value of engng by jessie mariano 2009 iloilo conference

8/22/2019 Value of Engng by Jessie Mariano 2009 Iloilo Conference

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Basics of Value Engineering


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Value engineering (VE) study shall be

an organized effort directed atanalyzing the functions of systems,

equipment, facilities, and supplies

for the purpose of achieving the

required function at the lowest

overall or life cycle cost.


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will result in reduced overall costs

without degradation of the essential

characteristics of the system byapplying value engineering principles

and techniques, thus, resulting to

higher productivity and efficiency


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VE METHODOLOGY

THE FUNCTIONAL APPROACH

THE VE JOB PLAN

HUMAN RELATIONS

CREATIVITY


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THE FUNCTIONAL APPROACH

A user/owner purchases an item or

service because it will provide certain

functions at a cost he is willing to pay. Anything less than the necessary

functional capability is unacceptable;

anything more is unnecessary andwasteful.


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To achieve optimum value, functions must be

carefully defined so that their associated costsmay be determined and properly assigned

The VE approach requires the development ofvalid and complete answers for the following

six questions:

What is it? What does it do?

What it is worth?


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What does it cost?

What else would work?

What does that cost?

1. Evaluation of Function.

- When it has been decided that a VEstudy will be conducted on an item

or system, the initial effort must bedirected toward determining theusers actual needs.


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The users needs are those explicit

performance qualities, traits, or characteristicsthat justify the existence of an item, that is, the

characteristics that must be possessed if the

system or item is to be useful or efficient.

Many times there is a temptation to look at an

item and say that the function it performs is

the required function. But this is not always

true. By defining the function, one learnsprecisely which characteristics of the design

are really required.


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2. Determining Function.

In VE, function is normally expressed using twowords a verb and its noun object:

The verb answer the question, What does it

do? The verb define the items required action ( it

may generate, control, pump, emit, protect,transmit . . . . ).

The noun answers the question, What does it do

it to? The noun tells what is acted upon,(electricity, temperature, liquids, light, surfaces,

sound . . . ).


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The system of defining a function in two

words, a verb and a noun, is known as two-

word abridgement. This abridgementrepresents a skeletal presentation with

retention of relative completeness

3. Identifying Function.

A function should be identified so as not to

limit the ways in which it could be perform.

For example, consider a buildingsmanagement operation of fastening a

simple nameplate on a piece of equipment


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Identification of function should concern

itself with how something is used, not justwhat it is. For example, the function of an

electric wire could be conduct current,

fasten part, or transfer force depending

on application.

Identifying function in broadest possible

terms provides the greatest potential for

value improvement because it gives greater

freedom in creativity developing

alternatives


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4. Classifying Functions. Functions of items

or systems may be divided into two types,basic and secondary.

Basic Function defines a performance feature that

must be attainted

It reflects the primary reason for an item or

system

A basic function answers the question, What

does/must it do?


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- Secondary function defines performance

features of a system or item other than thosethat must be accomplished.

- A secondary function answers the

question, What else does it do?For example,

-the basic function of exterior paint is

protect surface.-The secondary function is improve

appearance.


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Secondary functions often result from the

design configuration chosen to satisfy abasic function

For example, a valve on a radiator

restricts flow and is necessary onlybecause a hot water heating design was

chosen. Then, the presence of a

secondary function is incidental to themethod chosen to achieve a basic

function


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5. Functional relationships.

The relative position that a system or itemoccupies in the scheme of the total assembly is

called its level of indenture.

Figure 1.1 Typical System Model


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Level of Component Functions Classification

Indenture B = Basic

S = Secondary

1 Fire alarm system Make noise B

Detect Fire B

Protect Building S

2 Person Detect Fire B

Pull lever S

3 Pull boxes Break circuit S

Bells Make noise B

Panels Provide power S

Conduit and wire Transmit power S

Figure 1.2 Example of Functional Relationship


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6. Evaluation of worth. The second step in

functional analysis is to establish the Peso

value of worth for each function.

-It is a highly creative endeavor because worth

is relative to subjective rather than absolute

or objective measure.

-Skill, knowledge and judgment play a major

role in determining the quantitative aspect of

worth in terms of Pesos.


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7. Determining worth. The above guidelines for

evaluating worth must be applied against thefollowing rules for determining worth for a

specific VE analysis

-The worth of all secondary function is zero for VE

purposes.

-A Peso figure for the value of worth must be

established for each basic function.

