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.

Principal, AETs 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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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
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 VEPs 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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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
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 Quantity Verb Store Drawer & Box Assembly Provide 1 Provide Improve Holds Holds Steel frame 1 Provide Provide Hold Provide Keyboard assembly 1 Facilitate Hold Hold Table Top 1 Improve Provide Hold Slider Pair 1 Provide Secure Hold Base Top (Middle) 1 Provide Hold Base Top (Lower) 1 Provide Hold Base Top(Side) Keyboard Strip (Side) 1 Provide Support 1 Hold Slider Base X Surface Slider X X Surface Material X X Surface Material X X Locking Material Material Appearance Surface Keyboard Movement Tightness Material X X X X X X X X X Strength Grip Keyboard Movement X X X X Movement Appearance Assembly Parts X X X X Noun Material Locking Basic X X Secondary Basic Secondary Functional Analysis Worksheet Function Part Assembly

Table-2 Total Costing of Computer Work Station Sr. No. A B C D E F Part Drawer & Box Assembly Steel Frame Keyboard Assembly Table Top Slider Pair Base Top (Middle) Cost in Rs 800.00 620.00 122.00 270.00 25.00 75.00

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G H I Total Base Top (Lower) Base Top(Side) Keyboard Strip (Side) 63.00 57.00 16.50 2050.50

Table-3 Functional Evaluation Key Letter A B C D E F G H I Part Drawer & Box Assembly Steel frame Keyboard assembly Table Top Slider Pair Base Top (Middle) Base Top (Lower) Base Top(Side) Keyboard Strip (Side) Function Store Material Holds Assembly Hold Keyboard Provide Surface Provide Movement Hold Material Hold Material Hold Material Hold Slider Base Weight 21 24 13 14 11 2 1 2 2 % Cost 39.04 30.26 5.96 13.18 1.22 3.66 3.07 2.78 0.81

Components Weight and % Cost 4.3 Numerical Evaluation Sheet B C A B3 B A3 B3 C D A3 B3 D3 D E A3 B3 C2 D3 E F A3 B3 C3 D2 E3 F G A3 B3 C3 D2 E3 F/G G H A3 B3 C3 D2 E3 F/H I1 H I A3 B3 C2 D3 E2 I1 I1 H2 I 21 24 13 14 11 02 01 02

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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 Durability Maintenance Cost Stability Compactness Appearance 1 1 0 1 0 0 2 0 3 1 4 1 0 0 1 1 0 1 1 0 0 1 0 1 5 6 7 8 9 10 Total 3 1 4 1 1 % 30 10 40 10 10

Table 5 Function-Cost-Worth-Analysis (FCWA) Function Verb Store Hold Hold Provide Provide Hold Hold Hold Hold Position Noun Material Assembly Keyboard Surface Movement Material Material Material Slider Base Stud Total Existing Cost in Rs. 800.00 620.00 122.00 270.00 25.00 75.00 63.00 57.00 16.50 12.00 2060.50 Worth Tentative Alternative Board MS material Board Eliminate Eliminate Board Board Eliminate Eliminate Eliminate Estimated Cost in Rs. 650.00 560.00 110.00 0.00 0.00 60.00 55.00 0.00 0.00 0.00 1435.00 Value Gap 150.00 60.00 12.00 270.00 25.00 15.00 8.00 57.00 16.50 12.00 625.50 IV V I Ranking II III

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Table 6 Feasibility Ranking Matrix Parameters Ideas State of Art 10: Off the shelf 1: New Technology 1 2 3 4 5 6 7 8 9 10 11 12 10 10 10 06 06 05 10 10 10 05 10 01 Probability of Implementation 10: High Chance 1: Low Chance 10 05 08 10 08 10 10 10 10 06 10 10 Cost to Develop 10: High Cost 1: Low Cost 05 04 05 03 01 05 01 01 01 03 01 06 Time to Implement 10: No time 1: Maximum Time 05 06 09 09 10 05 10 10 10 08 10 05 Potential Cost Benefit 10: High 1: Low 10 06 10 10 05 08 10 10 10 10 10 05 40 31 42 38 30 33 41 41 41 32 41 27 Total

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 B A A2 B C A2 B3 C D A2 B2 D3 D 3 Major Difference in Importance RAW SCORE 6 5 0 3 FINAL SCORE 7 6 1 4

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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 Light Weight 6 2 28 Alternative I 4 28 Alternative II 4 28 5 4 3 2 1 3 18 4 24 3 3 Excellent Very Good Good Fair Poor 12 3 3 4 16 3 3 4 16 65 Accessibility 1 4 16 71 Appearance 4 59 Total

Rigidity 7 4

Existing

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 Ndasdi , CVS, Ph.D., FSAVE, College of Dunajvros Hungary, Dunajvros, Tncsics 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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