Improving Profits through Value Engineering

Value Engineering is all about analyzing the function of various systems, equipment, facilities, services, etc. to see if they are achieving each of their objectives at the lowest possible life-cycle cost, while also meeting the standard requirements of reliability, quality, safety, and performance. Value Engineering is also considered an effective problem-solving technique that makes use of function analysis, team work, and creativity for the purpose of improving the value of a product, service, or process. Value Engineering is therefore not just about ‘good engineering’, because cost-reduction is not the only aim of Value Engineering projects. It goes much beyond cost-reduction to identify areas where there is a possibility of improving quality in order to increase the value of a product, service, or process. Although initially Value Engineering was applied only in the manufacturing sector, because of the unmatched benefits that it offers, it is now being applied in all sectors including economic, government, construction, service, agriculture, education, and healthcare. Applying Value Engineering would entail certain costs. However, these costs are justified by the potential savings that result from the Value Engineering project itself. Hence it is important to first identify an area where there is a recognized need for change and a distinct opportunity to gain financial benefit. This is essential to warrant the cost of the Value Engineering project. This can help maximize profits and improve value for customers as well as the business. Moreover, the methodology used in Industrial Engineering is a powerful tool that can help resolve system failures and design performance improvements for any given process, product, or service in an organization. Applying Value Engineering can result in significant improvements to the quality and reliability of functions, and can fix problems in those areas that contribute most to system failures. This is done through specialized techniques such as root-cause analysis, where the root causes of a problem are identified and addressed, so that their recurrence can be prevented. Value Engineering projects can prove highly profitable by bringing about several advantages including cost reduction, increase in overall production, and elimination of redundancy. Organizations are therefore trying to integrate this technique with their prevailing engineering tools and operation models to bring about substantial margin improvements. Organizations are now able to achieve millions of dollars of cost savings by applying Value Engineering techniques such as Six Sigma, Lean manufacturing etc. Therefore, with the right tools, adequate technical knowhow, and expertise, organizations in all sectors can benefit greatly by applying Value Engineering. Check out - Aerospace Engineering