Value Engineering: A Comparison of Government and Automotive Application Techniques

Value Engineering (VE) is an organized effort directed at analyzing the function of a product, service, or process to achieve the lowest total cost of effective ownership while meeting the customer’s needs. A comparison as to how VE is applied and to what extent is made between the automotive industry and the Government using the Program Executive Office Ground Combat Systems (PEO GCS) as a standard. Both the automotive industry and the Government use common VE techniques to conduct VE studies. Both use VE to manage functionality to yield value to the customer. Neither the Government nor the automotive industry sacrifices the quality of the product or its reliability in the name of cost. Both the auto industry and the PEO employ a systematic team approach to analyze and improve the value of a product, facility design, system, or service. Applying systems engineering principles helps ensure successful execution of the PEO GCS VE program. The auto industry uses VE more widely and more successfully because of the cultural acceptance of VE, the wide-spread application of its principles, and the motivation to be profitable and survive. Formalizing and integrating the PEO’s VE process helps the organization meet its program and budget objectives in the current austere economic environment.