Reduce Manufacturing Costs - The Value Engineering Way
Value Engineering can get you your margins back
In these tight times, you will be forced by circumstances to bid with minimal margins, hoping perhaps that scope creep will enable you to at least cover costs or better still get you a couple of percent more.
Does this sound about right?
If this is the case then you are going to need some very sharp pencils and good spreadsheet cost breakdowns. As you will know, one of the more difficult on the spot questions to respond to is “what are our costs on this job?” your response may be, “well, it depends.” This is not a stupid response as the answer is very dependant on several factors normally, such as amortisation, life cycle costing, economies of scale, our purchasing clout, supplier “desperation”, timing of purchases, the list goes on……
A useful “tool” in the toolbox could be Value Engineering, a straightforward, systematic methodology, that focuses the team, (yes, in order to get anywhere close to your legitimate margins will demand a multi-disciplined approach, after all, if the solution were that easy an individual would already have done it!)
Value Engineering is not a cost cutting exercise; it is about maximising value! Actually any fool can cut costs, but without understanding functionality you will battle to realise the implications of your actions.
My own very early personal application of Value Engineering enabled me to hold product costs for three years! Starting from a very low margin base we were able to deliver better value product with a significantly increased margin.
We enabled the win-win we all strive for in a sustainable business
We are able to facilitate the process for you, assisting you to apply the Value Engineering methodology, or we can train you to do it yourself, the latter option will consume more time, but given that we will begin to apply the training using a real problem, you should get a return on your training investment, coming away with clear insight and direction towards solving your problem.
Give us a call, it might be one of the best value adding call you make.