-Worth is associated with necessary function orfunctions and not with the present design of the

item.


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-There must be no discrimination between

a function that is definitely required and theconsequences of failure to achieve that

function.

8. Evaluation of cost. The consideration ofcost is the third step in functional analysis.

Evaluation of cost serves several purposes:

1. Identifying high cost elements is useful in

determining the priority of individual VE studies to

be undertaken.


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2. Cost visibility is given to functional

performance where normally such costsare buried in unit or system estimates.

3. The validity of the claimed savings at theconclusion of a VE project depends upon

the accuracy of the cost figures for the

present design and the realism of costestimates of the proposed design.


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9. Determining cost. The cost of the presentdesign of a system, item or operation should

be determined in as great detail as possible.

- In conducting functional analysis the

following rules will always govern:

1. Where an item serves but one function,

the cost of the item is equal to the cost of thefunction.


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2. Where an item serves more than one

function, the cost of the item should be

prorated to each function.

For example, the cost of acoustical tile with aflame spread rating of 25 or less might be

Php 100.00 per square foot.

An appropriate breakdown of this cost on a

functional basis might be:


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ITEM FUNCTION COST/SF

Acoustic tile Absorb sound B Php 70.00

Cover ceiling S 10.00Protect ceiling S 20.00


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10. Evaluation of value. This is the fourth step in

the functional analysis process. The termvalue is used in many different ways, and has

several meanings.

-The value of a given item may differ

according to whether it is viewed from the

standpoint of the seller, the buyer, or the user.


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-Different concepts of value may exist

between individual users, depending on thetime, place, situation, or availability of

substitute items.

-Four general categories of Value

1. Cost value,

2. Use value,

3. Esteem value, and4. Exchange value.


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-Value is relative to both cost and price but use

value, which is the value normally considered by

most users/owners, may not be relative to either.

-A VE goal is the maximization of end item value

through the control of use value, cost value, and the

elimination of costs associated with any other valuenot related to performance of basic function.


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11. Determining value. Value can be

quantitatively expressed through the use of a

value index which is the relationship between

cost and worth.

-Remembering that cost and worth are

related to functions rather than items, the

index serves to:


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-Assist in determining whether to proceed

with the study.

-The study should proceed only when the

value index is greater than one, exists.

-Locate areas where the cost/worth ratio is

greater. Generally these areas will havethe greatest VE potential and is useful in

selecting projects for VE study.


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THE VE JOB PLAN


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The VE Job Plan consists of those tasks orfunctions necessary to properly perform a VE

study. Use of the Job Plan provides:

A vehicle to carry the study from inceptionto conclusion.

A convenient basis for maintaining a writtenrecord of the effort as it progresses.

Assurance that consideration has beengiven to facts that may have been neglectedin the creation of the original design.


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A logical separation of the study into units

that can be planned, scheduled, budgetedand assessed


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PHASES OF THE VE PLAN

1. Orientation phase.

This phase relates to the initiation

of ideas for projects and theirevaluation, selection, planning and

authorization rather than the steps

for conducting a specific project.


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2. INFORMATION PHASE.

-Objectives:a. to obtain through understanding of

the system, operation or item under study by

a rigorous review of all the pertinent factual

data, and

b. to define the value problem by

means of functional description

accompanied by an estimate of the worth of

accomplishing each basic function.


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Procedure:

a. Good human relations.

b. Collecting information.

c. Determine functions.

d. Evaluate functions.


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3. Speculation Phase

-Objective. The objective of this phase isto generate, by creative techniques, numerous

alternative means for accomplishing the basicfunctions identified.

- Procedure. Consideration of alternatesolutions should not formally begin until theproblem is thoroughly understood.


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- Free use of imagination is encourage so thatall possible solutions are considered.

-partial list of questions that can be used tostimulate and trigger ideas.

a. ELIMINATE-COMBINE

-Can it be eliminated entirely?-Can part of it be eliminated?

-Can two parts be combined into one?

-Is there duplication?-Can the number of different lengths,colors, types be reduced?


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STANDARDIZE SIMPLIFY

-Could a standard part be used?-Would a modified standard part work?

-Does the standard to cost?

-Does anything prevent it from beingstandardized?

-Is it too complex?

-Can connections be simplified?


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CHALLENGE IDENTIFY

-Does it do more than is required?

-Does it cost more than it is worth?

-Is someone else buying it at lower cost?

-What is special about it?

-Is it justified?

-Can tolerances be relaxed?


