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Reducing Process Costs with Lean, Six Sigma, and Value Engineering Techniques by Jon M. Quigley, Kim H. Pries

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Contents
Preface xvii
A. Tight Economic Conditions! xvii
Acknowledgment xxi
About the Authors xxiii
List of Figures xxvii
CHAPTER 1 – Introduction 1
I. The Use of Rubrics 1
II. Questions to Ponder 1
III. Cost Improvement Scenario 1
A. Situation 1
B. Objective 2
C. Action 2
D. Results 2
E. Aftermath 2
IV. A Brief Overview of Value Engineering 2
V. Product Life Cycle 2
VI. What Is Value? 4
VII. Cost Improvement Challenge 4
VIII. Cost Avoidance 5
IX. Cost Reduction 6
X. ProtImprovement 6
XI. Green and Corporate Stewardship Are the Same 7
XII. The Case for Cost Reductions 8
XIII. Planning for and Managing a Value Improvement Project 9
A. Project Concept 9
B. Project Information 9
C. Project Business Case 10
XIV. Conclusion 11
XV. EXERCISES 18
CHAPTER 2 – Saving Money with Homegrown Ideas 21
I. Rubric for Homegrown Ideas 21
II. Questions to Ponder 22
vi Reducing Process Costs with Lean, Six Sigma, and Value Engineering Techniques
III. Cost Improvement Scenario 23
A. Situation 23
B. Objective 23
C. Action 23
D. Results 23
E. Aftermath 23
IV. Your People Matter 24
V. Laboratory Equipment 24
VI. Production Equipment 27
VII. Production Test Equipment 29
VIII. Logistics Material 30
IX. Engineering 30
X. Marketing 32
XI. Accounting/Finance 33
XII. Procurement 34
A. Financial Determination 34
XIII. Brainstorming 41
A. Product, Process or Service Preparation for Critique 41
B. Suspend Judgment 43
C. Build on Ideas 43
XIV. Mind Mapping 43
XV. Selection Method 44
A. Weighted Matrix Such as a Pugh Matrix 44
B. Majority Decision 45
C. Voting Decision 46
D. Consensus 46
E. Rating 46
F. Delphi Method 46
G. Nominal Group Technique 47
H. Group Passing Technique 47
I. De Bono and His Thinking Hats 47
J. Advocacy and Inquiry 48
K. Strategic Assumption Surfacing and Testing (SAST) 49
Contents vii
L. Team Syntegrity 50
M. Facilitation 51
XVI. EXERCISES 52
CHAPTER 3 – Arbitrary Cost Down Approach 55
I. Rubric for Costing Down 55
II. Questions to Ponder 57
III. Cost Improvement Scenario 57
A. Situation 57
B. Objective 57
C. Action 58
D. Results 58
E. Aftermath 58
IV. Why the Arbitrary Cost Down Approach 58
V. Cost Down Process 59
VI. Cost Management Cycle 67
VII. When to Use 67
VIII. The Greedy Approach 68
IX. Cost Generators 68
X. Cost Generators and Cost Cutting 69
XI. EXERCISES 70
CHAPTER 4 – The Isuzu Approach to Teardowns 73
I. Rubric for Teardowns 73
II. Questions to Ponder 75
III. Cost Improvement Scenario 75
A. Situation 75
B. Objective 76
C. Action 76
D. Results 76
E. Aftermath 77
IV. What Is the Isuzu Approach? 77
A. Dynamic Teardown 79
B. Cost Teardown 82
C. Material Teardown 83
viii Reducing Process Costs with Lean, Six Sigma, and Value Engineering Techniques
D. Matrix Teardown 86
E. Process Teardown 87
F. Static Teardown 88
V. Why Use This Technique 88
VI. Teardown Example 89
A. Design for Assembly 89
B. Value Analysis Contribution to the Teardown Process 91
C. Value Analysis Teardown and Improvement/Innovation 92
D. Value Analysis Teardown Method and Its Components 92
E. Recognizing Parts Suppliers’ Competitive Capability 97
F. Collecting New Suggestions for Improvement 97
G. Case Study 98
VII. EXERCISES 99
CHAPTER 5 – The DoD Approach 101
I. Rubric for the DoD Approach 101
II. Questions to Ponder 102
III. Cost Improvement Scenario 103
A. Situation 103
B. Objective 103
C. Action 103
D. Results 103
E. Aftermath 103
IV. Benets 103
V. Function 105
VI. Worth 105
VII. Cost 106
VIII. Value 106
IX. Effective Value Engineering Programs 106
X. Cost Analysis 109
A. Variance Analysis 109
B. Ratio Analysis 110
C. Trend Analysis 111
D. Management Analysis 111
Contents ix
XI. EXERCISES 112
CHAPTER 6 – Classical Value Analysis / Value Engineering Techniques 115
I. Rubric for Classical Techniques 115
II. Questions to Ponder 119
III. Cost Improvement Scenario 120
A. Situation 120
B. Objective 120
C. Action 120
D. Results 120
E. Aftermath 120
IV. Benchmarking 121
A. Is Benchmarking Valuable? 121
B. Performance Benchmarking 121
C. Benchmarking Process 122
V. EXERCISES 128
CHAPTER 7 – Classical Techniques 131
I. Rubric for the FAST Approach 131
II. Questions to Ponder 132
III. Cost Improvement Scenario 132
A. Situation 132
B. Objective 132
C. Action 132
D. Results 133
E. Aftermath 133
IV. FAST Introduction 133
V. Creating a FAST Model 141
VI. EXERCISES 148
CHAPTER 8 – Saving Money with Six Sigma Projects 151
I. Rubric for Six Sigma Projects 151
II. Questions to Ponder 153
III. Cost Improvement Scenario 154
A. Situation 155
B. Objective 155

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