P d ti Management

Production M g tI
Session 17 Æ VA/VE
What is Value?

„ According to Aristotle (350 BC)

„ Political/ Social/ Economic/ Religious/ Ethical/
Aesthetic/ Judicial

„ Types off Economic

T E i Values
V l
„ Cost value
„ Use value
„ Esteem value
„ Exchange value

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Reasons for Poor Value

„ Lack of information
„ Wrong beliefs
„ Risk of personal loss
„ Reluctance to seek advice
„ Shortage of time
„ N ti attitude
Negative ttit d
„ Changing technology
„ Strict adherence to ‘requirements’
„ Poor human relations

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What is Value Analysis?
y

„ Value analysis is an organized creative approach which

has for its purpose the efficient identification of
unnecessary cost i.e.,
i e cost which provides neither quality
quality,
nor use, nor life, nor appearance, nor customer features.
„ L. D. Miles

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VE JJob Plan – Mudge
g (1971) – Phases

„ General phase
„ Information phase
„ Function phase
„ Creation phase
„ Evaluation phase
„ I
Investigation
ti ti phase
h
„ Recommendation phase
„ Implementation phase

Next

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JJob Plan – General Phase

„ Use good human relations

„ Inspire team work
„ Work on specifics
„ Overcome roadblocks
„ Apply good business judgment

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JJob Plan – Information Phase

„ Secure facts
„ Determine costs
„ Fix costs on specifications and requirements

Back

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 Generalized Cost Structure

Profit

Selling Cost

Generall
G
Administrative Costs

Field Service and

Selling Price ll
Miscellaneous Costs
Cost of
Overhead
Goods Sold
Indirect Labor Costs Conversion
Costs Cost of Goods
Indirect Material Manufacturing

Direct Labor
Prime
Costs
Direct Material

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JJob Plan – Function Phase

„ The goals of this phase are

„ To define the functions that a product actually
performs
„ To relate these functions to the cost and worth of
providing them

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Rules of Function Definition

„ Rule 1: Expression of functions must be

„ A verb and a noun

„ Rule 2: Types of Functions

„ Work function/ Sell function/ Constraint

„ Rule 3: Divide into two levels of importance

„ Basic function/ Secondary function

„ Function Analysis System Technique (FAST)

„ Technical oriented FAST Diagram
„ Customer oriented FAST Diagram
g
Back

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Example
p – Screwdriver Technical FAST
Customer FAST

Components Functions
Verb
V b Noun
N
Facilitate Grip
Handle Receive Torque
Prevent Rotation
Protect Wood
Varnish
Improve Appearance
Name Plate Identify Manufacturer
Suit Slot
Deliver Torque
Transmit Torque
Shank
Provide Approach
Facilitate Application
Prevent Rotation
Sleeve Prevent Cracking
Back
Join Components
Pin
Withstand Force Dipankar Bose - XLRI
Function Analysis System Technique
(FAST)

„ How to differentiate between “Basic Function” and

“Secondary Function”?

„ Proposed by Mudge – A Trial-and-error method

„ Divide the product into components
„ For
F each h componentt
„ Find basic function
„ Using numerical evaluation
„ Find weights of all basic functions
„ The basic function with highest weight
„ Becomes basic function of the product

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FAST

„ Developed by Charles V. Bytheway

„ Incorporating dimension “When” – Richard J. Park
„ Technical oriented FAST – Wayne Ruggles
„ Customer oriented FAST – Thomas Snodgrass & Theodore
Fowler

„ Function Æ An active verb + A measurable noun

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Technical oriented FAST – Some Terms

„ Scope line
„ Higher order function
„ Basic function
„ Required secondary function
„ Causative function or Lower order function
„ F
Functions
ti “At the
th same time”
ti ” and/or
d/ “A“Are caused
dbby””
some other functions
„ “All the time” functions
„ One time function
„ Design objectives
„ Critical path

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Technical Oriented FAST

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Steps
p

„ Identify Basic Function – Answer the questions

„ Is this function what users are looking for?
„ If this function is eliminated,
eliminated will the item continue to
do the job?
„ Will the function disappear, if the design approach is
changed?
h d?

