These continuous improvements drive the high degree of effectiveness, efficiency, and reliability found in modern management.
Regardless of the pace of change, organizations must continuously review and improve their production processes to remain competitive.
Value engineering: Value engineering and cost-benefit analysis are two formalized approaches used to enhance existing products and processes. Value engineering involves describing the primary function of every product and component using an action verb and a noun. Engineers then consider alternative methods, calculate their costs, and compare them to the existing dynamo.
If the cost ratio is close to unity, the dynamo is deemed efficient; if not, alternatives are examined in detail. This process is applied to each part until the best possible value is achieved.
Cost-Benefit Analysis: Cost-benefit analysis approaches the same problem from a different angle. It defines the function and measures the benefits or effectiveness of each part of a product or process. The costs of obtaining each part are reviewed, considering material, labor, investment, downtime, and other factors.
This focuses attention on the most expensive items, allowing for targeted efforts to seek economies where the rewards are greatest. When evaluating alternatives, it's crucial to use the same "cost" and "benefit" bases to avoid favoring familiar approaches.
Both value engineering and cost-benefit analysis are ongoing processes. The scientific techniques and operational methods provide opportunities for engineers to improve products continuously.
These continuous improvements drive the high degree of effectiveness, efficiency, and reliability found in modern management.
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