Value Engineering

Topics: Design, Costs, Production and manufacturing, Engineering, Cost / Pages: 5 (1183 words) / Published: Jul 31st, 2013
MAPUA INSTITUTE OF TECHOLOGY GRADUATE SCHOOL SCHOOL OF INDUSTRIAL ENGINEERING AND ENGINEERING MANAGEMENT FINAL EXAM IN VALUE ANALYSIS/ENGINEERING

RICHARD A. ABAYHON MS Engineering Management Student

No industry can take seriously Total Quality Management without operating a formalized system of Value Analysis/Engineering. No business that desires to become lean will succeed if product designs remain unchanged because of no amount of continuous improvement in the process can identify the costs of a poor design or a design that has not changed for many years. However, poor product reviews or an informal process that is restricted only to a review of the design by a particular group may yield only limited achievement in eliminating costs that could be avoided or the costs of poor quality. These efforts will miss the many opportunities to make the process in manufacturing, assembly and service much easier, optimal, less complex and less costly. Thus margins will not be improved significantly because only a small part of the total process has been managed correctly. As such, this type of superficial activity will not generate increased profit and the revenue stream that will be needed to finance new products and new investments in technology. A properly managed and effective value engineering process will easily repay the time invested over the life of the product and a truly effective process will yield significant competitive advantage for companies that exploit it. For businesses that supply other organizations, the ability to design and redesign product and processes opens the possibility of true, meaningful, profitable and long-term partnership with a customer. Each progressive step that secures a greater design responsibility for the supplier will, in parallel, make the supplier increasingly more important to the competitive advantage of the customer organization and will increase the benefits to both companies. In an environment where budgets are often

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