International Journal of Application or Innovation in Engineering & Management (IJAIEM)
Web Site: www.ijaiem.org Email: editor@ijaiem.org, editorijaiem@gmail.com
Volume 2, Issue 3, March 2013
ISSN 2319 - 4847
Optimization of Furniture Product in
Furniture Industry by Using Value Engineering
with Function Analysis, Function Evaluation
and Decision Matrix- A Case Study
1
Mr. Chougule Mahadeo Annappa & 2Dr.Kallurkar Shrikant Panditrao
1
Principal, A.G. Patil Polytechnic Institute, Vijapur Road, Solapur (Maharashtra), India.
2
Principal, AET’s Atharva College of Engineering, Charkop Naka, Malad (West) Mumbai.
ABSTRACT
The aim of value engineering is to design a product that will represent the optimum value to the manufacturer and customer.
Value Engineering is a systematic step by step methodology for continuous improvement of products, process, service and
system. M/s Gayatri Pvt. Ltd. Situated at Sangli Maharashtra has been manufacturing Different types of Computer work
stations, Office tables,
Bed, Benches, Wardrobe, Study table, TV Stand, Stools etc. and currently supply to local dealers and customers in Sangli and
near by area. This paper introduces how to apply theories and methods of Value Engineering in the industry. Value
Engineering is a proven management technique that can make valuable contributions to value enhancement and cost reduction
of the furniture manufacturing industry. The basic fundamental of Value Engineering with its different phases which can be
implemented in any product to optimize its value. A case study of furniture manufacturing small scale industry is discussed in
which the material size of the product is changed according to the value engineering methodology. The material is chosen such
that the cost is reduced without affecting the value of the product and its design. To find the best possible alternative from the
choices we have used the tools such as Function analysis, Functional Evaluation and Decision Matrix, which gives the most
appropriate results. Hence as a result of the analysis the cost is reduced.
Key words: Value Engineering, Functional analysis, Function Evaluation, Decision Matrix, Furniture Industry
1. INTRODUCTION
Lawrence D. Miles established the Value Engineering in the monograph of “Techniques of Value Analysis and
Engineering” in 1947. In the monograph he pointed out that success of a free enterprise in the overall long-term
competition lay in continuously selling the best value to customers and evoking expected price, and the best value is
function and cost. Using Value Engineering can help all the departments of a enterprise to determine the best scheme
that meets all the needs of the customers with the lowest cost. In general, 15% to 20% or more of the unnecessary costs
can be reduced within reducing the value of consumers. Since 1978, the theory of Value Engineering was introduced
into China, it has been widely adopted by many companies and made great economic benefits. With 35 years’ practice,
the theory and methodology of Value Engineering has been recognized by the academic community, especially the
business circles, which has been one of the significant methods to improve product quality, reduce product cost.
However, in India, VE is mostly associated to any alternative design with the intention of cost cutting exercise for a
project, which is merely one of the initial intentions of the VE. This paper outlines the basic frameworks of Value
Engineering and presents a case study showing the cost reduction of Value Engineering in a Furniture Manufacturing
Industry.
Roadblocks to Cost Effectiveness
The practice of VE doesn't imply that there may be intentional "gold plating," conscious neglect of responsibility, or
unjustifiable error or oversight by the design team. VE simply recognizes that social, psychological, and economic
conditions exist that may inhibit good value. The following are some of the more common reasons for poor value:
1. Lack of information, usually caused by a shortage of time. Too many decisions are based on feelings rather than
facts.
2. Wrong beliefs, insensitivity to public needs or unfortunate experience with products or processes used in unrelated
prior applications.
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Volume 2, Issue 3, March 2013
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3. Habitual thinking, rigid application of standards, customs, and tradition without consideration of changing function,
technology, and value.
