Innovation & RND Management: Value Analysis/Value Engineering & New Product Development

Innovation & RnD Management
Value Analysis/Value Engineering & New Product Development

1
DR. SRI BRAMANTORO ABDINAGORO
INDUSTRIAL PROJECT MANAGEMENT
DEPARTMENT OF METALLURGY & MATERIALS

FACULTY OF ENGINEERING-UNIVERSITY OF INDONESIA
2018
Humor in Product Design
2
As the customer wanted it. As Marketing

interpreted it.
© 1984-1994 T/Maker Co. © 1984-1994 T/Maker Co.
As Operations made it. As Engineering

designed it.
© 1984-1994 T/Maker Co. © 1984-1994 T/Maker Co.
POM - J. Galván
What is a Product?
3
 Need-satisfying offering of an organization

 Example
P&G
does not sell laundry detergent
P&G sells the benefit of clean clothes
 Customers buy satisfaction, not parts
 May be a good or a service
POM - J. Galván
Product Strategy Options
4
• Product differentiation
• Low cost
• Rapid response
POM - J. Galván
Generation of New Product Opportunities
5
 Economic change
 Sociological and demographic change
 Technological change
 Political/legal change
 Changes in
 market practice
 professional standards
 suppliers and distributors
POM - J. Galván
Product Components
6
Product
Brand Product
Package
(Name) Idea
Physical Quality Service

Features
Good Level (Warranty)
POM - J. Galván
Value Engineering the Forgotten Lean Tool
7
 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. 1998
Concept of Value
8
FUNCTION
VALUE =
COST
When is VE used
9
 Value Engineering is used to determine the best design

alternatives for Projects, Processes, Products, or
Services
 Value Engineering is used to reduce cost on existing
Projects, Processes, Products, or Services.
 Value Engineering is used to improve quality, increase
reliability and availability, and customer satisfaction .
 Value Engineering is also used to improve
organizational performance.
 Value Engineering is a powerful tool used to identify
problems and develop recommended solutions.
Six Sigma Process
10
 A) Identify what the customer wants.
Define the  B) Organize an improvement team.
Problem  C) Create a process flow chart - (SIPOC)
 A) Select “Critical to Quality Characteristic” metrics.

 B) Define Performance Standards.
Measure  C) Validate the measurement System.
 D) Establish baseline performance in terms of Sigma Capability -
Defects per Million Opportunities.
 A) Identify significant characteristics and establish process capability.

Analyze  B) Define performance targets for significant characteristics.
 C) Identify root cause of process variation.
 A) Identify and evaluate potential solutions.

 B) Implement short-term countermeasures.
Improve  C) Implement long term corrective actions.
 D) Identify systemic indirect effects and unintended consequences of
improvement ideas.
 E) Establish operating tolerances for new process.
 A) Verify corrective actions and validate new measurement systems.

Control  B) Determine process capability.
 C) Establish and implement control plan.
End  Move on to next highest priority process.

Competitive Advantage
11
 Quality is defined as “conformance to

specification.”
Function
 Value is defined as:
Cost
 You can’t have one without the other!
 Competitive Advantage = Quality + Value

Six Step Value Engineering Job Plan
Information Clearly identify the problem(s) to be solved, and
12
gather information on the background, functions and
Phase
requirements of the product, process, or system.
Creativity Brainstorm ideas on how to improve the high cost,

Phase broken, or inadequately performed key functions.
Screen ideas for acceptance, score remaining ideas on

Evaluation a scale and group ideas into categories. Develop
Phase design scenarios, and selection criteria. Rate and
rank ideas.
Planning Plan how to sell ideas to management, identify key

Phase recommendations, plan management presentation.
Reporting Give oral presentation to management, or develop

Phase written report.
Get management approval for go-ahead, make

Implementation management plan, make assignments, implement,
Phase follow-up.
Mapping VE to 6
VA/VE 6s
13 Value-based
 Value-based Define the
decision
Information
Problem decision process
Phase
process
Creativity
Measure  Uses statistical
Phase
 Uses functional approach
approach
Evaluation
Phase
 Follows a very Analyze  Follows a very
structured, structured,
Planning
organized plan Phase
organized plan
Focus on Reporting Improve  Focus on maximum

