Value engineering is the process of designing a product or a service so that it will provide the most possible value to the customer. The analysis will focus on the attributes which make the customer think this product better than the competitor’s product and which create customer satisfaction. In addition, value engineering will eliminate the costs that do not create a higher value for the customer.

When developing new products and reducing the costs of existing products, value engineering is successfully able to achieve a maximum benefit for the customer with a minimum of resources. The “value analysis”, perhaps the best-known method of cost reducing, is also based on the fundamental idea of value engineering.

The value analysis (or value engineering) was invented by L.D. Miles, chief purchaser of General Electric, in 1947. In Germany, it has been applied since the 1960s. The VDI guideline 2800 defines the value analysis as a system to solve complex problems in systems that cannot or cannot be fully algorithmized. It includes the interaction of its system elements: methodology, behavior and management while involving the surroundings as contribution to a comprehensive view on the subject of the value analysis.

The essential starting points for identifying cost-reducing potentials with the help of value- analytical approaches are:

• The reduction and/or modification of requirements
• The modification and/or simplification of the function
• The modification of the material and/or manufacturing process
• The modification of the manufacturing cost structure

In detail, the following factors have a significant impact:

• Function of the product
• Product design
• Product strategy
• Manufacturing technology
• Procurement competency
• Development and creative potential
• Material know-how