MEANING AND DIFFERENCE BETWEEN VALUE ANALYSIS AND VALUE ENGINEERING
Value Engineering
Value Engineering is concerned with new products. It is applied during product development. The focus is on reducing costs, improving function or both, by way of teamwork-based product evaluation and analysis. This takes place before any capital is invested in tooling, plant or equipment.
This is very significant, because according to many reports, up to 80% of a product’s costs (throughout the rest of its life-cycle), are locked in at the design development stage. This is understandable when you consider the design of any product determines many factors, such as tooling, plant and equipment, labour and skills, training costs, materials, shipping, installation, maintenance, as well as decommissioning and recycle costs. Therefore value engineering should be considered a crucial activity late on in the product development process and is certainly a wise commercial investment, with regard to the time it takes. It is strongly recommended you build value engineering into your new product development process, to make it more robust and for sound commercial reasons.
Value Analysis
Value Analysis is concerned with existing products. It involves a current product being analysed and evaluated by a team, to reduce costs, improve product function or both. Value Analysis exercises use a plan which step-by-step, methodically evaluates the product in a range of areas. These include costs, function, alternative components and design aspects such as ease of manufacture and assembly.
A significant part of VA is a technique called Functional Analysis, where the product is broken down and reviewed as a number of assemblies. Here, the function is identified and defined for each product assembly. Costs are also assigned to each one. This is assisted by designing and viewing products as assemblies (or modules). As with VE, VA is a group activity that involves brainstorming improvements and alternatives to improve the value of the product, particular to the customer.
| Basis of Difference | Value Analysis | Value Engineering |
| Meaning | Value Analysis is a cost reduction technique applied to the existing product with the aim of enhancing its worth. | Value Engineering is a technique used before the product gets approval for fabrication. |
| Nature of Process | Remedial Process | Preventive Process |
| Applied when | After the product is introduced. | At the design stage |
| Objective | To get better optimized commercial output. | To get better engineering results. |
| Worked Out | With the help of knowledge and experience. | With the help of specific technical knowledge. |
| Ensures | Elimination of unnecessary cost | Prevention of unnecessary cost |
| Change | May change the existing stage of the product or operation | Changes made by value engineering are implemented at initial stages only. |
