International Journal of Engineering Trends and Technology (IJETT) - Volume4 Issue7- July 2013
Value Addition of Computer Work Station
Manufactured in Furniture Industry by using
Value Engineering Concept
#1
Dr. S.P. Kallurkar, #2Mr. M. A. Chougule #3Dr. P.N. Nemade
#1 Principal, AET’s Atharva College of Engineering, Charkop Naka, Malad (West) Mumbai.
#2 Principal, A.G. Patil Polytechnic Institute, Vijapur Road, Solapur (Maharashtra),India.
#3 Professor, AET’s Atharva College of Engineering, Charkop Naka, Malad (West) Mumbai.
ABSTRACT - Value Engineering is used to design the
product that will represent the optimum value to the
manufacturer and customer. Value Engineering is a
systematic methodology for continuous improvement of
products, process etc. The basic fundamental of Value
Engineering can be implemented in any product to
optimize its value for customer satisfaction by keeping
same cost or by increasing the product cost to some
extent with value addition. A computer work station
manufactured in a furniture industry is taken for
optimization of its value in which the product is
designed by using value engineering concept. Existing
computer work station consists of table top, base top
(middle), base top (lower) base top (side), keyboard
base, keyboard side strip, keyboard stopper, steel frame,
slider, keyboard guide strip with rexin and stud. This
product is modified with value addition by reducing
length of keyboard and by adding one drawer with lock
and key and removing the base top (lower), there by
which some required material can be stored in the
drawer safely. This drawer can be manufactured from
waste cut pieces of board. Also the length of keyboard is
reduced thereby which the cost is also reduced.
Key words: Value Engineering, Value addition,
Computer Work Station, Product Improvement, Furniture
Industry.
1. INTRODUCTION
Fundamentally, Value Engineering (VE) is a
systematic process to improve the value of a product. VE
began in the industrial sector in the 1940s and 50s, in the
context of product design. Its beginnings are usually
attributed to Lawrence Miles, who pioneered its use at
General Electric in 1947. Since then, VE methods and
applications have expanded significantly and have been
applied in a wide variety of environments, from building
construction to health care. Similar processes appear under
analyzing the function and the cost of the object,
the core is to analyze the function.
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several different names, including Value Analysis and
Value Management. The Society of American Value
Engineers International, or SAVE, uses the broad term
“Value Methodology,” defined as “the systematic
application of recognized techniques which identify the
functions of the product or service, establish the worth of
those functions, and provide the necessary functions to
meet the required performance at the lowest overall cost.”
A few descriptions of VE concepts are necessary
to understand what is considered to be part of VE. First, the
product under consideration: this product may be virtually
anything; some examples are manufactured objects,
buildings, management plans, and road segments. SAVE
states that the Value Methodology, or what we shall call
VE, “can beneficially be applied to virtually all areas of
human endeavor,” “wherever cost and/or performance
improvement is desired.” In the construction industry, VE
is usually applied to individual projects at various points in
their development, particularly between the design and
construction phases. Next, it is important to understand
what constitutes the value of the product, since “the main
objective of VE is to improve value.” Several approaches
have been proposed to define and measure “value.”
Value Engineering is a directive significance way
to the improvement of the products’ cost and function, and
there are some disadvantages of the computer work station.
Though there are researches on the improvement of the
computer work station, we put emphasis on the aesthetic
and design parameters. Through evaluating the improving
program, we can see that the computer work station
improved based on the Value Engineering can solve the
disadvantage of material used, lacking of different sized
material and design of product with value addition which
also reduces the cost.
Value Engineering is a technical and economic
method which studies on how to achieve the necessary
function with the lowest cost. The main idea of Value
Engineering is to enhance the value of the object through
2. ABC Analysis in the Furniture Industry
Every manufacturing firm requires allocation of
raw materials consumption, labor, and overhead expenses
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to processed goods in order to determine the final
manufacturing costs. In most industries, manufacturing
costs range from 60 to 70 percent of the final sale price.
Therefore, the need for effective cost allocation systems is
vital to control manufacturing costs. In manufacturing
firms such as the furniture industries, raw materials and
labor might be assigned directly to a product, process, or
activity. However, some overhead or indirect costs require
the establishment of distributing or cost driving bases to
allocate them to final goods.
This publication was developed based on concerns
from furniture producers that more training in cost
accounting methods should be available for practitioners.
