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VAVE: Frequently Asked Questions
Table of Contents
Value Analysis/Value Engineering is a powerful tool for manufacturers to save costs while also optimizing the quality of their outputs. Although these cost savings can be substantial, VA/VE requires an investment in time and effort to complete. This tradeoff leaves many manufacturers wondering how to ensure that they’re doing VA/VE right, finding savings that exceed their labour costs.
Let’s break down some of the most common questions about VA/VE.
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How do you determine which parts and products are best to focus on for VA/VE?
Some projects are more or less likely to reveal substantial savings when engineered or analyzed through VA/VE. The three major factors you should look for when prioritizing VA/VE projects are:
- Long-tail parts. Products can be categorized on a spectrum based on the specificity of their designs, from core parts (like engine components, which have very strict design requirements to function) to long-tail (like brackets, which are more flexible in how they can be designed). As VA/VE involves finding substitutions, core parts may not offer as many opportunities for changes. Moreover, because of the complex functionality of core parts, changes require extensive retesting which will add to labour costs.
- Expensive parts. The higher the price currently is, the more space there is for it to be lowered. Being able to reduce the cost of a design by 20% makes much more of an impact when the initial price is $100 per unit versus 10$ per unit.
- High volume parts. The more volume you have for a part, the more impactful finding savings for that part will be. If you can find savings of $2 per part for a part you produce 10,000 of, that’s more impactful than finding savings of $20 per part for a part you produce 100 of.
Looking for parts that meet these three criteria will give you a good first step to finding opportunities for VA/VE.
Once you’ve established this category of likely good targets, you can start breaking down individual designs to find specific optimizations. This is a more nuanced and challenging stage in the process. You have to surface all of your relevant previous designs and sourcing to find potential alternatives. This is often labour intensive, requiring tedious manual searching.
Once you find all of these options, you need to review the differences to see which are viable. Sometimes a design will be obviously “overdesigned”, including unnecessary expensive components, but often the differences and their cost impacts will be more subtle.
Tools like CADDi can help keep labour costs down during this stage of the process. We automatically surface relevant designs alongside their costing information, then highlight differences between them. This makes it easy to understand the connections between design elements and costs, bringing the most cost-effective functionally sufficient solution to the forefront. Check it out by signing up for a demo.
How do you keep VA/VE within necessary constraints of time and effort?
Embarking in VA/VE is like going down a rabbit hole. There are so many different factors to research and apply to so many different parts that it feels like an infinitely large undertaking. At the same time, as you go past a level of optimization, you start experiencing diminishing returns for each VA/VE project.
To ensure your VA/VE efforts are as optimized as possible, there are two major strategies you should implement:
- Build structured goals and processes for VA/VE. Go into each VA/VE project with an objective in mind for savings, and a timeline for finding those savings. When you meet those goals or hit the time limit, move on to the next project. Projects that don’t have savings that can be uncovered in that time limit may not be the best fit for VA/VE. There’s no need to exert yourself to find savings for every single part when there’s other low hanging fruit to find.
- Reduce labour costs by building efficient infrastructure. The faster your VA/VE process is, the less labour costs you incur by undertaking them. This widens the window of viable VA/VE projects – projects that find savings that exceed the labour costs. Typically, the most time-intensive aspect of VA/VE is tracking down the data required to make strategic decisions. Tools like CADDi can automatically surface relevant data. See it in action by signing up for a demo.
By implementing these strategies, you can be confident that launching a VA/VE initiative won’t overrun your time requirements.
How do you get buy-in from teams in VA/VE initiatives?
Implementing VA/VE requires commitment and enthusiasm from your teams. This can be difficult at first. People would often rather focus on new projects than refine existing ones through value analysis. Engineers may also have reservations about changing their established design processes through value engineering.
Here are a few ways to create buy-in from teams:
- Convince them that real savings are within reach. Often, people are skeptical that initiatives like VA/VE will actually achieve their goals. They may think that they’re just being done for the sake of doing them. Demonstrating the potential of VA/VE through a particular example will show them the potential of the system. Also, make sure that these teams understand the connection between money saved by the company and benefits for them.
- Highlight productivity gains resulting from VA/VE. VA/VE doesn’t just save money, it also makes processes more efficient. VA/VE insights show you where you can reuse past design elements and already vetted suppliers more broadly. Rather than reinventing the wheel every time, your teams can skip ahead to the more innovative and interesting parts of design and production.
