Value Engineering – A Tool for Improvement...

Value Engineering – A Tool for Improvement Value engineering (VE) is a management technique that seeks the best functional balance between cost, reliability and performance of a product, project, process, system or service. It is a function oriented, systematic team approach and method to improve the ‘value’ of product, project, process, system or service by using an examination of function. Value, as defined, is the ratio of function to cost. Value can therefore be increased by either improving the function or reducing the cost. It is a primary tenet of value engineering that basic functions be preserved and not be reduced as a consequence of pursuing value improvements. Often, the value improvement is focused on cost reduction; however other important areas such as customer perceived quality and performance are also of paramount importance in the value equation. History of value engineering Value engineering was conceived at General Electric Company in early 1940s. At that time due to the World War II, there were shortages of skilled labour, raw materials, and component parts. To overcome theses shortages, Lawrence Miles, Jerry Leftow, and Harry Erlicher at G.E. looked for acceptable substitutes. They noticed that these substitutions often reduced costs, improved the product, or both. What started out as an accident of necessity was turned into a systematic process. This technique was named as ‘Value Analysis’.  Besides value analysis, value engineering is also sometimes known as value management and value methodology. The job plan A value engineering study generally encompasses three stages. Stage 1 consists of preparation. During stage 2, multi phase job plan is carried out. Stage 3 consists of documentation, implementation and audits. Value engineering is usually done by systematically following a multi stage job plan which is known as ‘value analysis job plan’.  The job plan is carried...