Tag Archives: machining

Valu Ngineering

My son, Ben, asked me last week, “How come the bacon cooks better on Grandma’s pan?” I’d just fried up some bacon using a pan handed down from my mother, and the bacon was, as Ben noted, much more consistently cooked.valu ng

I answered my son’s question: “Value engineering,” I said with private sarcasm.

Value engineering is a concept that’s been a concern to me over the years. In engineering-speak, Value, as defined, is the ratio of function to functional cost. Value can therefore be increased either by holding cost constant while increasing function, or by reducing the functional cost without diminishing the function. However, in nearly every encounter I’ve ever had with VE the emphasis has been on reducing cost to meet price targets, with considerable license given to engineers regarding the ‘diminishing function’ decisions. In the case of the copper clad cookware, an innovative product from an earlier era, the decision to reduce the mass of the pan was clearly an attempt to reduce costs. A later VE step for this company moved the manufacture to Indonesia, an action that may have further reduced the functional cost of the product (as opposed to the total cost), but did not unfortunately save the manufacturer from bankruptcy.

There was a point in time shortly after 1975 that companies could no longer raise prices to cover cost increases, a condition described by the cost subtraction principle:

Profit = Price – Cost

Since, the customer was now setting the price, the only way to stay profitable was to reduce costs. At this point, I think, the emphasis of VE shifted away from providing value to the customer and towards retaining profits for the provider.

“What is value engineering?” Ben pursued.

“It’s a process that’s supposed to provide greater value to the customer, but has been mostly relegated to cost cutting,” I answered.

I’ve been a party to similar attempts at value engineering in which assumptions regarding value are made by engineers on behalf of the customer: “This or that particular material or dimension or specification doesn’t affect the function of the product.” Perhaps an aluminum part would be substituted for steel, or an operation, like machining, would be out-sourced to reduce labor costs. Or, if the crystal ball prophesied enough market potential for this value-engineered product, we’d buy a new machine to cut production cycle times. Strictly speaking, that method reduced the functional cost for a specific customer order. But the view from the factory floor was that these actions substantially increased part and process variety and product complexity, not a VE consideration.

Never did these projects arise from an intent to provide greater value to the customer. They always seemed to be taking something away, subtracting rather than adding value. So I’ve redubbed the process “Valu Ngineering”, kind of a contraction of the original term to connote taking value away from the customer in the name of adding it.

Are you value engineering or Valu Ngineering? Share a thought.


BTW: Public Law 104-106 mandates Valu Ngineering in all federal agencies. : )

Too Happy Too Soon

Our machine shop was assisted by Toyota Supplier Support Center in 1996 to reduce set-ups on our CNC lathes.  TSSC had already helped us in a downstream final assembly department, and now we were endeavoring to provide just-in-time delivery to that department from machining.  After some study we were able to determine that one lathe could produce sixty-six different parts for this downstream customer, nearly all that were needed.  [There is a prequel to this story regarding early struggles we had in machining before TSSC arrived.]  While there were clearly families of similar parts within this group, the challenge was to be able to run quantities of five to fifty pieces in the exact order of need, irrespective of ‘set-up efficiency.’  We were given a target by TSSC of 8 minutes per set-up, a daunting drop from our then current average of 90 minutes.   I knew we could do much better than 90 minutes, but I was privately skeptical of 8 minutes.

With TSSC’s help we analyzed current set-up activities in detail, breaking minutes down to seconds.  Simple preparation steps like bringing material to the machine and gathering tools had a big payback. These were the steps that companies often refer to as the “low-hanging fruit.”  Soon, set-ups were under 40 minutes.  We dropped lot sizes proportionately and, most importantly, on-time delivery for this machine shot up.  A machine that had always been behind, now had extra time available.  For the operators, who had been roundly criticized for an inability to get parts to assembly, this was a big deal — something that spurred them on.  We were like a football team that, after years of losing seasons, was now going to the super bowl!   When our teacher, Mr. Ohba, visited, he was pleased with our progress, but reminded us of the eight-minute goal, and challenged our operators to use their knowledge and creativity to find many small improvements.  Seconds mattered.

Three more weeks passed with operators chipping away at time wasters. Each time a set-up was made there were more ideas.  One operator suggested that tool holders, which were each mounted by four bolts to the turret, could in fact be secured with just two.  The remaining two holes were replaced with guide pins to make it easier to position the tool blocks.  We tried it; it worked. (The equipment manufacturer, incidentally, said it wouldn’t work.)  In the process of pushing the envelope on set-up reduction, we began to realize the possibilities for improvement were much greater than we had initially supposed.

By the time of Mr. Ohba’s next visit, set-up times were under 20 minutes with high reliability.  About this time, operators decided to expand the pilot project to an adjacent lathe, replicating many of the lessons they had learned on the BNC.  This seemed like a good idea to me also.  Why not deploy what we had learned?

On the day of Mr. Ohba’s visit I greeted him enthusiastically in our company lobby with the words, “Things are going well.  Set-ups for the BNC are now below 20 minutes and we’ve expanded the pilot to include our LN22.” The words had barely left my mouth when Mr. Ohba turned on his heels and headed out the front door.  “Good luck.” he said.  “You won’t be needing our (TSSC’s) help any longer.”  Flabbergasted, I followed him to the parking lot.  I could see that I’d made a fatal mistake, but had not yet figured it out.  “I’m sorry,” I blurted out.  “What have we done wrong?”

Mr. Ohba stopped, turned to me and heaved a sigh.  “You’ll never be better than 20 minutes,” he said. In an instant I reflected on the miraculous change that had occurred in our machine shop over the preceding weeks and realized that I’d inadvertently short-circuited that process.  I apologized once more, apparently with enough anguish that he reconsidered and followed me back into the factory.

TooHappyPicHad my mistake not been brought to my attention, I might very well have never understood the problem – and we would never have gotten to the eight minute changeover – which we achieved several months later.  The moral of this story is that managers like me can become mesmerized by early results – or sometimes intermediate results – and lose sight of the environment that makes these possible.   I was ‘too happy, too soon’, a behavior that plateaus individual and organizational development.

How about your organization?  Have you had a similar experience?   Have you ever been too happy too soon?