- Focus on labour cost reduction within VA/VE. The most impactful way to empower VA/VE initiatives is to reduce the labour cost in implementing them. Making VA/VE efforts makes them more profitable, and also more appealing to the teams undertaking them. The steps that are best to optimize when reducing labour costs – such as searching through old data to find relevant information – are those that are most tedious to complete. Committing to improving the process of VA/VE isn’t only the best way to make it effective, but it will convince your teams that the process won’t involve toilsome work.
For all these cases, investing in infrastructure and tools will make the process more profitable, efficient, and appealing to your teams. Check out a demo of CADDi to see how you can accelerate VA/VE processes with our AI data platform.
How do you use VA/VE to negotiate with suppliers?
One of the most impactful outcomes of VA/VE is an improved ability to negotiate to mutually beneficial ends with suppliers. VA/VE allows you to uncover the patterns between design and production elements and ultimate costs. Those patterns will reveal opportunities to source products using cheaper materials by highlighting price disparities between similar component parts.
You can work with the supplier using this information to achieve a mutually beneficial new design. Consider this simplified example:
- You source Parts A and B from a supplier for $80 and $40 respectively.
- You’re designing a new Part C, which at first appears to be most similar to Part A
- However, through VA/VE, you determine that it can be built through much of the same process as Part B
- You share this insight with the supplier as you’d obviously rather pay something close to $40 than $80
- The supplier, who let’s say can produce Part A for $70 and Part B for $30, was initially going to produce Part C based on Part A and sell it to you for $80
- However, the insight you shared from your VA/VE investigation has revealed that Part B is a cheaper alternative to base Part C on
- The supplier is willing to produce Part C based on Part B rather than Part A, and sell it to you for $50 per part
- Your VA/VE analysis has not only saved you money, but it’s enabled the supplier to make more money – not just on your deal, but any similar deal
- This strengthens the longterm relationship between you and your supplier, while benefitting you both financially
These sort of win-win discoveries emerge from VA/VE processes. It can totally revolutionize how you manage suppliers, leading to savings and efficiencies.
How do I educate myself on VA/VE best practices?
VA/VE is fuelled by two types of information. First is the actual strategic data necessary to find cost-effective alternatives. This is the fuel for VA/VE itself. Investing in a data platform like CADDi allows this data to be activated and made into an asset. Check out a demo to see this in action.
The second is the wisdom of best practices that helps direct where, when, and how to implement VA/VE. We offer several guides on these best practices to get you up to speed:
VA/VE for Manufacturing Leaders
Value Analysis/Value Engineering is a powerful tool for manufacturers to save costs while also optimizing the quality of their outputs. Although these cost savings can be substantial, VA/VE requires an investment in time and effort to complete. This tradeoff leaves many manufacturers wondering how to ensure that they’re doing VA/VE right, finding savings that exceed their labour costs.
Let’s break down some of the most common questions about VA/VE.
{{subscribe}}
How do you determine which parts and products are best to focus on for VA/VE?
Some projects are more or less likely to reveal substantial savings when engineered or analyzed through VA/VE. The three major factors you should look for when prioritizing VA/VE projects are:
- Long-tail parts. Products can be categorized on a spectrum based on the specificity of their designs, from core parts (like engine components, which have very strict design requirements to function) to long-tail (like brackets, which are more flexible in how they can be designed). As VA/VE involves finding substitutions, core parts may not offer as many opportunities for changes. Moreover, because of the complex functionality of core parts, changes require extensive retesting which will add to labour costs.
- Expensive parts. The higher the price currently is, the more space there is for it to be lowered. Being able to reduce the cost of a design by 20% makes much more of an impact when the initial price is $100 per unit versus 10$ per unit.
- High volume parts. The more volume you have for a part, the more impactful finding savings for that part will be. If you can find savings of $2 per part for a part you produce 10,000 of, that’s more impactful than finding savings of $20 per part for a part you produce 100 of.
Looking for parts that meet these three criteria will give you a good first step to finding opportunities for VA/VE.
Once you’ve established this category of likely good targets, you can start breaking down individual designs to find specific optimizations. This is a more nuanced and challenging stage in the process. You have to surface all of your relevant previous designs and sourcing to find potential alternatives. This is often labour intensive, requiring tedious manual searching.
Once you find all of these options, you need to review the differences to see which are viable. Sometimes a design will be obviously “overdesigned”, including unnecessary expensive components, but often the differences and their cost impacts will be more subtle.
Tools like CADDi can help keep labour costs down during this stage of the process. We automatically surface relevant designs alongside their costing information, then highlight differences between them. This makes it easy to understand the connections between design elements and costs, bringing the most cost-effective functionally sufficient solution to the forefront. Check it out by signing up for a demo.
How do you keep VA/VE within necessary constraints of time and effort?
