Introduction
Delivering higher value at lower cost is the key business driver for all enterprises globally. Products have to be designed and manufactured keeping in mind, increasing customer value with lowest price, and this needs to be taken care from the inception stage of the product. Paradigms like ‘Design to Cost’, ‘Value Engineering’, ‘Value Analysis’ are popular in enterprises today to take care of the value cost equation. This paper addresses the mechanism to measure the value of the product with respects to its cost, and manage this information in PLM to leverage the function/cost relationship.
Value Analysis
Value of a product or its feature is defined as its function against its cost. Function is the intended capability of the product / feature to meet the needs. Products function can be further classified as basic function and support (additional) functions. To increase the value of a product or its features, either the function can be enhanced or the cost can be reduced.
Value = Function / Cost
For example the basic function of the car could be to transport people and the additional functions could be to provide safety, comfort, entertainment, protection against weather, etc. Then the cost for each of the function provided needs to be captured and analyzed to do value engineering on the Product. Many times the cost incurred on the basic function could be very less compared to the supporting function – this could be the driving factor or differentiator of the product in the market; nevertheless the function analysis provides the perspective to measure and analyze the cost of the components/ sub systems against the function. Hence this paradigm focuses on cost of the function of a product and its components against just the cost of components of the product. To conduct value analysis of a product or its sub system, first the function of the product needs to be defined in terms of basic and supporting functions. For certain products / Systems arriving basic and secondary functions could be difficult – for this techniques like Brain storming, mind mapping , FAST (Function Analysis System Technique) can be employed.
Value engineering technique involves that the functions be described in just two words verb and noun like transport people, provide protection. In Value analysis, first the basic function and the supporting functions of the product are listed; then the components/ subsystems providing the functions are listed; then the cost of the components against each function is listed. We have got the function cost matrix. To do the value analysis the importance of each function is noted as function index as a percentage number. Now we have function index, which is the percentage of importance of the function against the total function.(say the total function value of the product is 100, the basic function of the product could be 30 based on its importance). Similarly the cost index of a component is its percentage of actual cost against the product cost. So if the cost index of the component is 40 and its function index is 30, then it could be looked upon to increase the value/ cost index. Thus Value Analysis can be used as a tool to establish target cost of the product and components by throwing up the value / cost index for systems of the product for enabling value engineering exercise. Further the function index could be weighted based upon the customer needs, which we will discuss in the QFD (Quality Function Deployment) section.
Value Analysis in PLM
PLM (Product Lifecycle Management) serves as a collaborative platform for managing and storing the design content of the product. Since the Product / Sub System / Part (Component) information is registered in PLM as attributes using technical parameters, cost parameters, supplier details, etc. Value analysis parameters can also be registered wherein designers/authors can be mandated to register the functions of the part / sub system / product. Value Analysis can be employed initially at the product level and system level and then taken further at the lower levels of sub system. Since PLM provides the platform for registering product
information and its evolution lifecycle, it could just be the right platform for enabling and managing Value Analysis and managing Value Engineering Projects. PLM can capture the idea evolution, value definition of the products and its systems, which resides in the designer’s mindset; and this could pave way for parts reuse, value engineering and cost reduction programs in the collaborative space which organizations strive for. As products undergo changes using Engineering Change Process, so does its cost and so does its value; PLM could manage the value change and its impact as it tries to manage cost.
Deploying VA through QFD
As we saw in the previous section how function cost matrix can help to analyze value of the product. Further the function of the product can be weighted further by the customer needs or requirements and its importance. To manage this matrix, QFD can be very handy. QFD (Quality Function Deployment) is typically used to prioritize your system characteristics or understand the characteristic influences of the system based on the requirements. Here we have used QFD to analyze the cost function matrix of the product. As an illustration, the QFD for the cost function matrix for the product pencil is shown below.
(Source: Value Analysis and Function Analysis System Technique by Kenneth Crow, DRM Associates)
As you see in the above example, functions are listed on the left side of the matrix and the components/ sub systems are listed on the top horizontal side. Then the importance of the function is rated (total importance summing to 100); and the weight factor is decided for each sub system. Weight factor denotes how great or small is the component influences the function. The column values are arrived by multiplying the importance to the weight factor. Then the function value is calculated and target cost is established, which can be compared with the actual component/sub system cost. This will drive the value engineering processes enabling the cost optimization and delivering higher value of the product.
Benefits
The key benefits of the Value Analysis deployed through PLM are· Ability to set target costing based on function cost matrix using Value Analysis technique.
· Ability to capture the function parameters and register the idea generation processes paving way to value engineering exercise.
· Enables to optimize the cost and increase the value by focusing on function cost of the system rather than just the cost of the system.
· PLM with its product content in terms of design and Bill of Materials can greatly help in capturing function value matrix, thereby establishing framework for idea collaboration, value engineering and parts reuse.
Conclusion
Because these benefits of the Value Analysis technique and the capabilities of PLM being the collaborative platform for idea conception and management, VA in PLM provides the formidable framework which most enterprises are looking for in dealing their challenge to provide higher value products at lower cost.
REFERENCES
www.npd-solutions.com
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