Value Engineering

Use of Value Analysis Technique for Cost

Reduction in Production Industry –

A Case Study

Journal: International Journal of Engineering Science and Technology (IJEST)

Author: Mr. Chougule M.A. and Dr. Kallurkar S.P.

Summary By:
Abhinav Jaiswal, 2
PGDIE 42

Abstract:

This paper presents the basic fundamental of Value Analysis that can be implemented in any product to optimize its value. A case study of a Universal Testing Machine (UTM) is discussed in which the material, design of components is changed according to the value engineering methodology. In the present case study, it is observed that the unnecessary increase in cost is due to the use of expensive material, increase in variety of hardware items and thereby increasing the inventory and so on. Therefore author have selected some components from UTM and we have applied Value Analysis technique for the cost reduction of the some components of UTM.

Introduction:

In 1947, L.D. miles, Design Engineer in G.E.C. USA organized the technique of ‘Value Analysis’ while attempting to reduce the manufacturing cost of some products. His attempt was to search for unnecessary manufacturing cost and indicate the ways to reduce it without lowering down the performance of product. However in India, VE is mostly associated to any alternative design with the intention to cost cutting exercise for a project, which is merely one of the initial intention of the VE. This paper outlines the basic frame work of value Engineering and present a case study showing the merits of VE in a universal testing machine.

Definition of Value Analysis:

Value Analysis can be defined as a process of systematic review that is applied to existing product designs in order to compare the function of the product required by a customer to meet their requirements at the lowest cost consistent with the specified performance and reliability needed.

Types of Values:

a.      Use value - which is based on those properties of the product, which enable it to perform work or service.

b.      Cost value - which is based on the minimum cost of achieving a useful function.

c.       Esteem value - which is based on those properties of the product, which contribute to pride of ownership.

d.      Exchange value – which is based on those properties which make a product valuable for exchange purposes.

Value engineering phases:

1.      Orientation Phase: Refine the problem and prepare for the value study.

2.      Information Phase: Finalize the scope of the issues to be addressed, targets for improvement, and evaluation factors while building cohesion among team members.

3.      Function Analysis Phase: Identify the most beneficial areas for study.

4.      Creative Phase: Develop a large number of ideas for alternative ways to perform each function selected for further study.

5.      Evaluation Phase: Refine and select the best ideas for development into specific value-improvement recommendations.

6.      Development Phase: Determine the “best” alternatives for presentation to the decision-maker.

7.      Presentation Phase: Obtain a commitment to follow a course of action for initiating an alternative.

8.      Implementation Phase: Obtain final approval of the proposal and facilitate its implementation.

Case Study:

This paper discusses a case study of Universal Testing Machine which is manufactured in Balancing Instruments and Equipments Ltd. Miraj, (Maharashtra) since from last 35 years. They are also manufacturing big range of testing machines i.e. Impact Testing Machine, Hardness Tester, Torsion Testing Machine etc. Universal Testing Machine is selected for case study, as it is most popular and relatively fast moving product, and Value Analysis technique was applied to reduce cost of some components of UTM. The components are:

        I.            Dial Bracket

      II.            Top Bearing Bracket Assembly

    III.            Recorder Gears

    IV.            Main Dial

      V.            Rotary Dial

    VI.            Hand Wheel

I) RANGE SELECTOR KNOB:

The main function of Selector Knob is to select required load range. By rotating this knob, one can change the cam positions and dial marking suitably. Earlier this knob is made of C.I. for which different operations are to be carried out. After studying the function of this knob, it has been observed that the material of this knob can be replaced from C.I. to Nylon which is inexpensive, light in weight, corrosion resistance etc. Value engineering job plan was made, evaluated and finally applied. This resulted in Net Saving of Rs. 175/- or 58.33 % saving in cost.

