Value Engineering

Value engineering is gaining much significance in the present scenario. In a monopoly , (where there is a monopoly of a product or of a particular industry) there is no need to study the aspects of industrial engineering.

However, in the present scenario, for a single market segment, there are so many industries trying to increase their market share over a limited period of time. Now here, the concept of value engineering comes into picture.

Concept of Value Engineering

Suppose a new product is launched by a company at a considerably higher price. Over a period of time, the prices instead of increasing are coming down. Now here the question arises, is the company selling at loss?. Actually 'No', no company is going to sell at loss. Every company is going to make profit. But, with the advent of new materials, new technologies, invention of newer and newer methods of processing. By this the company is able to reduce the cost of product with time. This is the basic concept of value engineering. Value engineering when applied systematically in an organization has resulted into huge amounts of profit.

Money is of no value;

It cannot spend itself.

All depends on the skill of the spender.

(Ralph Waldo Emerson [1803-1882])

Spend the company's money

as you would spend your own.

(20 techniques of value engineering)

History of Value Engineering

In 1947, a vice president at General Electric, "Harry Erlicker" observed the occurence of a rather "unusual phenomenon" that had been appearing throughout the industry which further led to the development of value engineering.

Now, what was this unusual phenomenon. 

After the world war, it was observed, that most of the equipment, weapons, machinery etc. was damaged or was not in use. Now, this thing had to be redesigned, reconstruct, repair, calculations had to made, again manufacture. During the process it was found , that the new equipment or new materials that were used for manufacturing these types of products have resulted into a product which is of relatively low cost as compared to the older ones. It was observed that before the world war, the cost factor was high and after the world war the cost factor was relatively low with no compromise in quality, functionality and performance. It was then thought that why can't this particular phenomenon be translated and applied into other engineering products. And when it was applied, it was found that "YES" it works. It is universal. It can be applied into any particular field of engineering and thereby we would be able to save a lot of money of the organisation or the company.

Read the detailed explanatory article on value engineering at:
http://mechanicalnotes.com/subject-notes-3/subject-notesindustrial-engineering/