What is Value Added Engineering

One of the common misconceptions about Value Added Engineering is that it is focused solely on trying to make products at a lower cost.  That is one of the goals; but more importantly is a drive to improve functionality and quality while maintaining current cost.  True value added engineering is a dedicated process to review a broad spectrum of processes and designs for potential best practices that can be adopted to the product being reviewed.  This is the exact opposite of the often seen; “we’ve always done it this way” method of engineering and design used in many businesses.   Value added engineering looks at how to add increased functionality and value to a given product, while maintaining product quality, and hopefully driving down cost.

One of the more effective ways of performing Value Added Engineering is to bring in an outsider with a totally new set eyes, who has never worked on the product in question before.  This type of person then needs to be given the freedom to question everything; from design to packaging, to be able generate the maximum potential impact and savings.  This is the time to ask “why” a lot: why is it done this way, why can’t it be done some other way that is more efficient?  It is estimated that 70-80% of the overall cost of a product is fixed at the design stage and this is the time when value added engineering is most effective. During this same time; there should be a dedicated effort by the value engineering team towards reducing process variation during the design process.

One of goals of value engineering is to do more; while using less resources.  Looking at it that way puts an emphasis on efficiency; looking for ways to improve the individual and overall effectiveness of processes.   Looking for methods to reduce labor content is one of the more effective methods, since their proportionate cost is such a significant portion of the total product cost.  Effort should be made to eliminate non value-added costs for operations like tapping, inspection and rework.  At the same time, reducing scrap and rework will have a significant impact on the completed cost of the product, while also driving improved quality and functionality.

A truly efficient design and process that uses value added engineering methods effectively should result in a product design and assembly process that produces a world class product at the lowest possible cost, with the greatest functionality.  The use of Value Added Engineering should ideally be adopted as a philosophy to guide the design engineering process rather than just one more step in a flowchart if it is to truly have the maximum possible impact across an organization.