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Lecture 06 Value Engineering Concepts

Value engineering began during World War II when substitutes with equal or better performance were found at lower costs. It was later systematized by Lawrence D. Miles and the Society of American Value Engineers was established in 1959. Value engineering is defined as an organized study of functions to satisfy user needs with a quality product at the lowest life cycle cost through applied creativity. It aims to achieve the desired function at the lowest overall cost without compromising quality, performance, or efficiency. Value engineering can be applied to construction projects, manufactured products, business systems, services, and more to help achieve improved design quality and cost savings.

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82 views13 pages

Lecture 06 Value Engineering Concepts

Value engineering began during World War II when substitutes with equal or better performance were found at lower costs. It was later systematized by Lawrence D. Miles and the Society of American Value Engineers was established in 1959. Value engineering is defined as an organized study of functions to satisfy user needs with a quality product at the lowest life cycle cost through applied creativity. It aims to achieve the desired function at the lowest overall cost without compromising quality, performance, or efficiency. Value engineering can be applied to construction projects, manufactured products, business systems, services, and more to help achieve improved design quality and cost savings.

Uploaded by

Vimal Gupta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Lesson 06

Value Engineering Concepts

Dr. Inderdeep Singh


Department of Mechanical and Industrial Engineering

1
History
• Shortage of materials during World War II
• General Electric company found that many of the substitutes
have better or equal performance at less cost. Lawrence D.Miles
• Lawrence D. Miles launched an effort to make the concept 1904 - 1985

systematic

• Establishment of Society of American Value Engineers “SAVE”


in 1959
What is not Value Engineering?
• Cost Cutting
• Design Review
• Project Elimination
• Scope Reduction
• Quality Reduction
• Detailed Cost Estimating
• Redesign
What is Value Engineering
An organized study of FUNCTIONS to satisfy the
USER’S NEEDS with a QUALITY PRODUCT at the
LOWEST LIFE CYCLE COST through APPLIED
CREATIVITY
Definition of Value Engineering
• An analysis of materials, processes, and products in which
functions are related to cost and from which a selection may
be made so as to achieve the desired function at the lowest
overall cost consistent with performance.

• An Organized, Creative, Cost Search Technique for Analysing


the Function of a Product with the purpose of Value
Enhancement without Compromising with it’s Quality,
Performance & Efficiency.
Definition of Value Engineering

• The value of a function is defined as the


relationship of cost to performance
Performancemax
Valuemax =
Costmin
Reasons for Poor Value…
• Lack of and/or poor coordination among designers

• Failure to network with customer – poor definition of needs and wants

• Design based on habitual thinking or mistaken beliefs

• Outdated or inappropriate design standards

• Incorrect assumptions based on poor information

• Fixation with previous design concepts


When to apply Value Engineering

The Design team has


the greatest impact
on the cost savings

8
The Value Engineering cycle
The Value Engineering Cycle

Source:-http://www.t.itcinfotech.com/Engineering-Services/Value-Engineering
9
Application areas
• Construction projects

• Manufactured products

Source:- http://www.cpmscheduling.com/construction-projects
10
Application areas
• Business systems and processes

• Service organizations

Source:-http://www.posgroup.com.au/business-process

11
Advantages of Value Engineering
• Helps in achieving an improved product design and quality.

• Suggests to eliminate the unnecessary functions in the organization that


increase costs.

• Emphasizes on seeking the alternatives for achieving the function and


on applying the best alternative among the various courses of actions
available.

• Enhances the customers' satisfaction and sales by determining the exact


need and expectation of customers.
12
Thank
You

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