As a sales rep representing material and component suppliers, I have had the unfortunate task of passing along my share of price increases to door and window customers, which can become substantial given some of the recent tariff situations. Obviously, the news is less than welcome on the receiving end.
So, what can door and window engineers do to help their companies remain competitive given the seemingly endless series of material and component price increases? Well, are you familiar with the concept of value engineering?
The idea of value engineering sprung up in the 1940s at General Electric, in the middle of World War II. A purchasing engineer named Lawrence Miles and others sought substitutes for key materials and components that were in short supply due to the unusual demand spawned by the war. Substitutes were highly sought after to reduce costs while providing equal or better performance.
So, what exactly is value engineering? Value engineering (or VE), as defined by Investopedia, is a systematic method to improve the “value” of goods or products and services by using an examination of function. Value, as defined, is the ratio of function to cost. Value can therefore be increased by either improving the function or reducing the cost. The value of an item is defined as the most cost-effective way of producing an item without taking away from its purpose.
The thing that must be stressed, however, is that value engineering should not only consider alternative materials and components, but also the process and the machinery employed. So, the total overall cost is a function of not only the materials used but also the labor, the overhead, the wastage, and the “cost of quality” as well. So, a value engineered redesign that perhaps involves more expensive materials can still result in an overall lower unit cost and/or greater performance, if the methods employed involve fewer people, improved efficiency and lower cost of quality. Automating the process can also contribute to these factors and can become a game changer.
But all too often, engineers may look at materials only in their quest to lower costs or improve performance—looking for a lower cost material that will get the same or better results in the end. They may fail to consider the overall picture, which includes not only the design itself but also what I call the overall manufacturing triad.
The overall manufacturing triad is defined as an integration of the three dimensions of the overall manufacturing process, “the 3 Ms of the Triad.” These are the material, the methods and the machinery. The material may be a lower cost material but alternatively it can also be a higher cost, higher performance material that when employed with a different method, and with different machinery, can result in an overall unit cost that is lower, while at the same time offering greater performance and more consistent quality in the final product. This occurs when the method is altered, resulting in fewer manufacturing steps that reduce labor and variable overhead costs. Indeed, the third M, which is machinery, may also contribute to lowering overall unit cost and improving function through enhanced quality.
So, perhaps every door and window company should have a value engineer. This person could be a dedicated person in a large company or simply one of the many hats that the small business owner wears. But in any case, someone in the company needs to be responsible for reviewing the intended function of each product and consequently reviewing not only the best materials or components to use, but also to constantly develop better manufacturing methods using “state of the art” machinery to optimize efficiency and lower the cost of quality.
As markets grow, so grows the demand for materials and components from which to build our doors and windows. This leads to cost increases. The ongoing practice of value engineering can help manufacturers stay a step ahead of the game by providing an ongoing focus upon providing greater value to the consumer while minimizing the net effect of cost increases. In the end, those who offer the greatest value to the end user will reap the benefits of increased sales and profitability!