The Difference Between Value Analysis and Value Engineering

Value Analysis and Value Engineering (VA/VE) are systematic processes that optimize the value of a product or service by lowering costs and increasing benefits. Value Engineering is applied at the beginning of the product development process during the design stage, while Value Analysis is performed after a product has been produced.

Graphic showcasing the difference between Value Analysis and Value Engineering

What Is Value Engineering and Why is it Important?

Value Engineering (VE) is a preventive process that identifies ways to improve the design or process of a new product or service to increase its value before it is produced.

The value of a product is defined as the ratio between the benefits and costs. VE happens during the initial design and planning stage of new product development—before any significant financial investments in tooling, plants, or equipment have been made.

The goal of VE is to engineer a great design that minimizes costs and improves functionality and/or quality to benefit both the manufacturer and the end user.

During the Value Engineering process, several areas are analyzed by a team of cross-functional engineers. The VE team studies the materials, processes, transportation, plants, equipment, sourcing, and standards.

The main elements of the new product are identified, the functions of each element are analyzed, and areas of avoidable costs are discovered. The VE team then brainstorms, develops, and evaluates alternative innovative solutions. The top alternatives are vetted further based on their potential for reducing cost without compromising quality or functionality.

Because up to 80% of a product’s costs are determined during the design stage of new product development, Value Engineering is extremely important. A product’s design (whether good or bad) directly impacts the costs of many items down-the-road like tooling, plant layout, equipment, labor/skills, training, materials, shipping, installation, and maintenance.

A great design will lower these costs while improving the quality and/or functionality of the product.


What Is Value Analysis and Why is it Important?

Value Analysis (VA) applies problem-solving methods for increasing the value of existing products or services by reducing costs, improving function, and/or boosting quality.

VA evaluates the costs, functions, components, design aspects, manufacturability, and assembly of the product. Unnecessary costs are identified and eliminated while maintaining the utility of the product.

During the VA process, engineers employ a technique called functional analysis. The product is broken down into a number of assemblies. The function for each assembly is identified and costs are aligned to each one.

The VA team brainstorms cost-reducing alternatives to improve the value of the product for the manufacturer and the end user. VA encourages innovation. Cost reduction ideas are not limited by the existing design and ideas to enhance various types of value at a lower cost are explored.

Value Analysis is an important exercise for several reasons. It can lead to significant cost-savings in materials and labor which directly impacts the bottom line. By reducing material costs, inventory costs are also reduced. When labor costs are lowered, capacity is freed up for other revenue-generating opportunities.

VA can also reduce lead times which benefits end users and keeps them coming back.

By improving product quality in the VA process, the product is easier and less costly to produce, assemble, ship, install, use, service, and recycle. VA can also lead to more innovation.

Value Analysis and Value Engineering Examples

Let’s look at some real-life examples of what these optimizing processes look like. As a product development, engineering, and manufacturing technology firm—DISHER has helped hundreds of manufacturers with VA/VE initiatives.

An Example of Value Analysis:

An automotive client came to DISHER for some Value Analysis around an existing floor console. They wanted to reduce the cost and weight while maintaining the quality and functionality.

DISHER conducted primary research to determine the top five items’ people placed in their floor console, the features or comforts they would like in their console, and current features or functions that were not useful in their console.

DISHER also conducted secondary research to analyze the floor consoles of the top 25 selling cars currently on the market. We also benchmarked futuristic automotive technologies, new design concepts from other industries, and hi-tech materials from a variety of sources for ideation inspiration.

DISHER’s cross-functional VA team conducted a Whiteboard Wednesday brainstorming event to explore potential cost and weight-reduction processes. DISHER identified items such as using fewer PCBs, shorter or fewer wire harnesses, reducing the number of fasteners, reducing the amount of material, increasing the tolerance of parts and pieces of the subcomponents, and redesigning the parts to use less materials.

