Value Engineering: The Road to Profitability in Metal Fabrication

January 18, 2019 by Bob Wilson

The metal fabrication industry in Canada faces a rosy prospect: steady construction and manufacturing are boosting demand. Improved economic growth supports the production of metal goods. The rise in activity creates more employment, especially jobs involving the technological aspect of production.


Amid this exciting growth, one thing remains constant: the pursuit of cost-effectiveness and profitability in production. Original equipment manufacturers (OEMs) and their metal fabricator-partners are always seeking ways to cut costs without compromising the integrity of the product.


In this endeavour, many companies adopt the method of value engineering, a close examination of the function of the product. This often leads to cost-cutting and value-adding.


The Value Engineering Approach

Value engineering is an approach where fabricators eliminate unnecessary costs by identifying which functions — and by extension, parts — are needed for the product to work optimally. Designers then remove those that aren’t needed, increasing the products’ value.

While it might sound simple, value engineering requires a thorough examination of the product’s function, cost and alternative parts. The product is stripped down to its essential function. Anything that doesn’t contribute to it is removed.


Value Engineering in Metal Fabrication

In metal fabrication, the teams study the proposed metal product an OEM proposes, its estimated cost (preferably 5-10% of the actual final cost) and alternative solutions.

Alternatives help metal fabricators find a simpler way to manufacture a part of the product. For instance, an alternative type of metal may work just as well, for a fraction of the price. The same scenario may happen when designers reduce the metal sheet’s thickness.

If your company decides to adopt this approach, use it on newly designed products that are yet to be introduced to the market. At this stage, it’s relatively easier to make changes in the design and perform cost analyses. You can only optimize so much once production begins.


For Better Product Quality

While better product quality is not the main aim of value engineering, it inadvertently champions the integrity of the product.

Because value engineering generates cost savings, metal fabricators and OEMs have a greater capacity to invest in better equipment and more personnel, which improves operations, as well as the quality of the product. You can also invest in research and development to design better materials or discover more updated software you can use in production.


Be a Trusted Partner among Your Clients

Another advantage of this approach is that you become a high-value partner among clients. By removing unnecessary costs and, in the long run, increasing product quality, you offer them a higher value for a lower price. By removing unnecessary items — or those that don’t add much value but raise prices — you prevent the end price of your product from skyrocketing. This makes you a more appealing partner for OEMs and other companies that need metal fabrication in Edmonton.


The value engineering approach helps you produce products that perform at their best, even when they use more economical alternatives. It boosts your profitability without sacrificing the product’s quality, helping you win more clients over.


Our team can help you achieve this goal and more. Call today for a free quote.