Professional Documents
Culture Documents
Webinar on
LEAN Design with Value Engineering
Presented by
Jim Wixson CMfgE, CVS-Life
CEO Wixson Value Associates, Inc
Jim has been a featured speaker and author of several papers and articles
for SME, INCOSE, PMI, ASQ, SAVE International, Partners in Business,
Business,
Shingo Prize Operational Excellence Conference and the Systems
Dynamics Society.
2
Lean Design with
Value Engineering
Jim Wixson, CVS-Life, CMfgE-Life
President, Wixson Value Associates, Inc.
jrwixson@wvasolutions.com
(208) 520-2296
http://wvasolutions.com
Agenda
I. What is Lean Design?
II. How does Value Engineering (VE) facilitate
creative Lean Design?
III. Value of VE. Why use it?
IV. What is Function Analysis and FAST?
V. The benefits of functional thinking.
VI. The VE Job Plan & How it Relates to Lean
Design.
VII. How DFM/A and 3P work with the VE
methodology.
VIII. Questions and Answers
Identify Satisfy
Marketing Engineering Production
opportunity need
1947 1952 1955 1959 1962 1964 1969 1985 1988 1990 1993 Today
1970
VE a success, SAVE Army OMB
training of formed in Corps of First VE
OMB circular A-
employees and Wash. DC Engineers incentive
circular A- 131 passes
suppliers on Oct.22, begins VE clause
131 Sunset
begins 1959 training published in
published Review
Fed.
Register, requiring all
Boeing VE
GSA staffs Federal
Program Agencies to
for VE.
stopped -
use VE to
1968
identify and
reduce non-
essential
costs. 16
5/21/2009 Wixson Value Associates Inc.
FEDERAL DEPARTMENT OR AGENCY
DOLLARS SAVED BY VALUE ENGINEERING -- FY
95
Agency FY-95 VE Savings
Defense Department $734,385,000.00
Department of Transportation $686,373,874.00
General Services Administration $109,608,453.00
Army Corps of Engineers $59,554,000.00
Department of the Interior $22,427,840.00
Department of Agriculture $8,764,155.00
Justice Department $5,990,387.00
Veterans Affairs $2,270,800.00
Health & Human Services $1,884,464.00
Agency for International Development $800,000.00
State Department $91,721.00
TOTAL $1,632,150,694.00
http://www.fhwa.dot.gov/ve/index.cfm
Overhead
30%
Labor
Material
15%
Design 50%
5% Product Cost
5/21/2009 Wixson Value Associates Inc. 20
When to do Value Engineering?
Percent of Life-Cycle
100
Cost Committed
90
95
80 85
Percent
70
70
60
50
40
30
30 Percent of Program
20 Cost Expended
Brief Window of Opportunity
10
5
0
Re-Test/Re-qualification
Drawings Released Tooling Changes
VE Implementation
beyond this point
results in a net loss.
Engineering
&Production
Concept Design Production
Release
INFORMATION OR EXPERIENCE
COMMON TO ALL
Support Support
Support Support
DEVELOP
IMPLEMENT
PRESENT
PHASE
VERIFY
Generalized,
INVESTIGATE
SPECULATE
EVALUATE
vague
ANALYZE
SEARCH
SELECT
concepts or
problems
t
Di g en VM meets customer
v er g needs by providing
Th erge v
n in the best value solution
ink nt
ing Co hink for the entire value stream
T
Detailed
CONCEPT PRODUCTION Design &
REQUIREMENTS/
DEVELOPMENT PREPARATION Implementation
OBJECTIVES/
FUNCTIONS
A series of divergent and convergent thought processes that provide a logical path to achieving a solution.
