The Importance of Value Engineering and Obsolescence Management

CALIFORNIA CITY, Calif. – April 17, 2023 – PRLog — Value Engineering (VE) was first developed during World War II at General Electric and has since become widely used in various industries to optimize initial and long-term investments. The principles are applied to new product development across multiple domains and in the commercial engineering of large IT and digital transformation programs. The fundamental premise of VE in engineering is to prioritize the primary functions of a product or service over its auxiliary tasks.
Manufacturing companies must embrace continuous innovation in the rapidly shrinking product lifecycles and the need for cost-effectiveness. It involves dealing with rising costs and thus requires adopting a methodology that optimizes R&D spending. In addition, delivering localized products is a necessity when targeting emerging markets.
A product’s function is the specific task it was created to perform, while its cost refers to the expenses incurred during its entire life cycle. The function-to-cost ratio determines a product’s value, which can be enhanced by improving its function or reducing its cost. Within the context of value engineering, cost analysis covers expenses related to production, design, maintenance, and replacement.
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