Value Engineering is not a program but a process. It is a systematic method used to improve the "value" of the goods or the products and services through examination of the function. Value can be defined as the ratio of the function to the cost. The value can be increased by either improving the function or by reducing the cost. It is an on-going use of the methodology by the cross functional teams so that they can achieve the organisational objectives.
Value Engineering is sometimes considered as the technique in which the value of the system's output can be optimised by crafting a mix of the performance and cost. In most of the cases, the practice recognises and removes the unwanted expenditures. So, the value of the manufacturer and the customer can be increased.
The Value Engineering follows a structured thought process which is based on the "function". In value engineering, the "functions" are always described as one which consists of the active verb and the measurable noun and has to be done in the most non-prescriptive way possible. The value engineering uses the rational logic and also the analysis of the function to recognise the relationships which increase the value.
Value Engineering consists of four activities which are:
- Recognising the function of the product service.
- Establishing the worth for the function.
- Generating alternatives through the use of creative thinking.
- Providing the necessary function to accomplish the original purpose of the project at the lowest life cycle cost without sacrificing the safety, necessary quality and environmental attributes of the project
Value Engineering (VE) is also known as the "Value Management" or the "Value Methodology" (VM) and "Value Analysis" (VA). VE is the structured problem solving process which is based on the function analysis.
Value Engineering is done by systematically following a multi stage job plan. The father of Value engineering Larry Mile's original system is the six step procedure which is called the "Value Analysis Job Plan". There may be four, five, six or more stages depending on the application. In Value Analysis, it begins from Implementation as the first step. Let us now understand the different stages of this modern version, which has the following eight steps:
1. Preparation: The value analysis begins with a preparation of the list of all possible areas where the results should direct to.
2. Information: In this step we collect the available information of VA job plan completely. The information that is collected includes what the job plan is, what it does and the cost associated for the execution. The system identifies the roadblocks that might happen when we start the implementation.
3. Analysis: In this step, we identify functions, the required performance and the cost that need to be allocated to achieve it. The Analysis stage also identifies the value mismatches, in the function, performance and the costs.
4. Creation: During this step, typically, the alternative ways to meet the requirements are assessed and the actions to circumvent the roadblocks and the mismatches are analysed. This is done by brainstorming as many ideas as possible to accomplish each of the mismatches.
5. Evaluation: This step involves a step where we find out whether it would work according to expectation. Each of the idea that has been brainstormed is checked out for technical feasibility, the associated cost implications and the customer acceptance.
6. Development: During this step, proposals are developed with sketches for the ideas. Based on the surviving ideas, the estimated costs and strategies to implement the same are detailed.
7. Presentation: In this step, the proposals are presented to the project decision makers. Their approval is sought.
8. Follow-up: In this step the approvals and the changes proposed by decision-makers are incorporated into the project.
9. Presentation: In this final stage, the best alternative can be chosen and presented to the client for their final decisions.