while studying h i s geography and while further being f a s -

cinated by the space developments, pictured himself a s standing n e a r the
North Pole and was discussing what he would s e e each hour a s he looked
in the direction of the sun. I asked him how long it would take him to go
around the world i f he were standing near the North Pole. I was pleased
at hi s answer that it would depend upon which direction he went. If he chose
east it would be a few feet. If he chose south it would be 25,000 miles.

I was somehow struck by the analogy between this situation and that which
exists when we, a s designers, choose the approach which we will take to
accomplish the functions required of a system o r an assembly. Expanding a
. .
little on what he s a i d - -it was . depending upon the direction chosen, the dis -
tance around the earth would be somewhere between 25 ft. and 25,000 miles.
Similarly, depending upon the approach taken at the inception of the system
or assembly design project, the result may readily vary by a factor of 3 / 1
reliability-wise, 5 / 1 cost -wise, and 2 / 1 time-wise.
' Page 3 L. D. Miles

What i s the designer, in making choice of t h e system approach and the assembly
and product approach- -which so heavily govern the end r e s u l t s of the design
p r o c e s s - -to use f o r c r i t e r i a ?

EVALUATE THE F U N CTION IN DO LLARS

A significant contribution in establishing p r o p e r cost objectives, in developing

proper confidence in t h e m , and i n achieving them is provided by t h e p r o c e s s
of "evaluation of a function" i n d o l l a r s which is a contribution of the new tech- .
nology of value engineering.

In this p r o c e s s , when each function and each subfunction h a s been c l e a r l y

understood, it i s assigned a value in d o l l a r s on the p r e m i s e that "the value of
a 'function in d o l l a r s , i s the lowest cost which would reliably product i t . I '

T echnique s of value engineering provide p r o c e d u r e s for accomplishing this.

In this p r o c e s s , the function o r group of functions to be evaluated a r e brought

into a value system where meaningful cost comparisons a r e made. After one
set of alternatives stands out a s being t h e lowest over -all cost which could be
made t o reliably provide all of the functions and which would m e e t the c o s t
objectiveg it becomes the b a s i s for the "value of the function i n dollars1'. The
cost of this alternative i s , at l e a s t p r o - t e m , considered t o be the value of the
function in d o l l a r s . In a mament we will show how this drastically reduces
the exploration and decision a r e a i n the design logic causing the work, t i m e , and
money t o be spent in solving t h e problems of the alternatives which will have
t h e lowe st c o s t , most rimplicity, and best reliability. However, f i r s t an
example of evaluating 8 function will f u r t h e r clarify.

U S E THIS FUNCTION VALUE

The function of basoline tanks for Navy landing c r a f t is t o reliably contain

200 gallons of gasoline. The noncombat l i f e is aight y e a r s . T h e thinking
.
p r o c e s s to evaluate this function i s . .

. . . what i s the appropriate cost for housing 200 gallons of gasoline ?

. . . usefour 50-gallon standard d r u m s $25
. . . useone standard 250-gallon oil tank made for
domestic use $3 0

However, some environmental t r e a t m e n t and perhaps some e x t r a

connections would be required. T h e r e f o r e , add. . . . .. . . . . . .
. $25

. . . t o a r r i v e at a tentative $50 evaluation on the gasoline-containing function.

.
As a r e s u l t of applying t h e technique h e r e . . $80 gasoline containers w e r e
adopted to replace t h e $520 special alloy tank previously designed and used
in the absence of t h i s technique. Because a t this time t h e mechanism of evalu-
ating the function proceeded before other decisions w e r e made, the saving to the
taxpayers on the 1000 tanks was $440,000. . . t h e difference between $520,000
and $80,000.
h

Page 4 L. D. M i l e s

C o n s i d e r now the h o u r s of design t i m e used on t h e p r e v i o u s p r o c u r e m e n t

in s e l e c t i n g costly n o n - c o r r o s i v e m a t e r i a l , designing i r r e g u l a r s h a p e s whlch
would be welded t o g e t h e r , specifying welding methods, s t a n d a r d s , t e s t s , e t c . ,
only t o a r r i v e a t a " p e r f o r m a n c e t 1d e s i g n costing $520. None of t h i s " p e r f o r - #

m a n c e f i r s t 1 ' e x p e n s e , o r u s e of t i m e , a s s i s t e d i n t h e p r o c e s s i l l u s t r a t e d which,
by placing "cost" f i r s t , provided t h e function f o r $80.

CONCENTRATE RESOURCES

C h o i c e s a r e few, r e s o u r c e s and t i m e will not be s c a t t e r e d . T h e blueprint

f o r s t a r t of s u c c e s s f u l solution i s a t hand.

