How to Run a High-Impact VA/VE Program in 2026

VA/VE stands for value analysis and value engineering. Both methods improve product value by examining required function relative to cost. Value engineering is generally applied during initial development or redesign, while value analysis is generally applied to existing products or processes. Together, they give mechanical engineering teams a structured way to reduce cost without compromising function, quality or customer value.

This guide explains the fundamentals of VA/VE, how the process works and how mechanical engineering teams can build a stronger program that keeps ideas moving from identification to implementation.

What is VA/VE in mechanical engineering?

Value analysis and value engineering are distinct but closely related concepts within product development. In the simplest terms, VA/VE is a methodology for improving product value. This can be done by reducing costs while preserving required functionality, improving functionality without increasing cost or accomplishing both at the same time.

VA/VE involves systematically looking for opportunities to improve a product. This typically means analyzing the product’s overall design, its individual components and functions, and the manufacturing and production processes used to make it.

The goal is to increase the value delivered by the product by maximizing its benefits while minimizing unnecessary cost.

There is no single framework used by every company. What differentiates VA/VE from other problem-solving approaches is its focus on function analysis through a structured process.

No matter what a VA/VE process looks like, it will involve:

1. Assessing the product, component or process
2. Understanding its required functions and customer priorities
3. Identifying alternative ways to meet or exceed those 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 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, causing more engineering businesses to invest in dedicated VA/VE programs and roles.

Supplier negotiations and purchasing leverage still have a role, but they cannot remove costs embedded in product architecture, material selection, tolerances, manufacturing methods or assembly processes. VA/VE gives engineering teams a structured way to design those costs out.

Why engineering teams use 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/VE is not indiscriminate cost cutting. An alternative that reduces unit cost but compromises a required product function, safety margin, quality requirement, regulatory obligation or manufacturing capability does not improve value.

VA/VE 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/VE techniques to uncover potential cost-saving opportunities.

When an effective VA/VE process is executed consistently, it can produce tangible business results such as lower product costs, stronger margins and greater customer value.

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 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:

• External pressures such as supply-chain disruption and material availability
• Accelerated product-development cycles with ambitious 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-saving opportunities in a way that other cost-reduction methods cannot.

The strongest proposals do more than identify a lower-cost alternative. They explain which function is preserved, which requirements are affected, what technical work remains and how the expected savings will be validated.

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.

For a mechanical product, a function may be to support a load, contain pressure, transfer torque, prevent leakage, locate another component or protect an internal system. The existing geometry, material, tolerance or manufacturing method is the current solution—not necessarily the function itself.

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.

What software supports a VA/VE program?

‍As teams shift from discrete, event-based VA/VE to continuous cost reduction, the software stack you use matters more than ever. Engineering leaders are currently being flooded with AI promises, but few resources explain which tools actually drive results for cost engineering.Rather than looking for a single "AI for everything" platform, the most effective teams are taking a systems-level view. They are building a stack that combines specialized tools for each stage of the cost lifecycle:

• AI Agents: For scaling workshops, capturing feedback, and ensuring decisions don’t get lost between reviews (e.g., CoLab).
• Should-Cost Engines: For rapid, defensible cost estimation and negotiating leverage (e.g., aPriori).
• LLMs: For synthesizing vast amounts of specs, notes, and cost tables into clear narratives (e.g., ChatGPT Enterprise, Copilot).
• Generative Design: For physics-based topology optimization that reduces material usage (e.g., Siemens NX, nTop).

Navigating this landscape can be overwhelming. To help you determine the right combination for your program, we’ve broken down the product lifecycle into the specific decision points where cost is set and mapped them to the tools that deliver results.

These AI categories complement, but don't replace, the core engineering systems used throughout VA/VE. CAD tools create and modify the design while simulation tools test whether an alternative still meets technical requirements. Costing tools quantify the business case, while PLM controls released product data and formal changes. And finally, design review software connects the design to the people, evidence and decisions involved in evaluating each proposal.

