Tackling the supply chain crisis with value engineering
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Whether you’re following the media coverage of massively congested cargo ports in the United States or experiencing it firsthand through empty store shelves, rising consumer prices, long waits for products, and labor shortages, it’s become clear that the global supply chain crisis, which has caused disruptions for well over a year, is increasing.

Value engineering

As value engineering professionals, we know that before a solution is found, it is critical to first identify the basic function of any supply chain process. This is achieved through function analysis, the cornerstone of value engineering. Once the basic function of the supply chain is established, a collaborative process of developing ideas and ultimately implementable recommendations can be completed.

At Wood, we often perform value engineering studies to evaluate major infrastructure improvement projects, such as a highway expansion to improve safety and mobility. This traditional understanding of value engineering as a project evaluation tool can, similarly, be applied to products and processes. In the case of a supply chain evaluation, it involves a systematic approach to identify recommendations that could reduce inefficiencies and improve agility, as well as the value and quality of the supply chain, or provide a process that functions safely and efficiently at the lowest cost.

Finding innovative solutions

Several factors are involved in the provision of products or services. These can include, for example, networking processes between raw material producers, manufacturers, warehouses, transportation companies, distribution centers and retailers.

Using a function analysis approach at a very macro-level, we consider what a supply chain must do to be successful, and that’s distributing products or services. If it doesn’t accomplish that function, it fails.

Within the application of value engineering, it is essential to use a multidisciplinary team of individuals who aren’t directly involved with the supply chain being studied. This removes any biases and potentially capitalises on an atmosphere of open-minded and creative collaboration. The independent team is free to: analyse a supply chain and its components at a very micro-level; identify specific areas for improvement; eliminate redundancies; streamline processes; and, improve quality. Through function analysis and creative brainstorming, the team is also well-positioned to identify truly innovative solutions aimed at avoiding or correcting any current bottlenecks, such as what the United States’ supply chain is currently experiencing.

Industry leader

As an industry leader in value engineering, Wood has provided these services since 1976, conducting more than 910 value studies on projects exceeding US $25B in construction costs. While most of our clients have been state departments of transportation, we’ve also performed value engineering studies for several other state and federal agencies on projects that span multiple sectors. Our expertise can be easily replicated to solve the operational issues of virtually any client, including those who are facing the current supply chain crisis.

Relative to the current global pandemic, Wood has also responded to our clients’ needs, by quickly developing and applying an innovative virtual approach to our value engineering studies. This has allowed major public infrastructure investment projects to continue without delay.

Restoring supply chain resilience

The global nature of supply chains today means a product might contain parts that are sourced, manufactured or assembled in multiple countries, where there are lower costs for raw materials, labour and/or production. Shortages of source materials, essential product components, workers, and even available shipping containers can trigger wider, unforeseen issues, exposing bottlenecks that can set off disruptions and, even, supply chain shortages. Wood’s value engineering expertise can help identify solutions to these challenges reducing your vulnerabilities and restoring resilience to your supply chain.

Ryan Thomas, PE, VMA
Wood Regional Transportation Sector Leader
Suzanne Wood
Program Manager, Wood Value Engineering
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