what is value engineering 
value engineering is a systematic organized approach to providing necessary functions in a project at the lowest cost value engineering promotes the substitution of materials and methods with less expensive alternatives without sacrificing functionality it is focused solely on the functions of various components and materials rather than their physical attributes value engineering is also called value analysis understanding value engineeringvalue engineering is the review of new or existing products during the design phase to reduce costs and increase functionality to increase the value of the product the value of an item is defined as the most cost effective way of producing an item without taking away from its purpose therefore reducing costs at the expense of quality is simply a cost cutting strategy the concept of value engineering evolved in the 1940s at general electric in the midst of world war ii due to the war purchase engineer lawrence miles and others sought substitutes for materials and components since there was a chronic shortage of them these substitutes were often found to reduce costs and provided equal or better performance 1with value engineering cost reduction should not affect the quality of the product being developed or analyzed ratio of function to costmiles defined product value as the ratio of two elements function to cost the function of an item is the specific work it was designed to perform and the cost refers to the cost of the item during its life cycle 2 the ratio of function to cost implies that the value of a product can be increased by either improving its function or decreasing its cost in value engineering the cost related to production design maintenance and replacement are included in the analysis product value function cost begin aligned text product value frac text function text cost end aligned product value costfunction for example consider a new tech product is being designed and is slated to have a life cycle of only two years the product will thus be designed with the least expensive materials and resources that will serve up to the end of the product s life cycle saving the manufacturer and the end consumer money this is an example of improving value by reducing costs another manufacturing company might decide to create added value by maximizing the function of a product with minimal cost in this case the function of every component of the item will be assessed to develop a detailed analysis of the purpose of the product part of the value analysis will require evaluating the multiple alternate ways that the project or product can accomplish its function keep in mind that the steps below may slightly vary depending on the precise organization defining the steps for example it s common to see a step between gather information and think creatively for work done to review and analyze what needs improving eliminating or creating usually defined as function analysis steps in value engineeringvalue engineering often entails the following six steps starting from the information gathering stage and ending with change implementation value engineering begins by analyzing what a product lifecycle will look like this includes a forecast of all the spending and processes related to manufacturing selling and distributing a product value engineers will often break these considerations down into more manageable data sets in addition to assigned financial values value engineers may prioritize processes or elements along a product s manufacturing plan value engineering may also call for expectations regarding time labor or other resources for different manufacturing stages with the core baseline expectations for the product having been documented it s now time for the value engineering team to consider new different ways for the product to be developed this includes trying new approaches taking risks on things never been done before or creatively applying existing processes in a new way levering these creative ideas value engineers will re imagine how the product will be created and distributed from state to finish this phase is the idea generation stage where members of the team should be encouraged to brainstorm freely without fear of criticism examples of thinking creatively may include changing the materials used changing the product s design removing redundant features trading off reliability for flexibility or changing the steps order of the manufacturing process with a bunch of ideas now on the table it s time to decide which are reasonable and which aren t each idea is often assessed for its advantages and disadvantages instead of focusing on the quantity of each tally the value engineering team must consider which pros and cons outweigh their counterpart for example a single change may result in five new benefits however doing so would outlaw distribution to a country that the company exports the most goods to in this case the five benefits may not outweigh the one disadvantage once the ideas are ranked the best ideas are taken and further analyzed this includes drafting model plans detailing changes and their impacts producing revised financial projections redesigning physical renderings and assessing the overall viability of the change be mindful of timeline constraints and considerations when analyzing changes especially if other departments will be negatively impacted by pushed out schedules or deadline changes also consider how the break even point of a product may change as a result of the adjustment to ensure the strategy aligns with the philosophy and financial capability of the organization with plans devised and presentations pulled together it s time to deliver the best ideas to upper management or the board for their consideration often more than one idea will be presented at a time so the deciding group can consider and compare alternatives each alternative should be consistently presented with fair representation across each choice value engineering calls for enhancing the value of each product therefore presentations should begin and end with how the change will benefit the company presentations should also include revised timelines financial projections drawings and risks often management may seek specific answers on changes or desire to see different analysis performed than what is presented as management gives confirmation to move forward with changes value management shifts from a theoretical practice to an change management implementation process when proposed changes are accepted new teams are formed and assigned areas of oversight value engineer team leads often remain engaged with the changes to monitor what is being adjusted and how expectations are being aligned with new realities if a company lacks the required expertise to brainstorm changes it may rely on external third parties to manage the first five steps with the company taking over once it has decided what changes to make guiding principles of value engineeringregardless of the steps a company chooses to perform when value engineering there are a handful of high level vague guiding principles of value engineering these principles include types of value