Where AI can help

AI can help teams prepare for VA/VE reviews, organize large volumes of engineering information and recover knowledge from earlier projects. For example, AI Lessons Learned can surface relevant feedback from previous design reviews when similar geometry appears in a current review.

That can reduce repeated investigation and help participants understand why an earlier design decision was made. Engineers still need to evaluate whether the prior lesson applies to the current product, configuration, requirements and manufacturing context.

For a deeper comparison of software categories and their limitations, see VA/VE Tools for Engineering-Led Cost Reduction.

Where design review software applies

A VA/VE idea may begin during a workshop, get recorded in a spreadsheet, refer to a CAD model, require input from a supplier and eventually become an engineering change. The risk is not simply using multiple tools. It is losing the relationship between the idea, the affected design and the eventual decision.

A structured engineering-review environment can help teams:

• Examine the correct drawing, model and revision
• Attach a proposal to the affected part, feature or requirement
• Bring design, manufacturing, quality, sourcing and suppliers into the review
• Assign feasibility, costing and validation work
• Track whether a proposal is open, accepted, rejected, deferred or implemented
• Preserve why the proposal was accepted or rejected
• Prepare accepted ideas for the appropriate engineering-change and release process

CoLab supports the review and decision portion of VA/VE. It gives distributed participants access to models and drawings, keeps ideas connected to the design and turns findings into trackable items with status, ownership and history. It does not replace CAD authoring, cost accounting, specialist simulation or the PLM system responsible for released product data and lifecycle execution.

What to look for in VA/VE software

The right criteria depend on the gap your team is trying to close. For the review and execution portion of a VA/VE program, look for software that can:

• Open the CAD models, drawings and supporting documents used in the review
• Identify the design revision or product configuration being evaluated
• Capture structured ideas directly against the affected design
• Record projected savings, implementation cost, risk and supporting evidence
• Assign owners, priorities, due dates and dispositions
• Provide practical access for manufacturing teams, suppliers and non-CAD users
• Retain accepted and rejected ideas with their rationale
• Show what remains open and how long proposals take to resolve
• Support a controlled handoff into PLM, ECN or release processes

No single platform needs to replace the entire VA/VE toolchain. The more important requirement is that information does not lose its engineering context when it moves between tools.

VA/VE methodology

The value of a product can be expressed as the ratio of its benefits to its costs. This value ratio can be calculated using the following formula: Value = Function / Costs.

VA/VE methodology seeks to increase the value ratio of a component or process by increasing function, decreasing cost, or both. There are different approaches to VA/VE, but the main concept involves breaking the product down into its component parts and evaluating each one — all in a structured, systematic way.

7 steps of an effective VA/VE process

From selecting the best product for analysis to assessing and prioritizing ideas to implement, the VA/VE process can be long and complex. While no framework is perfect, it helps to have a rough idea of all the steps involved from start to finish.

Here are 7 steps for a quality-driven VA/VE process:

1. Product selection
   Choose a product with enough cost, production volume or strategic importance to justify the engineering effort and potential design change. Define which product families and configurations are in scope.
2. Cost Pareto
   Use reliable cost data to identify the components, processes or assemblies responsible for the greatest share of product cost. Confirm the baseline before calculating potential savings.
3. Marketing and voice-of-consumer interviews
   Identify the product functions and characteristics customers value most so the team does not reduce cost in an area that affects a key purchase criterion or customer commitment.
4. Manufacturing process go-and-see
   Observe the actual manufacturing and assembly process, including setup, changeover, scrap, rework, inspection, material movement and operator workarounds.
5. Review of prior work and design review and ideation with product SMEs
   Review previous cost-reduction proposals and the decisions behind the current design. Use the correct model, drawing, bill of material and revision so the discussion reflects the product actually being manufactured or released.
6. Ideation with engineering and design from external team members
   Bring in people with relevant experience from other products, plants, suppliers or disciplines. They may recognize alternatives the immediate product team has stopped questioning.
7. Evaluate, prioritize and advance ideas
   Score each proposal based on expected savings, required function, feasibility, risk, implementation cost and validation needs. Record an owner and disposition, then move accepted ideas into the appropriate engineering-change and release process.

