Value Engineering
Value engineering is a cost reduction technique. The main aim of value engineering is to eliminate unnecessary features of the component or product which adds to the cost. It also ensures that the products are functionally oriented. They are designed to perform only the function expected fo them. It also ensures that the required function are performed at the minimum cost.
Value means different things to different people. For a designer, it means reliability. For a purchase man it means the price for an item. For a production man it is the manufacturing cost. For the customer, it is the price he has to pay.
Value engineering came into being, because of the need for men to make cheaper product and to sell them cheaper. At the same time utility of the product is to be maintained.
Value = ( Function (or) performance (or) utility ) / cost
From the above, it can be seen that the value of a produce can be increased by
1) Increasing its utility keeping the cost constant
2) Decreasing the cost for the same utility
3) By increasing its utility by larger amount with a smaller increase in its cost.
Types of values
1) cost value
It is the sum of all costs uncurred in manufacturing the product the product. It is the sum of raw material cost labour and other overhead cost to produce the product.
2) Use value:
It is also called functional value. It considered the work done, functional performed by a component product.
3) Esteem value
It involves the qualities and appearance of a product ( like a scooter or a tv set) which attracts customers. it creates in them a desire to possess the product.
4) Exchange value
A product possess exchange value, if it can be exchanged for some thing else because of its qualities
Function
Function indicates the purpose of the product or what the product does or what is its utility. There can be three functions for a product .They are
1) primary function
2) secondary function
3) Tertiary function
These functions can be explained with an example with an example. let us take the case of paintings a bus
The primary function is to prevent corrosion
The secondary function is to give the bus a good appearance
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