Value Analysis/Value Engineering in custom metal fabrication is both a specific cost optimization process and a philosophical approach to manufacturing. The purpose of value engineering is the elimination of unnecessary costs by determining which functions of a product, and the manufacturing process by extension, are necessary for the end-product to perform optimally in the “field.” The parts of the manufacturing process or the product design itself seen as excessive are then eliminated. In other words, it’s a constant balance of function to cost. Lean manufacturing is a great example of an approach that finds its roots in the value analysis approach. The end-goal is efficiency through vetting parts of the manufacturing process or the product itself that don’t add functional value.
The VA/VE Engineering Approach
According to Techniques of Value Analysis and Engineering, the value analysis process begins with five questions:
- What is the item or service – What is the product that an OEM is proposing for the custom sheet metal fabrication partner to manufacture?
- What does it cost – What is the estimated cost (as accurately calculated as possible) of the proposed product design?
- What does it do – Capabilities and equipment of the OEM or the custom metal fabrication shop aside, what is the product’s or part’s intended purpose?
- What else would do the job – Is there a simpler way to manufacture a part or final end product, one that accomplishes the same goal, that has not yet been considered?
- What would the alternative solution cost — How does the price point of the alternative solution compare to the initial design, end product or manufacturing process?
At this point only a high level of cost analysis is being performed, so this doesn’t have to be absolutely perfect at first (so long as everything is calculated within 5-10 percent of the actual final cost). However, it’s important that a cost estimation is made even if every small detail of the manufacturing process or the product design is not entirely finalized. For an engineer on either the OEM side or the custom metal fabrication partner side, this means diligently researching potential alternatives through subject matter experts, peers, suppliers, cost studies and internal cost analysis. The common excuse of “we don’t know enough about X to do an accurate cost analysis” will almost always result in poor value analysis and the addition of excessive costs down the road. 100 percent accuracy is not the goal, due diligence is.
New Product Introduction (NPI) and Value Engineering
While VA/VE Engineering is consistently applied to existing products and manufacturing processes in custom sheet metal fabrication, it’s equally important when evaluating newly designed products. Given that the majority of a product’s eventual cost is directly tied in the product design phase (as well as the design for assembly on the part of the metal fabricator), the upfront cost analysis could not be more important. Which tools and machines, as well as which personnel will be involved in the project, are determined well before production of the project actually begins. This is reason, again, that it’s unwise to avoid a cost analysis in the early stages of planning before plans are finalized. Only so much can be optimized after production begins, where changes are generally subtler and the substantial changes are hard-fought. Every custom metal fabrication partner should incorporate VA/VE engineering into their NPI if they want to aim for maximum cost efficiency. OEMs, likewise, should be aware of the VA/VE process when NPI takes place and planning is done with a fabricator of choice).
Building on the Bottom Line
The cost savings generated by VA/VE Engineering allow metal fabricators more room to invest in new facilities, new equipment and new personnel. For OEMs working with metal fabrication partners, VA/VE Engineering gives them the savings to invest in research and development. Not only are final products more functional, but there is higher revenue per product than there would otherwise be. More importantly, metal fabricators that work with multiple industries can reapply VA/VE best practices more aptly.