What OEMs need to know about Value Analysis and Value Engineering (VAVE)?

In the present era, neglecting product value assessment can impact product engineering, weakening the foundation upon which products are developed. If product value is not evaluated properly, then it will fail to meet customer needs. It will also result in wastage of resources and have an impact on profit margins. Moreover, it can tarnish brand reputation and ruin the trust among customers when they are unhappy with the product. This is when VAVE can serve to be beneficial for product development. 


Table of Contents

  1. What is Product Engineering and how VAVE is part of it?
  2. What is VAVE?
  3. What is Value Analysis?
  4. What is Value Engineering?
  5. What is the Origins of VAVE?
  6. How does Value Engineering help OEMs?
  7. What do we mean by value, function, and cost?
  8. How do you calculate value?
  9. How is value maintained or increased for a customer?
  10. How to define the ‘function’ of a product?
  11. What is the Objective of VAVE ?
  12. Why is Value Engineering important for OEMs now?
  13. How Value Engineering can help OEMs stay in business and grow?
  14. Value Engineering Drawbacks
  15. The Value Engineering process
  16. Partner with Technosoft Engineering
  17. Closing Thoughts


Key Takeaways

In this article, you will know everything about Value Analysis and Value Engineering (VAVE). You will also know how it can benefit organizations across the manufacturing industry. 


What is Product Engineering and how VAVE is part of it?

For a long time, product engineering has always been known to be a process of designing, and developing products to meet customer needs. It constitutes many stages like concept creation, design, building a prototype, testing and production. In such stages, product engineering can benefit from Value Analysis and Value Engineering (VAVE), which assesses product functions and costs. Through the approach, engineers can find new ways to improve quality and enhance functionality at the same time. After all, they will ensure that the final product offers maximum value to customers and manufacturers. 


What is VAVE?

In the engineering sector, Value Analysis and Value Engineering (VAVE) is a systematic approach that helps in improving the value of the product or process. This improvement is accomplished through the optimization of various functions and reduction of costs. While engineers examine the components and processes comprehensively, they identify the areas for improvements without a compromise on performance or quality. Once the team focuses on the functions that the product or process has to perform, VAVE enables it to eliminate unnecessary expenses, and enhance overall efficiency. Customers and producers can later receive excellent value, cost savings, and increased production. 


What is Value Analysis?

Value Analysis (VA) refers to a systematic approach which helps in assessing the value of the product. This helps to minimize costs and enhance the overall functionality. As soon as professionals review the product’s design, its performance and manufacturing processes, they can look for areas which need improvements. By observing every component and how it adds on to the overall function, VA enables to achieve an efficient and cost-effective product that can surpass customers’ expectations. 


What is Value Engineering?

The main focus of Value Engineering (VE) is changing product design after assessing its value. Over time, this approach has added product analysis and optimization. Ultimately, the approach leads to solving a problem in a creative way and collaborating with cross-functional teams to seek alternative solutions. With a totally different product design, organizations can also gain a competitive advantage in the market. 


What is the Origins of VAVE?

Even though engineers embrace VAVE in many domains, it is used specifically in the construction industry. However, the approach was initially used, in World War II, by an engineer, Laurence Miles, who was working with General Electric (GE). Let’s look at the origin of Value Analysis and Value Engineering. 

In the past, VAVE was utilized to locate alternate materials for key products during a nationwide scarcity. But, Mr. Miles soon found the benefits of re-engineering products. Apart from maintaining functionality, his system helped to improve performance and save costs. After the end of the war, he moved ahead to make the approach perfect. 

While Mr. Miles was making the approach perfect, he named the approach as ‘Value Analysis (VA)’. The methodology further became popular as VAVE and presently it is called Value Engineering (VE). 


How does Value Engineering help OEMs?

How does Value Engineering help OEMs?

There are numerous ways in which Value Engineering can help OEMs.

Cost Reduction

With a systematic analysis of products and processes, VE helps to eliminate production costs without disrupting functionality. 

Improved Product Quality

As VE focuses on enhancing the functions of a product, it can help to improve the overall design and quality to meet customer expectations. 

Innovation and Competitiveness

While VE involves creative problem solving and seeking alternative solutions, the process fosters innovation. This enables OEMs to stay ahead in the market with cost-effective products. 

Resource Optimization

By helping OEMs to utilize resources optimally, VE leads to more sustainable manufacturing practices. It also helps to reduce the costs associated with the production process.