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MAINTAIN OPERATE

-Is it accessible?-Are service calls excessive?

-Would you like to own it and pay for its

maintenance?-Is labor inordinate to the cost of materials?

-How often is it actually used?

-Does it cause problem?-Have users established procedures to get

around it?


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REQUIREMENT COST

-Are any requirements excessive?

-Is it proprietary?

-Are factors of safety too high?

-Are calculations always rounded off on

the high side?

-Would lighter gauge materials work?

-Could a different finish be used?


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Techniques to use.- Blast, create and refine. Create, really

reach for an unusual idea; reach way out for

another approach. Refine, strengthen or addto develop an idea to perform basic functions

in a new unique manner.


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- Functional comparison. Conduct a

creative problem solving session

(brainstorming) in which new and

unusual contributions of known things orprocesses are combined and/or

rearranged providing different ways of

performing basic functions.


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- Simple comparison. Conduct a thorough

search for other items which are similarin at least one significant characteristic to

the study item.

- Scientific search. Conduct a search for

other scientific disciplines capable of

performing the same basic function.


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4. Analysis Phase.

- Objectives. The purpose of this phase

is to select for further analysis and refinement

the most promising alternatives from among

those generated during the previous phase.


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- Techniques. Several techniques are

available by which alternative ideas can be

evaluated and judged. These are:

a. Comparison technique.

b. Advantages versus disadvantages

technique.

c. Ranking technique.


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d. Checklist technique.

e. Probabilities technique.

f. Creativity approach.


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Procedure. Evaluation may be

accomplished either by the generating

group or an independent group.

a. Evaluation criteria. The first step is

to develop a set of evaluation criteria-

standards by which to judge the ideas.

b. Screening process. The next step in

the procedure is the actual ranking of ideas

according to the criteria developed.


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-Define alternatives. The remaining

alternatives are then ranked according to anestimate of their relative cost reductionpotential.

- Final selection. After the detailedcost estimates are developed for theremaining alternatives, one or more areselected for further study, refinement, testing,

and information gathering. Normally, thealternative with the greatest saving potentialwill be selected.


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5. Development Phase.

- Objective. In this phase, selected

idea or ideas are fully developed with the

intent of making specific recommendation for

change to management or owner.


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Procedures.

General. Each alternative must be subjected

to:

(a) careful analysis to insure that the usersneeds are satisfied;

(b) a determination of technical adequacy;(c) the development of estimates of costs,implementation expenses, and schedules,including schedules and costs of all

necessary tests; and(d) consideration of changeoverrequirement and impact.


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Develop convincing facts. As in the

Information Phase, the use of goodhuman relations is considerable

importance to the success of the

Development Phase.

Develop specific alternates. Those

alternates that stand up under close

technical scrutiny should be followed

through to the development of specific

designs and recommendations.


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Develop implementation plans.

Anticipate problems relating toimplementation and propose specific

solutions to each.

Testing. Tests required todemonstrate technical feasibility are

part of the VE process and should be

performed before the alternative isrecommended for implementation.


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Select first choice. Finally, one

alternative should be selected for

implementation, as the best value

(best cost reduction) alternative, and

one or more other alternatives

selected for presentation in the

event the first choice is rejected by

the approval authority.


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6. Presentation Phase.- Objective. This phase involves the

actual preparation and presentation of

the best alternatives to persons havingthe authority to approve the VE

proposals.


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This phase of the VE job Plan

includes the following steps:

- Preparing and Presenting the VE

proposals.

- Presenting a plan of action that will

insure implementation of the

selected alternatives.

- Obtaining a decision of positive

approval.


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- Form. Presentation of a VE proposal

should always be made in written form.- Format. During the course of a VE

project, two major documents should be

produced: a report summarizing theresults of the effort and a project book

that contains all the detailed back-up

information.


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- Content. Management, responsible for

review and approval, must base itsjudgment on the documentation

submitted with a proposal.


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Minimum Requirement of VE study

written reportContents page.

Executive summary.

Brief summary of VErecommendations

Site plan, floor plan and elevationson letter size paper.


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Summary sheet of cost estimate of

50% design submittal.

VE cost model of project.

VE worth model


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Each VE recommendation will be

described before and after VE andwill be accompanied with a detailedcost estimate of savings, life cycle costanalysis, and sketches as necessary.

Complete VE job plan of all work willbe submitted as a glossary forreference.

Review comments on preliminarysubmittal.

value of engng by jessie mariano 2009 iloilo conference

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