5/21/2009 Wixson Value Associates Inc. 29
Study Job Plan
Study
Information Phase
Data Collection & Analysis
Issues
Requirements
System models
Creative Phase
Pre-Study Create Quantity of Ideas by Function
Select Project Evaluation Phase
Define Problem/Opportunity Rank and Rate Alternative Ideas Post-study
Establish Goals/Constraints Select Ideas for Development
Determine Evaluation Metrics Validate Changes
Scope the Study Commit changes
Development Phase
Determine Team Implement Changes
Conduct Benefit Analysis
Study Preparation Plan Monitor Status
Complete Technical Data Package
Create Implementation Plan
Prepare Final Proposals
Presentation Phase
Present Oral Report
Obtain Commitments for Implementation
Event Preparation
Collect data
Event Logistics
COST
PROFIT
alue
Concerns/Expectations alue
Management
Displaying Attributes alue
Scaling Attributes
Management Management
A. Recurring Cost
H. Additional Imposed B. ROLT Attributes should be scaleable, rather than binary.
Requirements Cost
Identify opportunities to shrink lead time from product introduction
Attributes 1 2 3 4 5 6 7 8 9 10
Remove installation problems
Surface supplier/contractor issues to drive down costs, lower A. Recurring Cost ($) +.4K Today * -1.5K -4.5K -6.9K
rejection rates that impact contractor quality impacts G. All Rejects C. Flow Time
16*
B. Re-order Lead Time 33wks 4
Determine how contractor requirements impact the suppliers
Win/win/win for contractor , supplier and Airlines C. Flow Time (mdays) 30* 15 3 1 0
Gain a better perspective of the supplier F. Reliability D. Implementation Time D. Implementation Time 18 mo 6 4 2*
Reduce rejection tags Score 408
PRODUCT Bleed Ducts E. Non-Recurring Exp. 20% 30% 50% *
Reduce the flow time in the engineering & mfg. sides of the house Target 650 E. NRE
Continue to meet certification requirements Attribute Cost ROLT Flow Time Impl NRE Reli abili ty Rejects Rqmts Total F. Reliability
A Weighting Factor 22 14 12 15 2 15 20 100
System that does degrade over time - a robust system B Available Points 220 140 120 150 20 150 200 1000 G. All Rejects 5% 3% .003% 0
Get the best product at the best price C Baseline Score (1-10) 3 5 1 10 10 6 *
D Baseline Score (Weighte d) 66 70 12 150 20 0 90 0 408
Have good feelings about the contractual process with supplier E De lta (B - D) 154 70 108 0 0 0 60 200 592 H. Add. Reqmts Cost *-15% -34%
F Proposal Score (1-10)
See VE be used throughout company - Expand VE opportunities G Proposal Score (Weighte d) 0 0 0 0 0 0 0 0 0 * Product Benchmark
H De lta (B - G) 220 140 120 150 20 0 150 200 1000
J. J. Kaufman Assoc, Inc.
PROFIT
PROFIT
PROFIT
COST
COST
COST
What is the problem (or opportunity) we are about to resolve? Attributes are prioritized and graded using a Paired Comparison processes.
The cost/price of the part does not the allow supplier to make an adequate profit
margin, contractor to meet product price objectives, and an acceptable cost - of-
B C D E F G H I J Attribute Score Weight
ownership for the airlines.
A A1 C1 A3 A2 0 G2 A3 A. Recurring Cost 9 22%
Why do you consider this a problem (or opportunity) ?
Producibility and design improvements will allow for less expensive parts. PRE- B B2 B2 B1
C C3 C1
0 G2 H3
0 G1 H3
B. Re-order Lead Time
C. Flow Time
6
5
14%
12%
Why do we believe a solution is necessary? -OR- D D3 0 D2 D1 D. Implementation Time 6 15%
(What is the consequence of not solving the problem?)
Customers demand that contractor hold or reduce our costs.
STUDY E 0 G1 H1
F 0 0
E. Non-Recurring Exp.
F. Reliability
1
0
2%
0%
Supplier may choose to not renew its contract after 3 years G H1 G. All Rejects 6 15%
New supplier qualification costs. Weighting H. Add. Reqmts Cost 8 20%
H
Supports contractor in meeting its business plan Factors I
Retain a valuable supplier
1. Low J
Boeing want to build a strong supplier base 2. Medium Total 41 100%
Enable faster delivery of airplanes (reduce A/P flow time) 3. High
PROFIT
PROFIT
COST COST
alue Goals
COST
PROFIT
Management
Recurring Cost - Total manufacturing cost (material & labor) measured
Unit cost reduction > 21% in $/unit
Maintain or reduce cost-of-ownership TBD Meet certification requirements Re-order Lead time-ROLT - Total time from order receipt to on-dock
(to airlines-spares) delivery measured in M-days
First article inspection test - September, 1998 (?) Flow Time - Product received on dock from supplier until product is
consumed (installed in engine) M-days
Reorder lead time <16 weeks First delivery is January 1, 1999
Implementation Time - (to install changes) Time to plan, make and qualify
(80 m-days) (parts built and delivered) engineering changes measured in calendar
Target costs days
All changes incorporated by 1 Jan 99 Major interfaces and envelop must remain the same Non-recurring costs - Total cost (contractor & supplier) to develop and
implement change measured in % of return in 1 year.
Form, fit, function - transparent
All rejections - Number of part discrepancies for workmanship, quality,
Point of use delivery of parts 100% Engine interface loads fit, form, function issues. Measured in % of rejections per year .
