Reducing Process Costs with Lean, Six Sigma, and Value Engineering Techniques: 1st Edition (Hardback) book cover

Reducing Process Costs with Lean, Six Sigma, and Value Engineering Techniques

1st Edition

By Kim H. Pries, Jon M. Quigley

Auerbach Publications

365 pages | 122 B/W Illus.

Purchasing Options:$ = USD
Hardback: 9781439887257
pub: 2012-12-13
$91.95
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Description

A company with effective cost reduction activities in place will be better positioned to adapt to shifting economic conditions. In fact, it can make the difference between organizations that thrive and those that simply survive during times of economic uncertainty. Reducing Process Costs with Lean, Six Sigma, and Value Engineering Techniques covers the methods and techniques currently available for lowering the costs of products, processes, and services.

Describing why cost reductions can be just as powerful as revenue increases, the book arms readers with the understanding required to select the best solution for their company’s culture and capabilities. It emphasizes home-grown techniques that do not require the implementation of any new methodologies—making it easy to apply them in any organization.

The authors explain how to reduce costs through traditional Lean methods and Lean Six Sigma. They also present Six Sigma cost savings techniques from Manufacturing Six Sigma, Services Six Sigma, and Design for Six Sigma. The book also presents optimization techniques from operations research methods, design experiment, and engineering process control.

Helping you determine what your organization’s value proposition is, the text explains how to improve on the existing proposition and suggests a range of tools to help you achieve this goal. The tools and techniques presented vary in complexity and capability and most chapters include a rubric at the start to help readers determine the levels of competence required to perform the tasks outlined in that chapter.

Table of Contents

Introduction

The Use of Rubrics

Questions to Ponder

Cost Improvement Scenario

Situation

Objective

Action

Results

Aftermath

A Brief Overview of Value Engineering

Product Life Cycle

What Is Value?

Cost Improvement Challenge

Cost Avoidance

Cost Reduction

Profit Improvement

Green and Corporate Stewardship Are the Same

The Case for Cost Reductions

Planning for and Managing a Value Improvement Project

Project Concept

Project Information

Project Business case

Conclusion

Saving Money with Homegrown Ideas

Rubric for Homegrown Ideas

Questions to ponder

Cost Improvement Scenario

Situation

Objective

Action

Results

Aftermath

Your People Matter

Laboratory Equipment

Production Equipment

Production Test Equipment

Logistics Material

Engineering

Marketing

Accounting/Finance

Procurement

A. Financial Determination

Brainstorming

Product, Process or Service Preparation for Critique

Numbers Count

Suspend Judgment

Build on Ideas

Mind Mapping

Selection Method

Weighted Matrix such a Pugh Matrix

Majority Decision

Voting Decision

Consensus

Rating

Delphi Method

Nominal Group Technique

Group Passing Technique

De Bono and his Thinking Hats

Advocacy and inquiry

Strategic Assumption Surfacing And Testing (SAST)

Team Syntegrity

Facilitation

ARBITRARY COST DOWN APPROACH

Rubric for Costing Down

Questions to Ponder

Cost Improvement Scenario

Situation

Objective

Action

Results

Aftermath

Why the Arbitrary Cost Down Approach

Cost Down Process

Cost Management Cycle

When to Use

The Greedy Approach

Cost Generators

Generators and Cost Cutting

The Isuzu Approach to Tear Downs

Rubric for Tear Downs

Questions to Ponder

Cost Improvement Scenario

Situation

Objective

Action

Results

Aftermath

What is the Isuzu approach

Dynamic Tear Down

Cost Tear Down

Material Tear Down

Matrix Tear Down

Process Tear Down

Static Tear Down

Why use this technique

Tear Down Example

Design for Assembly

Value Analysis Contribution to the Tear down Process

Value analysis Tear down and Improvement/Innovation

Value analysis Tear down Method and its Components

Recognizing Parts Suppliers Competitive Capability

Collecting New Suggestions for Improvement

Case Study

The DOD Approach

Rubric for DoD Approach

Questions to Ponder

Cost Improvement Scenario

Situation

Objective

Action

Results

Aftermath

Benefits

Function

Worth

Cost

Value

Effective Value Engineering Programs

Cost Analysis

Variance Analysis

Ratio Analysis

Trend analysis

Management analysis

Classical Value Analysis / Value Engineering Techniques

Rubric for Classical Techniques

Questions to Ponder

Cost Improvement Scenario

Situation

Objective

Action

Results

Aftermath

Benchmarking

Is Benchmarking Valuable?