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The FAST Diagram (Technical
O i t d)
Oriented)

1. Prepare a list of all functions

2. Use verb and noun to define a function
3 Write each function in a small card
3.
ÆInvolve the whole team in the diagramming exercise
4. Select the card which appears to be basic function
5 A
5. Apply
l logical
l i l questionti ‘how’
‘h ’ and
d ‘‘why’
h ’ on selected
l t d
function to determine functions to right and left on this
selected function
6. Functions satisfy ‘how–why’ logic are ‘required secondary’
functions to be put in line
7. Draw scope line (dotted line) on left side of basic function

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FAST Diagram (Technically Oriented)
– Continued
C ti d

8. Higher order function on the left side of scope line

9. ‘All time function’ to be placed on right hand top corner
above critical path
10. ‘Design objectives’ is placed above the basic function
11. Functions that happen ‘at the same time’ placed below
th t function
that f ti
ÆPut them in reducing order of importance
12. Right scope line (dotted) to be drawn left of function that
is suitable input to the system
13. Function right to the right side of right scope line is lower
order/causative function
Screwdriver

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Customer Oriented FAST

„ May have more than one “Basic function”

„ Only left side scope line is there

„ Task
„ Basic function
„ S
Supporting
ti functions
f ti
„ Assure convenience
„ Assure dependability
„ Satisfy user
„ Attract user
„ Scope line

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Customer Oriented FAST

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FAST Diagram
g (Customer Oriented)

1. Prepare a list of all functions

2. Use verb and noun to define a function
3 Write each function in a small card
3.
ÆInvolve the whole team in the diagramming exercise
4. Select the card which appears to be basic function
5 A
5. Apply
l logical
l i l questionti ‘how’
‘h ’ and
d ‘‘why’
h ’ on selected
l t d
function to determine functions to right and left on this
selected function
6. The logical question ‘why’ to basic function will provide
‘Task’
7. Draw scope line (dotted line) on left side of basic function

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FAST Diagram (Customer Oriented) –
C ti
Continued
d

8. ‘Task’ will be on the left side of scope line

9. Support functions should be placed below the basic
function
10. There are four supporting functions at the primary level
ÆThey are Æ Assure convenience/ Assure dependability/
S ti f user/
Satisfy / Attract
Att t user
11. Each supporting function will branch out to secondary
level function
12. Secondary level functions will branch out to third level
functions
Screwdriver Back

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Function-Cost-Worth Analysis
(FCWA)

„ Value Gap = Difference between Worth and Cost

„ Indicates scope of possible value improvement
„ Value Index = Cost per unit worth
„ More than 1 Æ Potential for value improvement

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Cost Allocation Procedure

1. Split the product into components and service/system into

activities
2 Define functions of components/activities
2.
3. Divide the total cost of product/service/system into
components/activities cost
4 Processes
4. P performed
f d to
t achieve
hi particular
ti l function
f ti
ÆCost allocated to that function
5. Component provided to achieve particular function
ÆCost allocated to that function
6. Component accomplishes more than one function
ÆAllocate based on weight/volume/surface area/length
7. Hold each function in isolation of the others to do this
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Function–Cost–Worth Matrix

1. Write down all functions for the project as a whole

2. Divide the project into parts
3 Function(s) of each part to be defined in two words
3.
ÆAn active verb and a measurable noun
4. Apply three tests to identify the basic and secondary
f
functions
ti
5. Cost of each part to be ascertained
6. Cost of the part to be transformed into function
7. Check whether the cost of the functions are equal to the
sum of the costs of the parts
8. Assess the worth (least cost of achieving) functions

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Assess the Worth

„ First list all functions and costs in descending order.

„ Then ask the following questions:
„ Will you pay if it is your money?
„ If not, what do you consider reasonable?
„ By whom or where a similar function is available at
l
lower cost?
t?
„ What should you do to obtain the function within that
cost?

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