T o t h e d e s i g n e r m o r e skilled in meeting h a r d p e r f o r m a n c e o b j e c t i v e s than

h a r d cconomlc o b j e c t i v e s , it a p p e a r s t h a t t h e design job h a s been made infinitely
m o r e difficult by the elimination of h i g h - c o s t p e r f o r m a n c e - p r o d u c i n g a l t e r n a t ~ v e s
In p r a c t i c e , h o w e v e r , a wide r a n g e of significant benefits h a v e a l r e a d y been
brought into t h e design p r o j e c t :

1 . T h e p r o b l e m h a s now been r e d u c e d t o one containing only one unknown;

that i s , r e l i a b l e p e r f o r m a n c e of t h e r e q u i r e d functions. Any solution within
t h l s f r a m e w o r k will m e e t the r e q u i r e d c o s t .

2 . T h e whole field which would f o r m e r l y r e q u i r e .study a n d s e l e c t i o n h a s

been reduced t o one -fifth s o t h a t in far l e s s t i m e , thorough s t u d i e s may be
made within t h i s useful f r a m e w o r k .

3 . Since t h e s e a r e a p p r o a c h e s f o r accomplishing t h e functions a t low c o s t ,

the c o n s t r u c t i o n s and p r o c e s s e s and a r r a n g e m e n t s a r e f o r c e d t o be e s s e n t i a l l y
s i m p l e , producing g r e a t e r r e l i a b i l i t y . T h e opportunity t o u s e highly complex
s u b s y s t e m s , a s s e m b l i e s , and p r o c e d u r e s i s , by t h e n a t u r e of t h e solution
l o g i c , denied t o t h e d e s i g n e r .

4 . I n t e n s e p r o b l e m - s o l v i n g technique will be c o n c e n t r a t e d i n t h e few "per -

f o r m a n c e and r e l i a b i l i t y g a p s . " E x p e r i e n c e shows t h a t t h i s c o n c e n t r a t i o n d o e s
produce s d u t i o n s which bring with t h e m s i m p l i c i t y , e f f e c t i v e n e s s and r e l i a b i l i t y .
An e x a m p l e will i l l u s t r a t e .

QUALIT P R O V'ED

In a recent s p e c i a l p r o g r a m , twenty-four a s s e m b l i e s w e r e studied. Twenty-one

had excellent quality while t h r e e did not h a v e t h e quality d e s i r e d . F o r t h e
twcnty-one, functions w e r e studied and evaluated. T h e p e r f o r m a n c e and quality
of a l l w e r e kept, but enough b e t t e r solutions t o specific d e s i g n p r o b l e m s involved
in t h e l o w e r c o s t b r a c k e t s w e r e developed t o r e d u c e manufacturing c o s t s i n
all by significant p e r c e n t a g e s .

T h e t h r e e quality p r o b l e m s w e r e handled somewhat differently. Objectives

w e r e developed t o "hold c o s t a t the s a m e level" but e l i m i n a t e t h e p r o b l e m s .
T h e m e n on t h e t h r e e a s s e m b l i e s u s e d c o s t f i r s t , evaluated t h e function, and
d e t e r m i n e d t h a t , even l o w e r - c o s t o b j e c t i v e s , w e r e applicable t o t h e i t e m s .
Page 5 L. D. Miles

" P e r f o r m a n c e gaps" w e r e fir s t illuminated, then eliminated. T h e changes

brought a c c u r a c y , quality, simplicity, and lower c'ost. Annual manufacturing
cost of each of the t h r e e w a s l o w e r e d by five f i g u r e s .

Low c o s t and high quality a r e often p a r a l l e l s . Low coet m e a n s accomplishing '

the functions the s i m p l e , r e l i a b l e , effective way. High quality m e a n s a c c o m -

plishing t h e functions t h e s i m p l e , r e l i a b l e , effective way.

N E W TOOLS F O R DESIGNER

I t must b e borne i n mind that i n o r d e r t o design t o low c o s t and high reliability,

the d e s i g n e r m u s t believe that t h e objectives a r e attainable. T h e basic s t e p s ,
--
job plan, and special techniques of value engineering provide t o him opportunity
--
to develop that a s s u r a n c e and guide h i m i n doing i t .

T h i s n e c e s s a r y a s s i s t a n c e c o m e s i n four types. 1

1. Identifying, classifying and evaluating functions: 1

"Any product o r s e r v i c e h a s one o r m o r e p r i m e ' u s e ' functions which
can usually be d e s c r i b e d in a two-word definition--such as, provide light,
communicate intelligence, t r a n s m i t t o r q u e ; 'secondary' functions --such as
r e s i s t shock, allow a c c e s s , o p e r a t e quietly; and ' e s t e e m ' functions -such as. -
provide a t t r a c t i v e n e s s . Value, being a relative m e a s u r e , the c o m p a r i s o n
approach must be used i n evaluating functions- -it t h e r e is no c o m p a r i s o n , t h e r e
is no evaluation."

