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.