TABLE OF CONTENTS The term value may mean different things to different people because it is used in a variety of ways. Around 350 B.C., Aristotle, the teacher of Alexander the Great, identified seven classes of value: economic, moral, social, religious, aesthetic, judicial, and political [1]. Interestingly, these classes are still recognized today. Nonetheless, value engineering may simply be described as an organized effort directed at analyzing the function of an item or a product with the objective of achieving the specified function at the lowest possible overall cost [2].
Past experience indicates that the application of the value engineering concept has helped to reduce manufacturing and procurement costs by approximately 15% to 25%. In particular, the U.S. Department of Defense reports that the use of value engineering has consistently produced a return on investment of 10:1 across the organization [3].
The history of value engineering may be traced back to 1947, when General Electric (GE) management selected Lawrence D. Miles, a GE electrical engineer, to devise appropriate approaches or methods that would be helpful in generating tangible savings through material or part substitutions, changes in manufacturing techniques, or design [4, 5]. Miles and Harry Erlicker, GE vice-president for purchasing, used the term value analysis [2]. In 1954, with the help of Miles and his GE team, the U.S. Navy Bureau of Ships set up a formal Navy value program and Rear Admiral Wilson D.Leggett renamed the term value analysis to value engineering [6]. By 1956, all 11 naval shipyards...
