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It can be conducted both internally and externally. The concept took shape during the Second World War. The thinking process calls for a deep study of a product the purpose for which it is used, the raw materials used, the processes of transformation,the equipment needed etc. and question whether what is being used is the most appropriate and economical. This applies to all aspects of the product. For example, let us consider a component needs a round brass rod as raw material in size 21.5 mm. Diameter. It has seven operations cutting, drilling, chamfering boring. milling, plating and polishing. Value analysis considers all aspects of each of these and investigates whether any of them can substituted by another material, a different size, a different tool, a different machine, a different cot sequence, a different tool for an operation, a different chemical, a different concentration, a different voltage, shorter time or processing. Studies can be conducted to verify whether any operation can be eliminated. Simplification of processes reduces the cost of manufacture. Every piece of material and the process should add value to the product so as to render the best performance. Thus there is an opportunity at every stage of the manufacturing and delivery process to find alternatives which will increase the functionality or reduce cost in terms of material, process and time. It should be remembered that we are not seeking a cost reduction sacrificing quality. It has been found that there will be an improvement in quality when systematic value engineering principles are employed.
Relevance of VE in modern manufacturing Modern manufacturing can be seen from two important perspectives. One is the management approach which consists of TQM, JIT, Kanban, concurrent engineering, Lean Manufacturing, TPM, Group Technology, Cellular Manufacturing and others. These have basic philosophies based on which techniques, tools and methodologies are developed. To aid the process, we have computers and softwares written to collect data, process them, distribute them and analyse them. We have Management Information Systems which help in decision making. Optimisation at every level looks into the aspects of cost and benefit. Modern machines like automatic machines, Special Purpose Machines, Robots are built to high produce highly accurate components at greatly reduced costs. New materials and processes have resulted in great advances in the variety of products available to large numbers of people. With globalisation procurement and distribution are being conducted over great distances. The main thrust is on quality, timely delivery at the least price. These are the values that we put in the product.Value Analysis looks at the manufacturing activities with a view to make the components simpler, processes faster and the products better. Since huge investments on the machines, it is mandatory that every component/part used is made as economically as possible. Fabrication, erection and installation being costly and have long term implications, assessment of utility of the materials used and processes adopted is important. In the manufacturing activities power drives many machine elements with respect to one another to obtain the transformation on the materials that result in becoming parts. Using machines with appropriate capabilities in terms of power, voltage, distances moved, lifting and placing them all provide opportunities for value analysis.