Performance Benchmarking

Benchmarking Process

Classical Techniques

Rubric for FAST Approach

Questions to Ponder

Cost Improvement Scenario

Situation

Objective

Action

Results

Aftermath

FAST introduction

Creating a FAST model

Saving Money with Six Sigma Projects

Rubric for Six Sigma Projects

Questions to Ponder

Cost Improvement Scenario

Situation

Objective

Action

Results

Aftermath

What is Six Sigma?

How Does Six Sigma Relate to Value Engineering?

The Phases of Six Sigma

Choosing Six Sigma Projects

Costing Six Sigma Projects

Using Design for Six Sigma

Rational Expectations From Six Sigma

Enterprise Process Management and Metrics

Define

Measure

Analyze

Improve

Control

Design for Six Sigma (DFSS) Frameworks and Methodologies

Saving Money with Lean Manufacturing

Rubric for Lean Manufacturing

Questions to Ponder

Cost Improvement Scenario

Situation

Objective

Action

Results

Aftermath

What Is Lean?

Production Organization or 5S

Lead Time Reduction

Kanban

Demand Segmentation

Production Scheduling

Inventory Reduction

Lean Six Sigma

Lean Six Sigma Overview

Lean Six Sigma Goals

LSS Project Management

Team Organization & Dynamics

Defining Opportunities

Measurement Techniques

Analysis Techniques

Improvement Techniques

Control Concepts

Design Improvement

Saving Money with Optimization

Rubric for Optimization

Questions to Ponder

Cost Improvement Scenario

Situation

Objective

Action

Results

Aftermath

Operations Research Approaches

Evolution of Operations Research in Academics

Origin, History, and Developments

Operational Research Activities

The Operations Research Approach

Significance of Operations Research

Operations Research in Manufacturing

The Operations Research Experience in the US

Growth of Operation Research in Different Sectors

Challenges in Operations Research

Future Trends

Conclusion

Genetic Algorithms

Particle Swarm Optimization (PSO)

Ant Path Optimization

Simulations

Regaining Money with Cost Recovery

Rubric

Questions to Ponder

Cost Improvement Scenario

Situation

Objective

Action

Results

Aftermath

What is Cost Recovery?

When to Use Cost Recovery

Benefits of Cost Recovery

Steps to Cost Recovery

Two-way Cost Recovery

Other Methods

Rubric for Other Methods

Questions to Ponder

Cost Improvement Scenario

Situation

Objective

Action

Results

Aftermath

Other Tools

Project Management

What is DFA?

Design for Manufacturing

Rapid Prototyping

Finding Cost Reductions

Rubric for Finding Cost Reductions

Questions to Ponder

Cost Improvement Scenario

Situation

Objectives

Actions

Results

Aftermath

Finding Cost Reductions in the Plant

Operations

Engineering

Accounting/Finance

Purchasing

Marketing

Project Management

Human resources

Finding cost reductions in the office

Office supplies

Equipment

Copies/printing

Paper/paperless

Finding cost reductions in education

Operations

Accounting/Finance

Purchasing

Project management

Human resources

Sports and Extra-curricular activities

Finding cost reductions on the personal side

Used versus new material

Quantity versus quality

Food

Clothing

Furniture

Housing

Vehicles

When Cost Improvement Goes Wrong

Rubric

Questions to Ponder

Cost Improvement Scenario 1

Situation

Objective

Action

Results

Aftermath

Cost Improvement Scenario 2

Situation

Objective

Action

Results

Aftermath

Cost Improvement Scenario 3

Situation

Objective

Action

Results

Aftermath

Material

Substitution is a poor fit

Bulb removal tool

Vehicle Diagnostics Connector

Supplier selection

Scope or Design Review

Drop in replacement

Reuse of material

About the Authors

Kim H. Pries & Jon M. Quigley

Co-Founders, Value Transformation, LLC

Subject Categories

BISAC Subject Codes/Headings:
BUS000000
BUSINESS & ECONOMICS / General
BUS070050
BUSINESS & ECONOMICS / Industries / Manufacturing Industries
COM032000
COMPUTERS / Information Technology