| Value Analysis |
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| An Example of the Value Analysis Section In The Virtual Innovation Center (VIC)
The following example assumes a refrigerator company that currently screws door panels to the refrigerator door – there are 10 screws per door and a total 240,000 units manufactured per year. The solution in this case is to POP rivet the panels using 2 Point and Set systems (Approx. $30,000 including spare parts).
Note: The piece price of the proposed rivet is double that of the initial screw, but the in-place costs per fastener are considerably less.
Value Engineering/Value Analysis |
Pieces per Unit |
10 |
Annual Unit Build |
240000 |
Annual Pieces |
2400000 |
Labor Rate per Hour |
$25 |
Fringes and Benefits |
30% |
Total Labor Cost per Hour |
$32.50 |
Present Method
Fastener Type:
Screw |
Proposed Method
Fastener Type:
POP Rivet and ‘Point and Set’ |
All items per piece |
Time To Install (s) |
7 |
Time To Install (s) |
1.5 |
Installation Cost
(Labor) |
0.06319 |
Installation Cost
(Labor) |
0.01354 |
Price Per Fastener
(Material) |
0.01 |
Price Per Fastener
(Material) |
0.02 |
Maintenance Cost
(Including consumables) |
0.001 |
Maintenance Cost
(Including consumables) |
0.00045 |
Unidentified Cost
(Other variables) |
0 |
Unidentified Cost
(Other variables) |
0 |
In-Place Cost |
0.07419 |
In-Place Cost |
0.03399 |
Savings Per Unit |
$0.402 |
Yearly Cost Savings |
$96480.00 |
Capital Investment |
$30000 (2 Point and Set Units) |
Simple Payback Period |
0.31 years |
Duration of Project |
1 year |
Depreciation (Manuf. Equip.) |
7 year |
Depreciation per Year |
$4285.71 |
Tax Rate |
35% |
Discount Rate |
12% |
Depreciation Tax Shield |
$1500.00 |
Net Present Value |
$32,838.49 |
About Emhart Teknologies
New Haven, Conn.-based Emhart Teknologies is the global leader in the design and creation of unique assembly technologies from concept through installation. Emhart’s technology-based assembly products and systems deliver innovative, integrated system solutions to virtually any manufacturing challenge anywhere in the world. From automotive to construction, computers to appliances, Emhart products are sold in more than 100 countries. A Black & Decker Company, Emhart has 3,000 employees in 24 operating facilities worldwide. Please go to www.emhart.com for more information.
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