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IoT and Digital Engineering
Bringing Together IoT and Digital Engineering to Create Rich Experiences
Highlights
- Organizations must continually improve the value of their products and systems to stay relevant amid technological, economic, and geopolitical disruptions.
- Value engineering is a function-based, structured, life cycle-focused improvement methodology for products, processes, and systems.
- It ensures end-of-life (EoL) management and sustenance ownership for products and systems at the lowest possible cost.
- Beyond cost optimization, product companies are looking at value engineering to meet their sustainability goals.
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Exploring value improvement
A decades-old cost management framework is coming to the rescue of sustainability-conscious product companies.
Once seen as just a cost management technique, companies are now finding new value in value engineering—a function-based, structured, life cycle-focused improvement methodology for products, processes, and systems.
Product companies have often used it to improve the value of their products and systems, keep up with evolving customer preferences, and stay relevant amid technological, economic, and geopolitical disruptions. Beyond cost optimization, they are now looking at value engineering to help meet their sustainability goals. With 70%-95% of a product organization’s carbon footprint created during a product’s use phase, companies realize the need to design for sustainability—design products with energy and material efficiency that long after they go out into the world keep helping them realize their sustainability goals.
The need for value engineering
Value engineering allows companies to reengineer products and systems with a focus on minimizing materials, manufacturing, and waste.
It allows end of life (EoL) management and sustenance ownership for products and systems at the lowest possible cost. Take, for instance, support structures for a product or machinery that are usually designed as large weldments. Using particle function analysis, which is core to value engineering, the function of each part in the weldment can be identified and the same function can be fulfilled using a simple standard hollow extrusion. Also, by sourcing the materials used for extrusions locally, emissions from manufacturing large weldments and transporting them across several miles can be avoided.
Another example is the ubiquitous printed circuit boards. Their life can be extended by replacing legacy components with compact, multifunctional, and cost-effective ones and increasing the number of layers of a board to the maximum to reduce the form factor, thereby making it economical and sustainable.
Value engineering becomes most critical during economic slowdowns when demand for low-cost products and services increases and companies need to produce more with less. During such times, organizations resort to one or more of the following strategies: developing value-driven products or services, simplifying product portfolio, or refining the new product development roadmap with a renewed focus on cost savings, expense reduction, and compliance with new regulations like sourcing and export restrictions.
Strategy is key
With the right strategy, companies can extract maximum value from products and systems.
Traditionally, value engineering applications have mostly focused on the cost aspect. However, to extract the maximum value from products and systems using this method, companies need to have a holistic understanding of the industry, the current life cycle stage and maturity of the product, and technology and business model disruptions. They also need to ensure that the right value engineering strategy—whether it is product and system near-shoring, product simplification and parts integration, dimension analysis and management, EoL management, sustenance ownership, model-based design and development, making products connected and intelligent, recycling, or supply chain optimization—is applied at the right stage.
Integrating continuous improvement techniques such as 5S, Kaizen, Six Sigma, theory of constraints, blue ocean strategy, technology scouting, and functional benchmarking will also help bring out the value in value engineering.
GenAI impact
GenAI can be a game changer for value analysis and value engineering (VAVE) projects.
A challenge with VAVE projects is the time-consuming and cumbersome product life cycle data collection process, verification, and analysis. Traditionally, these data have been handled by siloed departments, and it is hard to collate them on time and identify the gaps for value enhancements. GenAI can be a game changer here. GenAI solutions can be integrated with IT systems having the required information and use the data from them in real time to generate insights to identify the value gaps. In addition, they can also be leveraged for documenting and updating VAVE study reports in a repository for reuse and refinement for further innovation.
Sustainability focus
Reduce SCOPE 3 emissions with value engineering.
With cost optimization being a top priority for C-suite leaders and an increasing focus on sustainability, value engineering has found new relevance. As material, energy, and transportation savings achieved through value engineering directly contribute to a reduction in SCOPE 3 emissions (those that are not the result of activities from assets owned or controlled by a company, but by others in the value chain), taking the approach can help companies accelerate the journey to becoming more sustainable organizations. To get better outcomes from VAVE initiatives, companies would do well to partner with engineering services providers who can bring in out-of-the-box value improvement ideas from across industries.
