- Slides: 25
Value Engineering What is VALUE Engineering
Value Engineering Value Function Value = Quality Function + Quality Cost = F+Q C
Value Engineering Value = Function + Quality Cost = F+Q C Function: The specific work that a product must do. Quality: Customer needs, desires and expectation Degree of excellence, Do it right at the first time Cost: The Life Cycle Cost (LCC) or Total Cost Customer: The person(s) for who the output is created Value: The lowest cost to reliably accomplishes function(s), needs, desires and expectations of the customer
Value Engineering Example : Three types of Air Conditioning systems (A, B and C) V= AC System Function Quality Cost F+Q C Value A 8 5 6 2. 16 B 7 10 10 1. 7 C 9 7 2. 29 7
Value Engineering VE Definition
Value Engineering Improving (upgrading) Value is Customizing Quality and optimizing the life cycle cost (LCC)
Value Engineering Customize Quality Not always Improve Value Improving Quality Optimize Cost Not always Reducing Cost
Value Engineering Is actually coming up with … Useful Ideas
Value Engineering Efficiency vs. Effectiveness Efficient Do things right Useful Idea Effective Do the right thing
VE examines Life Cycle Cost LCC
LCC Life Cycle Costing A technique used during VE approach. If focuses on the total cost Total Cost = Initial Cost + Follow on costs (or Ownership cost) Are all the associated cost of running the facility. It covers energy, maintenance, repair replacement, staffing. . Etc.
Life Cycle Costing Where are the “ Hidden Costs “ ? The Client Site Cost Fees Capital cost Occupancy Furnishing Cost Energy Maintenance Operating Cost
Life Cycle Costing For a 160 bed Hospital - Life span is 25 years Case 1 : Initial Cost = SR 124 Millions 17%
Life Cycle Costing Level of Influence on Cost
Pareto’s Law %of Total Cost 100 80 20% 60 of the items Makes up 40 80% 20 0 20 40 60 80 %of Items 100 of the cost
Value Engineering Again Why VE
Value Engineering Where senior managers invest their time … Actual Common Sense is not always Common Practice What they Say. . .
Value Engineering Function Analysis l Determine Function s Active Verb & Measurable Noun l Classify Function s Basic, Secondary and Required Secondary l Develop FAST s Relationship between functions s Test Validity of functions s Identify Missing functions s Comprehend the project
Value Engineering According to a survey (In Saudi Arabia, 1991) When asked … after the completion of the facility: Q. Are you satisfied with what you’ve got ? A.
Value Engineering According to KSU , 1999 When asked … after the completion of the facility: Q. Are you satisfied with what you’ve got ? A.
Value Engineering Reasons for unnecessary Costs: ¨ Lack of information ¨ lack of Ideas ¨ Temporary circumstances ¨ Honest wrong beliefs ¨ Habits and attitudes ¨ Change in the owner requirements ¨ Lack of communication coordination ¨ Using unsuitable standards & specification ¨ Others
Value Engineering VM Stages
Value Management The 3 Stages of the VM Study 1 Coordination Data Preparation Team Selection Modeling Pre-Study 1 - 3 Days 2 Information Function Analysis Idea Generation Evaluation Development Presentation VE Workshop 3 - 5 Days 3 VE Study Report Implementation Plan Follow-Up Post-Study 1 - 4 Weeks
Value Management VE Job Plan The 7 Phases of The VE Workshop Value Circle Development Presentation Function luat Analysis No Eva Information ea r C ty it vi Follow up Decision Implementation Yes