The VE Cheat Sheet

The equation

• Value = Function ÷ Cost. Improve the ratio, not just the denominator.
• Five legit moves: same function / lower cost · more function / same cost · more function / lower cost · function grows faster than cost · trim unvalued function, cut cost sharply.

SAVE job plan — 6 phases

Function rules

• Every function = active verb + measurable noun ("heat water", not "provide heating capability").
• Banned verbs: provide, allow, enable — they measure nothing.
• Basic = why the product exists. Secondary = how this design happens to work → where removable cost hides.
• FAST: move right = HOW? · move left = WHY? Read the chain aloud both ways to validate.

Value Index verdicts

Worth = the lowest cost that could still reliably perform the function (cheapest solution in any industry, physics floor, or historical best).

Ideation quick-fire

• Rule #1: defer judgement — evaluation has its own phase.
• 6-3-5 brainwriting: 6 people × 3 ideas × 6 passes = 108 ideas in ~30 min, silently.
• SCAMPER: Substitute · Combine · Adapt · Modify · Put to other use · Eliminate · Reverse.
• TRIZ: 40 principles for contradictions; physical contradictions → separate in time/space/condition; ask the Ideal Final Result: "how would the function perform itself?"

Key formulas

• VI = Cost ÷ Worth
• Should-cost = material + process + labour + overhead + fair margin
• Machine rate = (depreciation + energy + floorspace + maintenance) ÷ (annual hrs × OEE)
• Payback = one-time cost ÷ annual saving
• Buy-to-fly = material bought ÷ material in finished part
• Allowable cost = market price − required margin
• Value gap = drifting cost − allowable cost

Lever families (with examples)

Teardown discipline

• First step: photograph, weigh, measure everything — before disassembly.
• Cost their BOM at their region, volumes & processes; trust deltas over absolutes.
• Benchmark value ratios (torque/€, lumens/€), not absolutes.

Target costing

• Set the allowable cost before design; cascade vehicle → system → part → supplier target price, each with a named owner.
• Cardinal rule: the target is never exceeded — content trades, it doesn't drift.
• Run cost like mass: gate status + recovery plan. After SOP, hand over to kaizen costing.

Savings funnel & expectations

• L1 idea → L2 validated → L3 implemented → L4 audited vs. frozen baseline. Only L4 counts.
• First structured wave: 8–15% of product cost. Mature programme: 3–5%/yr. Study ROI > 10:1.
• ~80% of lifecycle cost is committed during design — go early.