The top 24 concepts were developed further by the VA team comprised of industrial designers, conceptual engineers, mechanical engineers, and subject matter experts.

A summary of the new innovative ideas which included a cost and weight reduction matrix was presented to our client for further vetting and exploration. DISHER also reported on the research findings around what functions were valuable to end users and which functions end users would like to experience in future consoles.

An Example of Value Engineering:

A furniture client approached DISHER with the need to design a new mixed-material transitional seating line for the fast-casual market. They wanted to design furniture that not only had the right form and function, but furniture that was optimized for their current manufacturing processes and supply chain partnerships.

DISHER conducted competitive benchmarking on numerous dining and restaurant seating and table designs that incorporated wood and metal materials.

During the ideation phase, industrial designers and conceptual engineers sketched dozens of possibilities, exploring a variety of materials, forms, functions, colors, and trends. DISHER’s cross-functional team then analyzed the concepts based on the assembly processes, manufacturing feasibility, and design consistency.

The top design ideas were vetted by the DISHER team with our client. We analyzed the costs, materials, functionality, form, manufacturability, and sustainability. Based on the data, we became unified in a clear direction.

Our client successfully launched five new seating lines and two new table lines. The furniture is not only high quality, comfortable, and aesthetically pleasing but profitable and sustainable.

The Goal of VA/VE with DISHER

DISHER offers both Value Analysis and Value Engineering services for manufacturers, suppliers, and entrepreneurs.

Our product development team incorporates Value Engineering methodologies into every stage of our design process.

Our manufacturing tech experts advise clients on Value Analysis techniques to optimize outcomes on existing products and manufacturing systems.

Our goal with VA/VE initiatives is to help our clients achieve higher levels of performance, productivity, and profitability with their products and services. We are motivated every day to Make a Positive Difference with our customers and leave this world better than we found it.

Our Unique VA/VE Capabilities

DISHER is unique in that we are a complete end-to-end product engineering firm. Our team is able to come alongside clients and assist with any aspect of the product development life cycle—from ideation, design, and concept development to detailed engineering and manufacturing.

Because we have a deep, diverse, experienced pool of engineering and manufacturing expertise—our VA/VE innovation process is impressive. We are able to draw from a wealth of cross-functional knowledge for our clients.

DISHER employs our proven Whiteboard Wednesday brainstorming process to create and vet innovative concepts for VA/VE regularly. In fact, we have an entire room built for it. We can assemble VA/VE teams for our clients that can speak into the subject matter with knowledge and experience, whether early in the design phase or later in the manufacturing process. We look at product design from every angle—user desirability, commercial viability, and production feasibility.

Another added benefit is our in-house research and benchmarking capabilities which benefit both VA and VE initiatives. With DISHER, VA/VE projects are managed with high innovation, timely communication, informative reporting, and within the timeframe and budget allotted.

DISHER also facilitates Value Engineering Workshops to increase innovation, quality, and functionality of products while lowering and validating costs.

Our VE workshop is designed for professionals within design engineering, procurement, operations, quality, and advanced product development. The half-day to multi-day workshops are facilitated by DISHER and can be conducted at the desired location and time that works for your team.

We would love to equip your team with a proven process and practical tools that will boost innovation, reduce costs, and help you stay competitive in the market.

Experience Top Engineering Talent

When you approach the DISHER team with a complex VA/VE challenge—we can’t wait to start pealing the onion of optimization! With DISHER, clients have access to our talented team of 100+ engineers with multiple degrees, certifications, experience, and industry backgrounds.

Our smart, collaborative team gets energized by building on innovative ideas and solutions for our clients. And the way we serve our clients gets noticed. Our Midwest values, work ethic, and persistent grit makes the entire experience pleasant for our clients.

Clients choose DISHER because we consistently deliver measurable results. Organizations trust our work. DISHER’s innovative dream team can’t wait to generate VA/VE outcomes to benefit you for years and years to come. 

Contact us to get started on your next project.