ASSESSMENT OF THE APPLICATION OF VALUE ANALYSIS AND VALUE ENGINEERING IN COST REDUCTION

ASSESSMENT OF THE APPLICATION OF VALUE ANALYSIS AND VALUE ENGINEERING IN COST REDUCTION

ABSTRACT

This project work was chosen in order to determine an assessment for the application of value analysis and value engineering in cost reduction. It will X- Ray the gains, Benefits and contributions of value analysis and value engineering in an organization with special reference to Nigerian Bottling Company Owerri.
The topic in question will reveal the methods by which value analysis and value engineering techniques can be applied as well as the contribution of other functional departments in the application of value analysis and value engineering.
It will also identify the factors that are responsible for unnecessary cost of products and the reasons why value analysis programme fail some times.

CHAPTER ONE

1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY:
Value Analysis as an organized study of the function of materials, parts and components involves the critical examination of goods or products, which is aimed at improving its efficiency in use by changes in design, production techniques, packaging and other related process where as value engineering represents the application of value analysis at the pre-production stage. It centers more on cost avoidance ie it ensures that those things that adds to cost are being removed at the production floor before the materials are being processed in to finished product while value analysis is concerned more of cost corrections.
Value analysis is an organized procedure for the efficient identification of unnecessary cost by analysis of the function (ie the property of the product which makes it work or sell). The essence of value analysis, therefore, is fist to identify the function of the product and then, examine alternative ways in which this function can be achieved choosing that which involves the least cost. Value analysis is probably the greatest cost- saving techniques used in industries today. It represents a powerful set of tools which can be used by management in controlling costs. The fundamental objective of value analysis activities is the procurement of materials representing the, “Best Buy” in terms of function to be performed.
The general idea behind this is the issue of quality and cost. The main objective of every organization is to make profit. Just as a product is purchased to satisfy a particular purpose. For this reasons, it becomes important to correct or even avoid those unnecessary cost elements in a production design. This in essence stimulated the researcher most in carrying out this research.

ASSESSMENT OF THE APPLICATION OF VALUE ANALYSIS AND VALUE ENGINEERING IN COST REDUCTION