Cost Reduction Through Value Engineering Practices in Manufacturing Assembly

Value Engineering (VE) is important tool to company in global market competition to providing a demand. VE process can provide for company continued growth and prosperity if applied properly. VE is defines as the systematic application of recognized techniques, which identify the function of product or service, establishes a monetary value for that function and provides the necessary function reliability at the lowest overall cost. This paper will presents a process on how to apply VE tools in manufacturing company. Therefore, we would like to study the application of VE approach method and at the same time investigating how much cost reduction can be done. The function of product will be defining and cost reduction is suggested by proposing alternative method to achieve that function. However the function quality is never degrading. The result is showed that 60% cost reduction can be proposed.