USING VALUE ANALYSIS AND VALUE

ENGINEERING IN COST REDUCTION,

VALUE ADDITION AND TOTAL QUALITY
MANAGEMENT

The aim of value engineering is to design a product that will represent the
optimum value to the manufacturer and customer. Value Engineering is a
systematic step by step methodology for continuous improvement of
products, process, service an system. M/s Ganpati Pvt. Ltd. situated at
Hazrat Nizzamuddin, New Delhi has been manufacturing Different types of
Computer work stations, Office tables,Bed, Benches, Wardrobe, Study table,
TV Stand, Stools etc. and currently supply to local dealers and customers in
Delhi and nearby area. This paper introduces how to apply theories and
methods of Value Engineering in the industry. Value Engineering is a
proven management technique that can make valuable contributions to value
enhancement and cost reduction of the furniture manufacturing industry. The
basic fundamental of Value engineering with its different phases which can
be implemented in any product to optimize its value. A case study of
furniture manufacturing small scale industry is discussed in which the
material size of the product is changed according to the value engineering
methodology. The material is chosen such that the cost is reduced without
affecting the value of the product and its design. To find the best possible
alternative from the choices we have used the tools such as Function
analysis, Functional Evaluation and Decision Matrix, which gives the most
appropriate results. Hence as a result of the analysis the cost is reduced.

Optimization Of Computer Work Station : An Analysis.

In this paper we have discussed a Computer work station manufactured

in . M/s Ganpati Pvt. Ltd. situated at Hazrat Nizzamuddin, New Delhi
manufacturing Different types of Computer work stations, Office tables, Bed,
Benches, Wardrobe, Study table, TV Stand, Stools etc.. currently supply to
local dealers and customers in Sangli and near by area.
Value Engineering is applied as pre the following steps to the Computer work
station: 1. Functional Analysis Worksheet is prepared for the different parts of the
product.
2. Functional Evaluation is done of each part
3. Numerical Evaluation Sheet is prepared
4. Creativity Worksheet
5. Selection of alternative is done through Decision Matrix
6. Finding and Recommendation
7. Conclusion

Work Station Layout

Computer Work Station:

Flow Process Chart For Production Of Computer Work Station:

Functional Analysis Worksheet

Part Name
Description

Quantity

Drawer& box
assembly

Steel Frame

Keyboard
assembly

Function

Part

Assembly

Verb

Noun

Basic

Secondary

Basic

Secondary

Store

Material

Provide

Locking

Provide

Movement

Improve

Appearance

Holds

Assembly

Holds

Part

Provide

Strength

Provide

Grip

Hold

Keyboard

Provide

Movement

Facilitate

Locking

Provide

Material

Table top

Slider pair

Base top
middle

Base top lower

Base top side

Keyboard strip
side

Hold

Material

Improve

Appearance

Provide

Surface

Hold

Keyboard

Provide

Movement

Secure

Tightness

Hold

Material

Provide

Surface

Hold

Material

Provide

Surface

Hold

Material

Provide

Surface

Support

Slider

Hold

Slider Base

Table 2: Total Costing of Computer Work Station

Sr.No
Part

Cost in Rs.

Drawer & Box assembly

800.00

Steel frame

620.00

Keyboard assembly

122.00

Table top

270.00

Slider Pair

25.00

Base Top middle

75.00

Base Top lower

63.00

Base Top side

57.00

Keyboard strip side

16.50

Total

2050.50

Table 3 Functional Evaluation

Key Letter

Part

Function

Weight

% Cost

Drawer & Box

Assembly

Store Material

21

39.04

Steel frame

Holds Assembly

24

30.26

Keyboard assembly

Hold Keyboard

13

5.96

Table Top

Provide Surface

14

13.18

Slider Pair

Provide Movement

11

1.22

Base Top (Middle)

Hold Material

3.66

Base Top (Lower)

Hold Material

3.07

Base Top(Side)

Hold Material

2.78

Keyboard Strip
(Side)