Embarking in VA/VE is like going down a rabbit hole. There are so many different factors to research and apply to so many different parts that it feels like an infinitely large undertaking. At the same time, as you go past a level of optimization, you start experiencing diminishing returns for each VA/VE project.
To ensure your VA/VE efforts are as optimized as possible, there are two major strategies you should implement:
- Build structured goals and processes for VA/VE. Go into each VA/VE project with an objective in mind for savings, and a timeline for finding those savings. When you meet those goals or hit the time limit, move on to the next project. Projects that don’t have savings that can be uncovered in that time limit may not be the best fit for VA/VE. There’s no need to exert yourself to find savings for every single part when there’s other low hanging fruit to find.
- Reduce labour costs by building efficient infrastructure. The faster your VA/VE process is, the less labour costs you incur by undertaking them. This widens the window of viable VA/VE projects – projects that find savings that exceed the labour costs. Typically, the most time-intensive aspect of VA/VE is tracking down the data required to make strategic decisions. Tools like CADDi can automatically surface relevant data. See it in action by signing up for a demo.
By implementing these strategies, you can be confident that launching a VA/VE initiative won’t overrun your time requirements.
How do you get buy-in from teams in VA/VE initiatives?
Implementing VA/VE requires commitment and enthusiasm from your teams. This can be difficult at first. People would often rather focus on new projects than refine existing ones through value analysis. Engineers may also have reservations about changing their established design processes through value engineering.
Here are a few ways to create buy-in from teams:
- Convince them that real savings are within reach. Often, people are skeptical that initiatives like VA/VE will actually achieve their goals. They may think that they’re just being done for the sake of doing them. Demonstrating the potential of VA/VE through a particular example will show them the potential of the system. Also, make sure that these teams understand the connection between money saved by the company and benefits for them.
- Highlight productivity gains resulting from VA/VE. VA/VE doesn’t just save money, it also makes processes more efficient. VA/VE insights show you where you can reuse past design elements and already vetted suppliers more broadly. Rather than reinventing the wheel every time, your teams can skip ahead to the more innovative and interesting parts of design and production.
- Focus on labour cost reduction within VA/VE. The most impactful way to empower VA/VE initiatives is to reduce the labour cost in implementing them. Making VA/VE efforts makes them more profitable, and also more appealing to the teams undertaking them. The steps that are best to optimize when reducing labour costs – such as searching through old data to find relevant information – are those that are most tedious to complete. Committing to improving the process of VA/VE isn’t only the best way to make it effective, but it will convince your teams that the process won’t involve toilsome work.
For all these cases, investing in infrastructure and tools will make the process more profitable, efficient, and appealing to your teams. Check out a demo of CADDi to see how you can accelerate VA/VE processes with our AI data platform.
How do you use VA/VE to negotiate with suppliers?
One of the most impactful outcomes of VA/VE is an improved ability to negotiate to mutually beneficial ends with suppliers. VA/VE allows you to uncover the patterns between design and production elements and ultimate costs. Those patterns will reveal opportunities to source products using cheaper materials by highlighting price disparities between similar component parts.
You can work with the supplier using this information to achieve a mutually beneficial new design. Consider this simplified example:
- You source Parts A and B from a supplier for $80 and $40 respectively.
- You’re designing a new Part C, which at first appears to be most similar to Part A
- However, through VA/VE, you determine that it can be built through much of the same process as Part B
- You share this insight with the supplier as you’d obviously rather pay something close to $40 than $80
- The supplier, who let’s say can produce Part A for $70 and Part B for $30, was initially going to produce Part C based on Part A and sell it to you for $80
- However, the insight you shared from your VA/VE investigation has revealed that Part B is a cheaper alternative to base Part C on
- The supplier is willing to produce Part C based on Part B rather than Part A, and sell it to you for $50 per part
- Your VA/VE analysis has not only saved you money, but it’s enabled the supplier to make more money – not just on your deal, but any similar deal
- This strengthens the longterm relationship between you and your supplier, while benefitting you both financially
These sort of win-win discoveries emerge from VA/VE processes. It can totally revolutionize how you manage suppliers, leading to savings and efficiencies.
How do I educate myself on VA/VE best practices?
VA/VE is fuelled by two types of information. First is the actual strategic data necessary to find cost-effective alternatives. This is the fuel for VA/VE itself. Investing in a data platform like CADDi allows this data to be activated and made into an asset. Check out a demo to see this in action.
The second is the wisdom of best practices that helps direct where, when, and how to implement VA/VE. We offer several guides on these best practices to get you up to speed:
VA/VE for Manufacturing Leaders
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