International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056

Volume: 06 Issue: 04 | Apr 2019 www.irjet.net p-ISSN: 2395-0072

Overview of Value Engineering and Value Analysis

Charudatta Ahire1, Tanmay Chaudhari2, Prabhu Kanjoor3, Aviraj Chavan4, Shital Patel5
1,2,3,4 Students, Department
of Mechanical Engineering, Bharati Vidyapeeth College of Engineering,
Navi Mumbai, India
5Guide, Professor, Department of Mechanical Engineering, Bharati Vidyapeeth College of Engineering,
Navi Mumbai, India

---------------------------------------------------------------------***---------------------------------------------------------------------
Abstract - Though the two terms are used synonymously improvements and alternatives to improve the value of the
and philosophy underlying is same unnecessary cost product, particular to the customer.
elimination, there is a difference between the two. The
difference lies in time and the phase of product life-cycle at 2. ORIGINS OF VALUE ENGINEERING
which the technique is applied.
Value Analysis is applied to the existing product with a view to The technique of value engineering gained considerable
improve its value. It is analysis after the fact and it is a momentum during the Second World War. During the year
remedial procedure. Value engineering is applied to the design 1947, Lawrence Miles, who was working for the American
stage and thus ensures prevention rather than elimination. General Electric Company (GEC) became increasingly aware
of the limitations of traditional cost reduction techniques. As
Key Words: Value Engineering, Value analysis
a design engineer involved in cost reduction activities, was
able to distinguish between what is good value and bad value
1. INTRODUCTION and realized that very few people had a real grasp of good
and bad value. He established that this is because of
1.1 Value Engineering altogether a different approach. He evolved a set of tests that
could be applied to any product either projected or being
Value Engineering (VE) is concerned with new products. currently produced. Then he persuaded the management to
It is applied during product development. The focus is on
try this technique which was already subjected to cost
reducing costs, improving function or both, by way of
teamwork-based product evaluation and analysis. This takes reduction exercises many times. The result was encouraging
place before any capital is invested in tooling, plant or and soon the G. E. Company started using this to their
equipment. Value engineering should be considered a crucial products.
activity late on in the product development process and is The technique soon spread to other American companies
certainly a wise commercial investment, with regard to the and later to Europe. It is now generally accepted by
time it takes. It is strongly recommended you build value management as a powerful tool to ensure that unnecessary
engineering into your new product development process, to
costs are not built into their products. The principle behind
make it more robust and for sound commercial reasons.
value analysis is that it is a functionally oriented method for
1.2 Value Analysis improving product value by relating the various elements of
product worth to their corresponding elements of cost. Thus
Value Analysis (VA) is concerned with existing products. value analysis allows the required functions to be performed
It involves a current product being analyzed and evaluated at the minimum cost. To apply principles of value analysis
by a team, to reduce costs, improve product function or both. effectively it is recommended that a systematic and rigorous
Value Analysis exercises use a plan which step-by-step,
approach is to be followed to ensure that no steps are
methodically evaluates the product in a range of areas. These
include costs, function, alternative components and design omitted. Value engineering is a team approach. A team of
aspects such as ease of manufacture and assembly. A people drawn from various specialist areas is found to be the
significant part of VA is a technique called Functional best way to handle V. E. projects. The participating team
Analysis, where the product is broken down and reviewed members are drawn from design, purchase, production,
as a number of assemblies. Here, the function is identified accounts and marketing coordinated by an engineer
and defined for each product assembly. Costs are also belonging to any one of the above departments.
assigned to each one. This is assisted by designing and
viewing products as assemblies (or modules). As with
VE, VA is a group activity that involves brainstorming

© 2018, IRJET | Impact Factor value: 7.211 | ISO 9001:2008 Certified Journal | Page 1245
 International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056
Volume: 06 Issue: 04 | Apr 2019 www.irjet.net p-ISSN: 2395-0072

3. USES OF VALUE ENGINEERING 6. BENEFITS OF VALUE ANALYSIS

1. It is a cost prevention as well as cost elimination Value analysis is a methodical approach to sharpening the
technique thus reducing cost of the product. efficiency and effectiveness of any process. Often, businesses
2. Helps employees for better understanding of their jobs apply it to the processes used in product creation or service
and oriented then towards creative thinking. delivery. Paramount to the value analysis is the practice of
breaking down a process into each individual component
3. Balance the cost and performance.
and considering ways to improve that component's value as
4. Prevents over design of components. measured by cost and importance to the process. General
5. Motivates employees to come out with creative ideas. Electric developed value analysis during the late 1940s.
6. Increases the profits and deflates costs.
7. Helps to satisfy the customer with company's products.  Eliminating Costs
A critical advantage to using value analysis is its potential
for reducing costs, which is a benefit that permeates all
advantages of the system. Because value analysis breaks
4. STEPS IN VALUE ANALYSIS down a product or service into components, it enables you to
analyze each component on its own, evaluating its
importance and efficiency. A value analysis correctly
implemented and applied allows you to identify components
that are not worth the cost they require and that can be
eliminated or replaced with an alternative. In this manner,
the process for the product or service being analyzed is
refined to be done at less expense.