2. Identifying and dealing with roadblocks: 1

"Rules and g e n e r a l i t i e s stop p r o g r e s s as fog stops t r a f f i c . Although
t h c r e i s not n e c e s s a r i l y any tangible obstruction i n a fog, i t is dense and un-
manageable and constitutes a n effective stopper, because t h e r e is no a s s u r a n c e
that the fog shrouds no p r o b l e m s . Attack each 'generality'. "

3. I
Providing s e a r c h -oriented as d i f f e r i n g f r o m knowledge -oriented techniques:
"The technique of finding, utilizing and paying f o r v e n d o r s ' s k i l l s and
knowledge yields a n exceptionally high r e t u r n . Only a relatively small amount
of t h e total special knowledge bearing on any technology e x i s t s i n any one place
at any one t i m e . F o r s e v e r a l r e a s o n s , d e s i g n e r s too often d o not u s e i t . They
don't know i t e x i s t s . T h e y don't know w h e r e it is. They a r e u n s u r e of r e s u l t s
b e f o r e s t a r t i n g the s e a r c h , t h e r e f o r e , s e t t l e f o r a known though m o r e costly
solution. ' I

4. Providing "quick rejection" techniques t o minimize t h e u n n e c e s s a r y u s e

of r e s o u r c e s on unsuitable solutions: 1
" F o r n e a r l y e v e r y function a n d for n e a r l y e v e r y manufacturing situ-
ation, t h e r e exist many a l t e r n a t i v e solutions, all of which will accomplish t h e
- - - - - - - - - - - - - I - . - . - . - - - - - - - - - - -

l ~ a r t i a quotation
l f r o m "Techniques of Value Analysis and Engineering, "
McGraw -Hill Book Company, New York, New York, 1 9 6 1 .
 a'
C Page 6 L. D. Miles

purpose. P r o p e r selection depends upon meaningful c o s t s . How is the business

really affected ? Without meaningful c o s t , decisions cannot be made to provide
good value. "

In the p r o c e s s of providing i d e a s , knowledge, and approaches in these performance

g a p s , the engineer will find t h e s e a r c h s y s t e m s and quick rejection systems
of the value analysis and engineering techniques of g r e a t value.

SUMMARY OF PROCEDURE

1. Secure c l e a r l y defined performance needs.

2. S e c u r e definite cost needs.

3. . Intensely study a l l functions and sub-functions both as t o the r e s u l t s to

be accomplished and the conditions under which they must be accomplished.

4. Evaluate functions and subfunctions in d o l l a r s . Bring enough effective -

n e s s into this t a s k t o achieve an evaluation equal t o o r below the cost objective.

5. Use function evaluation t o eliminate concepts and approaches which cannot

be used. Commit r e s o u r c e s t o the remaining alternatives.

6 . Identify the a r e a s i n the, remaining system where l a c k of knowledge o r

lack of suitable i d e a s produce what we have called a "performance gap. "

7. Pinpoint sufficient r e s o u r c e s on t h e s e gaps t o bring forth effective solutions.

CONCLUSION

Much h a s changed.

In Europe t h e r e e x i s t s a v a s t growing, unfilled m a r k e t , for e v e r y type of con-

s u m e r goods used in t h i s country. European families a r e buying them. Their
standard of living is on the rise-fast. A s consumer goods a r e purchased,
producer goods a r e required.

T h e volume of products available t o the designer and producer who will l e a r n

how to handle cost f a c t o r s with top skill is exceedingly high.

The t a s k f o r the designer h a s changed. H i s approach is changing. When h i s

task was 90 percent dealing with performance capability and 10 percent dealing
with cost capability, it w a s certainly t h e c o r r e c t approach to design f i r s t for
p e r f o r m a n c e , then utilize any remaining t i m e and other r e s o u r c e s available to
improve cost f a c t o r s . A8 t h i s h a s changed progressively t o 88-20, 70-30, 60-40,
and now 50 percent performance capability and 50 percent cost capability, and
a s new tools have become available in t h e Value Analysis and Engineering System,
the r e v e r s a l of the design approach is often producing better quality, lower cost
products and s y s t e m s in s h o r t e r t i m e a t lower design cost.
Age 7 L. D. M i l e s

T h e mechanism 3f evaluating functions, then using this evaluation to screen

#
design approaches, first forces vigorous creative search, then narrows choices
to a practical successful minimum. It, thus, is--another potent tool to assist
the engineer to win in the competitive race.