The paper discusses the basics of cost accounting and
explains the strengths and weaknesses of two cost
accounting techniques — the direct method and the
activity-based costing (ABC) method — using simple
examples and applications in the furniture industry.



Figure 1 ABC Analysis
A class items which represent about 10-15% of
the total parts count but account for 70% of the
total product cost
B Class items which represent the next 20% of the
total parts count and the next 20% of the total
product costs (for a total of 90%
C Class items which represent 70% of the total
items, but only about 10% of the total cost.
3. Classification of Product Cost
Cost can be classified depending on the financial
format used for reporting. For manufacturing companies,
cost is usually reported based on product cost. Under this
reporting format, the cost needs to be broken out into direct
materials, direct labor, and overhead/indirect costs.
Direct materials costs are directly linked to a
product, activity, or process and sometimes are the largest
portion of the total costs. Direct materials can be raw
materials or subassemblies as well. Direct labor cost refers
to all employees that worked in the manufacturing of a
product; they can be allocated by activity, product, or
process as well. Collecting direct labor cost information
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might require intensive use of information technologies,
and these costs are a major driver for business strategy in
value-added wood products industries such as the furniture
industry, which is very labor intensive.
All other manufacturing costs that cannot be
classified or traced back to the product, activity, or process
are considered “indirect costs” or “overhead”; these might
include labor, materials, or supplies. Because overhead
costs cannot be directly allocated to a product, activity, or
process, a cost driver is needed to allocate the cost into a
“cost pool.” A cost pool is a collection of indirect costs
assigned to a cost object (machine hours, units produced,
etc.). Some examples of indirect costs/overhead in a wood
products industry include glue, paint, sandpaper, tooling,
electricity, hardware, insurance, water, administrative
salaries, and energy.
4. Computer Work Stations
Figure 2 Computer Work Station (Existing) Model No.:
CWS-1002
Figure 3 Computer Work Station (Proposed) Model No.:
CWS-1009
5. Value Engineering Analysis of the Computer Work
Station
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1. Distribution of cost
The Existing computer work station consists of
table top, base top (middle), base top (lower) base top
(side), keyboard base, keyboard side strip, keyboard
stopper, steel frame, slider, keyboard guide strip with rexin
and stud. Existing computer work station is modified by
reducing length of keyboard and by adding one drawer
with lock and key and removing the base top (lower).
There by which some material can be stored in the drawer
safely. This drawer can be manufactured from waste cut
pieces of board. Also the length of the keyboard is reduced
thereby which the cost is also reduced.
According to the principle of classification, if
cumulative proportion of total costs of the component is
between 60%-70%, the component is classified as the A
classification, if it is between 15%-20%, the component is
classified as the B classification, and if it is near 10%, the
component is classified as the C classification.
2. Analyzing of function
The basic function of the computer work station is
to hold the all parts computer system, and the secondary
function is easy to handle, durable and with a beautiful
appearance. Through analysis of function of each
component, we define the function of table top is to support
the computer, base top (middle) is to support the printer
and UPS, base top (side) is to support the CPU, keyboard
base is to support keyboard, keyboard side strip is to hold
slider, keyboard stopper is to restrict extra movement, steel
frame is to hold top, the function of slider is to hold
keyboard, keyboard guide strip with rexin is to provide
comfort, drawer is to hold the material and stud is to
support weight and leveling. The function definition of
computer work station’ component is shown in table no.2.
3. Functional evaluation
3.1 Defining the functional coefficient
(1) Defining functional importance coefficient:
Calculating the importance coefficient using
absolute evaluation method which asks 6 operators to grade
for each function. Sum up the grade of each function given
by the 6 operators, and then calculate the importance
coefficient using the total grade of each function given by
the 6 operators to divide by the total grade of the computer
work station.
The grade given by operators and the result of calculating
the functional importance coefficient are just like table no.1
shown. From the result, we can see that functional
importance coefficient of support the computer is 31.17%,
functional importance coefficient of easy to handle is
21.16%, functional importance coefficient of durable is
23%, functional importance coefficient of beautiful
appearance is 15% and Fictional importance coefficient of
hold other material is 9.16%
(2) Calculating the functional evaluation coefficient of key
components. Asks 6 operators to grade for each function of
each component, the total grade of each function is 100,
which is shown in table no.1. Then calculate the functional
coefficient of each component shown in table no.3 by
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multiplying functional importance coefficient which is
shown in table no.1 and the functional proportion
coefficient which is shown in table no.2. From the result
we can see that functional evaluation coefficient of Steel
Frame, Table Top, Drawer with Lock & Key, Keyboard
base, Base Top (Middle), Base Top (Side), Keyboard side
strip, Slider, Stud, Keyboard guide strip with rexin,
Keyboard stopper is 0.2901, 0.2476, 0.1358, 0.0763,
0.03538, 0.05518, 0.0075, 0.0653, 0.0453, 0.0225 and
0.018.
