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Value analysis/engineering cuts costs by weighing alternatives.

By focusing on function and questioning the need for a component or process, VA/VE can provide foundries with a powerful tool.

"Value Engineering (VE) is a management tool that can be used alone or with other management techniques and methodologies to improve operations and reduce costs. The complementary relationship between VE and other techniques increases the likelihood that overall management objectives are achieved."

- The Office of Management and Budget Circular No. A-131, requiting federal departments and agencies to use value engineering as a management tool.

During World War II, the war effort placed difficult production demands on American industry, and critical materials were often scarce. Many times, material substitutions were necessary, sometimes to the detriment of the final product. After the war, in an effort to ensure that future material substitutions didn't adversely affect the quality of its products, General Electric Co. assigned staff engineer Lawrence Miles to investigate substitution feasibility.

Miles recognized that proper analysis of an item's function often lead to the application of performance improving, cost saving alternative materials and manufacturing methods. He developed a system of function evaluation called "Value Analysis."

Today, value analysis, or value engineering (VA/VE), is defined as a discipline applying the systematic analysis of function to remove unnecessary cost from the design of products and services, while retaining or enhancing their properties. In short, VA/VE yields value-enhancing alternatives.

VA/VE can be used as a management tool in any situation that can be described in terms of functions. Software, hardware, medical science, government, industry, academia and personal efforts can all benefit from this objective, critical and thorough approach to value improvement. The tools of the VANE practitioner help identify the root cause of a problem by separating it from its symptoms and effects. It allows the problem to be set up in a logical cause and effect form that stimulates speculation on how functions can best be accomplished and problem issues resolved.

In foundries, VA/VE can be used to evaluate and improve both the casting for sale and the internal systems and materials that produce it. The foundry using VANE can look at a customer's design, understand the function of the part it's been asked to cast, and tell the customer the best possible way that function can be served.

A Unique Method

What is VA/VE and how is it distinguished from other efforts that may have similar results?

VA/VE first concerns itself with what the item is supposed to do - only afterward with the item itself. It is built around function analysis. While simple cost-reduction programs may save money, VA/VE goes so far as to question the need for the item itself. Documented cases exist where foundries and OEMs significantly reduced the cost of an item through other management methods, but the existence of the item went unchallenged and was, in fact, unnecessary.

VA/VE's first task is to determine the function of the item or system in question. Function, the specific purpose or intended use of an item, is that characteristic that makes the product work or sell - the reason the customer purchases it. Function is closely related to use value, or the properties and qualities that satisfactorily and reliably accomplish a use.

For example, the function of a cigarette lighter is not to light a cigarette, but to produce heat. That lighter can just as well thaw a frozen lock or light a candle. The customer may smoke, but he has purchased the lighter to produce heat. The name of the product is secondary, as is the method through which the heat is produced.

The basic rule of function analysis is that an item's function must be described by two words: an active verb and a measurable noun. The verb answers the question "What does it do?" The noun tells what is acted upon. Asking "What does it do?" focuses attention on the function that needs to be served, rather than on the item, helping to avoid getting locked into the current practice or item.

The method of stating function in two words helps to keep the definition as precise as possible. An axle shaft transmits torque. Painting is applying pigment. For a foundry, melting is liquefying metal. This conciseness also strips the problem of its uniqueness, allowing a thorough, formulaic approach.

Speaking this language of function facilitates communication within a multidisciplined team that might be assigned to perform the analysis. It minimizes the territorial thinking that often characterizes managers.

Example: A team made up of people from an OEM and various foundry departments is examining a costly part to evaluate substitution possibilities. The engineer is thinking dimensional tolerances, the patternmaker is thinking tooling materials, the foundryman is thinking gating systems and the purchasing manager is thinking dollars and cents. All are worried what a decision might mean for his department.

Enter VA/VE. Each member of the team is comparing the part to the function it must serve, working toward a common goal that will not support adversity. Focusing on function encourages cooperation and generates an understanding of the impact of decisions on the others.

How It Works

A proper VA/VE study is a formal process with a series of steps that must be followed if it is to be successful. It has several general phases, each containing some very important steps.

1. The first is the information phase. In this phase, the functional description of the item or system is established and followed by an estimate of the worth of the required functions. At this point, the engineer should get a comprehensive understanding of the item under study with a rigorous review of all pertinent background information. The complexity of the subject, the amount of available information and the study schedule will all affect the amount of time devoted to this phase.