4. Risk of personal loss, the ease and safety experienced in adherence to established procedures and policy.
5. Reluctance to seek advice, failure to admit ignorance of certain specialized aspects of project development.
6. Negative attitudes, failure to recognize creativity or innovativeness.
7. Over specifying, costs increase as close tolerances and finer finishes are specified. Many of these are unnecessary.
8. Poor human relations, lack of good communication, misunderstanding, jealousy, and normal friction between people
are usually a source of unnecessary cost. In complex projects, requiring the talents of many people, costs may
sometimes be duplicated and redundant functions may be provided. Cooper and Slagmulder, in their book,
comprehensively discussed the interaction between the target costing method and value engineering. They elaborately
present the Survival Zone for a product that consists of three characters:
1. Price,
2. Functionality,
3. Quality.
Here it is shown how these three factors interact with each other and provide the Zone for the operations of the
industry. This Survival Zone is presented in Figure 1. The interaction of price and functionality was, also, shown.
2. FIVE PHASES OF VALUE ENGINEERING PROCESS
Information Phase - During this phase, the VE team gathers as much information as possible about the program
requirements, project design, background, constraints, and estimated/projected costs. The team performs functional
analysis of systems and subsystems to identify high cost areas. The project designer provides additional design data and
participates in the initial VE team conference.
Figure No.1. The survival zone for a product source
Speculative/Creative Phase - The team uses a group interaction process to identify alternative ideas for accomplishing
the function of a system or subsystem.
Evaluation/Analytical Phase - The ideas generated during the speculative/creative phase are screened and evaluated
by the team. The ideas showing the greatest potential for cost savings and project improvement are selected for further
study.
Development/Recommendation Phase - The team researches the selected ideas and prepares descriptions, sketches,
and life cycle cost estimates to support the VE proposal (VEP) recommendations.
Report Phase - The team presents the VEP’s to the Government during an oral presentation at the conclusion of the
workshop. Shortly after the completion of the VE workshop, a preliminary
VE report encompassing the entire VE effort is prepared by the VE team leader and submitted to the Industry
Management.
3. ACCESS TO SUCCESS
There are many keys to the success of a VA program and it is wise to consider these issues before commencing the
project, as errors in the project plan are difficult to correct, without causing frustration, once the VA project has started.
One of the most important initial steps in developing the VA process is to create a formal team of individuals to
conduct the exercise. These individuals must be drawn from different parts of the business that affect the costs
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associated with design, manufacturing, supply and other relevant functions. In addition, the team must be focused on a
product or product family in order to begin the exercise. Further key success factors include:
a. Gain approval of management to conduct a Value Analysis exercise. Management support, endorsement and
mandate for the VA project provide legitimacy and importance to the project within the business. This approval process
also removes many of the obstacles that can prevent progress from being made by the team.
b. Enlist a manager as a champion of the project to report back directly to the board of directors and also to act as the
program leader.
c. Once a program team has been developed it is important to select an operational leader to coordinate the efforts,
monitor progress and to support the project champion. This leader will remain with the VA team throughout the life of
the project and will be the central linking pin between the team and the management leaders.
d. Establish the reporting procedure for the team and the timing of the project. This project plan needs to be formal and
displayed as a means of controlling and evaluating achievements against time.
e. Present the VA concept and objectives of the team in front of management.
Widespread communication of the VA project is important so that other employees, particularly managers (who may
not be involved directly with the process) understand the need to support the project either directly by assigning staff or
indirectly through the provision of data.
f. Maintain a list of those business functions that should receive a regular communication of progress even though they
may not be directly involved with the project. This process allows other individuals in the business to be informed about
the progress and findings of the group.
This form of promotion is important as it maintains a momentum and communicates the findings of the team as widely
as possible.
g. Provide an office space and co-locate the team members where practical and possible to do so.
The ability to locate a VA improvement group in one area of the business is important and assists the communication
within the group. A convenient area can also be used to dismantle the product and also the walls of the area can be used
to record, on paper charts, the issues that have been discovered by the team (and the associated actions that must be
undertaken).
h. Select the product for the first study. Ideally the existing product, or family of products, will be one that is
established, sells in volume and has a relatively long life expectancy. As such any improvement in the cost performance
of the product will provide a large financial saving to the business
i. Write down the objectives of the project and the key project review points. Estimate the targets to be achieved by the
project. These objectives provide a reference point and framework for the exercise. The objectives also focus attention
on the outputs and achievements required by the company.
j. Select and inform any personnel who will act in a part time or temporary role during the project. This process is used
to schedule the availability of key specialist human resources to support the team throughout the duration of the project.
k. Train the team in both the process of VA and also in basic team building activities. It is important that all members
understand the nature of the project and its importance. The initial team building exercises are also a good way of
understanding the attitude of all members to the project – especially those with reservations or a negative attitude to
what can be achieved.
