Value engineering refers to the systematic method of improving the value of a product that a project produces. It is used to analyze a service, system, or product to determine the best way to manage the important functions while reducing the cost.
Value engineering encourages using alternative methods and materials that are less expensive and do not lower the functionality of the system, service, or product.
Most often, value engineering takes place after the completion of the design process, but it is best performed before the design is conducted to allow the experts to incorporate the option of using alternative materials and methods.
Most value engineering projects opt for a team approach, where subject matter experts work together to execute the value methodology.
Understanding Value Engineering
Value is calculated as a ratio of function to cost. A business can add value to a product by either cutting down on cost or improving the function. Most companies use value engineering as a cost-cutting strategy, where the basic function of a product is preserved – not sacrificed – in the process of pursuing value improvement.
From a markaeting perspective, value engineering is used to design a product so that it lasts for a specific duration before it becomes obsolete. Usually, when a product is expected to be stylistically or practically obsolete within a specific duration of time, the manufacturer uses value engineering to save on costs without taking away the intended purpose.
While the product can be designed using high-quality components, value engineering allows manufacturers to use alternative low-cost components to avoid imposing unnecessary costs to the production process, which will ultimately be passed on to the consumer.
The manufacturer uses cheaper components that meet the product lifetime duration while preserving the basic purpose of the product.
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