Value Analysis and Value

Engineering

Presentation By:-
Dilip Pathak
Vaishak Pillai
Taiba Sheikh
Meghna Manohar
Swapnil Jumbad
 Value Engineering
• Introduction: Value engineering began at General
Electric Co. during World War II. Because of the war,
there were shortages of skilled labour, raw materials,
and component parts.
• Lawrence Miles, Jerry Leftow, and Harry Erlicher at
G.E. looked for acceptable substitutes. They noticed
that these substitutions often reduced costs,
improved product, or both.
• What started out as an accident of necessity was
turned into a systematic process. They called their
technique “value analysis”.
 Concept
• Value engineering is also referred to as "value
management" or "value methodology" (VM), and "value
analysis" (VA).
• VE is above all a structured problem solving process based
on function analysis.
• For understanding it can be described in two words, the
active verb and measurable noun abridgement.
• For example, the function of a pencil is to "make marks".
This then facilitates considering what else can make
marks. From a spray can, lipstick, a diamond on glass to a
stick in the sand, one can then clearly decide upon which
alternative solution is most appropriate.
 The Job Plan
• Value engineering is often done by systematically
following a multi-stage job plan. Larry Miles' original
system was a six-step procedure which he called the
"value analysis job plan." Others have varied the job plan
to fit their constraints.
• One modern version has the following eight steps:
1. Preparation
2. Information gathering
3. Analysis
4. Creation
5. Evaluation
 The Job Plan Contd.
6. Development
7. Presentation
8. Follow up
Four basic steps in the job plan are:
• Information gathering - This asks what the requirements
are for the object. Function analysis, an important
technique in value engineering, is usually done in this initial
stage. It tries to determine what functions or performance
characteristics are important. It asks questions like; What
does the object do? What must it do? What should it do?
What could it do? What must it not do?
 The Job Plan Contd.
• Alternative generation (creation) - In this stage value
engineers ask; What are the various alternative ways of
meeting requirements? What else will perform the desired
function?
• Evaluation - In this stage all the alternatives are assessed
by evaluating how well they meet the required functions
and how great will the cost savings be.
• Presentation - In the final stage, the best alternative will be
chosen and presented to the client for final decision.
Methodology Of Value Engineering
 Value Analysis
MANUFACTURING: Systematic analysis that identifies and
selects the best value alternatives for designs, materials,
processes, and systems. It proceeds by repeatedly asking
"can the cost of this item or step be reduced or eliminated,
without diminishing the effectiveness, required quality, or
customer satisfaction?" its objectives are
1. To distinguish between the incurred costs (actual use of
resources) and the costs inherent(locked in) in a
particular design (and which determine the incurring
costs)
2. To minimize the locked-in costs
 Value Analysis Contd…
• PURCHASING: Examination of each procurement item to
ascertain its total cost of acquisition, maintenance, and
usage over its useful life and, wherever feasible, to replace
it with a more cost effective substitute. Also called value-in-
use analysis.
• WHEN TO APPLY VALUE ANALYSIS:
 New designs are being introduced.
 Cost of raw material is increasing disproportionately to
the volume of production.
 The firm is unable to meet delivery promises.
 Complaints from the customers regarding performance of
the product.
 DIFFERENT TASKS THAT ARE UNDERTAKEN
BY VALUE ENGINEER:
Preparing And Administering Maintenance Programs.
1. Forecasting Expenditure Flows.
2. Advising On Cost Limits And Preparing Budgets.
3. Advising On Cash Flow Forecasting.
4. Advising On Life Cycle Costing.
5. Cost Analysis
6. Cost benefit analysis
7. Estimating
8. Evaluating Alternative Designs.
9. Undertaking Feasibility Studies.
 BENEFITS OF VALUE Analysis And VALUE
Engineering
• Cost Optimization: Value Analysis (VA) or Value Engineering
(VE) is measuring its results by measuring Value being the
end result of doing something functionally correct for the
least cost.
• A better understanding of needs and the functions
necessary to meet those needs
• A better definition of program or project objectives
• A better definition of quality and performance standards
• Reduced wastage of resources
• Capital funds savings
• Improved operational efficiencies
 Case Study : Value Analysis for Mumbai
Local Train
Introduction : The Mumbai Suburban Railway is a suburban
rail system serving the Mumbai Metropolitan Region. It has
the highest passenger density of any urban railway system in
the world. If annual ridership (2.64 billion) is taken into
account, the Suburban rail would be the second busiest rapid
transit system in the world.
• Over 4,500 passengers are packed into a 9-car rake during
peak hours.
• This has resulted in what is known as Super-Dense Crush
Load of 14 to 16 standing passengers per square meter of
floor space. Trains on the suburban line are on average
more than 4 minutes apart, contributing to the problem of
overcrowding.
 Case Study : Value Analysis for Mumbai
Local Train Continued…..
• On an average, 3,700 people die annually on the Mumbai
Suburban Rail network.
• In order to increase safety of the local train commuters and
reduce cost of the trains, present case study on railway
handles is undertaken.
• Orientation phase: The problems & potentials, which can
be well understood by the survey conducted on it. This
phase is known as an Orientation phase in the language of
Value engg. All other phases or steps involved in the
analysis are explained one after other in this text.
• 1. “My first finger skin got cut in the handle and the rod
junction, when I tried to hold the rod.” Mr. Rakesh Tripathi.
 Case Study : Value Analysis for Mumbai
Local Train Continued…..
• 2. “I don't get chance to get in 9:15 Kalyan- CST local at
Mumbra because people hold the handles & don’t move
in.” Mr. Usama Ansari.
• 3. “People irritate me by making noise with the handles.”
Mr. Shramik Bawkar.
• 4. “When compartment is empty handles only talk” Mrs.
Vani.B
• These are the problems encountered by the four
individuals, which are documented.
• In order to start the value analysis, Handle assembly is
studied for its need and different functions of each
components of the assembly.
 Case Study : Value Analysis for Mumbai
Local Train Continued…..
• Functional matrix of the same is prepared which is shown
in Table I.
Table 1
Component Verb Noun Type