Like the legal process, obtaining valid, reliable information is crucial. Personal opinions and hearsay will not do. Experience has proven that a VA/VE study based on personal opinion is almost impossible to justify. Crucial steps in the information phase are:

* Obtain all costs - the total cost of the item and the costs of material, labor and overhead should be determined and itemized, followed by an exhaustive cost comparison to find the cheapest alternative.

* Gain cooperation - the best VA/VE proposal is wasted if rejected by management. The value engineer needs to be able to see the "big picture" through the eyes of everyone concerned to effectively sell his recommendations.

2. The speculation phase is when the analysis team directs a creative effort toward developing alternatives. Every member of the team is expected to make a contribution, and creative thinking should replace conventional thought as every attempt is made to depart from ordinary patterns, typical solutions and habitual methods. At this point, there should be no judgmental constraints placed on ideas that surface. Again, the function itself must be critically examined. Only after determining that the function itself is vital should alternate ways to perform it be considered. The steps in this phase:

* Keep informed - the value engineer should be open to all new products and processes that may provide viable alternatives. Keep a library of trade magazines and technical publications to be abreast of emerging technologies;

* "Blast, create, refine" - blast away old concepts of function, create new ways to perform that function, and then improve on them.

3. The purpose of the planning phase is to further analyze and refine the most promising alternatives generated by the speculation phase. Ideas must be critically scrutinized and all pertinent information obtained and considered. The team must develop accurate cost estimates for all final alternatives. The team must:

* Evaluate by comparison - compare the costs of achieving a function through the new ideas with that of the current method. In this way, you can assign a worth to the old method, and have a basis from which to judge the new ideas.

* Put dollar signs on each idea - the worth of each new idea should be estimated before taking the time to study their technical and economic feasibility. Setting up a priority system based on dollar opportunity and listing the advantages and disadvantages of each idea provides a more objective basis for selection.

4. The development phase is when final recommendations must be culled from the remaining alternatives. Any testing needed to establish technical feasibility must be done at this point, and sketches drawn up of the proposed design. Any anticipated implementation problems should be addressed with the help of specialists in the areas in question. To help with this:

* Use specialty suppliers - vendors may have specialized capabilities with unique products or processes. Many companies train their reps in VA/VE techniques to consult customers and make effective recommendations.

* Put dollar signs on tolerances and finishes - as tighter tolerances and finer finishes are required, manufacturing costs escalate. Often, impressive savings can be realized by challenging unusually tight tolerances or fine finishes.

5. The presentation and implementation phase involves presenting the final alternative(s) to those with the authority to implement the proposal. There should be a final written report coupled with an oral presentation. All "before and after" cost information, as well as the Cost of implementation must be included.

Successful Examples

VA/VE is widely used by the U.S. Army to save the government money and increase profits for industry contractors. Below are a few typical applications.

In this case, VA/VE was used to improve a process, rather than an item. The casting that acts as a feeder base on the U.S. Army's Mk19 40mm grenade machine gun was found to have shrinkage, which required testing to determine whether these defects would affect weapon operation or safety. The conventional test method required firing about 25,000 rounds per weapon and then analyzing stresses on the feeder base - a time consuming and expensive process.

A VA/VE study recommended using stress simulation as an improved method for fatigue analysis. Feeder bases were instrumented with measuring devices and cyclically loaded on a computer controlled universal test machine to duplicate the stresses produced during firing. Because of the new method, the government saved more than $700,000, while reducing test time from 30 days to just one.

Another instance of the successful application of VA/VE was the redesign of the U.S. Army Abrams tank engine nozzle. The original design of the turbine engine included a two-piece machined sheet metal weldment air nozzle. After a VA/VE study, it was determined that the function of the part could be sewed just as well by a one-piece net shape casting. The government saved over $600,000.

Of course, a VA/VE study might also reveal that a casting is not the optimal part to perform the function, and take that business away from the foundry. In that case, it is important for the foundry to recognize that what benefits the customer will ultimately benefit the foundry in a supplier relationship based on trust and good will. It is also important to remember that a foundry that itself uses VA/VE should not be surprised, because it has already performed its own evaluation.
COPYRIGHT 1995 American Foundry Society, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1995, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Author:Miller, Robert E.
Publication:Modern Casting
Date:Apr 1, 1995
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