Value engineering

About: Value engineering is a research topic. Over the lifetime, 1231 publications have been published within this topic receiving 10882 citations. The topic is also known as: VE.

The value of design:an issue of vision, creativity and interpretation

Abstract: What is the value of design? Why should firms invest in design? The paper aims at clarifying the value of design, its dimensions and its variables (qualitative and quantitative) throughout a literature review and analysis. The premise is that firms invest in design to create value. Design has evolved, becoming closely related to innovation, and the need to clarify its dimensions and relationships to value within firms and society rises. Despite the global growing interest in design, it is not fully understood how it brings benefits to the company. The concept of value is found in a fragmented literature including economics, marketing, business, management, value engineering, design domains, social and environmental sustainability. In conclusion, the value of design still is under-researched and new dimensions emerge. It is shaped by designers and companies visions, creativity and interpretations. Better crossfertilization is required to identify the mechanisms of value creation by design.

Value Engineering: A Blueprint

Abstract: The implementation of value engineering results in "more for less, " and it is fast becoming the favored method of planners and engineers to design parts, equipment, and products in a way that will provide the lowest cost without sacrificing reliability. In Value Engineering: A Blueprint, James Brown uses his vast experience to fully explain every aspect of the subject from its history to application. It takes the novice or experienced engineer through every phase of the process, step by step, and even explains how to write a VE report. Value engineering is so critical that Armed Services Procurement Regulations specify that all contracts over a stated dollar value must include either a VE program or incentive clause.

The Role of Purchasing in Cost Savings Analysis

Abstract: The Role of Purchasing in Cost Savings Analysis The current recession has stimulated many firms' desire to contain or reduce costs. This article discusses a study that explored the role of purchasing in analyzing cost savings projects. The author argues that it is important for purchasing to be involved in purchasing cost savings projects. Such projects may be strategic in nature, and they may affect purchasing's decision-making process and its supplier relationships. Results of the study indicate that most purchasing departments are involved in cost savings projects, and believe that they should be involved in such projects. The purchasing function also expects to play a greater role in cost reduction projects of all types in the future. To support growing involvement in such projects, the author concludes that purchasing professionals must educate themselves to a greater extent in the techniques used to analyze cost savings projects. Further, the purchasing function must assume a more aggressive, proactive role in becoming involved in purchasing cost savings projects, educating top management, and publicizing the results of such projects. BACKGROUND Most purchasing professionals are acutely aware of the large portion of the organization's resources used to purchase materials and services for operations. One recent estimate indicates that in the manufacturing sector purchased production materials alone account for approximately 56 percent of the average firm's sales dollar.[1] The value of purchased items is by far the greatest single cost category for most manufacturing firms. Until recent years, however, the potential contribution of the purchasing function to the profitability of a firm has received relatively little attention. Top management has focused on controlling labor costs, selling costs, and administrative expenses, while treating the cost of purchased goods and services as a largely uncontrollable item. As a result, efforts of individuals in the purchasing function who focused on improving the efficiency and effectiveness of purchasing frequently went unrewarded. The function itself often received only limited recognition and respect within the firm. In the late 1970s and early 1980s, an increased focus on quality by many firms increased the visibility and involvement of the purchasing function in key decisions. Top management began to recognize the importance of the quality of purchased inputs in producing high quality end-products. Thus, the purchasing function proceeded to concentrate more heavily on quality. Even though higher quality inputs may have had a higher purchase price, most companies were not concerned. Firms felt that "quality was free."[2] The higher purchase price they thought would be more than offset by savings resulting from reduced rejects, rework, returns, and so on, reducing the total product cost. With the recession in the early 1980s, many firms also began to focus on cutting costs. Demand was down, profit margins were being squeezed by intense competition, and inventory levels and interest rates were up. Firms began to question the high costs of quality. Enlightened firms began to further scrutinize the functionality of parts. Quality was important, but only to the extent that it served an important function. Thus, though not a new concept, value analysis or value engineering reemerged. Firms wanted a way to simultaneously improve quality and lower costs. OVERVIEW OF THE RESEARCH With the growing recognition and acceptance of value analysis, the purchasing function has an opportunity to achieve a more visible role in managing a firm's cost and profitability. The purpose of this research is to understand the role that purchasing plays in analyzing and justifying cost savings projects for various types of purchases. The study addresses the following questions: 1. Why should the purchasing function be interested and involved in justifying cost savings associated with purchased goods? …

Applying Process Simulation Technique to Value Engineering Model: A Case Study of Hospital Building Project

Abstract: Applying value engineering (VE) in a construction project has proven to be an effective way to save the cost of a project. Different VE models have been developed and used in construction projects in the past. One common attribute of construction projects is the dependence of a highly qualitative decision making process: capturing, interpreting, and quantifying expert's subjective judgment. This study proposes an advanced five-phase VE model, each phase of which consists of a series of steps to better quantify subjective opinions of VE team members. Construction simulation technique, the Cyclic Operation Network, is used as a means to minimize subjectivity in estimating the value of different alternatives in terms of time and cost savings. A case study shows that the advanced five-phase VE model improves analysis, assessment, and decision on VE. This new approach has a great potential to minimize subjectivity during VE process and improves VE decision-making process by using quantitatively derived data from the simulation analysis.

Value Engineering Handbook

Abstract: : In today's environment of reduced budgets and staffing, the Department of Defense (DoD) can no longer afford the extensive time delays and increased costs that programs have experienced in the past. When one program costs more than planned, decisionmakers are forced to delay or cancel other programs. Such actions result in criticisms and may prompt outside involvement by the Government Accountability Office, the Inspector General, or even Congress. Value Engineering (VE) can play a key role in ensuring programs stay within budget or even save money. This document updates information in DoD Handbook 4245.8-H, Value Engineering, last published in March 1986, and Army Pamphlet 11-3, Value Engineering (undated), both of which were used as sources of information. It shows how VE can be an effective mechanism for generating cost savings or cost avoidance for contractors and the U.S. Government. It is intended for multiple audiences. For Government practitioners, it gives details on the basics of the VE methodology and discusses how to establish a VE program. For Government program office personnel, it explains the impact VE can have on their success. For Government contracting officers and industry, it describes best practices for applying VE on Government contracts. For both Government and industry management, it provides an overview of the benefits of a strong VE program.