Hold Slider Base

0.81

3 Numerical Evaluation Sheet

B3

A3

A3

A3

A3

A3

A3

A3

21

B3

B3

B3

B3

B3

B3

B3

24

D3

C2

C3

C3

C3

C2

13

D3

D2

D2

D2

D3

14

E3

E3

E3

E2

11

F/G

F/H

I1

02

I1

I1

01

H2

02

Creative Phase
The central theme of the creative phase is what else could do the same needed function? the
ranking of the function based on the value gap in descending order, is the indicator to which
one must pinpoint in order to get the maximum advantages,
In order to more ideas, the group restored to the brainstorming technique. The following ideas
were generated during this phase
Change the material from square pipe to angle in same place.
Make the design simpler
Make it folding
Use the wheels for movement
Change the stud size
Make it in powder coating
Reduce the thickness of the board
Use waste pieces of required size in some places
Reduce the size of the board in same places
Reduce the gauge of the pipe
Remove compartment shelf from box
Instead of box, make total three drawers with central locking by same existing lock
The first phase of brainstorming usually result in quantity generation and the second
phase generates a qualitative evaluation. The ideas are evaluated against five parameters as
shown in table of feasibility ranking matrix The team accepts those ideas which generate 40
points and above.

Forced Decision Matrix

No
of
com
pari
sion
para
met
ers
Dura
bilit
y
Main
tena
nce
cost

10

Total

30

10

Stab
ility

40

Com
pact
ness

10

App
eara
nce

10

Function-Cost-Worth-Analysis (FCWA)
Function
Verb

Noun

Existing Cost in
Rs

Store

Material

800.00

Hold

Assembl 620.00
y

MS Material

560.00

60.00

III

Hold

Keyboar 122.00
d

Board

110.00

12.00

Provid
e
Provid
e

Surface

Eliminate

0.00

270.00

Moveme 25.00
nt

Eliminate

0.00

25.00

Hold

Material

75.00

Board

60.00

15.00

Hold

Material

63.00

Board

55.00

8.00

Hold

Material

57.00

Eliminate

0.00

57.00

IV

Hold

Slider
Base

16.50

Eliminate

0.00

16.50

Provid
e

Stud

12.00

Eliminate

0.00

12.00

Total

2060.50

1435.00

625.50

270.00

Worth

Value Gap

Ranking

Tentative
alternative

Estimated
cost in Rs.

Board

650.00

150.00

II

Feasibility Ranking Matrix

Parameters Ideas

State Of Art

Probability Of
Implementation

Cost Of Develop

Time to Implement

Potential Cost
benefit

10:Off the Self

1:New Technology

10:High chance

1:Low Chance

10:High Cost

1:Low Cost

10:No Time

1:MaximumTime

10:High

1:Low

Total

10

10

05

05

10

40

10

05

04

06

06

31

10

08

05

09

10

42

06

10

03

09

10

38

06

08

01

10

05

30

05

10

05

05

08

33

10

10

01

10

10

41

10

10

01

10

10

41

10

10

01

10

10

41

10

06

03

08

10

32

11

10

10

01

10

10

41

12

01

10

06

05

05

27

Evaluation Phase
Parameters
Rigidity
Light Weight
Accessibility
Appearance
Alternative I
Change Material (Pipe to angle)
Alternative II
Make it in Folding
Weightage of the Parameters
Score
B
C
A2

Raw Score

Final Score

A2

A2

B3

B2

D3

3 Major Difference in Importance

2- Medium Difference in Importance
1- Minor Difference in Importance
0- No Difference in Importance

Evaluation Matrix

Parameters Rigidity
Weightage
alternative

Light
Weight

Accessibilit
y

Appearance
s

Existing

Alternative
I

Alternative
II

Total

28

12

16

28

24

16

28

18

16

59

71

65

Excellen
t

Very
Good

Good

Fair

Poor

Recommendation Phase
The evaluation Matrix indicates that the first alternative is better
than the existing as well as second alternative. The cost benefit
analysis is also done for both alternatives along with the existing one
as shown below
Table 8 Cost Benefit Matrix
Sr.No

Parameters

Existing

Alternative I

Alternative II

Price/Piece (Rs)

2050.50

2030.50

2000.50

Components(Nos.)

08

08

08

Reduction in Price

0.00

20.00

50.00

Based on Evaluation Matrix as well as the cost benefit

analysis, alternative II is recommended.

Conclusion & Future Scope

The total saving which can be incurred per annum by

the implementation of above recommendation is Rs.
1,20,000/-. for alternative I and Rs. 3,00,000/- for
alternative II (by considering the production of computer
work station per shift per day are 20 units with 300
working days per annum)
No Company can take seriously Total Quality
Management without operating a formalized system of
Value Analysis. No business that wishes to become lean
will ever succeed if product designs remain unchanged
because no amount of continuous improvement in the
manufacturing process can release the costs of a poor
design or a design that has not changed for many years.