Original Date: 09/14/1998
Revision Date: 01/18/2007
Information : Value Engineering Process
In 1988, Raytheon Missile Systems Company (RMSC) initiated an active Value Engineering process on its AMRAAM program to implement low-cost design changes. The primary Value Engineering objectives were to maintain system performance and lower unit costs. The secondary objectives were to improve system performance and increase reliability. As a result of the Value Engineering process, the AMRAAM program’s overall missile costs were reduced, enabling the Air Force to fulfill its missile inventory requirements.
The Value Engineering process allows RMSC to progressively update a program’s design and incorporate current parts technology. This approach avoids obsolete part procurements, and facilitates missile and productivity improvements. RMSC’s customers have been very supportive of the Value Engineering process. Low-cost design changes have financially benefitted RMSC, its suppliers, and the Joint Strike Project Office. Since 1995, AMRAAM Value Engineering projects are credited with a cost savings of more than $9 million. These changes focused primarily on parts reduction including COTS and PEMs.
The Value Engineering process promotes a cooperative teaming environment, and enables RMSC to reduce unit costs, increase reliability, and improve system performance on projects. Recent pricing agreements have also provided RMSC and its suppliers with incentives to develop and implement future cost reductions.
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