Page 156 - Design for Six Sigma for Service (Six SIGMA Operational Methods)

130 Chapter Seven

was frequently necessary to make substitutions for the critical materials that
not only satisfied the required functions but also gave better performance
and lower cost. He reasoned that if it was possible to do this in wartime, it
might be possible to develop a system that could be applied as a standard
procedure to normal operations to increase a company’s efficiency and
profit. Mr. L. D. Miles was assigned to study the possibility, and the result
was a systematic approach to problem solving based on functional per-
formance that he called value analysis.

Value analysis, value engineering, value management, value assurance, and
value control are all the same in that they make use of the same set of
techniques developed by Mr. Miles in 1947. In many cases, the title tends to
describe how the system is being applied. Value analysis is generally con-
sidered to apply to removing cost from a product. Value engineering and
value assurance are applied in the development phase to keep cost out of a
product. Value management and value control are overall programs that
recognize that value techniques can be applied in business operations.

Value engineering was first applied in product development, manufacturing,
and the construction industry. Since the 1970s, value engineering started to
be applied in the service industry. David Reeve’s (D. Reeve 1975) case
study on the youth service bureau was among the first successful case
studies in service organizations. Since then, successful value engineering
service case studies are reported in retail, finance, health care, photo shops,
and many others.

Value engineering achieves results by following a well-organized, planned
approach. It identifies unnecessary cost and applies creative problem-
solving techniques to remove it. The three basic steps in this planned
approach are
1. Identify the functions. (What does the product or service do for
customers?)
2. Evaluate the functions. (What is the lowest cost to create these
functions?)
3. Develop alternatives. (What else will do the job?)

Identify the Functions

Function is the very foundation of value engineering. The concern is not with
the part or act itself but with what it does; what is its function? It may be said
that function is the objective of the action being performed by the product or
system. Function is the property that makes something work or sell. We pay