3.2 Defining the cost coefficient
Calculating the cost coefficient of the 11 key components
according to their current cost, the result is shown in table
no.6. From the result we can see that the cost coefficient of
Steel Frame, Table Top, Drawer with Lock & Key,
Keyboard base, Base Top (Middle), Base Top (Side),
Keyboard side strip, Slider, Stud, Keyboard guide strip
with rexin, Keyboard stopper is 0.3961, 0.1927, 0.1784,
0.0499, 0.0535, 0.0364, 0.0356, 0.0356, 0.0085, 0.0071
and 0.0057.
3.3 Calculating the value coefficient
The 11 key components’ value coefficient can be
calculated according to functional evaluation coefficient
table (table no.5) and cost coefficient table (table no.6),
which as table 5.15 shown, in order to determine the target
of improvement. The value coefficient of Steel Frame,
Table Top, Drawer with Lock & Key, Keyboard base, Base
Top (Middle), Base Top (Side), Keyboard side strip, Slider,
Stud, Keyboard guide strip with rexin, Keyboard stopper is
0.7323, 1.2848, 0.7612, 1.5290, 0.6613, 1.5159, 0.2106,
1.8342, 5.3294, 3.1690 and 3.1578. So the order of the
components to be improved is keyboard side strip, base top
(middle),steel frame, Drawer with lock and key, table top,
base top (side), keyboard base, slider, keyboard stopper,
keyboard guide strip with rexin and finally stud,
3.4 Result of value Analysis
According to the value coefficient of the 11 key
components shown in table no.7, we can come to a
conclusion:
(1) Drawer with lock and key, Keyboard side strip, Steel
frame, and Base top (middle) are the main components
need to be improved, for their value coefficients are less
than 1, which means the function are too less or the cost are
too much.
(2) Table top, Keyboard base, base top (side) and slider
need not to be improved for their value coefficients are
close to 1 which means the function and the cost are nearly
the same.
(3) The coefficients of Keyboard stopper, keyboard guide
strip with rexin and stud are more than 1, which means the
cost is already lower compared with function that has
already met the needs. And in this condition, Base top
(Side), slider, keyboard guide strip with rexin and stud are
not the target of value analysis, we may neglect the
analysis
of
them.
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International Journal of Engineering Trends and Technology (IJETT) - Volume4 Issue7- July 2013
Table-1 ABC Analysis of the Computer Work Station
Name of Component
Proportion
of the Total
No.
Qty.
Steel Frame
1
Table Top
Drawer with Lock &
Key
Keyboard base
1
1
Base Top (Middle)
5.26%
5.26%
Current
Cost in
Rs.
Proportion
Cumulative
of Total Cost Proportion of
in Rs.
Total Cost in Rs.