As with most team exercises there is a requirement to allow the team to build and bond as a unit. It is often difficult for
individuals, drawn from throughout the industry, to understand the language that is used throughout the business and
also to understand the ‘design to market’ process when their own role impacts on a small section of this large and
complex process.
4. OPTIMIZATION OF COMPUTER WORK STATION: A CASE STUDY ANALYSIS
In this paper we have discussed a Computer work station manufactured in Gayarti Industries Pvt. Ltd. Sangli,
Maharashtra (India) scince 5 years. The major products of the industry are Different types of Computer work stations,
Office Tables, Bed, Benches, Wardrobe, Study Table, TV Stand, Stools etc. currently supply to local dealers and
customers in Sangli and near by area.
Value Engineering is applied as pre the following steps to the Computer work station:1. Functional Analysis Worksheet is prepared for the different parts of the product.
2. Functional Evaluation is done of each part
3. Numerical Evaluation Sheet is prepared
4. Creativity Worksheet
5. Selection of alternative is done through Decision Matrix
6. Finding and Recommendation
7. Conclusion
4.1 Work Station Layout
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Computer Work Station
Figure No.3
4.2 Flow Process Chart For Production Of Computer Work Station
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Table-1
Part Name/
Description
Drawer & Box
Assembly
Steel frame
Keyboard assembly
Table Top
Slider Pair
Base Top (Middle)
Base Top (Lower)
Base Top(Side)
Keyboard Strip
(Side)
Functional Analysis Worksheet
Function
Part
Assembly
Quantity
Verb
Noun
Basic
Secondary
Store
Material
Provide
Locking
X
Provide
Movement
X
Improve
Appearance
X
Holds
Assembly
Holds
Parts
X
Provide
Strength
X
Provide
Grip
X
Hold
Keyboard
Provide
Movement
X
Facilitate
Locking
X
Hold
Material
X
Hold
Material
X
Improve
Appearance
X
Provide
Surface
Hold
Keyboard
Provide
Movement
Secure
Tightness
Hold
Material
Provide
Surface
Hold
Material
Provide
Surface
Hold
Material
Provide
Surface
X
Support
Slider
X
Hold
Slider Base
Basic
Secondary
X
1
X
1
X
1
1
1
X
X
X
X
X
1
X
X
1
X
X
1
1
X
Table-2 Total Costing of Computer Work Station
Sr. No.
Part
Cost in Rs
A
Drawer & Box Assembly
800.00
B
Steel Frame
620.00
C
Keyboard Assembly
122.00
D
Table Top
270.00
E
Slider Pair
25.00
F
Base Top (Middle)
75.00
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G
Base Top (Lower)
63.00
H
Base Top(Side)
57.00
I
Keyboard Strip (Side)
16.50
Total
2050.50
Table-3 Functional Evaluation
Key Letter
Part
Function
Weight
% Cost
A
Drawer & Box Assembly
Store Material
21
39.04
B
Steel frame
Holds Assembly
24
30.26
C
Keyboard assembly
Hold Keyboard
13
5.96
D
Table Top
Provide Surface
14
13.18
E
Slider Pair
Provide Movement
11
1.22
F
Base Top (Middle)
Hold Material
2
3.66
G
Base Top (Lower)
Hold Material
1
3.07
H
Base Top(Side)
Hold Material
2
2.78
I
Keyboard Strip (Side)
Hold Slider Base
2
0.81
Component’s Weight and % Cost
4.3 Numerical Evaluation Sheet
B
C
A
D
E
F
G
H
I
B3
A3
A3
A3
A3
A3
A3
A3
21
B
B3
B3
B3
B3
B3
B3
B3
24
C
D3
C2
C3
C3
C3
C2
13
D
D3
D2
D2
D2
D3
14
E
E3
E3
E3
E2
11
F
F/G
F/H
I1
02
G
I1
I1
01
H
H2
02
I
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4.4 Creative Phase
The central theme of the creative phase is “what else could do the same needed function?” the ranking of the function
based on the value gap in descending order, is the indicator to which one must pinpoint in order to get the maximum
advantages.
