TVM Total Value Management The New innovative VETQM

TVM Total Value Management The New innovative VE-TQM integration in Project Management Organized & Sponsored by Presented by ﺍﻟﻤﺤﺎﺿﺮ Abdulaziz S. Al-Yousefi, CVS –Life, FSAVE ﻋﺒﺪﺍﻟﻌﺰﻳﺰ ﺳﻠﻴﻤﺎﻥ ﺍﻟﻴﻮﺳﻔﻲ ü 1 üü

Value studies are mandatory in … ü All US federal projects > $ 2 M ü All Japan projects > $ 2 M ü All Saudi Government Project > $ 5 M ü All RC of J&Y projects > $ 5 M ü All Saudi Aramco projects > $ 10 ü also in UK, Germany, Francs, Australia, Korea, India, Malaysia, . . etc. Why is that ? !! 2 ü

VE Accomplishments in the Gulf Area VE Studies …. Done ü More than 500 VE Studies ü More than 6, 000 participants ü Done at the rate of 80 -100 /year ü Improved the Quality of our projects ü Saved More than $ 3 billion ü Saving ranged from 5 -30% ü Rate of return is 1 : 100 ü 7 official VE Program. 3 ü

Saudi Ministry Of Finance Mandate October 2001 ü Emphasis on Function, LCC and ROI ü Perform VE during early design stages ü Train employees on VE ü Include VE Clauses in the Design contracts ü Apply VE as follows … Ø Typical repeated projects that is > SR 5 M Ø Projects that are > SR 20 M (about $ 5 million) Ø O&M Contracts that are > SR 5 M First three years was optional then became mandatory 4 ü

This 40 -minut presentation is about What rather than How What is it? Why we do it? What makes it different? TVM Benefits Recorded results 5 ü

The 7 Phases of The VE Workshop VE Job Plan Value Circle ion Function luat Analysis No Eva Information ea r C ty it vi Follow up Decision Implementation Yes Development Presentation 6 ü

When to apply VE ? Detailed. Conformity VE Alternatives to the design, specs Goals, Objectives, Requirements to Code, standards, Define Scope Systems Design Criteria, work Makeofsure that VEP of VE 2 are implemented VEP VE 2 DR 100 Cost 10 1 & Effort Saving Acc epta nce tation nleve e m l e l p Im Planning Schematic Design & Design Development Analysis Working Drawings Construction Documents Construction Project Life Cycle Operation & Maintenance 7 ü

Who are the Decision Makers ? Who are the most influencers ? Top SM Circle of SM influence Mangers Technical, workers 8 ü

According to a survey (In Saudi Arabia, Dubai & USA 1996) Where do senior managers invest their time … ﺍﻟﻘﻴﺎﺩﺓ ﺍﻹﺩﺍﺭﺓ ﺍﻟﻌﻠﻴﺎ ﺍﻹﺩﺍﺭﺓ ﺍﻟﻮﺳﻄﻰ ﺍﻟﺘﻨﻔﻴﺬﻳﻴﻦ Actual 1 - Marketing 2 - Human Resources 3 - Projects 4 - Finance 5 - Quality Common Sense is not always Common Practice What they Say 9. . . ü

Reasons for unnecessary Costs (Poor Value) Ø Shortage of time Ø Misleading information How many Ø Ambiguous goals, objectives, scope etc. projects do you Ø Hasty decisions based on false assumption know that have Ø Lack of ideas some of these? Ø Lack of funds Ø Resistance to Change Ø Unrealistic temporary circumstances Ø Politics Ø Bad habits and attitudes, beliefs Ø Over design & Unrealistic safety factors Ø Continues changing in the owner requirements Ø Lack of communication coordination 10 Ø Using unsuitable standards & specification Ø No LCC estimate …… and more…. ü

Life Cycle Costing Space distribution for a hospital in Riyadh Circulation Administration Medical Function Services 34 27 21 12 Others 6 0 5 10 15 20 % 25 30 35 Can you believe it? ……… It is true !! 40 11 ü

Value Engineering What makes it different? Tools & Techniques 12 ü

VE Objective is … To evaluate Three issues 1 Technical 2 Operational 3 Financial 13 ü

QBS, Laptop Computer Quantifying Quality Non-Monetary Criteria A. Speed How Important 2 points for Major Preference A B. HD Capacity A/1 C. Cash Memory A/1 C D. Wireless, LAN A/D B/D C/D D E. Warranty A/1 E/1 C/E D/E E B 1 points for Minor Preference 1 point each for Same preference Q C V=Q/C Weight 4 2 3 4 3 Quality LCC Value Index % of the total 25 12 19 25 19 Points SR Q/C 5 5 5 4 125 60 95 100 TOSHIBA Satellite M 30 -114 DELL Inspiron 6000/2 IBM Think. Pad T 42 5 95 5 5 125 60 95 125 75 5 4 5 125 60 95 100 95 475 7. 79 61 480 4. 99 96 4 Rates : (5) Excellent, (4) Very Good, (3) Good, (2) Fair, (1) Poor 14 475 8. 99 ü 53

Quality Model ( Star Diagram for a Housing Project) Environmental Impact Setting the priorities Operation Engineering Effectiveness Balance Performance Quality Profile Maximum User Comfort 10 5 10 Safety & Security Minimum Schedule Image ( Site & Facility) Flexibility 15 ü

VE Accomplishments in the Gulf Area VE Training … We have two courses (offered by PMI-AGC) - Module 1 (Basic, 5 days) = 40 PDUs - Module 2 (Advanced, 3 days) = 21 PDUs TVM Course - More than 10, 000 have trained - VE Training workshops are done at the rates 60 -80 per year 16 ü

Certification in VE Total certified world wide about 3400 AVS > 350 VMP CVS 17 ü VE studies … > 80 / year ü VE Training. . > 60 / year ü Certified in the Gulf … 10% 17 ü

Success rates – KFUPM Research Why VE is successful ü Team effort ü It is Task oriented ü It takes short time ü It gets Quick results ü Many new ideas ü Acceptable Solutions 18 ü

Future Top 10 Emerging trends 2000 and beyond … by AIA, 1999 19 ü

Value Engineering TVM Benefits 20 ü

Feeling tired !!! Do not worry …. We are going to finish in 5 minutes please be patient 21 ü

Benefits for your organization ü Improve your project performance. ü Come up with many practical solution in short time. ü Improve your project design ü Customize your project Quality and scope ü Save Money, time and effort (5 -10%) ü Avoid unnecessary cost during O$M ü Minimize risk ü Simplify complicated ad open ended issues 22 ü

Benefits for your organization MOF circular ü Generate many ideas and alternative using scientific approach. ü Define suitable solutions at the least possible cost. ü Reduce cost in positive ways. ü Maintain project life span, functions, goals and objectives. ü Avoid phasing the project or deleting some of its components ü Assure best investments for government resources. ü Optimize cost of the government projects. 23 ü

Benefits for individuals ü Certify in VE (AVS, VMP, CVS) … and PMP. ü increase your decision making ability. ü Differentiate between alternatives using VE tools. ü Enhance your team work participation. ü Gain new innovative management techniques. 24 ü

VE studies are mandatory in … ü All US federal projects > $ 2 M ü All Japan projects > $ 2 M ü All Saudi Government Project > $ 5 M ü All RC of J&Y projects > $ 5 M ü All Saudi Aramco projects > $ 10 That’s Why 25 ü

Thanks for sharing the knowledge The End If you want a copy of this presentation, please bring your flash memory For more information, please visit www. alyousefi. com www. value-eng. org www. pmi-agc. com 26 ü