In the end, OEMs can enhance customer satisfaction as they will be using high-quality products. This drives sales when existing customers recommend the products to others. 


What do we mean by value, function, and cost?

In simple parlance, value means the product’s worth to customers. Function, on the other hand, refers to the properties of the product. Cost is nothing but the cost of goods sold (CAGS).


How do you calculate value?

When engineers are involved in calculating the value of a product, they evaluate its cost and its performance. As they calculate the total cost, they will consider direct costs, indirect costs, and lifecycle costs. But, when it’s time to assess the performance, it is measured in terms of reliability, effectiveness and many other metrics. Towards the end, the value is calculated by the formula as below. 

How do you calculate value?


How is value maintained or increased for a customer?

When you have to maintain the product’s value, it can be done by increasing or maintaining the function and reducing the cost. The value can also be maintained by keeping the function and cost consistent.  


How to define the ‘function’ of a product?

The functions of a product are nothing but the properties and what it can do for the customer. When companies consider the functions, they don’t take features into account. This helps them think creatively when the team has to visualize the product in future. Hence, when you think about customers’ expectations through the product, they can think of the ways in which the product functions and the process of manufacturing. 


What is the Objective of VAVE ?

As VAVE helps in determining the cost to benefit ratio, it enables experienced professionals to seek alternative materials, and product designs. This helps to reduce costs when it’s essential to maintain functionality. A group of experienced professionals then play a role in presenting alternatives to designs, logistics and processes related to manufacturing. 


Why is Value Engineering important for OEMs now?

With the COVID-19 pandemic, and many calamities, several sectors along with the supply chain have been exposed to unexpected disasters. This has affected agility and led to an increase in costs for consumers as well as manufacturers. Automation and Artificial Intelligence (AI) have also impacted the profitability of many businesses. Hence, value engineering has helped OEMs to develop products which customers will always like to use.   


How Value Engineering can help OEMs stay in business and grow?

How Value Engineering can help OEMs stay in business and grow?

Through the years, Value Engineering has always helped OEMs to pace ahead in their business. 

Reduction in Costs

With the elimination of unnecessary costs, VE has helped to reduce overhead expenses, and thereby lower the production costs. 

Improved Product Quality

By optimizing the salient functions of the product, VE has led to improvements in the performance.

Customer Satisfaction

As high quality products are manufactured, it results in higher customer satisfaction.


Value Engineering can help organizations to develop more sustainable products. The production team can improve energy efficiency and reduce waste to an extent. 


Value Engineering Drawbacks

While VE can serve as a tool for improving product value and optimizing costs, it also has some drawbacks as well. Organizations have to make an initial investment in resources and be prepared for the complex analysis. As every detail has to be recorded during the analysis, organizations have to hire skilled professionals who can understand the product and the VE approach. So, to eliminate the need for investment in time and money, companies have to think about entrusting VE to a trustworthy and experienced engineering firm. 


The Value Engineering process 

A certain approach is always followed with Value Engineering. Here are the steps in the VE process.

  • Experts gather important information about the product, including performance requirements, design and manufacturing processes.
  • An analysis of functions is conducted to prioritize the functions of the product.
  • By conducting brainstorming sessions, professionals come up with a range of and alternative solutions to improve functions and reduce costs.
  • Now, the experts evaluate every idea based on the performance, impact, and cost. Decision matrices may be used by engineers to list down the alternatives.
  • Detailed designs and implementation plans are then presented for the chosen alternatives. Professionals may also be involved in performing risk analysis to ensure proper product development. 
  • Engineers present comprehensive reports to outline benefits and implementation plans. They will also seek feedback and approval from business leaders.

Towards the end, the approved solutions are put into practice and implemented changes are evaluated for ensuring continuous improvements. 


Partner with Technosoft Engineering 

When you partner with Technosoft Engineering, you can experience product innovation with great precision. Our VAVE expertise further will help in optimizing product’s functionality and its performance while reducing costs. We will also ensure innovative solutions through 3-D modeling, process simulation, and finite element analysis. 


Closing Thoughts

Finally, the future of VAVE seems promising as companies advance with technologies and changing consumer demands. As processes will be more sophisticated, engineers will unveil new opportunities for reducing costs and optimizing performance. A collaborative approach will also enhance the effectiveness of VAVE while creating products and delivering value ahead. Moreover, organizations can think about eco-friendly product designs as teams will emphasize on sustainability. 

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