Classification
555
39.61
39.61
A
270
19.27
58.88
A
250
17.84
76.72
A
5.26%
70
4.99
81.71
A
1
5.26%
75
5.35
87.06
B
Base Top (Side)
1
5.26%
51
3.65
90.71
B
Keyboard side strip
3
15.79%
50
3.57
94.28
C
Slider
4
21.05%
50
3.57
97.85
B
Stud
4
21.05%
12
0.86
98.71
C
Keyboard guide strip
with rexin
1
5.26%
10
0.72
99.43
C
Keyboard stopper
1
5.26%
8
0.57
100
C
Total
19
100%
1401
100
5.26%
1
Graph 1 ABC Analysis of the Computer work station (Proposed)
Table-2 Function Definition of Computer Work Station Components
Name of Part (Component)
Steel Frame
Function Definition
Table Top
Support Computer
Drawer with Lock & Key
Hold Material
Keyboard base
Support Keyboard
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Hold Top
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International Journal of Engineering Trends and Technology (IJETT) - Volume4 Issue7- July 2013
Base Top (Middle)
Support Printer
Base Top (Side)
Support CPU
Keyboard side strip
Hold Slider
Slider
Hold Key Board
Stud
Support Weight
Keyboard guide strip with rexin
Provide Comfort
Keyboard stopper
Restrict Extra movement
Table-3
Calculation of the Functional Coefficient of Furniture Components
Function of Computer
work station
Support the Computer
A
30
Expert Rating
B
C
D
32
25
35
28
40
General
Comment
Score
191
E
F
Functional
Importance
Coefficient
31.66%
Easy to handle
25
20
20
20
33
20
127
21.16%
Durable
30
23
25
20
20
20
138
23%
Beautiful Appearance
10
15
15
20
15
15
90
15%
Hold other Material
05
10
15
05
15
05
55
9.16%
100
100
100
100
100
100
600
100
Total
Table-4
Functional Distribution of key Components of Computer Work Station
Functional Items
Name of Component
Support the Easy to
Beautiful
Computer
handle
Durable
Appearance
Hold other
Material
Steel Frame
35
25
30
20
30
Table Top
30
20
25
20
25
Drawer with Lock & Key
05
10
20
20
25
Keyboard base
10
10
05
05
05
Base Top (Middle)
05
00
00
10
05
Base Top (Side)
10
00
05
05
05
Keyboard side strip
00
00
00
05
00
Slider
00
20
10
0
00
Stud
Keyboard guide strip with rexin
05
00
05
05
05
00
05
05
00
05
Keyboard stopper
00
05
00
05
00
100
100
100
100
100
Total
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International Journal of Engineering Trends and Technology (IJETT) - Volume4 Issue7- July 2013
Graph 2 Functional Distribution of key Components
Table-5
Functional Evaluation Coefficient of key Components of Computer Work Station
Functional Items
Name of Component
Steel Frame
Table Top
Drawer with Lock &
Key
Keyboard base
Base Top (Middle)
Base Top (Side)
Keyboard side strip
Slider
Stud
Support the
Computer
0.1108
0.0949
Easy to
handle
0.0529
0.0423
Durable
Beautiful
Appearance
0.069
0.03
Hold
other
Material
0.0274
0.03
0.0229
0.0575
Functional
Evaluation
Coefficient
0.2901
0.2476
0.0229
0.0158
0.02116
0.046
0.03
0.0316
0.02116
0.0115
0.0075
0.00458
0.0763
0.015
0.00458
0.03538
0.0075
0.00458
0.05518
0.0075
0
0.0075
0.0158
0.0316
0
0
0
0
0
0.0423
0
0.0115
0
0.023
0
0.1358
0
0
0.0653
0.0158
0.0105
0.0115
0.0075
Keyboard guide strip
with rexin
0
0.0105
0
0.0075
0.00458
0.0225
Keyboard stopper
0
0.0105
0
0.0075
0
0.018
0.3163
0.21132
0.23
0.15
0.09152
1
Total
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0.0453
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Graph 3 Functional Evaluation Coefficient of key Components
Table-6
Cost Coefficient of Furniture Components
Name of Component
Cost in Rs.
Cost Coefficient
Steel Frame
555.00
0.3961
Table Top
270.00
0.1927
Drawer with Lock & Key
250.00
0.1784
Keyboard base
70.00
0.0499
Base Top (Middle)
75.00
0.0535
Base Top (Side)
51.00
0.0364
Keyboard side strip
50.00
0.0356
Slider
50.00
0.0356
Stud
12.00
0.0085
Keyboard guide strip with rexin
10.00
0.0071
Keyboard stopper
08.00
0.0057
1401.00
1
Total
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International Journal of Engineering Trends and Technology (IJETT) - Volume4 Issue7- July 2013
Graph 4 Cost Coefficient of key Components
Table-7
Value Coefficient of Furniture Components
Functional
Evaluation
Coefficient (F)
Cost
Coefficient
(C)
Value
Coefficient
(V)=F/C
Steel Frame
0.2901
0.3961
0.7323
3
Table Top
0.2476
0.1927
1.2848
5
Drawer with Lock & Key
0.1358
0.1784
0.7612
4
Keyboard base
Name of Component
Order of
Improvement
0.0763
0.0499
1.5290
7
Base Top (Middle)
0.03538
0.0535
0.6613
2
Base Top (Side)
0.05518
0.0364
1.5159
6
Keyboard side strip
0.0075
0.0356
0.2106
1
Slider
0.0653
0.0356
1.8342
8
Stud
0.0453
0.0085
5.3294
11
Keyboard guide strip with rexin
0.0225
0.0071
3.1690
10
0.018
0.0057
3.1578
9
Keyboard stopper
Table-8
Target Cost of Furniture Components
Functional
Evaluation Component
Name of Component
Coefficient
Cost in Rs.
