Research On Value Engineering Application For Project C Target Cost Management

In the increasingly competitive market,as a century-old large company,F Automobile Company faces a severe challenge in the Chinese market.On one hand,the vehicles start to show a lack of the competence,on the other hand because the management of Target Cost setting for the vehicle R&D projects become formalistic,the cost-control also has a big problem.This article analyzes the Target Cost setting and its management of one vehicle component in the project C.Furthermore,it studies the relationship between its function setting and target cost.First,using the Value Engineering objective selection methods which is ABC analysis and mandatory decision method,this article selects the primary target-improvement objective which is sunroof system.Then,according to the workflow of the Value Engineering,this article analyzes the sunroof system and its sub-components’ functions by Function Definition,Function Classification and Function Analysis System Technique(FAST)which includes the One Way and System Analysis methods.Third,the function has been quantified by the function scoring method,so that the functional coefficient and cost coefficient of the sub-components can be calculated.The VE coefficient is calculated from the ratio of functional and cost coefficient.Finally,the VE coefficient is used as a criterion for judging whether the design is efficient or not.If the design is not efficient enough,it will be optimized but not change the function to optimize the cost.Also,the reasonable target cost can be set and accepted by the team.This is a typical application of Value Engineering in Target-Cost management.It is a demonstration for the upper and lower levels of the project.At the end,several enlightenments have been listed on how to apply Value Engineering on target cost management.