Value Engineering

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VALUE ENGINEERING

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

VALUE ENGINEERING

VALUE ENGINEERING A I M S A T

VALUE TO CUSTOMERS Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

VALUE ENGINEERING Which one is high in value ?

1 Kg. Gold

Luxury Car Prof. Madhavan . P Bangalore

1 Plate meal

House

Fame

Education T2W Consultants Sep.’09

VALUE ENGINEERING Efficiency Life Wt./Vol.

Mft. Cost Business Turnover Plan

Utility

Cost

VALUE Time

Esteem Beauty Prof. Madhavan . P Bangalore

Publicity

Place

Prestige T2W Consultants Sep.’09

VALUE ENGINEERING Value increases with Respect to needs both Implicit

Explicit

- Travel (5 persons)with right power, speed, milage, manovarability etc.,

Prof. Madhavan . P Bangalore

-

Styling Colour Size Interiors, AC, Stereo To suit to status etc., T2W Consultants Sep.’09

VALUE ENGINEERING Value Engineering to

-

is Stepwise, organised, creative team work

to

Eliminate or minimise Add value in factors contributing relation to cost poor value In order to In order to due to Poor flow of information over/under specification - Provide value to the over specialisation customer compartmentalisation - Catch up the market

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

VALUE ENGINEERING

Success

VE CAR

. Driver Value Engineering Success Driven by users / beneficiaries

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

Value Engineering Cost Distribution ( Indicative )

25%

43%

Matl. Engg. Process Others

18% 14%

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

Value Engineering Value / Function

Value

=

Function @ lowest Cost.

Function

=

Performance + Reliability

Performance

=

Utility + Esteem + Exchange

Reliablity

=

Perform @ desired place & time without failure.

Lowest Cost

=

Lowest life cycle cost

Life cycle cost =

Prof. Madhavan . P Bangalore

Cost ( Initial + Install + consumable + maintenance )

T2W Consultants Sep.’09

Value Engineering FAST ( Function Analysis System Technique )

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

Value Engineering Value analysis

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

Value engineering Reason for Poor Value

1.

Lack of Information

2.

Poor Communication

3.

Lack of Ideas.

4.

Time Pressure

5.

Temporary Circumstances

6.

Wrong Beliefs

7.

Habits & Attitudes

8.

Lack of perception at higher levels

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

Value engineering Cost Analysis Cost to Customer

=

Sale price + taxes + installation

Sale Price

=

Total Cost + Profit

Total Cost

=

Manufacturing cost + Marketing cost

Manufacturing cost

=

Factory cost = Product cost

=

Material + Labour + Over heads

=

Function costs + Other costs

Does Customer want to pay for the product ? Or for the functions in the product ? Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

Value engineering What you want & For what you pay

Does Customer want the product ? Or the functions in the product ?

Is Customer willing to pay for the product ? Or pay for the functions in the product ?

Do Or

you pay for the sugar ? for the sweetness in the sugar ?

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

Value engineering Determine Cost -Manufacturing cost -Break up of cost elements ( material + labour + overheads ) -Each component / process cost -Each subassembly , assembly , calibration cost -Each function / functional group cost -Proposed changes cost & savings -Pay back period / rate of return -Analyse cost per size/weight/time Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

Value engineering

Cost is the Objective

Function is the Key .

Value is the Customer.

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

Value Engineering APPROACH 1.

TEAM FORMATION

2.

5 PHASES OF VE

3.

-

INFORMATION

-

CREATION

-

EVALUATION

-

INVESTIGATION

-

RECOMMENDATION

- What it is / What it does / Cost

What other simple ways it can be done ? How much will it cost ?

