Sign up to get the latest exclusive offers!
Get Swivelt news, offers and announcements right to your inbox!
The increasing complexity of doing business and striving to create maximum value for our customers and employees has every organization on a continuous path to seek out “Value”.
We deploy a variety of methodologies and structure our organizations to create, extract and preserve value. This ongoing journey crosses our products and services, as well as they, strive for operational excellence where automation, AI, FMEA, Six Sigma, DMAIC, COPC, etc. are some of the tools to help us in that journey.
In our opinion, at the heart of a successful company is the continuous questioning of value across all aspects of the company; product development, service delivery, operational execution, sales, and marketing, etc.. That process can be simplified into a single focused principle of Value Engineering that we believe is a powerful tool to cultivate an organizational culture centered on value.
Value engineering is not a new concept, however, there is an opportunity for greater application to all parts of the business and in particular to the products and services that every organization is offering into the market.
Very simply, Value engineering (VE) is a systematic methodology to improve the “value” by an examination of function.
Value engineering was originally developed in the 1940s during World War II in response to a shortage of materials. The substitutes they managed to find usually lowered the total cost while increasing the potential for growth.
As value is the ratio of function to cost, VE focuses on improving the function and/or reducing the cost so that an increase to the value is achieved. During the “engineering” process, the “engineer” needs to ensure that the function is either preserved or improved and that there is never a reduction to the function as a consequence of pursuing value improvements.
Value engineering is the holistic structural and analytical process, irrespective of detailed principle used for a particular scenario or case, that seeks to maximize value for money.
How an operation, a product or service is structured from the inception will need to evolve over time to take advantage of technology developments, new techniques and/or general evolution of the organization and/or the needs of customers.
This continuous evolution is much easier to realize with a holistic approach as it will no doubt require more than one discipline to help you achieve the maximum potential value.
You can break value engineering down into five phases or steps. Following these steps can help to ensure that you have success and enable growth:
Where can VE work for companies? It’s simple: value engineering can easily be deployed by creating value targets into three general platforms:
Swivelt and Nityo Infotech call this focused value creation platform “RIG”, where the platform is an eco-system to help your business preserve, extract and create value.
Generally, RIG starts with VE being deployed to initially reduce the cost in your running business, without impacting your outcomes. Then these savings are deployed to develop and test an innovation which expands into a growth strategy that drives revenue growth for your business.
This cycle keeps the actual cost value-neutral and recycles savings into growth for the company.
Take the next steps… deploy your RIG and see your business grow!
Written by: Eric Suzor, Swivelt CEO