A team of five people from a major Midwestern manufacturer of welding equipment joined together with a team of expert business strategists. The goal? To reduce the cost of one of their “heart-of-the-line” products – a welding rod. Specifically, their goal was to find any savings that could help prevent the loss of market share to an off-shore manufacturer. In addition, the president gave them a second special goal:  “Any change you consider… must either maintain or improve the quality of the product”.

Through the agile Value Analysis process, twenty-seven ideas were considered. After evaluation, nine were not cost effective and fourteen still required work. Finally, four were presented to management as implementable solutions. The results of these four ideas, created dramatic spin-off savings to other products their line. These results are shown in the table below. Additionally, two key faults with the packaging were resolved, and two innovative ideas for product improvement were initiated.

The team stated at the end of the project that because of the intensity and depth of the discussions presented throughout the process of Value Analysis, (also known as Value Engineering) they got the equivalent of a master’s degree in metallurgy. The team proposed the savings shown below to the president and his executive staff. The Value Study was considered a success by the client, who subsequently scheduled two more projects.