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VALUE ANALYSIS

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VALUE ANALYSIS Value Analysis is a step approach to

identified the function of a product, process,

system or service; to establish a monetaryvalue for that function and then provide the

desired function at an overall minimum cost

without affecting any of the existing parameters like Quality, Maintainability,

Productivity, Safely and other performance

characteristics.

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k  Value analysis is a disciplined approach that

ensures necessary functions for minimum cost

without determinant to quality, reliability, performance and appearance.

Value analysis is one major technique of costreduction. It is team approach and members of 

the team are drawn from different functionalareas.

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Value analysis can not degrade or cheapen the

 product quality but improves its value by

reducing cost. The elimination of (unnecessary) cost causes no adverse effect on

quality, reliability, maintainability or sales

ability of the product.

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ADVANTAGES/IMPORTANCE OF VALUE

ANALYSIS

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Importance Value analysis helps the employees to better 

understand their jobs.

Value analysis reduces the cost of the product.

Value analysis create cost consciousness

among the operating personnel of the essential

functions.

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Value analysis generates new concepts and

idea for the R &D work.

Value analysis motivates employees to comeforward with innovative ideas.

Value analysis provides good training for the

future managers of a company.

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Procedure of value analysis

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1. What is the item?

2. What does it do?

3. What does it cost?

4. What else would do the job?

5. What would the alternative cost be?

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Answer of these questions, basic steps

are necessary1) Identified the function- any useful product

has some primary function which must be

identified, a bulb to give light, a refrigerator to preserve food, etc. these two must be

identified.

2) Evolution of the function by comparison-value being a relative term, the comparison

approach must be used to evaluate functions.

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VALUE ENGINEERING

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Value engineering Value engineering is usually done by design

engineers. Value Engineering can be definedas ³ an intensive appraisal of all the elements

of design, manufacture, inspection, procurement, installation and maintenance of a product and its components, including theapplicable specifications and operationalrequirements in order to achieve the necessary performance , reliability and maintainabilityof a product at minimum cost.´

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Elements of Value Engineeringa) Product selection

 b) Analysis and determination of functions.

c) Collection of information concerning

 production such as relating to the present

cost, quality, reliability, development, history

etc.d) Development of alternatives.

e) Cost- analysis of alternatives.

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f.) Testing of the alternatives.

g.) Proposal submission.

h) Follow- upi.) implementation phase

value engineering is where the value of all the

components used in the construction of a product from design to final delivery stage are

completely analyzed and pursued.

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Just- in- time Manufacturing

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JIT Just-in-time (JIT) is an integrated set of 

activities designed to achieve high-volume

 production using minimal inventories of rawmaterials, work in progress, and finished

goods. Parts arrive at a workstation just when

they are required and move through the

operation quickly. JIT works on a pull system.

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JIT Just in time is to produced and deliver 

finished goods just in time to be sold, make

sub- assemblies just in time to be assembledinto finished goods, fabricate/ purchase parts

 just in time to go into sub-assemblies and

 procure raw materials just in time to be

transformed into fabricated parts.

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JIT though cuts down drastically the

inventory at different stages yet it is not just away to reduce inventory rather it is a means of 

solving problems that block the building of an

excellent manufacturing organization. JIT in

fact is a complete business philosophy and the

 process of thinking, working and managing to

eliminate waste.

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Waste is µanything other than the minimum

amount of equipment, materials, parts andworkers (working time) which are absolutely

essential for production.¶

Waste has been categorized into seven types:

Waste from overproduction

Waste of time (waiting)

Transportation waste

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Inventory waste

Processing waste

Waste of motion

Waste from product defects

The seven elements to eliminate waste are:

Focused factories

Group technology

Quality at the source

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JIT production

Uniform plant loading Kanban production control system

Minimized set up times

JIT is an inventory strategy implemented toimprove the return on investment of a business by reducing in process inventory andits associated costs. The process is driven by a

series of signals, which can be kanban, thattell production processes when to make thenext part.

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Kanban are usually µtickets¶ but can be simple

visual signals, such as the presence or absenceof a part on a shelf. Quick communication of 

the consumption of old stock which triggers

new stock to be ordered is key to JIT and

inventory reduction. This saves warehouse

space and costs.

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Advantages of JITo Reduced inventories of raw materials,

 purchased parts, work in progress and

finished goods.o Lower per unit cost due to reduced cycle time

and lower inventories.

o Greater administrative efficiency due to lesser number of suppliers, simplified receiving

activities.

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Disadvantages of JITo The organization is highly open to supply

failures.

o Suppliers may raise their prices to cover for cost of delivery, small production runs,

inventory costs of stocks to be used by them

etc.