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What is VA/VE in mechanical engineering?
Value analysis (VA) and value engineering (VE) are distinct but related concepts within product development. In the simplest terms, VA/VE refers to a methodology for optimizing product value. This can be done by reducing costs while preserving functionality, and/or by enhancing functionality without increasing costs.
VA/VE involves systematically looking for opportunities to improve a product. This typically means analyzing a product’s overall design, its individual components and functions, and/or its manufacturing and production processes. The goal is to optimize the value a product delivers by maximizing its benefits while minimizing its costs.
Rather than a single, specific framework for VA/VE, there are many ways to execute value methodology. What differentiates VA/VE from other problem-solving approaches is its focus on function analysis via structured process. No matter what a VA/VE process looks like, it will involve 1) assessing a product, 2) understanding its functionality and customer priorities, and 3) identifying alternate ways to meet or exceed the relevant requirements.
For some companies, VA/VE is just one piece of a broader cost reduction plan. Yet, although finance-led and procurement-led cost reduction tactics are still common, more and more businesses are identifying engineering-led cost reduction efforts (such as VA/VE) as a strategic priority — particularly in response to the current global economic climate. Pressures like inflation and supply chain disruption are reducing the effectiveness of traditional go-to methods for achieving cost reduction goals, which is causing more engineering businesses to step up their investment in dedicated VA/VE programs and job roles.
Purpose of VA/VE
The basic purpose of VA/VE is not difficult to grasp: it’s all about improving value. That happens either by eliminating unnecessary costs, or by making the product better without increasing costs. (Of course, the holy grail is to consistently generate an idea pipeline full of ways to do both at once!)
In other words, the goal of VA/VE is to ask: Can we spend less while delivering the same end value? Or, can we spend the same amount but deliver greater value?
VA is also intended to recover costs from earlier phases of the product lifecycle. During new product development (NPD), the benefits of getting to market faster tend to outweigh the potential benefits of optimizing initial product costs. That means speed and quality typically take priority over cost. However, once a new product is introduced, it’s crucial to use VA techniques to uncover potential cost-saving opportunities.
Ultimately, the true purpose of VA/VE boils down to having a positive impact on the business. When an effective VA/VE process is executed consistently, it produces tangible business results like lower expenses, higher customer satisfaction, and increased market share.
The difference between value analysis and value engineering
Although value analysis and value engineering share the same ultimate goal, they are deployed at different points in a product’s lifecycle. While the concepts are distinct, even seasoned engineers may use the terms “VA” and “VE” almost interchangeably. Yet part of building an effective VA/VE process is considering when, where, and how to use each method.
The difference between value analysis (VA) and value engineering (VE) is:
- Value engineering focuses on finding cost savings during the initial design phase
- Value analysis focuses on finding cost savings for existing products
In other words: value engineering involves optimizing value from the outset of the design process, before launching a product to market. Conversely, value analysis applies to existing products with at least one complete design and production cycle.
To illustrate this difference with examples of value engineering and value analysis, consider a simple plastic bottle. Imagine the closure design consists of a delivery nozzle that threads onto the bottle and a separate sealing cap that attaches to the nozzle.
Through VA, you may uncover an opportunity for significant cost savings by redesigning the closure into an integrated sealing cap-nozzle that provides both functions in one component. On the other hand, VE is more about cost avoidance than cost reduction. So with a VE approach, the bottle’s closure redesign would happen before the initial product launch, as part of NPD.
How to separate function vs. feature
Understanding a product’s function is at the core of value analysis and value engineering.
In this context, function refers to the product’s essential purpose: a car’s function is transportation, whereas a chair’s function is to provide seating. A feature, on the other hand, is a specific aspect or characteristic of a product — like the leather interior of a luxury car, or the material used to upholster an armchair.
When performing VA/VE, it’s important to distinguish between functions and features. This can be done using techniques such as functional decomposition (breaking the product down into its component parts and identifying the function of each) or functional analysis (describing a product in terms of its functions and how they’re performed).
Identifying the functions of a product and separating them from the features is part of the systematic and analytical approach of VA/VE. Before you can generate cost-saving ideas or redesign the product, you need to have a strong understanding of where it already stands. By getting a clear picture of what the product needs to achieve and how it currently achieves it, you’ll have the information you need to find and assess potential savings opportunities.
Why do you need VA/VE?
Engineering companies that neglect to develop a robust VA/VE strategy in the coming years will have a harder time competing for customers, talent, and market share. On the other hand, creating a strong VA/VE culture is a smart strategic move that can have big ROI when done well.
When it comes to new products, an effective VA/VE process is a necessary counterbalance to the demands of typical NPD. The iron triangle of Good, Fast, and Cheap — of which only two are achievable at a time — deprioritizes cost when leaders want high-quality solutions in a hurry. Despite the importance of profitability, the choice must be Good and Fast to keep up with the rapid pace of business. That’s why companies rely on techniques like value analysis to recover cost in later product phases.
From a broader business perspective, VA/VE is a fundamental tool for engineering-led cost reduction initiatives. Traditional finance-led or procurement-led cost reduction efforts aren’t being abandoned. But they’re no longer going to be sufficient, either.
To continue meeting targets, large engineering enterprises will need to grow their investment in engineering-led cost reduction programs including VA/VE. This is due to factors such as:
- Overall macroeconomic climate (recession, market conditions)
- Added external pressures like supply chain disruptions and global affairs
- Accelerated product development cycles with lofty time-to-market goals
- Rising product complexity that requires multidisciplinary expertise and collaboration
Rather than negotiating with suppliers for incremental cost improvements, VA/VE is a way for engineering teams to design cost out. By focusing upstream, on a product’s design and design processes, engineering-led cost reduction can generate substantial cost savings opportunities — in a way that other cost reduction methods simply cannot.
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