value-engineering

name	value-engineering
description	Value engineering (VE) — function analysis (FAST diagram, primary/secondary/basic functions), value index V = F/C, 40 inventive principles (TRIZ), job plan phases (information, function analysis, creative, evaluation, development, presentation), Pareto analysis for cost reduction targets, tear-down analysis, should-cost modeling, design-to-cost (DTC), value stream mapping, and aerospace/automotive/construction VE applications.
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Value Engineering (VE) — Complete Skill

Value Engineering Fundamentals

Definition and Value Concept

Value Engineering (VE): systematic method to improve the value of products and services by examining function relative to cost Originated: Lawrence Miles, GE, 1947 (originally "Value Analysis" for purchased materials)

Value definition: V = F / C [Value = Function delivered / Cost of providing it; maximize V] Where Function = performance the customer actually needs; Cost = total lifecycle cost (not just purchase)

Types of value: Use value: functions or services enabling product to work Esteem value: properties making product desirable (aesthetics, prestige) Exchange value: money or other goods for which product can be traded Cost value: sum of labor, material, overhead to produce

Value equation: V ↑ can be achieved by: increasing F with same C; maintaining F while reducing C; increasing F faster than C; or reducing C faster than F decreases

Common Value Problems ("Unnecessary Costs")

Value mismatches to find: Over-engineering: more performance than needed (tolerance too tight, grade too high, factor of safety too large) Under-function identification: functions the customer doesn't value but pays for Wrong process: expensive process when cheaper achieves same function Lack of standardization: custom parts where standard would work Poor supplier leverage: single-source when alternatives exist Over-specification: military-spec tolerances on commercial products

FAST Diagram (Function Analysis System Technique)

Construction

FAST diagram: logical map of functions organized by how/why questions Left-to-right: "How is function achieved?" → lower-level functions Right-to-left: "Why is this function performed?" → higher-level functions

Function categories: Basic function: primary reason product exists; cannot be eliminated without destroying product purpose Secondary function: supports basic function; potentially eliminable or replaceable Aesthetic function: improves appeal; customer may or may not value

FAST template: Higher-order function ← Basic function ← [How?] Supporting functions ← [How?] Detailed functions

Example: FAST for a bolted joint: Why? → Maintain assembly [higher-order] Basic function: Transfer load; Prevent separation Secondary: Align components; Distribute load; Resist corrosion; Provide access Aesthetic: Improve appearance (chrome plating)

Function verbalization rule: two-word function: Active verb + Measurable noun Good: "Transfer force"; "Seal fluid"; "Conduct electricity"; "Provide stiffness" Bad: "Bolt assembly" (noun + noun); "Strong" (not a function)

VE Job Plan (SAVE International 6-Phase)

Phase 1: Information

Objective: understand product, function, cost breakdown, customer requirements Activities:

• Obtain cost model: material, labor, overhead by component
• Determine function of each component: complete function analysis worksheet
• Identify "worth" (minimum cost to provide function): estimate from first principles
• Calculate value index = worth / cost; low VI = high VE potential

Should-cost model: Estimate what a component should cost based on materials + direct labor + standard overhead Compare to actual cost: difference = potential VE savings Example: Sheet metal bracket actual cost = $4.20; should-cost = $1.80; gap = $2.40/unit → VE target

Pareto analysis: Plot components by cost: top 20% of components typically represent 80% of cost → focus VE on these Also: plot by function gap (VI < 0.5) → functionally poor value deserves attention

Phase 2: Function Analysis

Complete function analysis for all components: Component → Function → Classification (Basic/Secondary) → Cost → Worth → Value Index

Component	Function	Type	Cost [$]	Worth [$]	VI
Housing	Enclose mechanism	Secondary	8.50	3.20	0.38
Shaft	Transmit torque	Basic	2.10	1.80	0.86
Bearing	Support rotation	Basic	4.20	3.50	0.83
Cover	Protect components	Secondary	5.10	0.80	0.16

→ Cover (VI = 0.16) and Housing (VI = 0.38) are priority VE targets

Phase 3: Creative (Idea Generation)

Brainstorming rules: no criticism during idea generation; quantity over quality; build on ideas TRIZ (Theory of Inventive Problem Solving) — 40 Inventive Principles:

Key principles relevant to mechanical engineering:

1. Segmentation: divide into independent parts; make interchangeable; increase fragmentation
2. Taking out (Extraction): extract only necessary part
3. Local quality: non-homogeneous structure/function; different conditions per zone
4. Asymmetry: use asymmetry instead of symmetry if not fully symmetric
5. Merging: bring objects/operations closer in space or time; combine parallel parts
6. Universality: multi-function object eliminates need for others
7. Nesting: place one object inside another
8. Counterweight: compensate for weight or force with another
9. Preliminary action: carry out required changes in advance; pre-arrange for convenient action
10. Spheroidality-curvature: use curves, spheres, rotations
11. Dynamism: make characteristics adaptable; divide into moving parts; increase flexibility
12. Convert harm into benefit: use harmful factors to positive effects
13. Cheap short-living: replace expensive durable object with cheaper short-life collection
14. Mechanics substitution: replace mechanical means with optical, acoustic, thermal, olfactory
15. Parameter changes: change state, concentration, flexibility, temperature

Contradiction matrix (TRIZ): identify technical contradiction (improving X worsens Y) → look up matrix cell → suggests inventive principles

Phase 4: Evaluation

Weighted criteria matrix: List evaluation criteria: function achievement, cost, weight, manufacturability, reliability, risk Assign weights (sum = 100%): cost 30%, function 25%, reliability 20%, weight 15%, risk 10% Score each VE idea against each criterion (1–10) Weighted score = Σ (weight × score) Select ideas with highest weighted score and within risk tolerance

Rough-order-of-magnitude (ROM) cost estimate for top ideas: Material cost + labor cost estimate from process analysis Cross-check: should-cost model for proposed alternative design

Phase 5: Development

Detailed engineering analysis of top VE alternatives: FEA/CFD analysis to verify function not compromised Tolerancing review: ensure manufacturing is achievable at lower cost Supplier identification: alternative materials, processes, vendors Risk assessment: technical risk, schedule risk, supplier risk

Value Change Analysis: Savings: unit cost reduction × annual volume × product life Investment: engineering, tooling, qualification testing Payback = Investment / Annual savings; target < 12 months for manufacturing VE

Phase 6: Presentation

VE report contents: Executive summary: total savings potential [$]; implementation priority Function model (FAST): with cost overlaid Top VE ideas (10–20): function preserved, cost reduced, implementation risk Implementation plan: phasing, resource requirements, ownership, timing Lifecycle cost comparison: current vs. proposed (not just unit cost)

Design-to-Cost (DTC)

Design-to-cost (DoD/aerospace): set cost as design constraint equal to performance Cost target set from: competitive price, should-cost model, market analysis DTC process:

1. Establish total program target cost (life cycle or unit production)
2. Allocate to subsystems/components
3. Track cost during design vs. allocated target (cost estimating relationships, CERs)
4. VE/trade studies when actual exceeds target
5. Cost tracking integrated with design reviews (PDR, CDR)

Should-cost modeling: Material cost = weight × $/kg for each material Labor cost = operation time × rate Overhead = labor × factor Profit = (material + labor + overhead) × margin Compare to vendor quote → identify discrepancy for negotiation or VE

Value Stream Mapping (Manufacturing VE)

VSM: map current-state process from customer order to delivery Identify: value-added steps (customer pays for); non-value-added (waste) 7 wastes (TIMWOOD): Transportation, Inventory, Motion, Waiting, Overprocessing, Overproduction, Defects Future-state map: eliminate waste; reduce lead time; continuous flow

Lead time ratio: VAT/total lead time; benchmark: 5–25% typical; target > 50% with lean

Standards and References

Standard/Reference	Scope
SAVE International	VE methodology; Value Methodology Standard 2015
SAE AS9100D	Quality management in aerospace (VE integration)
DOD 5000.4-M	Cost analysis guidance (DTC)
Altschuller "Creativity as an Exact Science"	TRIZ foundation
Miles "Techniques of Value Analysis and Engineering"	Original VE reference

Output

Provide: product/system description (product; annual volume; current unit cost [$]; key functions served; customer value drivers), cost breakdown (Pareto of cost by component/subassembly; top 5 cost drivers [$ and %]; identify VI < 0.5 targets), FAST function analysis (key functions; basic vs. secondary classification; component-function-cost matrix; VI for each), VE target identification (components with VI < 0.5; should-cost gap [$]; total opportunity [$ × annual volume]), creative ideas (5–10 VE ideas per target component: alternative material/process/geometry/supplier; how function is preserved), evaluation (weighted score matrix; top 3 ideas advancing to development), development (estimated cost of top idea [$]; FEA/testing needed; tooling investment [$]; qualification risk; payback period [months]), lifecycle comparison (current lifecycle cost vs. proposed [$]; sensitivity to volume), implementation roadmap (phase 1/2/3 changes; who owns each; estimated completion; expected savings per year), and applicable reference (SAVE International standard; Miles for methodology; TRIZ principles for idea generation).