Do Value Engineering Upfront, Right at Design Stage

Typically the value engineering (VA/VE) practices take already designed, validated and productionised components and apply the VA/VE methodologies to increase the value of the product either by reducing cost (weight) or increasing functionality.

 

What if we, the designers or design engineers, could do the value enhancement of the product at virtual concept design stage itself?

To make the things clearer, let’s get into the numbers with a simple example:

Assume,

Selling volume of a popular car = 60K unit per year.

Engine front mounting arm of the car is a casting component, weight= 1.2kg,

Material cost per unit (A) = 1.2 kg x 1.5 USD = USD 1.8

Design and virtual validation of the mounting arm (B) = 300 Man-Hours x USD 20 = USD 6000

Physical validation of the arm (C) = 200 Man-hours x USD 20 = USD 4000

Tooling cost of the arm (D) = USD 3500

So, total design and development cost of the engine mounting arm (E) = B + C+ D = USD 13500

Design_Management_in_brief

Image Source: Wiki

Now, let’s see the cost benefit analysis comparison for upfront value engineering at initial product development stage vs. separate value engineering (VA/VE) drive after 1 year of production:

 

Upfront Value Engineering Separate VA/VE Drive after 1 year 
Design & Development Cost 13500 13500
Additional Design & Development Cost 0 13500
Opportunity cost of  Material saving for 1 year of production* 0 21600
Total Cost (USD) 13,500 48,600

* Assumptions – 20% material saving could be achieved through VA/VE. So, total material cost saving through 1 year of production = 20% x 1.8 x 60000 =  USD 21600

 

Time benefit analysis similar to the above cost benefit analysis can show the benefits of upfront value engineering in terms of time as well. Now, the next question arises as how to do upfront Value Analysis / Value Engineering ? The answer is using the design optimization tools and software right at the concept development stage, many such tools like SolidThinking Inspire are available out there.

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