Classification: Internal Use Dear TAE, Our professor in the college formed a team, and asked us to write a project about “the impact of value engineering on the organization” My assignment is to write...

MANAGEMENT
Executive Summary
Value engineering consists of processes of decision making in an organized and systematic procedure. It has many uses and can be applied in almost any organization or business. It provides support in the process of creative generation of alternatives that can provide security to essential functions having the utmost worth instead of the costs. This is what value consists of. It can also be alternatively called value analysis, value management, and so on. As opined by Cooper (2017), value engineering provides functions necessary at a minimum cost and promotes substituting materials and processes with alternatives, which cost less and do not sacrifice any kind of functionality, with sole focus on functions of the components and materials instead of the other attributes. Through value analysis, unnecessary expenditures are identified and removed in order to increase the value for the manufacturer and the customer. Rational logic and analyzing the function of product is used in value engineering for identifying the relationships that help in increasing the value of the product. This method is considered to be of quantitative nature like scientific methods since its focus is on hypothesis conclusion approach.
The impact it has on the organizations and businesses are as follows-
The reduction of cost of products allows the company takes increased number of jobs during the period when prices remain low. The companies get better opportunities of going after jobs having fewer margins when the products are more and more cost effective. This allows the companies win jobs from their rivals and other competitors, help in considering additional businesses, and create more money. In addition, reduction in the cost of materials contributes to lowering the inventory cost. Companies to which JIT is not feasible, the inventory costs are of much importance (Ahmed & Pandey, 2016). Reduction of inventory cost is of paramount importance to such companies and companies like these can use the money freed up from the inventory cost for other purposes.
Adding to these benefits value engineering also facilitates reduced material costs which play a vital role is helping the absorption of commodity price volatility. As a result, the companies have to utilize less and consequently have to pay less. Another apparent impact value engineering has is the optimization of the labor effort on the orthodox or historical products. This results in freeing up of capacity of the organizations for opening up new and complex business. This allows the companies and organizations to generate more money without any or very less effort and facilitates the companies further in diverting the available resources in creating critical jobs that allows the company to make more money, gain revenue and larger margins. Value engineering also helps to cutting the lead-time by reduction of the labor effort. This facilitates the companies get products to the customer quicker. The quicker the products reach the customers the better chances the company has in winning the jobs and beating the competition. Implementation of Value Engineering methodology in a company helps in increasing the profit growth through...