Additional Imposed Requirements Costs - The additional costs to
Meet current operating envelope of engine manufacture the parts in accordance with the drawings measured in %
reduction.
100% radiographic inspection
5/21/2009 Wixson Value Associates Inc. 32
The Processing of Information
FACT FINDING
What do you need to know about the problem that
you dont know now?
What facts are known?
Are these facts, opinions, assumptions, or
prejudices?
Where, or how can information be obtained?
Gather Information weeks) guides the team to the resolution of the project issues. Monitor status
The Process is particularly applicable for both small projects, as FOLLOW-UP
Plan Workshop
well as resolving key issues within much larger projects.
Confirm Commitment (The Society of American Value Engineers (SAVE) has recently change their name to SAVE Success is achieved after
International, The Value Society, and the name of the VA/VE Process to Value Methodology verification
rather than Value Analysis/Value Engineering due to emerging broader application of the
process. The term Value Management is being used when an organization employs the Value
Methodology for Managing Value.)
Value Method
Value Method Value Method
THE VALUE METHODOLOGY
PRE- JOB PLAN THE PRESENTATION PHASE
THE INFORMATION PHASE POST
STUDY
STUDY
Analyze Information Package Proposals
Define Problem
Develop Sales Strategy
Set Targets
Assess Attributes SUCCESS Plan Presentation
INFORMATION
Identify Constraints PRESENTATION Present Proposal
Isolate Functions
Develop FAST Model CLOSE
Dimension FAST Model
CREATIVE
DEVELOPMENT
EVALUATION
Value Management presentation developed by W. Marlo Stebner in cooperation with J.J. Kaufman, Associates, Inc.
Value Engineering
Gather Value Engineering (VE) - is a
systematic activity used during
Information product development to reduce
costs without loss of product
Define the performance. The scope of value
engineering includes design cost
Function(s) reduction, process improvements
and supplier cost reductions
Brainstorm
Evaluate
Investigate
Recommend
5/21/2009 Wixson Value Associates Inc. 36
Lean Design Methodologies
Core Process Costing ability to provide visibility & analysis of
Tools costs by business or manufacturing process
TOOLS
DFMA
FAST
3P
QFD
VSM
TRIZ
Barriers
METHODOLOGY
Lean Design
w/VE
SUCCESS
5/21/2009 Wixson Value Associates Inc. 38
The Value Methodology Process
Sponsor $ Opportunity
1 2 3 PROJECT
Team PLAN
Implementation
4
7
=
5
8
0
6
9
=
Event
J. J. Kaufman Associates,
Inc.
Cost
Tolerance
Zone Project Cost
C
O
Target Cost
S
T
Performance
Tolerance
Zone
Performance
FUNCTION
VALUE =
COST
Function Function
Value =
Cost
Cost
Function Function
Value =
Cost
Cost
5/21/2009 Wixson Value Associates Inc. 45
Function Analysis
Function Analysis is the key to understanding
the problem.
FAST
FAST
FAST
(GOAL) (METHOD)
or (Support)
Specification Function
Major Logic Path
Concept
Objective Independent
or (Support)
Specification Function
Concept
Activity
Left Scope Line
Right Scope Line
Scope of the Problem
RESPONSIBILITY/COST MATRIX
Symbol
FACILITATE
PORTABILITY
OBJECTIVES OR
SPECIFICATIONS
ALLOW
SAFETY
OUTPUT INPUT
(concept)
SUPPORT DISSIPATE
IMAGE HEAT
AMPLIFY
IMAGE GENERATE
NOISE
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Reduce part count and part numbers. (Nonexistent parts cost nothing to
make, handle, assemble, purchase or service)
Dont fight gravity!
Eliminate fasteners and adjustments
Design parts to be self-aligning and locating ( This can eliminate tooling)
Ensure adequate access and unrestricted vision
Design parts that cant be installed incorrectly (MISTAKE PROOF)
Minimize opposite parts
Use catalog parts
Know process capability before specifying tolerances
Think Ergonomics
You cant design and build standard parts for less than the cost of
buying already available catalog parts.
21 Parts 6 Parts
Simplifies assemblies
Reduction of parts
Simplified assemblies
Quicker disassembly and repair using fewer tools
Simplified trouble shooting & fault isolation
Inspections for quality made easier
Cost effective upgrades
5/21/2009 SimplifiesWixson
Inspection
Value Associates Inc. 74
Eliminate Fasteners
Do you try to find out the process capability tolerance of the manufacturing
process(es) you are going to use, before you call out the tolerances on your
design?
or
Do you specify a tolerance, and then let manufacturing struggle to meet your
tolerance?