Value Engineering as a Leverage in Cost Competitiveness - A Case Study

Value Engineering as a Leverage in Cost Competitiveness - A Case Study


Abstract 

The Value Analysis Method can identify both ways to decrease manufacturing cost and technical modification to a product based on both the manufacturer's viewpoint (an engineering approach) and the customer's perspective (a marketing approach). Based on a thorough examination of a product's existing cost, the technique allows for the study of options for lowering production costs. The purpose of this article is to look at how to use the Value Analysis Method in the manufacture of electrical motors, with a focus on flameproof motors. The authors classified flameproof motor functions into four categories: (a) strongly undervalued functions, (b) strongly overvalued functions, (c) somewhat under/overvalued functions, and (d) proportionally valued functions (by the manufacturer).
As a result, data on manufacturing costs is given by a local (Romanian) manufacturer. It investigates the method's potential for developing solutions to improve the efficiency and efficacy of the motors under consideration.


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Introduction

When engineer Lawrence Delos Miles altered the product's strategy from breaking down the product into its component components to identifying the functions that the product must fulfil, the Value Analysis Method was born.

As a result, he substituted "What materials should I buy?" with "What functionalities do I need to buy?" . As a consequence, Lawrence Delos Miles created a systematic technique for product functional analysis in 1947 in order to decrease product manufacturing costs by removing expenses that do not add to the product's operation/value. The technique was dubbed "value analysis" by him.

The concepts of Value Analysis, when implemented, include a review of the product from the user's perspective of the external environment. This method identifies ways to decrease the product's cost by combining the manufacturer's (technical problems) and the end user's (marketing issues) points of view. Furthermore, Value Analysis may be used to evaluate the quality and technological level of goods, as well as for competitive analysis.


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Conclusion

The Value Analysis Method provides for the evaluation of cost-cutting opportunities based on a thorough examination of a product's existing cost. The paper's primary contribution is the development of a Value Analysis technique for the area of electrical machines. The manufacturer's Value Analysis programme for the two flameproof motors showed four types of product functions: strong undervalued functions, strong overvalued functions, somewhat under/overvalued functions, and proportionally valued functions. The findings may be applied to the whole category of flameproof motors.


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