How long should a Value Engineering (VAVE) project take and what should it deliver? The answer is, it all depends where you are in the product development cycle.What is the objective of a value engineering project?
This blog explores when and why VAVE can be applied and the potential time commitment required to deliver savings at each stage. VAVE is a system that looks to optimise the material choices, design, manufacturing and delivery processes of end products to improve the value of an offering for consumers. It seeks to deliver greater value for money without increasing costs of production, sacrificing quality, or adding additional features.
When can VAVE happen?
The Lean Enterprise Institute say that 95% of process activities associated with the manufacture and delivery of products typically add no value to customers. And that’s bad news for everyone in the chain. It represents a lot of wasted time and effort that no one is profiting from.
Instead, VAVE can highlight and eradicate all the unnecessary accretions of expense that can be layered on at every stage of product development.
VAVE can be usefully applied during:
- The design process (before tooling is set and manufacturing begins)
- Following launch (when profitability or market share begin to wane)
- As the product is being phased out (and the next generation designed)
1. VAVE in the design phase
It’s well known that 80% of costs are locked into a product during the design phase, so capturing potential issues at this stage, before tooling is set, can bring you significant savings over time.
The product that is fresh from the designers’ bench should have been properly validated against customer needs, so the VAVE process at this stage won’t be about fundamentally redesigning the way the product works.
But when a product leaves the hands of a design team, there will be many unnoticed inefficiencies built into the product - everything from the designers' choice of the most expensive materials to over-specified engineering tolerances.
At this stage a VAVE team should concentrate on the following:
1. Optimising the NPI process to ensure it is as efficient as possible.
2. Optimising DFMA - (design for manufacture and assembly) to ensure the manufacturing process chosen is exactly appropriate for the part or product.
This can mean looking at the way specifications can be changed and materials substituted for cheaper options without affecting quality.
Common considerations at this stage can be around:
- Mechanical properties - How strong does the material need to be?
- Optical properties - Does the material need to be reflective or transparent?
- Thermal properties - How heat resistant does it need to be?
- Colour - What colour does the part need to be?
- Electrical properties - Does the material need to act as a dielectric (act as an insulator rather than a conductor)?
- Flammability - how fire resistant must the material be?
If cuts and substitutions can be made without compromising safety, compliance, or intended reliability - then significant savings can be made before production has even begun.
Other DFMA techniques could also be applied to ensure the design of the product is optimised for faster, more cost-effective production and assembly.
At this phase in the product development cycle, the typical time required for an implementation of a VAVE project is around 1 - 3 months, as the product is tweaked into a more profitable shape.
2. Post-production Value Engineering
Once a product has been launched and has been on the market for a while it may benefit from (or urgently require) some degree of re-design to remain competitive and profitable.
Post-production, you’ll be getting feedback from many sources. You’ll start to get a sense of what features are working and valued by your customer and which aren’t. You may begin to see how the product has been overspecified and where waste can be cut back in ways that were not obvious before. Your team may also be telling you where the manufacturing process is itself becoming wasteful.
You may also be seeing the profitability of your product slip, or more keenly priced competitors' offerings eating into your market share.
Worse, there could be unnecessary costs accumulating unseen in different parts of the supply chain. There may be materials that you are using (or even logistic solutions that you rely on) that have become suddenly more expensive.
A VAVE process will systematically identify issues and suggest alternatives that will address these pain points, improving value for consumers at the same time.
Redesign opportunities with VAVE
Can you minimise the design? Research may show you certain features are simply not being used by your consumers. Can they be removed from your product altogether?
Can the product be built with fewer parts making it easier to manufacture or assemble?
Can you eliminate durability or reliability? Overspecification against user needs is a common cause of inflated costs that may become more obvious and serious as price pressures in the marketplace increase.
Power vacuum? A working example of VAVE re-engineering
Take the example of a vacuum cleaner built to withstand a one-tonne impact. Is a one-tonne impact a credible use-case for a domestic appliance? Will reworking the product design to remove extra material from the design save you money in procurement, assembly, and delivery costs? Could it make the product lighter and more maneuverable and, therefore, more attractive to your customers?
Identifying LEAN manufacturing opportunities
Overprocessing and overproduction can also be examined as part of a VA/VE process. Is there duplication of effort in production that has crept in overtime? Have successive, corrective actions resulted in more complicated processes that now need rationalisation? A deeper VAVE investigation will show you if there are unnecessary production, testing or validation steps that can now be eliminated, combined or redefined.
Supply chain optimisation
A supply chain that has not been examined for a while may contain some nasty surprises within it. A cross-discipline VAVE process can systematically uncover optimisation potential in everything from material sourcing to delivery methods and could offer some relatively quick wins.
A VAVE process undertaken midway through the life of a product to protect and optimise market position or profitability can take anywhere between 4 and 8 months to complete.
But you should do the proper calculations to ensure the cost of the process will not outweigh the potential savings you can make.
3. VAVE for the next generation
As mentioned above, it’s no good spending time and money optimising a product that has only a few years left of productive life. But VAVE can still help you determine a more profitable future for the next generation of your products.
Major redesign initiatives
Value engineering the next iteration of a product can include major redesign initiatives, starting with a thoroughgoing function analysis.
This is not about tweaking and optimising products. Instead it can be about fundamentally reassessing the unique benefits that your customers derive from a product and working out how to deliver these ‘functions’ more efficiently and cost-effectively for everyone in the chain.
The product can change its shape, size and feature set dramatically to fulfill its function more effectively. In some cases, the entire purpose and intended marketplace of a product could be changed. The product may end up being put to an entirely different use in another sector!
VAVE for the next generation of your product may consider using radically different materials and novel production techniques to fulfill customer needs better and increase value. Whole platform re-design initiatives may also be one of the outcomes.
Considering the effort and expertise required to rethink a product in its entirety a project like this may take between 6 - 9 months to complete. It can also be a high-risk enterprise since a reconfigured product may not automatically inherit a strong or loyal customer base from the fading fortunes of its predecessor.
Formalising the VAVE process at each part of the product management cycle will ensure that evaluation of a product is done consistently and solutions are not implemented in a piecemeal way. A good VAVE project will clearly identify its objectives, justify its recommendations with evidence and regularly assess results to ensure your strategy is working.