Download - Gmp_pom - Session 26
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Production and Operations ManagementSession 26 VA/VE
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POM_GMP SyllabusForecasting (14-15)
Capacity Planning/ Layout/Location (16-18)
Medium-term Short-termong-term
Aggregate ProductionPlanning (19-20) Material RequirementsPlanning (21)
Production ProcessQuality (23-25)
QFD(22)
FMEA(22)
VA/VE(26)
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What is Value?
According to Aristotle (350 BC) Political/ Social/ Economic/ Religious/ Ethical/
Aesthetic/ Judicial
Types of Economic Values
Cost value
Use value
Esteem value Exchange value
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Economic Value Examples
For a particular raw material used in your productionprocess, on an average it takes 20 days to receive raw
material after an order is placed (procurement lead time).
A new supplier has promised that they will reduce this
lead time to 15 days so that you can reduce your rawmaterial inventory.
In a peak season, when you outsource some of your
production, the manufacturer charges you 15% above his
production cost. One real estate company said in their advertisement, If
you buy a flat from us, you may find some famous people
as your neighbor.
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Economic Value Examples Continued
When a construction company was bidding for highwayproject, during proposal submission they also mentioned,
We are ISO 9001:2008 certified, as relevant
information.
The Benjamin Franklin Z Grill", is a 1-cent postage stamp
issued by the United States Postal Service in February 1868
depicting Benjamin Franklin. One of these rarest stamps
was sold for $935,000 in 1998.
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What is Value Analysis?
Value analysis is an organized creative approach whichhas for its purpose the efficient identification of
unnecessary cost i.e., cost which provides neither quality,
nor use, nor life, nor appearance, nor customer features.
L. D. Miles
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VE Job Plan Mudge (1971) Phases
Covered General phase
Information phase
Function phase
Not covered Creation phase
Evaluation phase
Investigation phase
Recommendation phase Implementation phase
Next
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Job Plan General Phase
Inspire team work Work on specifics
Overcome mental roadblocks
Apply good business judgment
Back
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Job Plan Information Phase
Specifications and Requirements Difference?
Imposed by customer or producer
Real or Imaginary?
Secure facts on specifications and requirements
Determine costs related to product
Fix costs on specifications and requirements
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Generalized Cost Structure
Selling Price
ProfitSelling Cost
Cost ofGoods Sold
General Administrative CostsField Service andMiscellaneousCosts OverheadCosts ConversionCosts Cost of GoodsManufacturingIndirect LaborIndirect MaterialDirect Labor Prime CostsDirect Material
Back
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Job Plan Function Phase
Define the functions that a product actually performs Evaluate functional relationships
Subjective evaluation
Function Analysis System Technique (FAST)
Technical oriented FAST Diagram Customer oriented FAST Diagram
Numerical evaluation
Back
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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
Back
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Example ScrewdriverComponents FunctionsVerb Noun
Handle Facilitate GripReceive Torque
Prevent Rotation
VarnishProtect Wood
Improve Appearance
Name Plate Identify Manufacturer
Shank
Suit Slot
Deliver Torque
Transmit Torque
Provide Approach
Facilitate ApplicationPrevent Rotation
Sleeve Prevent Cracking
PinJoin Components
Withstand ForceBack
Technical FASTCustomer FAST
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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 each component
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
Work Function An active verb + A measurable noun
Sell Function A passive verb + A non-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 Functions At the same time and/or Are caused by
some other functions
All the time functions
One time function Design objectives
Critical path
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Technical Oriented FAST
Screwdriver
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Customer Oriented FAST SomeTerms Task
Basic function
Supporting functions
Assure convenience
Assure dependability Satisfy user
Attract user
Scope line
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Customer Oriented FAST
Backcrewdriver
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POM_GMP Syllabus At a GlanceForecasting (14-15)
Capacity Planning/ Layout/Location (16-18)
Medium-term Short-termong-term
Aggregate ProductionPlanning (19-20) Material RequirementsPlanning (21)
Production ProcessQuality (23-25)
QFD(22)
FMEA(22)
VA/VE(26)
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VA/VE Continued(Out of End-term Syllabus)
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Numerical Evaluation Techniques Weighted evaluation method
Equal importance method
Descending order of importance method
Paired comparison method
Forced decision techniqueQuantitative method
Predetermined minimum method
Breakeven analysis
Life cycle costing (Not covered)
Back
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Job Plan Creation Phase Deal with predominantly creative mind and set aside
judgment
First steps to try answering question What else will do?
Steps Establish positive thinking
Develop creative ideas
Back
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Job Plan Evaluation Phase Select the promising ideas of the creative phase for further
analysis Will it work? Is it less costly than the present design? Is it feasible to implement?
Refine and combine ideas Establish cost on all ideas
An estimated cost should be calculated Other questions
What are the potential costs of implementing the idea?
What are the resultant savings implied? Develop function alternatives Evaluate by comparison
Function-Cost-Worth analysis
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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 Potential for value improvement
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Cost Allocation Procedure1. Split the product into components and service/system into
activities
2. Define functions of components/activities
3. Divide the total cost of product/service/system into
components/activities cost4. Processes performed to achieve particular function
Cost allocated to that function
5. Component provided to achieve particular function
Cost allocated to that function6. Component accomplishes more than one function
Allocate based on weight/volume/surface area/length
7. Hold each function in isolation of the others to do this
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Worth Allocation Procedure 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 atlower cost?
What should you do to obtain the function within that
cost?
Back
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Job Plan Investigation Phase Three techniques are used to
Further refine the selected ideas into workable and
acceptable solutions
Providing lower cost methods for performing the
desired function
Techniques
Use company and industrial standards
Consult vendors and specialists Use specialty products, processes and procedures
Back
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Job Plan Recommendation Phase Finally selected value alternative is recommended for
acceptance and implementation
Techniques
Present facts Motivate positive action
Team recommendation
Back
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Job Plan Implementation Phase Addresses following issues
Factors governing acceptance Requirements for acceptance Mechanism for implementation: who will monitor the
implementation, who will do it, who provides the fund,
who reports the progress, etc.? Determine the areas that are affected Determine time and sequence of effort and quantity at
break-even point
Follow up Measure results of gain in money and time. Compare
net gains with the full cost of the value effortBack
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Benefits of Value Engineering Helps to pinpoint areas that need attention and
improvement
Helps in generating ideas and alternatives for possible
solution to a problem
Provides a method to evaluate alternatives Provides a platform for dialogue
Records the logic behind the decisions
Improves the value of goods and services significantly
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Case Isuzu Motors DevelopmentStages and VE Aspects
Conceptproposal Planning Developmentand Productpreparation
Development andProduction-salespreparation
Production-salespreparation
Target valueZeroth look VE
First look VESecond look VE
Manufacturing VE
Mini VEWave methodVE reliability program
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Relationship Job Plan and Isuzu Case General phase
Prepare Cost Deployment Flowchart/Strategy Map
Information phase
Tear-down programs
Function phase Creation phase
Developing functional alternatives
Zeroth look VE
First look VE
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Relationship Job Plan and Isuzu Case Continued Evaluation phase
Second look VE
Manufacturing VE
Mini VE
Investigation phase Value target
Recommendation phase
Implementation phase