II) HAND WHEEL:

There are two main control valves one at right side and other at left side are provided on control panel of UTM. The right side valve is pressure compensating flow control valve with integral over load relief valve. Left side valve is return valve which allows the oil in the cylinder to go back during the downward motion of main piston. If this return valve is closed, oil delivered by pump passes through the right side valve to the cylinder and piston goes up. Therefore after studying the function it has been observed that only by rotating the hand wheels these valves can be opened or closed. By keeping same function the material of hand wheel can be changed from cast iron to Nylon. For this Value engineering job plan was made, evaluated and finally applied which resulted in Net Saving of Rs. 216/- or 54% saving in cost.

III) TOP BEARING BRACKET ASSEMBLY:

The lower beam is rigidly connected with upper beam by the two columns and the entire assembly is connected to hydraulic ram a ball and ball set joint which ensures axial loading. The lower and upper beam assembly moves up and down with the ram. This movement is guided at the top side by the bearing sliding round the main screws. In the existing design four guide bearings are provided in each of the two top bearing brackets fixed at the top of upper beam. It has been observed that, when the entire assembly moves up and down with ram, only one or two bearings come in contact with the main screw. Therefore the design of existing bearing bracket can be modified by providing three bearings instead of four. This modified design resulted in total saving of Rs. 1450/-. This includes:

•        Saving in raw material cost = Rs. 110/-

•        Saving in machining cost = Rs. 90/-

•        Saving by reducing one pin = Rs. 150/-

•        Saving by reducing one bearing (6301zz) = Rs. 1100/-

Hence percentage saving in this proposal is 19.33 %.

IV) DIAL BRACKET:

The main function of dial bracket is to support the inner dial, outer dial, pointer assembly (reading pointer and dummy pointer) and cover at top. The existing dial bracket is very bulky in design and complicated which is actually not required. The design and shape of existing dial bracket is studied in detail and it has been observed that by keeping same function, the design of the existing dial bracket can be modified in following two ways:

1.      Two arm dial bracket

2.      Three arm dial bracket

The design of dial bracket in the first proposal saves the raw material of cost of Rs. 900/-. Hence percentage saving in this proposal is 10 %.

The design of dial bracket in the second proposal saves the raw material of cost of Rs. 450/-. Hence percentage saving in this second proposal is 5%.

V) RECORDER GEAR:

The main function of recorder gear (Gear A and Gear B) is to give the rotary motion to the chart roller and function of the pinion is to give the linear to the rack scale. Presently in the recording unit brass gears are used which are very expensive. After studying the working of recorder unit, it has been observed that, the material of gear can be replaced by nylon, which in inexpensive, light in weight, corrosion resistance etc. By using Nylon Gears and Pinion, the motion can be easily given to the chart roller and rack scale. The modified design resulted in net saving of Rs. 433/-. This includes:

•        Savings in cost of Gear A = Rs. 281/-

•        Savings in cost of Gear B = Rs. 420/-

•        Savings in cost of Pinion = Rs. 433/-

Hence percentage saving in this proposal is 78.72 %.

VI) Hardware Items

Variety of 23 Different hardware items is reduced to 18. This reduces the investment in inventory of variety of tools, tap sets, drills etc. Dependability of tooling has increased, and delays are avoided and can be worked out at medium or lower skills. This makes maintenance easier and less costly.

CONCLUSION AND FUTURE SCOPE:

Value Engineering is executed in this case study by implementing design modifications and change in materials of components. From the results of the execution of value engineering to the selected components of Universal Testing Machine, we conclude as fallows,

•        The design modification suggested for Dial Bracket and Top Bearing Bracket Assembly reduces the weight, material and the cost of the component.

•        Value Engineering results in use of alternative less expensive and light material. The Recorder Gears, Range Selector Knob and Hand Wheel of brass, cast iron are replaced by Nylon. This results in reduction in weight and cost of component.

•        Value analysis also deals with minimizing variety of different hardware items. This reduces the inventory of hardware and also of the required tools for operation.

•        It is clear that Execution of Value Engineering technique to selected six components results in net saving of 20.84 %.

Value Engineering is executed in this case study only for six selected component and substantial reduction in cost is achieved. In the similar manner secondary analysis for the remaining components can be made and further cost reduction can be achieved. Also, Value Engineering results in the elimination of unnecessary cost by avoiding the unwanted machining of components.