(F)
Cost
Coefficie
nt (C)
Value
Coefficie
nt
(V)=F/C
Target
Cost in
Rs.
Amount of
Cost
Reduction
Steel Frame
0.2901
555.00
0.3961
0.7323
356.82
+198.18
Table Top
0.2476
270.00
0.1927
1.2848
304.75
-34.75
Drawer with Lock & Key
0.1358
250.00
0.1784
0.7612
167.23
+82.77
Keyboard base
0.0763
70.00
0.0499
1.5290
93.95
-23.95
Base Top (Middle)
0.03538
75.00
0.0535
0.6613
43.69
+31.31
Base Top (Side)
0.05518
51.00
0.0364
1.5159
67.87
-16.87
Keyboard side strip
0.0075
50.00
0.0356
0.2106
9.33
+40.67
Slider
0.0653
50.00
0.0356
1.8342
80.42
-30.42
Stud
0.0453
12.00
0.0085
5.3294
55.72
-43.72
Keyboard guide strip with rexin
0.0225
10.00
0.0071
3.1690
27.68
-17.68
0.018
08.00
0.0057
3.1578
22.54
-14.54
1
1401.00
1
1
1230
171.00
Keyboard stopper
Total
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International Journal of Engineering Trends and Technology (IJETT) - Volume4 Issue7- July 2013
Graph 5 Target Cost of Components
6. Conclusion
The value engineering analysis suggests that the
existing Computer work station can be modified in to
proposed computer work station by adding one drawer with
lock and key and removing the base top (lower) by which
the customer requirements are can be fulfilled. Cost
analysis of the existing
computer work station
(Rs.1194.00) and proposed Computer work station
(Rs.1401.00) shows that the cost is increasing by Rs.
207.00 but in the proposed computer work station we have
added one drawer which can be manufactured by using
waste cut pieces therefore only lock and fitting screws are
required which costs Rs. 30.00. Therefore the cost of
drawer can be reduced from Rs 250.00 to Rs. 30.00 as it is
manufactured from waste cut pieces. Also in the proposed
computer work station, the base top (lower) is also
removed with reducing the size of the keyboard base in
which the material saving is achieved.
The total cost of proposed computer work station
can be reduced from Rs. 1401.00 to Rs. 1181.00.
Comparing this with existing computer work station, we
achieved the cost saving of Rs.13.00 with Value addition
by adding one drawer with lock and key in the proposed
computer work station.
7. References:
[1] The Use of Target Cost Techniques to Achieve Market
Dominance with New Technology
by Renee V.
Dorjahn
[2] REN Jie, ZHANG, Xiao-hua. (2008). Appliance of
Value Engineering on the construction enterprise.
Construction Economy, 6:50-51
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[3] Value Engineering in Product Renovation Fang-Lin
CHAO, Chien-Ming SHIEH and Chi-Chang LAI
[4] The ABCs of Cost Allocation in the Wood Products
Industry: Applications in the Furniture Industry by
Henry Quesada-Pineda, Assistant Professor, Wood
Science and Forest Products
[5] Lawrence D. (1972). Miles. Techniques of Value
Analysis and Engineering, New York, Mcgraw-Hill
(Tx), June.
[6] Quality Function Deployment, Value Engineering and
Target Costing, an Integrated Framework in Design
Cost Management: Mathematical Programming
Approach
F. Jariri_ and S.H. Zegordi
[7] Application of VE Methodology To Product
Development That Warrants Compliance To Key
Certification Requirements - Daniel Arockiam and
Raghavendra Rao, Tata Consultancy Services (TCS),
India
[8] Techniques of Value Analysis and Engineering by
Lawrence D. Miles 2nd edition, McGraw Hill Text
(1972).
[9] Structured Cost Reduction Value Engineering by the
Numbers David Meeker F James McWilliams
Hewlett-Packard Company.
[10 Improving Nickeling Process through Value
Engineering Technique by: Chinmay Das
[11] An analysis of materials and plant in current
use in the furniture industry by T. G. Doyle
[12] LI, Zhi-rong, XUE Song, NI Cui-ping (2009).
Installation, maintenance and conservation of the
headstock gear. Water Conservancy of Jiang Su
Province, 12:27-28
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