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Value Engineering

Definition

Value engineering is a systematic method to improve the "value" of goods or products and services by using an examination of function. Value, as defined, is the ratio of function to cost. Value can therefore be manipulated by either improving the function or reducing the cost. It is a primary tenet of value engineering that basic functions be preserved and not be reduced as a consequence of pursuing value improvements.

What is 'Value Engineering'

Value engineering is a systematic and organized approach to provide the necessary functions in a project at the lowest cost. Value engineering promotes the substitution of materials and methods with less expensive alternatives, without sacrificing functionality. It is focused solely on the functions of various components and materials, rather than their physical attributes. Also called value analysis.

Explaining 'Value Engineering'

The concept of value engineering evolved in the 1940s at General Electric, in the midst of World War II. Due to the war, purchase engineer Lawrence Miles and others sought substitutes for materials and components, since there was a chronic shortage of them. These substitutes were often found to reduce costs and provided equal or better performance.


Further Reading


Product development process with focus on value engineering and target-costing: A case study in an automotive company
www.sciencedirect.com [PDF]
Contemporary Engineering Economics, 4th edition Chan S. Park Typo Errors Found in the First Printing as of … P{AfP,l!,N]. (3.11) Now we have an equation for determining the value of the … N0te: A missing figure title 102 CHAPTER 3 Interest llatio and Economic Equivalence Equal …

Value destruction and financial reporting decisionsValue destruction and financial reporting decisions
www.tandfonline.com [PDF]
Contemporary Engineering Economics, 4th edition Chan S. Park Typo Errors Found in the First Printing as of … P{AfP,l!,N]. (3.11) Now we have an equation for determining the value of the … N0te: A missing figure title 102 CHAPTER 3 Interest llatio and Economic Equivalence Equal …

Re-engineering agriculture for enhanced performance through financingRe-engineering agriculture for enhanced performance through financing
papers.ssrn.com [PDF]
Contemporary Engineering Economics, 4th edition Chan S. Park Typo Errors Found in the First Printing as of … P{AfP,l!,N]. (3.11) Now we have an equation for determining the value of the … N0te: A missing figure title 102 CHAPTER 3 Interest llatio and Economic Equivalence Equal …

Options Theory: A New Way Forward for Exploration and Engineering Economics?Options Theory: A New Way Forward for Exploration and Engineering Economics?
www.onepetro.org [PDF]
Contemporary Engineering Economics, 4th edition Chan S. Park Typo Errors Found in the First Printing as of … P{AfP,l!,N]. (3.11) Now we have an equation for determining the value of the … N0te: A missing figure title 102 CHAPTER 3 Interest llatio and Economic Equivalence Equal …

Meeting the challenge of wastewater irrigation: economics, finance, business opportunities and methodological constraintsMeeting the challenge of wastewater irrigation: economics, finance, business opportunities and methodological constraints
www.tandfonline.com [PDF]
Contemporary Engineering Economics, 4th edition Chan S. Park Typo Errors Found in the First Printing as of … P{AfP,l!,N]. (3.11) Now we have an equation for determining the value of the … N0te: A missing figure title 102 CHAPTER 3 Interest llatio and Economic Equivalence Equal …



Q&A About Value Engineering


What is value engineering?

Value engineering is a systematic and organized approach to provide the necessary functions in a project at the lowest cost.

When did value analysis begin?

The concept of value analysis began in 194s during World War II when there was a shortage of supplies.

How does value engineering differ from other approaches?

Value engineering differs from other approaches by being focused solely on the functions of various components and materials rather than their physical attributes.

What does value engineering promote?

Value engineering promotes the substitution of materials and methods with less expensive alternatives, without sacrificing functionality.

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