Participation should depend on the product function and proposed change being evaluated — not simply on inviting a large group to one workshop. Relevant participants may include design engineering, manufacturing engineering, quality, sourcing, cost engineering, suppliers, toolmakers, service teams and subject-matter experts responsible for the affected function.

When a proposal depends on process-specific supplier knowledge, a structured supplier DFM review can expose tooling, tolerance, material and process-capability constraints before the idea advances.

These seven steps describe how teams select a target, understand the product, develop proposals and decide which ideas should move forward. A complete VA/VE program must then carry accepted ideas through validation, engineering change, release and implementation. Otherwise, the program measures the size of its idea pipeline rather than the savings that reach production.

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What should teams evaluate before approving a VA/VE idea?

Projected savings are only one part of the decision. Before approving a proposal, the team should evaluate:

• Required function and product requirements
• Expected recurring savings
• Tooling, capital and engineering cost
• Manufacturing and assembly feasibility
• Quality, safety and reliability risk
• Supplier and supply-chain impact
• Validation requirements
• Implementation timing
• Total lifecycle cost

Every proposal should identify the affected part or assembly, current design, proposed alternative, required function, expected savings, one-time cost, principal risks, required validation, owner and current status.

A proposal should be marked accepted, rejected, deferred or returned for further analysis. Recording why an idea was rejected or deferred is as important as recording why another was accepted. Without that rationale, later teams may repeat the same investigation or propose an alternative that was already ruled out for a valid engineering reason.

Accepted ideas still need to pass the appropriate validation and engineering-change process before they affect production cost. Depending on the proposal, that may include simulation, tolerance analysis, prototyping, supplier feasibility, tooling trials, qualification testing or production validation.

Tips for your next VA/VE initiative

Here are three tips for a stronger VA/VE program:

1. Lower the participation barriers.
   
   The right digital processes should enable more people to give input, more often. Are there ways you can facilitate smoother cross-functional collaboration? Is there work that could be done asynchronously? Define the entry barriers to your cost reduction process, and figure out how you might lower as many as you can. Because when it’s easier for more people to participate, you end up with stronger ideas (and more of them).
   
   Lowering the barrier does not mean inviting everyone to every discussion. It means making the design accessible to the specific people who understand the affected function, manufacturing process, supplier capability, quality risk or customer requirement.
   
   
2. Shift from discrete VA to continuous VA.
   
   ‍:Is your approach to cost reduction and/or value analysis largely event-based or meeting-based?
   
   When it was necessary to physically get everyone in the same place, at the same time, that inherently meant that your cost reduction work would be largely discrete. But as norms shift toward virtual and hybrid methods, your cost reduction approach should also shift toward a more continuous framework.
   
   A continuous approach gives participants time to investigate the design before the event, contribute ideas asynchronously and complete feasibility work after the live discussion. It can also connect VA/VE more closely to ongoing design reviews, supplier reviews and planned product changes.
   
   
3. Develop a repeatable, consistent structure.
   
   ‍It shouldn’t feel like you’re starting from scratch every time you need to organize cost-reduction work or plan a VA event. With a repeatable framework, your team can work more effectively and your efforts become scalable.
   
   On top of that, following a consistent format each time means you’ll be able to accurately compare data from your VAVE and cost-reduction activities.
   