In order to more ideas, the group restored to the brainstorming technique. The following ideas were generated during
this phase,
1. Change the material from square pipe to angle in same place.
2. Make the design simpler
3. Make it folding
4. Use the wheels for movement
5. Change the stud size
6. Make it in powder coating
7. Reduce the thickness of the board
8. Use waste pieces of required size in some places
9. Reduce the size of the board in same places
10. Reduce the gauge of the pipe
11. Remove compartment shelf from box
12. Instead of box, make total three drawers with central locking by same existing lock.
The first phase of brainstorming usually result in quantity generation and the second phase generates a qualitative
evaluation. The ideas are evaluated against five parameters as shown in table of feasibility ranking matrix.
The team accepts those ideas which generate 40 points and above.
Table 4 Forced Decision Matrix
No. of Comparison
Parameters
1
2
3
4
Durability
1
0
1
1
Maintenance Cost
0
0
Stability
1
Compactness
5
6
0
7
9
10
1
0
1
3
30
1
10
4
40
0
1
10
0
1
1
10
1
0
0
0
%
Total
1
1
Appearance
8
Table 5 Function-Cost-Worth-Analysis (FCWA)
Function
Verb
Noun
Worth
Existing
Cost in Rs.
Tentative
Alternative
Estimated
Cost in Rs.
Value Gap
Ranking
Store
Material
800.00
Board
650.00
150.00
II
Hold
Assembly
620.00
MS material
560.00
60.00
III
Hold
Keyboard
122.00
Board
110.00
12.00
Provide
Surface
270.00
Eliminate
0.00
270.00
Provide
Movement
25.00
Eliminate
0.00
25.00
Hold
Material
75.00
Board
60.00
15.00
Hold
Material
63.00
Board
55.00
8.00
Hold
Material
57.00
Eliminate
0.00
57.00
Hold
Slider Base
16.50
Eliminate
0.00
16.50
Position
Stud
12.00
Eliminate
0.00
12.00
Total
2060.50
1435.00
625.50
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I
V
IV
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Table 6 Feasibility Ranking Matrix
Parameters Ideas
State of Art
Probability of
Implementation
Cost to
Develop
Time to
Implement
Potential Cost
Benefit
10: Off the shelf
10: High Chance
10: High Cost
10: No time
10: High
1: New Technology
1: Low Chance
1: Low Cost
1: Maximum
Time
1: Low
Total
1
10
10
05
05
10
40
2
10
05
04
06
06
31
3
10
08
05
09
10
42
4
06
10
03
09
10
38
5
06
08
01
10
05
30
6
05
10
05
05
08
33
7
10
10
01
10
10
41
8
10
10
01
10
10
41
9
10
10
01
10
10
41
10
05
06
03
08
10
32
11
10
10
01
10
10
41
12
01
10
06
05
05
27
4.5 Evaluation Phase
Parameters
a) Rigidity
b) Light Weight
c) Accessibility
d) Appearance
Alternative –I
Change Material (Pipe to angle)
Alternative –II
Make it in Folding
Weightage of the Parameters
A
B
C
D
RAW
SCORE
FINAL
SCORE
A2
A2
A2
6
7
B
B3
B2
5
6
C
D3
0
1
D
3
4
3 – Major Difference in Importance
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2- Medium Difference in Importance
1- Minor Difference in Importance
0- No Difference in Importance
Table 7 Evaluation Matrix
Parameters
weightage
Alternative
Existing
Rigidity
7
4
Appeara-
bility
nce
6
1
4
3
4
4
3
3
3
28
59
16
4
24
4
Total
4
12
28
Alternative –II
Accessi-
2
28
Alternative –I
Light
Weight
3
3
71
16
4
18
3
5
Excellent
4
Very Good
3
Good
2
Fair
1
Poor
65
16
4.6 Recommendation Phase
The evaluation Matrix indicates that the first alternative is better than the existing as well as second alternative. The
cost benefit analysis is also done for both alternatives along with the existing one as shown below.
