Liberalization and globalization of the Indian economy have caused intense competition for the Indian industry from the global players. This, in turn, has imposed a heavy responsibility on Indian industries to reduce cost, improve quality and competitiveness, upgrade technology, find import substitutions, and achieve higher productivity in the organization. Though there are several tools and techniques, Value Engineering (VE) is one of the most effective tools to achieve these objectives. Cost reduction being the primary aim of the vE, the study is based on its application on an automobile instrument cluster to reduce the material cost by 20%. The basic framework for conducting a VE study is the job plan: A seven-phase job plan has been followed in the present work. The VE study made on instrument cluster has resulted in an expected 19.28% reduction in material cost against the targeted 20%. This article recommends proposals for design and material changes for 26 components based on value. Five components were eliminated through `achieving function by alternate means'.

In today's competitive and rapidly changing business environment, globalization and liberalization have broken the trade barriers. The world has shrunk and the business has no boundary. Consumers are free to buy products and services according to their liking and producers are free to sell their products and services anywhere in the world. The situation has become more stressing as India became a member country of World Trade Organization (WTO) by signing the memorandum, according to which free trade is allowed in the country. Now the scenario is "survival of the fittest". Indian industries have to compete with the multinationals in quality, cost, technology, delivery and flexibility, which are the major contributors to the highest level of customer satisfaction.

The high cost of the products is the one of the reasons behind the insignificant contribution from India in international trade. Most of the exportable items manufactured in India do not compete well in the global market, due to price discrimination. In order to stay competitive, specific and tangible effort is required on the parts of Indian industry by bringing down the cost of products, improving quality, making optimum use of available resources and ontime delivery of products and services. These issues indicate the need of cost reduction in Indian industries, which are generally plagued by spiraling costs of all types of materials, wages and other inputs. Stiff competition and other market constraints do not permit the unlimited transfer of these cost escalations to the customers (Vittal, 1993).

Management Research Journal, Value Engineering, Cost Saving in Instrument Cluster, Business Environment, Globalization and Liberalization, World Trade Organization, WTO, Products and Services, Feasibility Ranking, Value Management.