Clip Fasten Handle & Rod B

Allow Bolt S

Brush Avoid Contact B

Distribute Pressure on S
the rod
Nut & Bolt Fasten Clip & Handle B

Have Shear S
strength
Withstand Repeated S
 Case Study : Value Analysis for Mumbai
Local Train Continued…..
• Secondary functions can be modified or eliminated to
reduce product cost.
• INFORMATION PHASE: information regarding the value
engineering project is gathered by the value engineering
team. I.e. the handle assembly’s validity is 240 per car &
2880 for a 12 car train, they are attached on the rod at an
interval of one foot and the cost of the handle is Rs105
(Approx.)
• CREATIVE PHASE: Theme of this phase is, “Which are the
other alternatives for the same functions” of the handle
assembly. Many ideas are generated and discussed in the
brain storming session.
 Case Study : Value Analysis for Mumbai
Local Train Continued…..
BRAIN STORMING SESSION: In this session every member of
the committee is encouraged to generate ideas and weirdest
ideas are also encouraged. Many ideas are generated and
top five ideas are listed below
1.Use leather handles which are presently used in BEST
(Mumbai’s local road transport) buses.
2. Use plastic handles (Bakelite) which can be used for
publicity purpose also
3.Use one screw for one restrictor plate.
4. Make the handle straight (eliminate curvature)
5. Eliminate handle assembly and lower the rod, on which
handles are mounted.
 Case Study : Value Analysis for Mumbai
Local Train Continued…..
• After the Brain storming technique, the Function Cost
worth analysis matrix is prepared.
• Ideas after brain storming session were given and finalized.
• EVALUATION PHASE: In this phase four different parameters
are considered for evaluating the two proposals (Idea 2 &
Idea 5) with the existing one. The parameters are a) Rigidity
b) Light weight c) accessibility d) Appearance.
• RECOMMENDATION PHASE: With the handle less
arrangement in a local train its weight will get reduced by
2,304 kg per rake and 44,0064 kg /191 rakes & this much of
material got saved, that means no need to manufacture
this much material.
 Case Study : Value Analysis for Mumbai
Local Train Continued…..
• Hence, less pollution. Costs of one handle is Rs. 105
(approx.) and for one rake Rs. 3, 02400/ 12 cars and Rs. 5,
77, 58,400/ 191 rakes. With this amount two 12 car trains
can be bought. As handles are eliminated passengers
wouldn’t block the passages and passengers falling ratio
from the trains will get reduced. There is one limitation of
this arrangement that rods are generally made of stainless
steel and are smooth. When passenger holds rods, hands
may slip. Therefore, checkered plate arrangement can be
provided on the rod which will give grip to passengers.