Value engineering
Value engineering is a systematic review of a product's design and processes that asks whether each element creates value customers actually perceive and pay for.
Also known asvalue analysis
FrameworkTarget costing
What it is
See it move
A waterfall chart starts at a current unit cost of €11.20. Two engineering changes reduce it: a grip redesign saves €1.00 per unit and removing the collar saves €0.60 per unit, bringing the revised unit cost down to €9.60. Value engineering focuses only on features that add manufacturing cost without adding customer-perceived value, so the product can meet its target cost without sacrificing what buyers actually pay for.
Check yourself
A value-engineering team finds that a commercial coffee machine's target cost is €88 but the current design costs €96. Which action most accurately represents value engineering?