 Modernizing
The value analysis process often allows users to root out
practices that have grown out of date and can be replaced
with more modern approaches. This is particularly beneficial
when something has been done the same way for an
extended period of time. Because the old way works and was
new when it was instituted, you have had little impetus to
Figure -1: Steps in Value Analysis make changes. However, a value analysis, which calls for
questioning every step of a process, can reveal new methods
that are cheaper, more efficient and sometimes more
5. WHEN TO APPLY VALUE ANALYSIS effective.

One can expect very good results from application of value  Design Flaws
analysis at the proper time and correct phase of product. Value analysis can uncover design flaws that not only
Life cycle. V. E. should be applied in case of the following operate inefficiently but also create problems. In the case of
a product, this could mean a high rate of malfunctioning
indications:
items, creating customer complaints and warranty claims
that put a strain on personnel and inventory. It also can lead
1. Company's products are losing in the market and to bad publicity and damage to the product brand and the
there is a decline in sales. company producing it. Similarly, in the case of a service,
2. Company's products are priced higher than the value analysis can help pinpoint design flaws in the customer
competitors. support system that causes service to fall short of customer
expectations.
3. New design of products being undertaken.
4. Symptoms of disproportionate increase in cost of
 Customer Service
production. Value analysis is oriented to weigh costs and the benefit to
5. Decreasing profitability and return on investment. customers of a product or service. It forces you to consider
6. Company failing to meet its delivery commitment. every aspect of a process in the context of how it serves the
customer, which could be a consumer or another business.
This means that each step in the process is scrutinized and
questioned from the perspective of the benefit that it
provides the customer. If the benefit to the customer is small
and the step is not necessary for the product or service as a
© 2018, IRJET | Impact Factor value: 7.211 | ISO 9001:2008 Certified Journal | Page 1246
 International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056
Volume: 06 Issue: 04 | Apr 2019 www.irjet.net p-ISSN: 2395-0072

whole, it can be eliminated, allowing you to streamline your [5] Industrial Engineering and Production Management by
operation and to reduce the use of resources. Martand Telsang.

7. TEN COMMANDMENTS OF VALUE ANALYSIS BIOGRAPHIES

1. Do not use a component or part that does not Charudatta Ahire is an aspiring
contribute to the value of the product. 1’st Mechanical Engineer, currently
2. Do not use a component or part whose cost is not Author studying in Bharati Vidyapeeth
Photo College of Engineering. His areas of
proportional to its usefulness.
interest are Machine design and
3. Do not provide any features to the component or Industrial Engineering.
finished product that are not absolutely necessary.
4. Accept the change if part of the required quality can
be made out of cheaper and easily available material. Tanmay Chaudhari is pursuing
5. If the part of required quality is made by a process or 2nd Mechanical Engineering from
method costing less, then do use the alternative Author Bharati Vidyapeeth College of
Photo Engineering. His areas of interests
process or method.
are Automobiles and Design of
6. Use standard parts wherever possible. Machines.
7. Use proper tooling and manufacturing methods taking
into consideration the quantities,
8. The cost of the component used should be Prabhu Kanjoor is in final year of
3rd Mechanical Engineering in Bharati
proportional to its use or function.
Author Vidyapeeth College of Engineering.
9. Use the material, part best suited for the purpose.
Photo His strengths are Bussiness
10. Purchase the part instead of manufacturing in house, Management and Mathematics.
if suitable supplier can provide the part of good
quality at the reasonable price.

Aviraj Chavan is a final year

4th Mechanical Engineering student of
8. CONCLUSIONS
Author Bharati Vidyapeeth College of
In conclusion, the completion of a functional analysis Photo Engineering. His areas of interest
exercise will result in a cost-effective design and will are Operations research and
ultimately result in an improved competitive advantage. Theory of Machines.
Value Engineering and Value Analysis is the systematic
application of recognized techniques by a multi-disciplined
team which identifies the function of a product or services;
establishes a worth for that function; generates alternatives
through the use of creative thinking; and provides the
needed functions to accomplish the original intent of the
project, reliably and at the lowest life-cycle without
sacrificing project requirements for safety, quality,
operations, maintenance and environment.

REFERENCES

[1] http://www.businessdictionary.com/definition/value-
analysis.html
[2] https://en.wikipedia.org/wiki/Value_engineering
[3] http://www.advice-manufacturing.com/Value-
Analysis.html
[4] https://smallbusiness.chron.com/benefits-value-
analysis-41686.html

© 2018, IRJET | Impact Factor value: 7.211 | ISO 9001:2008 Certified Journal | Page 1247