Failure Mode and Effects Analysis (FMEA) and Value Engineering (VE) are well-established methods in the manufacturing industry, commonly applied to optimize product reliability and cost respectively. Both processes, however, require cross-functional teams to identify and evaluate the product/process functions and are resource-intensive, hence their application is mostly limited to large organizations. In this paper, we present a methodology involving the concurrent execution of FMEA and VE, assisted by a set of hierarchical Functional Analysis Diagram (FAD) models, along with the outcomes of a pilot application in a UK-based manufacturing Small-Medium Enterprise (SME). Analysis of the results indicate that this new approach could significantly enhance the resource efficiency and effectiveness of both FMEA and VE processes.