What you’ll learn
- What value means, and the simple equation behind the whole method
- The five ways to improve value
- The difference between VA, VE and VM, and the four types of value
- Why VE works better than ordinary cost-cutting
What you’ll produce
By the end of this module you’ll have a one-page cheat sheet and the first entry in your value study logbook. Free templates:
From the module
Value is a ratio
Everything in this course is built on one equation: Value = Function ÷ Cost. Function is what the product has to do: how well it works, how reliable it is and how appealing it is. Cost is everything you spend to deliver that function over the product's life. A product isn't expensive or cheap on its own. It's good or bad value compared with what it does. Value Engineering is a way of improving that ratio on purpose.
The method started at General Electric in 1947. During the Second World War, shortages had forced GE to use substitute materials, and the substitutes often worked as well or better and cost less. Lawrence D. Miles was asked to turn that lesson into a method. He realised teams had been buying parts when they should have been buying functions. Ask "what does it do, and what else could do it?" and you find many more possible designs.
Short narrated video in this module
Continue reading in Module 1, or read the related guide: VAVE explained.