IMPLEMENTATION

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING Creation Intensification

VALUE

Information Intensification

Industrialization

Agriculturization

TIME Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING What is Brain Storming ? Ú Storming takes place when there is a sudden release of pressure that is built-up. Ú This release of pressure releases Sound & Light. Ú This is what happened to Archimedes when he shouted ‘Eureka’. Ú Storming drives a person to various possible solutions when the right one is found, there is a big release of pressure. Ú This is one of the Ideas Generation Technique. Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING Why Brain Storming ? Ú The world is changing rapidly. Ú One must adapt to this changes and keep pace with Competition, Technology, Quality & Customers whims & fancies. Ú This requires knowledge, attitude and approach. More than that it require ideas, ideas & ideas to be a winner in changing world. Ú Ideas Galore. Ú For this we depend on Brain Storming as one of the Technique for Generation of Ideas. Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING How to Storm the Brain ? Rules : Ú Do not judge Ú Be wild Ú Give plenty Ú Combine & Improve

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING How to Storm the Brain ? Conditions : Ú Committed Group Ú Diverse Skills in the Group Ú Moderate pressure play.

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING

Value

No Criticism

Free Thoughts

Prof. Madhavan . P Bangalore

1+1= 3

Combine & Improve

Prepare clear objective

Cost

Gather Ideas

Brain Storming Rules

T2W Consultants Sep.’09

BRAIN STORMING 8 Principles of Creativity 1. 2. 3.

4. 5. 6. 7. 8.

Every one is creative. Creativity brings in many opportunities & reduces risks 4 faces of creativity - Socialiser - Neat Organiser - Finance figures - Jack of all One does not leave by data alone (Mix feelings, emotions) One picture is worth more than 1000 words. There are no impossible dreams or problems (only limited dreamers and problem solvers. The sub-conscious is a full partner in creative process. Creative Thinking brings win / win situations.

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING 4 Basic Skills for Creativity Thinking 1.

Divergent Thinking

- The Kid and the Judge

2.

Forcing relationships

- Connecting unrelated ideas Wheels + Chair = Wheel Chair

3.

Become the Angle’s advocate - Looking at the good points in bad situation.

4.

Dissecting Ideas

Prof. Madhavan . P Bangalore

- Generate ideas within ideas.

T2W Consultants Sep.’09

BRAIN STORMING Soft - Kid Metaphor Dream Humour Ambiguity Play Approximate Fantasy Paradox Diffuse Hunch Generalization Child Prof. Madhavan . P Bangalore

Hard - Judge Logic Reason Precision Consistency Work Exact Reality Direct Focused Analysis Specific Adult T2W Consultants Sep.’09

BRAIN STORMING How to Storm the Brain ? Methods : Ú Ú Ú Ú Ú Ú Ú Ú Ú Ú

Set the stage and ambiance of acceptance. Ensure Clarity of goal. Allow free flow of thinking. Mind Map to trigger Ideas. Use flexible thinking. Start collection of Ideas individually & in sub groups. Assign Quotas for Ideas. Call for funniest, stupidest, silliest Ideas. Have humour but no personal criticism. Try Brain writing.

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING IDEAS, IDEAS, IDEAS

IDEA One idea can be a stimulus to generate many ideas. Hence, the Brain Storming is done in a group. Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

COST REDUCTION

WHAT ?

HOW ?

NS

WHO ?

A ME

PE RS O

N

PURPOSE

RECORD

E NC

CE WHY ?

PLA

E QU SE

WHERE ?

WHEN ?

REASON

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

WHY HE ?

HOW ?

WHY THAT WAY ?

WHO ELSE ?

NS

PE

WHO ?

EA M

RS O N

COST REDUCTION

HOW ELSE ?

EXAMINE

WHY THEN ?

Q SE

WHEN ELSE ?

CE N UE

Prof. Madhavan . P Bangalore

WHERE ? WHY THERE ? WHERE ELSE ?

PL AC E

WHEN ?

T2W Consultants Sep.’09

BRAIN STORMING Part be eliminated ?

Part be Combined

Function be eliminated ?

Cheaper Spec. Matl. be used ?

Can any

Other matl. be used ?

