Value Engineering: Finding a Balance Between Reducing Costs, Maintaining Quality

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Product designers are under increasing pressure today to design products faster, while also reigning in design costs. Often these objectives are at odds with each other. Enter Value Engineering (VE) initiatives, efforts that enable engineers to find the optimal tradeoff among cost, specification and quality. While VE is often associated with architectural design, it holds tremendous value for product design as well.

Value Engineering, a term was coined by General Electric during World War II, is a technique for reducing costs, increasing productivity and improving quality. It is used to analyze the functions of a product to determine “best value” or the best relationship between worth and cost. In other words, it’s applying engineering expertise to meet the original objectives at a lower cost or greater value.

Obviously the earliest and most advantageous time to implement VE practices is early in the concept phase of product development, however it can be deployed at any stage of the product’s lifecycle. Even at the end of a design project, when design teams review the project and discuss what areas they would have liked to explore in more detail, VE best practices can be implemented.

Early in the design cycle is when the considerations in regards to total costs associated with a product, including materials costs, manufacturing costs, and operating costs, are initially evaluated. Design teams must weigh these costs in context with product performance and the ability to meet the product’s required specification. VE techniques greatly facilitate finding the optimum tradeoff between these criteria.

Value Engineering is not Cost Cutting

Often the concept of Value Engineering is confused in cost-cutting initiatives. Cost cutting, however, without considerations to potential tradeoffs in quality, life expectancy and maintenance costs, can lead to disaster. Applying VE techniques correctly means achieving the original requirements of the product without sacrificing quality.

A common tool used to achieve VE objectives is simulation. Increased use of digital simulation tools can not only improve the design of the product but also find areas of optimization after a product has been completed. Engineers use simulation software to run ‘what if’ iterations to determine the potential impact of design decisions for the product, as well as the manufacturing and assembly processes.

Simulation, however, is not the only discipline involved in VE. Part of VE objectives is to systematically connect product value (worth) with product costs. Here’s where product lifecycle management (PLM) tools could potentially come into play since by design these systems connect these two in a very systematic way.

PLM systems provide the tools to centralize product data, standardize business processes and speed up the exchange of product data among design teams. PLM software manages product data across the entire lifecycle, from concept to design, manufacturing, maintenance to retirement, all the phases during which VE techniques can be deployed.

Though PLM vendors are not currently touting PLM’s role in VE initiatives, if implemented properly, PLM systems contain lots of the information needed to make VE decisions. If your PLM system covers requirements, you need to have a functional breakdown. If your PLM system is linked to manufacturing, costing information is readily accessible. Bottom line is PLM can provide users with the information they need to further their VE objectives: designing better products that meet their design specifications at a lower cost.

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