   ‍A repeatable structure should define what information is captured, how ideas are evaluated and what happens after the workshop. At minimum, each proposal should include:
   • The affected part, assembly or process
   • The current solution and proposed alternative
   • The required function
   • Projected savings and implementation cost
   • The principal technical or business risks
   • Required validation
   • An owner, due date and disposition
   The same structure should carry proposals beyond idea generation. Teams need a consistent way to assign follow-up work, resolve open questions, approve or reject ideas, move accepted changes into the appropriate release process and confirm whether the expected savings were realized.
   
   That also makes program results easier to compare across products, events and business units. Useful measures may include ideas evaluated, acceptance rate, time to disposition, time to implementation and projected, validated and realized savings.
   
   CoLab’s review and feedback tracking keeps findings, ownership, status and decision history connected to the design throughout that process.

VA/VE examples

Since VA/VE can be applied in a broad range of industries, there are many different examples of VA/VE and how it works. Depending on the product being evaluated and the goals of the VA/VE process, the specific techniques and tools used in VA/VE will vary from team to team.

The distinction between the two methods is mainly about timing: value engineering addresses an opportunity during initial development or redesign, while value analysis applies similar methods to an existing product or process. See more value analysis and value engineering examples.

Value analysis example

Optimizing a plastic bottle closure design is an example of VA. A commercially available bottle may have a delivery nozzle that threads onto the bottle and a separate sealing cap that attaches to the nozzle, protecting it from the air that could evaporate the product’s fluid.

The cost Pareto may show that the sealing cap is significant to the overall product cost, leading the engineering team to design an integrated sealing cap-nozzle that provides both functions in one component.

This solution would likely require additional tooling for the new shape. Still, it would reduce a significant amount of material by removing a component, also a sustainability win, and the assembly time to place and install the cap.

In addition, this design change would reduce manufacturing tolerance stack-ups that could increase scrap rates or introduce an additional leak path.

Before implementation, the team would still need to confirm sealing performance, durability, customer use, tooling payback, manufacturability and production quality.

Value engineering example

Assembling two mature piece parts is an example of VE. A customer may ask the manufacturer to construct the joint between two system components. The initial design may amount to a bolt-on solution accomplished by extending mating flanges to the existing components to attach the parts.

Engineers could run this step through a VE analysis before launch to consider redesigning a more integrated joint, using less material, and potentially recommending a different manufacturing technique to incorporate joints into a single component.

The alternative would still need to satisfy the applicable loads, interfaces, tolerances, assembly access and service requirements. Reducing material or part count improves value only when the integrated design continues to perform the required function.

Other VA/VE examples in mechanical engineering

Other common opportunities include:

• Reducing part count without compromising serviceability
• Standardizing fasteners or purchased components across product families
• Replacing a machined feature with a cast, molded, forged or formed feature
• Relaxing tolerances that are tighter than the functional requirement
• Changing a material or finish after reviewing structural, environmental and regulatory requirements
• Redesigning a part for casting, molding or sheet-metal production
• Reducing tooling, setup or changeover complexity
• Combining suppliers or processes without creating unacceptable capacity or continuity risk

In every case, the team has to evaluate the tradeoff. A lower purchase price does not improve value if the change creates greater tooling, scrap, inspection, warranty or service costs.

VA/VE in manufacturing and the supply chain

VA/VE should be less a lever to pull when you need to improve profitability and more a strategic mindset shift in the approach to extracting the most value from a product’s total cost of ownership (TCO).

The VA/VE project team can extend its assessment to add the total cost of ownership across the entire supply chain to the manufacturing process and product-design analyses to find areas to remove waste.

These factors are additive to the cost-savings potential, but team members must consider potential interdependencies or conflicts between procurement, manufacturing and design before proposing a cost-saving idea.

A critical component of a VA/VE project is the manufacturing process go-and-see, where the project team observes the manufacturing process.

Before diving into the process, the team should analyze setup and changeover time in addition to the capital situation. Setup and changeover are non-value-added steps, so organizing multiple component runs on the same asset to reduce setup and minimize changes can increase daily throughput.

