Application Of Value Engineering Method In The Cost Reduction Of A FOTON's High-end Light Bus

Over past years,China's automobile industry is facing tremendous pressure with slow economic growth and weak market demand.Along with momentum of de-bubbling and de-leveraging,car-makers shift the mainstream business model from the "product-driven" to "customer-oriented",from "Size-Is-King" to "Quality-Goes-First".To stand out over market competition,car-makers try best means to control costs.To best control the cost,car-makers give priority to reduce the spending over auto-parts procurement.In consequence of car-makers' cost-control strategy,Auto-parts suppliers are stuck with homogenous competition.As a result of price war,auto-parts supply falls into a vicious spiral of "low cost & inferior quality".As a trade-off Of cost control,vehicle cost have been control,auto-parts quality and performance is adversely affected.How to get out of this vicious cycle? It is imperative to find out the scientific method of evaluation.In this paper,the research of "Value Engineering" is the effective approach to assess then improve the product(auto-parts)value through optimizing "life-cycle-cost and expected performance".The application of Value Engineering method in the auto-part procurement may efficiently translate each auto-part's utility into evaluation,therefore set reasonable price target.With such approach,OEM may achieve the dual goals of cost control and quality improvement.Foton Motor's sales of commercial vehicle ranks first in global market.However,Mathew Company stays around No.5 for long time in China,which is far from the company's strategic goal.At current stage,Foton Mortor is upgrading its product performance in light bus category.According to the Company business needs,this paper is to select a high-end light bus of Foton as the researching target.In order to align the assessment of high-end light bus auto-parts core function with expected performance from car-user perspective and demanded utility from market competition perspective,this Paper applies the concept of QFD into field study and market research which focuses on how to translate car-user expected and market demanded functionality into Auto-part's design with cost control concern.Vehicle functionality can be classified according to Value Engineering and classified functionality can be assigned to differentiated weighting.Thus all car-users expected performance can be analyzed on quantative basis.Furthermore,based on the evaluation of car-parts and whole-car performance correlation,function evaluation method was applied to calculate the value of coefficient of the procurement module.In application of Mutual authentication with ABC analysis and value added coefficient method,procurement cost reduction targets and related production plan can be determined.After trial production and prototype testing,the application of Value Engineering is supposed to improve vehicle performance while reducing procurement costs.The paper through the application of the value engineering in the Foton a high-end light passenger is to reduce the costs,ensure product performance and enhance competitiveness successfully.