Developing Alternatives

Can any

Waste matl. Be reduced ? Waste matl. be used ? Prof. Madhavan . P Bangalore

Dimn. be reduced ?

Limit to relaxed ?

Finish be reduced ? Finish be cheaper ? T2W Consultants Sep.’09

BRAIN STORMING Standard part any spl. part ?

Std. Spec. matl. replace any spl. spec. matl.

Std. inferior matl. replace std. superior matl. ?

Can any Developing Alternatives

Other execution be cheaper ? Change in make/ buy decision result in cost redn. ? Prof. Madhavan . P Bangalore

Other supplier supply the part cheaper ?

Other process be cheaper ?

Cheaper matl/part be indigenised/ imported ?

Can any

Tapping be replaced by other fastening ?

Curves/bends be eliminated ? T2W Consultants Sep.’09

BRAIN STORMING

Constructive Dis-satisfaction

Active Knowledge

Prof. Madhavan . P Bangalore

Internal Urge

Techniques for Creativity

Experience

Understanding the problems at their roots

T2W Consultants Sep.’09

BRAIN STORMING THINKING Specific Use

Basic types of Thinking

Focus

Achievement

Challenge

Thinking (reach)

Alternatives

Improvement Thinking (change)

Random Input

Green field Thinking (start)

Structure

Organised Thinking (arrange)

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING THINKING Wear 6 different Thinking Hats of Edward De Bano White

: For collecting Information

Black

: Be a critical Judge

Red

: Spontaneous opinion / feeling

Yellow

: Look for benefits

Green

: Think ideas / alternatives

Blue

: Think process - conclusion

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING Five figures are shown below. Select the one that is different form all the others.

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING Brain Storming Preparations 1. Number of people in the group - 6 to 8 < 6 Limits variety > 6 Not enough air time Disturb inter-personal Power balance. 2. Select forceful imaginative participants - Power people divergent view people The idea users Free flexible Thinkers Positive tangential Thinkers PAC, HRM, RC.., CLP Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING Brain Storming Preparations 3.

Preparation - Create a stage / attitude, hunger for ideas - Invite individually and tell them why their participation is valuable and provide them support data in advance. - Give alternative dates to choose and fix it personally (Personal touch is very important than the office track). - Check physical environment. (Quite place, no telephones) - Fresh air atmosphere. - Large room. - Coffee / Tea, Biscuits availability. - Semi-circle meetings. - Use of Metaplan boards, templates and flip charts.

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING Brain Storming Preparations 4.

Methodology - Brain Storming Intuitive, associative, unpredictable, spontaneous, like a games play, generating plenty of ideas. - Card Method Pull out a card or set of cards from the bunch and use the pictures in them to trigger ideas. - Method 635 6 participants write 3 ideas in 5 minutes and continue the game. - Delphi Method Listening to the views of groups and then working independently of each other generating ideas. - Synetics Deliberate stimulation of creative process which goes on un-consciously.

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING Brain Storming Preparations -

5.

Bionics Examines solutions of nature and their convertibility to the set of problems. SCAMPER Technique. Substitute, Combine, Adapt, Modify, Put to other users, Eleminate Reverse.

Rules for Group Work - Clear definition of problem / objectives. - No criticism in the stage of ideas collection. - Free unfolding of ideas. - One idea can generate many ideas. - Combine and improve ideas. - Do not conclude on ideas, even if it is the best one.

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING 6.

Watch out obstacle for creativity and neutralize them -

Perception blocks due to operating blindness, thinking habits and specialization.

-

Cultural blocks due to style of working, guidelines and procedures And adopting to superiors culture.

-

Emotional blocks due to fear, mis-trust and antipathy

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

BRAIN STORMING

THANKING YOU & GOOD DAY Contact : Prof. Madhavan .P # 55, 8th B main, 4th C block Koramangala Bangalore – 560 034 Ph: 080 - 5531595

Prof. Madhavan . P Bangalore

T2W Consultants Sep.’09

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