Another opportunity for VA/VE in the supply chain is capital expenditure, often a considerable investment. The team can look at depreciation schedules and expected replacement timing to tie product-design changes to new equipment.

Considering capital during VA/VE improves the ROI of a VA/VE idea substantially and helps the business know when to execute the change.

The assessment should also account for transportation, inventory, supplier capacity, lead time, tooling ownership and continuity risk. A proposal that reduces component cost while increasing supply disruption or inventory exposure may not lower total cost of ownership.

See how to incorporate supply-chain optimization into a VA/VE strategy.

VA/VE in automotive

Let’s consider a specific example of how VA/VE can be used in the automotive industry.

Lightweight materials can reduce vehicle mass, improving fuel efficiency or electric-vehicle range and increasing value for customers. The VA/VE process can help determine whether the benefit of changing the design justifies the material, manufacturing and implementation costs.

A team might begin with a function analysis to identify the components and systems contributing most to vehicle mass, such as the body, chassis and powertrain. It could then evaluate alternatives such as aluminum, composites or revised component geometry.

The assessment should account for more than material cost. Engineers also need to consider joining methods, corrosion, crash performance, repairability, tooling investment, supplier capability, production volume and the effect on surrounding systems.

If the alternative provides sufficient product and business value, the change can move through the appropriate design, validation and release process.

Read more about improving automotive profitability through VA/VE.

VA/VE case study: How JCI hits ambitious cost reduction targets with virtual VA/VE in CoLab

For global technology and industrial leader Johnson Controls (JCI), VA/VE is a big priority. Historically, JCI’s VA/VE program revolved around in-person events that happened once or twice a year. The events required flying team members from around the world to a factory location for 2-3 jam-packed days of walking the factory floor and trying to come up with as many ideas as possible.

When the Covid-19 pandemic disrupted international travel in 2020, Johnson Controls quickly pivoted their VA/VE approach and began running virtual events in CoLab instead. Since adopting CoLab for VA/VE events, the JCI team realized there were downsides to the old approach of doing everything in person:

• Travel expenses and logistics limited who could participate, which meant fewer participants overall as well as fewer opportunities for cross-functional input
• Trying to fit the entire event into 2-3 days wasn’t giving people the chance to do their best cognitive work, at their own pace
• Walking the factory floor didn’t give visibility to the internal workings of products (and those without CAD/PLM access had no way to interrogate the 3D models themselves)

With CoLab, those barriers disappeared — and idea generation doubled.

“We’ve been using this for over a year now for VA/VE events,” says Brian Stauffer, Global Product Design Manager at Johnson Controls.. “And what we’ve actually seen is: we get a better benefit out of doing it virtually than we would have typically on the factory floor.”

Get the full scoop on how JCI leveled up their cost reduction results in this VA/VE case study.

For teams evaluating how to run the same type of program, see how CoLab supports virtual and hybrid VA/VE cost-reduction events.

Run VA/VE reviews around the actual design

A high-impact VA/VE program does more than generate ideas. It gives each proposal the product context, technical review, ownership and follow-through required to become a validated design decision.

CoLab brings distributed engineering, manufacturing, sourcing and supplier teams together around the same models and drawings. Ideas stay connected to the affected design, projected savings can be captured alongside implementation costs and risk, and the strongest proposals can be tracked toward implementation.

See how CoLab supports VA/VE cost-reduction events.

Resources

Blog Posts

• The 5 pillars of modern VA/VE
• 21 truths for large engineering companies to build a powerful VA/VE engine
• 3 practical ways to modernize your VA/VE process
• How to Improve Automotive Profitability Through VA/VE
• Real-World Examples of Value Analysis and Value Engineering
• VA/VE in Action: Effective Tools for Transforming Your Next Initiative
• How to integrate value engineering into NPD

Podcast Episodes

What high-performing VA/VE programs are doing differently

The enterprise leader’s guide to scaleable cost engineering

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Tutorials