Table 8 Cost Benefit Matrix
Sr. No
Parameters
Existing
Alternative I
Alternative II
1
Price / Piece (Rs)
2050.50
2030.50
2000.50
2
Components (Nos.)
08
08
08
3
Reduction in Price
0.00
20.00
50.00
Based on Evaluation Matrix as well as the cost benefit analysis, alternative II is recommended.
4.7 Implementation Phase
Subsequently, the prototype samples as per alternative II & alternative I are made samples are tested with the costumer
and the feedback/reports are found to be satisfactory for both alternatives. Only the difference is in alternative II, less
space is required and easy for transportation as it is folding type. And in alternative I weight reduction is found to some
extent with cost reduction.
4.8 Audit Phase
The proposal is put up to the management / finance department for approval, mentioning the price of the product before
and after the value engineering test was conducted and the final implementation of the proposal.
5. CONCLUSION & FUTURE SCOPE
The total saving which can be incurred per annum by the implementation of above recommendation is Rs. 1,20,000/-.
for alternative I and Rs. 3,00,000/- for alternative II (by considering the production of computer work station per shift
per day are 20 units with 300 working days per annum).
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The Value Engineering process and procedures are generally well defined and well-understood at all levels in the
industry. VE is recognized as an effective way to improve the performance of a product with reduction in cost. The
quality (qualifications and experience) of the team leader and specialists is a key ingredient to the success of the VE
program. It is more effective and influential on the performance, quality, and cost of a product when done relatively
early in the production schedule.
In the Case Study discussed above we have seen how the VE is used for the cost reduction without the change in the
product design & its value. A proper decision matrix is prepared for choosing the appropriate alternative from the
feasible choices available.
In Future we can make the changes in the design so that the Value of the product can even be enhanced. Various other
Industrial Engineering techniques can be even made use in further improvement of product.
References:
[1] Don J. Gerhardt, Ingersoll Rand, 800-E, Beaty street, Davison, NC, 28036, “Managing Value Engineering in New
Product Development.”
[2] P. F. THEW, “Value Engineering in the Electronic Industry”
[3] John b. sankey, “The Use of Design Charettes to Enhance the Practice of Value Engineering”
[4] Fang-Lin CHAO, Chien-Ming SHIEH and Chi-Chang LAI, “Value Engineering in Product Renovation”
[5]Habibollah Najafi, Amir Abbas Yazdani, Hosseinali Nahavandi, “Value Engineering and Its Effect in Reduction of
Industrial Organization Energy Expenses”
[6] Dr. Diego Masera, “Eco-design a Key Factor for Micro and Small Enterprise Development”
[7] Hisaya Yokota, “Why Problems Cannot Be Solved and Why VE Is Effective?”
[8] Jin Wang, Lufang Zhang, Xiaojian Liu, College of Art, Zhejiang University of Technology Hangzhou, Zhejiang
Province 310032, China, 978-1-4244-5268-2/09/$25.00 ©2009 IEEE, “Material Application and Innovation in
Furniture Design.”
[9] Xu Jun “Application Research on Value Engineering in Link Chain Enterprise”
[10] L.D. Miles “Techniques and Approaches of Value Engineering,” A Reference Book.
[11]A Case Study Analysis Through The Implementation Of Value Engineering by: Amit Sharma and Harshit
Srivastava
[12] Dr. Habil. Ferenc Nádasdi , CVS, Ph.D., FSAVE, College of Dunaújváros Hungary, Dunaújváros, Táncsics M. u.
1/a., “Can Value Added Strategies Enhance the Competitiveness Of Products?”
AUTHOR
Mr. Chougule M.A. (Ph.D. Scholar in Mechanical Engg.)
Principal, A.G. Patil Polytechnic Institute, Solapur, Maharashtra, (India)
Date of Birth: 20th April 1965, Teaching Experience: 25 Yrs., Industrial Experience: 2 Yrs.
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