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Value Engineering Job Plan

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Agenda

What is Value Engineering Job Plan

Comparison of Job plans of various Value

Engineering Authorities

Components of VE Job Plan

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VE Job Plan

1. Orientation Phase

2. Information Phase

3. Function Phase

4. Creative Phase

5. Evaluation Phase

6. Recommendation Phase

7. Implementation Phase

8. Audit Phase

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Comparison of Job Plans by Different Experts

Phases Experts

Miles Mudge Fallon Dell ’Isol

1 Selection

2 Information Information Information Information

3 Analysis Function Analysis

4 Creativity Creative Creative Speculative

5 Judgement Evaluation Evaluation Analytical

6 Development Investigation

7 Recommendation Presentation Proposal

8 Implementation

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Comparison of Job Plans by Different Experts

Phases

Experts / Associations

General Service

Administration SAVE INVEST

1 Orientation Orientation Orientation

2 Information Information Information

3 Function Function Function

4 Creative Creative Creative

5 Judicial Evaluation Evaluation

6 Development

7 Proposal Recommendation Recommendation

8 Implementation Implementation Implementation

9 Follow-up Audit

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Orientation Phase

This phase lays stress on three aspects:

Training

Selection of an appropriate teams

Selection of projects

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Orientation Phase - Training

Tentative Training Schedule

Level Duration Course Coverage

Top Management Half Day Concept, applications and

benefit through case studies

Senior Management One Day Concept, applications plus

implementation strategies

Middle Management Five Days Concept, application through

Live Case Studies

Supervisors One Day Awareness programes

through a number of case

studies

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Orientation Phase – Selection Of Team

Team Members • From different departments • Having knowledge & expertise of

the VE project

Team Leader • Fairly senior person • Departmental head where project

originated

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Orientation Phase - Project Selection

I. Based on Problems

High Rejection

Low Material Yield

High Warranty Claim

High Rectification

High Throughput time

High Wastages

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Orientation Phase - Project Selection

II. Based on Design

Tight Tolerance specified

Use of Non-Standard Item

Special Types of Material Used

Too many components in the Assembly

Heavy Weight

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Orientation Phase - Project Selection

III. Based on Time Factor:

Design developed long back

Product developed within short time

Product developed on Customer request

Tools to be Used: ABC Analysis

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INPUT– PROCESS -- OUTPUT

INPUT Management Resort to Value Engineering

PROCESS

Orientation Phase

OUTPUT Selection of Project Team Formation

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Information Phase

First, review the type of information needed: Physical information

Methods and Use information

Performance information

Criteria, or other restrictions

Cost and quantity

The objective is to answer the following two questions:

What is it?

What does it cost

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Information Phase

Second, review the resources :

Project files

Contracts

Criteria, handbooks, codes

Experience data – test reports, etc.

Commercial data – catalogues, literatures

Historical data – libraries etc.

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Information Phase

Third, ask questions

Plan your questions

Select the appropriate time

Understand the answers

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Information Phase

Forth, determine how much information is enough

Gather more information than you feel required

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Information Phase

Fifth, other thoughts on information gathering

Get information from the same sources to facilitate comparison

“Cost” information composed of many arbitrary factors.

The “accuracy” of cost information relatively less important

Important is how cost figure is derived.

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INPUT– PROCESS -- OUTPUT

INPUT Selection of Project

PROCESS

Information Phase

OUTPUT Full information about Project

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Function Phase

Four Basic Questions:

What Does it do?

What Must it do?

What does it Cost now?

What Must it Cost?

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Function Phase

Activities performed in this phase:

Identify and classify functions

Consider how it is being used, why someone wants it.

Prepare FAST Diagram?

Determine required function, desired function

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Function Phase

Activities performed in this phase:

Allocate cost to function

Determine function worth

Calculate value indices

Select high cost/poor value areas for study

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Function Phase

In analyzing cost-worth relationship consider:

Cost elements

Cost per kg.

Cost per dimension

Cost per “property parameter”

Review for redundant functions

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INPUT– PROCESS -- OUTPUT

INPUT Full information about Project

PROCESS

Function Phase

OUTPUT Identify Functions on Critical Path High Value Gap Funtions

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Creative Phase

This Phase answer the question: What else will do the job? Consists of: Divergent Thinking Convergent Thinking

Techniques to be Used: Brainstorming Gordon Technique Morphological Analysis Feasibility Ranking of ideas

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Creative Phase

Yoshihiko Sato & Jerry Kaufman present the following data on the % of VA/VE ideas generated during the five steps:-

(Source:- “Value analysis Tear-Down by

Yoshihiko Sato & Jerry Kaufman )

Steps % Contribution

Select Competitors

Product

5

Disassembly 30

Analysis 40

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Creative Phase

Yoshihiko Sato & Jerry Kaufman present the following data on the % of VA/VE ideas generated during the five steps:-

(Source:- “Value analysis Tear-Down by

Yoshihiko Sato & Jerry Kaufman )

Steps % Contribution

Display 10

Examination 15

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INPUT– PROCESS -- OUTPUT

INPUT Identify Functions on Critical Path High Value Gap Functions

PROCESS

Creative Phase

OUTPUT At least Two Alternative Proposals

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Evaluation Phase

The process consists of:

Parameters of Evaluation

Weightages of Parameters

Evaluate Alternatives for Decision Making

Cost Benefit Analysis

Tools to be Used: Brainstorming

Weightages Evaluation

Evaluation Matrix

Life Cycle Cost

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INPUT– PROCESS -- OUTPUT

INPUT At least Two Alternative Proposals

PROCESS

Evaluation Phase

OUTPUT Value Engineering Change Proposal

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Recommendation Phase

VE Team should:

Finalise based on Evaluation Matrix & Cost Benefit Analysis

Prepare for Verbal / Written Presentation to Decision makers

Arthur Mudge’s Advice:

Use of language should be as per the profile of the Decision Maker Engineering – Performance / Product life & meeting the

customer specifications

Manufacturing – Build to Drawing / On time delivery / Low scrap

Purchasing – Meeting the specifications or On time Delivery

Management – Return on Sales / ROI / Debt Ratio / Return on Equity / Investment to sales

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INPUT– PROCESS -- OUTPUT

INPUT Value Engineering Change Proposal

PROCESS

Recommendation Phase

OUTPUT Oral Presentation Written Presentation Final Acceptance

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Implementation Phase

Decision makers’ requirement:

Testing in Test rigs

Destructive testing

Live Testing

Follow-Up Implementation Plan (Indicative format):

Sl

No

Recommendation Action to

be Taken

Person /

Agency

Completion

Date

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INPUT– PROCESS -- OUTPUT

INPUT Final Acceptation

PROCESS

Implementation Phase

OUTPUT Implemented, Part of the System

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Audit Phase

Operational Audit

Financial Audit

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INPUT– PROCESS -- OUTPUT

INPUT Implemented, Part of the System

PROCESS

Audit Phase

OUTPUT Included in Profit and Loss Account

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Learning Checklist

What is Value Engineering Job Plan

Comparison of Job plans of various Value

Engineering Authorities

Components of VE Job Plan

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Thank You