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UI PTTE 434 - Value Engineering the Forgotten Lean Technique

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Value Engineering the Forgotten Lean TechniqueOverviewLean and Six Sigma Are Not EnoughSlide 4Slide 5Value Engineering the Forgotten Lean ToolConcept of ValueVE TimelineVideo - The Principles of Value Analysis/Value EngineeringWhen is VE usedSome Thoughts on LeanLean StrengthsLean WeaknessesSome Thoughts on 6s6s Strengths6s WeaknessesSome Thoughts on VEValue Engineering StrengthsVE’s WeaknessesVE Weaknesses Addressed by Lean Six SigmaComparing VE to LeanComparing VE to Lean (Cont’d)Lean and VE SimilaritiesFormula for Superior Continuous ImprovementSix Sigma Process - Click HereValue Engineering/Value Analysis - Why is it important?Competitive AdvantageSix Step Value Engineering Job PlanMapping VE to 6Slide 30Slide 31How and When is Value Engineering Applied?Potential Savings from VEWhy use Value Engineering?FEDERAL DEPARTMENT OR AGENCY DOLLARS SAVAD BY VALUE ENGINEERING -- FY 95Slide 36A Failure to CommunicateSacred CowVE Task Team/Quality Process Improvement TeamThe Synergistic Effect of Value Analysis/Value EngineeringConcepts of Value - DesirableConcepts of Value - UndesirableInformation PhaseFact FindingFunction AnalysisSlide 46The Technical FAST ModelFAST Example - Overhead ProjectorCustomer Oriented FAST Model Vacuum CleanerFAST Model of 737/757 AutopilotPit 9 FAST ModelOther tools that can work with VECost/Function MatrixSlide 54Creativity PhaseCREATIVITY DEFINITIONCREATIVITY & INNOVATION RELATIONSHIPIMAGINATIONThought for the day:IDEA vs. SOLUTIONPROBLEM SOLVINGCreative and Judicial Ability DevelopmentWhat do you see?What is the next symbol in sequence?Slide 65Slide 66INFORMATION FOR SKEPTICSSlide 68Slide 69Slide 70Slide 71Slide 72CREATIVITY TECHNIQUESCREATIVITY TECHNIQUES (continued)Rules for BrainstormingBrainstorming ConceptEvaluation PhaseEvaluation Phase - Idea ScreeningEvaluating IdeasSlide 80Criteria Weighting - Paired ComparisonSlide 82Planning and Reporting PhasesThe Planning & Reporting PhasesACTION PLAN GUIDELINESAnticipate Roadblocks And Plan For ThemImplementation PlanningThe Planning & Reporting PhaseVe Workshop Follow-up ActivitiesLean, Six Sigma and VE Synergy Final ThoughtsLeft click to advance slidesValue Engineering the Forgotten Lean TechniqueUniversity Of Idaho, Industrial Technology Program, PTTE434, J. R. Wixson, Instructor2University of Idaho, Idaho Falls, ID, Industrial Technology Program, PTTE434, J.R. Wixson - InstructorOverview What is Value Engineering?How is VE Applied?When is it used?How can it enhance Lean & Six Sigma?What are the differences and similarities between VE, Lean and Six Sigma?What is Function Analysis and FAST?3University of Idaho, Idaho Falls, ID, Industrial Technology Program, PTTE434, J.R. Wixson - InstructorLean and Six Sigma Are Not EnoughCost of Goods SoldMaterials60%Variable O.H.30%Labor10%Historical focus on touch labor and variable overhead ignores the largest piece of the pie.Sourcing programs fall shortMaterial cost is embedded in the product design4University of Idaho, Idaho Falls, ID, Industrial Technology Program, PTTE434, J.R. Wixson - InstructorValue Engineering the Forgotten Lean TechniqueDon't look now, but an old discipline (value analysis/value engineering) is on the comeback trail. Originally called merely VA by its inventor, Larry Miles, an engineer in GE's purchasing operation in 1947, VA/VE uses a value equation that says value is equal to function divided by cost. If, for example, the buyer wants to get more item value, he/she needs to either increase the item's functionality at the same time he/she is containing cost; or he/she needs to reduce cost while holding or improving its functionality. Either way, the result is more value for the customer (Excerpt from Purchasing Magazine - "Value Analysis makes a comeback," Jim Morgan, November 20, 2003.").5University of Idaho, Idaho Falls, ID, Industrial Technology Program, PTTE434, J.R. Wixson - InstructorValue Engineering the Forgotten Lean TechniqueValue Engineering is truly the "Forgotten Lean Technique." However, over 50 years later, it has gained recognition in private industry and governmental agencies as an indispensable tool for cost reduction, improved product development and product re-engineering. It is also used to improve organizational performance and cost effectiveness as well. The heart of VA/VE is function analysis and "Function Analysis Systems Technique" that sets it apart from other lean methodologies by opening the door to creative problem solving that capitalizes on an interdisciplinary teams creative juices to arrive at truly value added, cost effective solutions to problems ranging from design problems, quality and reliability problems, to organizational problems resulting in increased value and performance for the customer and the organization.6University of Idaho, Idaho Falls, ID, Industrial Technology Program, PTTE434, J.R. Wixson - InstructorValue Engineering the Forgotten Lean ToolValue Engineering (VE) is an intensive, interdisciplinary problem solving activity that focuses on improving the value of the functions that are required to accomplish the goal, or objective of any product, process, service, or organization.VALUE METHODOLOGY“The systematic application of recognized techniques which identify the functions of the product or service, establish the worth of those functions, and provide the necessary functions to meet the required performance at the lowest overall cost.” John M. Bryant, VM Standard, Society of American Value Engineers, Oct. 19987University of Idaho, Idaho Falls, ID, Industrial Technology Program, PTTE434, J.R. Wixson - InstructorConcept of ValueVALUE =FUNCTIONCOST8University of Idaho, Idaho Falls, ID, Industrial Technology Program, PTTE434, J.R. Wixson - InstructorVE TimelineLarry Miles assigned to cost reduction at GEVE a success, training of employees and suppliers beginsNavy adds VE incentive clauseSAVE formed in Wash. DC on Oct.22, 1959Army Corps of Engineers begins VE training VE included in ASPR for military procurementsFirst VE incentive clause published in Fed. Register, GSA staffs for VE.Larry Miles takes VE to Japan.DOE Order 4010.119701947 1952 1955 1959 1962 1964 1969 1988 1990 1993 Today1985Larry Miles dies.VE adopted by NASA ofc of facilities.OMB circular A-131 published requiring all Federal Agencies to use VE to identify and reduce non-essential costs.OMB circular A-131 passes “Sunset Review”Charles Bytheway invents FAST Modeling9University


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