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Value Engineering/Analysis
Definition and Explanation of the Terms
- "Value" is what people are willing to pay for something.
- Then, value analysis (VA)/value engineering (VE) are techniques for assessing the “value” content of the elements of a product or process. They also encompass carrying out improvements in the value.
- The terms value analysis (VA) and value engineering (VE) are sometimes used interchangeably. However, more specifically, value analysis generally refers to ongoing improvements, especially of processes, while value engineering generally refers to first-time design and engineering of a product or process.
- Both VA and VE emphasize value added by focusing on the ability of product elements (product components) or process elements (steps and procedures) to add to a product’s worth in terms of customer expectations.
- All production and support activities add to a product’s cost but not all add to its value. Similarly, all components add to the cost of a product but they do not all effectively contribute to its functional value. VA and VE look at how much value something adds compared to the cost it adds.
- Since the price customers are willing to pay for something cannot significantly exceed the value they perceive in it, the cost of the elements involved in the product’s components and its manufacture can not exceed the value contributed by those elements.
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