Phase
maximum possible possible solution based
solution based on on analytical
creativity Implementation optimization
techniques. Phase
Control techniques.
Michael Mladjenovic - Intier Automotive Interiors, Toronto, CA

VE Job Plan with 6s
Michael Mladjenovic - Intier Automotive Interiors, Toronto, CA

14
How and When is Value Engineering Applied?
15
How When
 Interdisciplinary Team  Problem Solving/Decision
 Formal Job Plan Analysis
 Trained Facilitators  Strategic Planning
 Function Analysis/FAST  New Product Development
 Documentation  Re-engineering efforts
Customer Oriented FAST Model
Vacuum Cleaner
16
HOW WHY
Basic Functions
Receive Air
Move Accelerate Air
Air
Clean Air
Loosen Dirt
Clean Remove Entrain Dirt
Surface Dirt
Convey Dirt
Entrap Dirt
Store
Dirt
Collect Dirt
Supporting Functions Display Directions

Simplify Directions
Furnish Instructions
Clean Exterior
Clean filter
Assure Facilitate Upkeep
Convenience Dispose Dirt
Signal Bag Change

Aid Service
Minimize Storage
Enhance Portability
Assure
Dependability
Satisfy
User
Potential Savings from VE
17
No engineering Document Revision
Change Revision
Re-Test/Re-qualification
Drawings Released Tooling Changes
Net Savings from VE
Total Cost of VE Implementation
VE Implementation
beyond this point
results in a net loss.
Engineering
&Production
Concept Design Release Production
Why use Value Engineering?
18
Save Time
Save Money
Build Teamwork
Improve Quality
Satisfy Customer
VE Task Team/Quality Process Improvement Team
19
Core Team
Support
Support
Support Support
Support Support
5 to 8 PARTICIPANTS
OPTIMAL
The Synergistic Effect of Value Analysis/Value
Engineering
20
INFORMATION HELD BY
ONE MEMBER ONLY
INFORMATION HELD BY
TWO OR MORE MEMBERS
INFORMATION OR
EXPERIENCE COMMON TO
ALL
Concepts of Value - Desirable
21
Ideal Good Acceptable Passable
Function Function
Value =
Cost
Cost
Concepts of Value - Undesirable
22
Undesirable but Passable

(cheapening the product)
Function Function
Value =
Cost
Cost
Your Homeworks...
23
 Looking for examples :

 2 (two) “new” products that you analize with VAVE..
 2 (two) companies ( 1 Indonesia company & 1 International

company) who have R&D function intensively and explain it

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Innovation & RnD Management

Value Analysis/Value Engineering & New Product Development

DR. SRI BRAMANTORO ABDINAGORO

INDUSTRIAL PROJECT MANAGEMENT

DEPARTMENT OF METALLURGY & MATERIALS

As the customer wanted it. As Marketing

© 1984-1994 T/Maker Co. © 1984-1994 T/Maker Co.

As Operations made it. As Engineering

© 1984-1994 T/Maker Co. © 1984-1994 T/Maker Co.

 Need-satisfying offering of an organization

 suppliers and distributors

Physical Quality Service

 Value Engineering (VE) is an intensive, interdisciplinary

 Value Engineering is used to determine the best design

 A) Select “Critical to Quality Characteristic” metrics.

 A) Identify significant characteristics and establish process capability.

 A) Identify and evaluate potential solutions.

 A) Verify corrective actions and validate new measurement systems.

End  Move on to next highest priority process.

 Quality is defined as “conformance to

 Competitive Advantage = Quality + Value

Creativity Brainstorm ideas on how to improve the high cost,

Screen ideas for acceptance, score remaining ideas on

Planning Plan how to sell ideas to management, identify key

Reporting Give oral presentation to management, or develop

Get management approval for go-ahead, make

Focus on Reporting Improve  Focus on maximum

Michael Mladjenovic - Intier Automotive Interiors, Toronto, CA

Michael Mladjenovic - Intier Automotive Interiors, Toronto, CA

Supporting Functions Display Directions

Signal Bag Change

Net Savings from VE

Total Cost of VE Implementation

Ideal Good Acceptable Passable

Undesirable but Passable

 Looking for examples :

 2 (two) companies ( 1 Indonesia company & 1 International

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