Key Takeaways

Rising technology and regulatory costs have made VA/VE essential, yet many initiatives fail due to idea overload, execution delays, and service complexity. The article argues that significant efficiencies can be unlocked for both OEMs and suppliers by adopting a flow-based planning approach and aligning production with actual consumption. This can deliver sustainable cost reduction while creating a true OEM–supplier win-win.

VA/VE 2.0: A value 'creation' approach

<div style="-webkit-text-stroke-width:0px;caret-color:rgb(0, 0, 0);color:rgb(0, 0, 0);font-style:normal;font-variant-caps:normal;font-weight:400;letter-spacing:normal;margin-bottom:0.5em;margin-top:0.5em;orphans:auto;text-align:left;text-decoration:none;text-indent:0px;text-transform:none;white-space:normal;widows:auto;word-spacing:0px;"><span><strong>Problem:</strong> Rising technology, sustainability, and regulatory costs are squeezing OEM margins as customers resist higher prices, making VA/VE more critical than ever. Yet 30%-50% of VA/VE initiatives fail because they are treated as idea-generation exercises, while procurement and supplier teams lack the capacity to execute amid daily firefighting. Execution is further undermined by aftermarket complexity and volatile planning that disrupts supplier flow and erodes savings.</span></div><div style="-webkit-text-stroke-width:0px;caret-color:rgb(0, 0, 0);color:rgb(0, 0, 0);font-style:normal;font-variant-caps:normal;font-weight:400;letter-spacing:normal;margin-bottom:0.5em;margin-top:0.5em;orphans:auto;text-align:left;text-decoration:none;text-indent:0px;text-transform:none;white-space:normal;widows:auto;word-spacing:0px;"> </div><div style="-webkit-text-stroke-width:0px;caret-color:rgb(0, 0, 0);color:rgb(0, 0, 0);font-style:normal;font-variant-caps:normal;font-weight:400;letter-spacing:normal;margin-bottom:0.5em;margin-top:0.5em;orphans:auto;text-align:left;text-decoration:none;text-indent:0px;text-transform:none;white-space:normal;widows:auto;word-spacing:0px;"><span><strong>Solution:</strong> The solution shifts cost reduction from squeezing suppliers to creating value by unlocking hidden supplier capacity through stable, flow-based planning and actual consumption-based production. This collaborative approach improves productivity without new assets, enables shared gains through price reductions, and frees OEM teams to focus on fewer, high-impact VA/VE initiatives.</span></div><div style="-webkit-text-stroke-width:0px;caret-color:rgb(0, 0, 0);color:rgb(0, 0, 0);font-style:normal;font-variant-caps:normal;font-weight:400;letter-spacing:normal;margin-bottom:0.5em;margin-top:0.5em;orphans:auto;text-align:left;text-decoration:none;text-indent:0px;text-transform:none;white-space:normal;widows:auto;word-spacing:0px;"> </div><div style="-webkit-text-stroke-width:0px;caret-color:rgb(0, 0, 0);color:rgb(0, 0, 0);font-style:normal;font-variant-caps:normal;font-weight:400;letter-spacing:normal;margin-bottom:0.5em;margin-top:0.5em;orphans:auto;text-align:left;text-decoration:none;text-indent:0px;text-transform:none;white-space:normal;widows:auto;word-spacing:0px;"><span><strong>Benefits:</strong> Suppliers gain 30%-40% higher throughput and significantly higher contribution margins with lower operational stress and predictable cash flows, while OEMs achieve 5%-10% sustainable cost reduction without design or quality risks. The approach improves parts availability, production stability, and collaboration, delivering systemic cost reductions and a resilient, win-win supply chain.</span></div>

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<p>VA/VE 2.0: A value 'creation' approach</p>

Traditional VA/VE is failing to deliver savings as costs rise and execution stalls. Discover how VA/VE 2.0 unlocks supplier capacity through flow-based collaboration to deliver sustainable, win-win cost reduction for OEMs and suppliers.