The 5 Stages of a Value Engineering project (3/5)

Published on 26 November 2021 at 11:51

The results of the Teardown workshop are in. Your team has come up with many innovative ideas, all written down on post-its: Some are easily implemented, others will take a lot of effort. some are very creative, other very obvious. Many are feasible, some are not. But where do you go from here? How do make sure no information gets lost. And how do you make the right decisions? This blog on stage 3 takes you from analyzing raw ideas to decisions on implementation.

Idea Generation

A value engineering project roughly takes the following five stages from kick-off to results. 

  1. Define your Needs, Goals & Targets
  2. Ideate, Explore & Brainstorm
  3. Analyze, Evaluate & Decide
  4. Execute & Implement
  5. Track & Achieve results

This blog will look deeper into each of these stages, so you'll know what to expect and what to look out for.
Today's topic: Stage 3 - Analyze, Evaluate & Decide.

Value Engineering Project

Stage 3: Analyze, Evaluate & Decide

You've just finalized stage 2. The brainstorm workshops have been a great success. The results of this session are on your desk: a pile of over 60 post-its with ideas of improvement generated by you and your team. But where do you start from here? First it's important to log each and every one of them. There's always a possibility things that might seem impossible or unfeasible now could be feasible or inspirational later. After logging all of them, it's time for evaluation and further analysis!

Inventorize Ideas 

The first step is creating a clear overview of all the generated ideas.  Excel is a good tool for this. Create a table of all the ideas containing e.g. the idea title, a descriptive text & the owner. Directly merge duplicate ideas while doing this. You'll probably notice a large variety among them. Some ideas are already described very elaborate, others contain just a couple of keywords. Some might be very easily implementable, others will be very complex or even seem unfeasible at all.

When the table is complete, you'll probably notice many ideas missing some sort of information. This brings us to the next step: evaluate idea descriptions.

Value Engineering
Scenario Selection

Evaluate Idea descriptions

When all ideas are typed out in Excel there'll probably be some gaps of missing data. The next step now is to go into details for every idea separately. But be careful! It's not yet time to evaluate (burn down) the ideas itself. No matter how far-fetched an idea might look now, look at it objectively and ask: do we have all relevant background data to make a decision on this idea later? 

Some examples of what has to be presented:

  • Current situation: what does the current solution look like exactly?
  • Idea description: What's the idea exactly? Is it presented in a way also non-engineers understand it?
  • Saving potential: (rough) estimate of its potential savings
  • Required investment: estimate on the effort (hours & money) needed to implement it
  • Alternatives/ different scenarios: Are there other ways this can be implemented?
  • Timing: when can this idea be implemented? How long will it take?

And last but very important:

  • Customer Experience: Will the customer / end-user notice the implementation of this idea? Often, you don't want cost reduction ideas to have an impact on the customer experience. Whereas value add ideas should be very evident to (potential) buyers.

Make a to-do list for all the ideas and assign an owner to it. Are there any answers missing? Who can provide them?
Again, make sure to use one clear template for all ideas to keep all information together.

Further Analysis

Now obtain all missing information from the idea descriptions. Have someone from engineering assess the feasibility and expected efforts of each idea. Ask cost & value engineering to estimate saving potentials. Create clear drawings and animations to make the current situation and idea description clear for everyone and make sure to check with your quality department if there are any restrictions of (internal) requirements or regulations.

Cost Reduction

Evaluate & Decide

When all information is complete, its time to evaluate the ideas themselves and make a decision. A good starting point is to map all idea's on the Now-How-Wow matrix. Plotting all ideas on saving potential & required investments, you can see in one view which ideas should be implemented as soon as possible, and which ideas you'd better to stay away from. Also strategy & customer value can be taken into consideration when deciding. 

The final decisions are best to be made in a meeting with all relevant stakeholders involved: Management team, sales, product owners, engineering, Cost & Value should all be involved. During this session, all ideas are pitched by their owners. Key points to mention here are (annual) saving potentials, required effort & customer experience.
This way, policy makers can quickly form an opinion on this idea without going into too many details.

After the pitch and a short discussion, a decision should be formed. Possible decisions are: accepted, declined & postponed (to be re-evaluated at a certain date). When the idea is accepted or postponed it should be assigned an advocate. This can be the idea owner or someone else, tracking its progress and making sure the idea is followed up & implemented.


Would you like to organize a Teardown workshop to generate new ideas for cost reduction or design improvements? Or could you use some help in the process of tracking ideas & decision making? Explore the opportunities at Our Services or Contact Us Now!


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