save international introduces “ value methodology ” presentation version 1

VM

SAVE InternationalSAVE InternationalSAVE InternationalSAVE International

providing value ….. to the worldproviding value ….. to the world

VM BriefingVM BriefingVM BriefingVM Briefing

SAVE International

introduces

“Value Methodology”

Presentationversion 1

VM




What Is It?History of VM & SAVEWhy Use It?Who Uses It?How Is It Applied?

Methodology Function Analysis

Example ApplicationsReasons for Low ValueNext Steps

SAVE Membership Training, Certification

VM in the next Millennium

Agenda:

VM




What is It:

Value Methodology (synonyms: value analysis, value engineering and value management)

... function-oriented, systematic, team approach to add customer value to a program, facility, system, or service. Improvements like performance, quality, initial and life cycle cost are paramount in the value methodology.

VM




Brief History: Began at GE early 1940’s 1947 - Value Analysis

Lawrence D. Miles “Father of VM”

1954 - Value Engineering U. S. Navy

Society of American Value Engineers (SAVE)

Formed in 1959 Value Management, Value

Control, Value Improvement SAVE International

Name change 1996

VM




Why Use It: Customer Satisfaction Performance Improvement Productivity Improvement Quality Improvement Time Saving Proven over 50 years Functions Achieved Results Oriented

Enhanced operation 5 - 15% cost savings Lower life cycle costs Increased revenue

Benefit to cost 20:1

VM




Who Uses It: Construction ASTM E-1699

Manufacturing / Industry ISO Certification

Transportation Environment Health Care Services & Systems Government

OMB Circular A-131 Public Law 104-106

VM




How is it Applied? Methodology PRE-STUDY

VALUE STUDY• Information Phase

• Function Analysis Phase

• Creative Phase

• Evaluation Phase

• Development Phase

• Presentation Phase

POST-STUDY

Pre Study

ValueStudy

Post Study

VM




Value Study Information Phase Review Data Package Present Study Overview

• Stakeholder Briefing

Review Project• Background / History

Determine Value Study Expectations

Visit Site Conduct Interview

Pre Study

ValueStudy

Post Study

VM




Value Study Function Analysis Phase Identify Functions

• Verb / Noun Classify Functions

• Basic, Secondary Model Functions

• FAST, Hierarchy Establish Function Worth Determine Function Costs Establish Value Index Select Functions for Study

Pre Study

ValueStudy

Post Study

VM




Define Functions Basic Function

Defines a performance feature that must be obtained

Satisfy only user’s needs not desires - What must it do ?

Secondary Function Defines performance features

other than those that must be accomplished

Are user’s desires rather than needs - What else can it do ?

VM




Value Study Creativity Phase

Reduce Roadblocks

Brainstorming, Check Lists, & Other Techniques

Produce Solutions, QUANTITY of ideas to accomplish FUNCTIONS in alternative ways

Synthesize Ideas

Pre Study

ValueStudy

Post Study

VM




Value Study Evaluation Phase

Rank & Rate IDEAS

• Functional Compliance

• Eliminate Nonsense

• Cost Impacts

• Schedule Changes

• Project Objectives

• Study Goals

Select IDEAS for Development

Pre Study

ValueStudy

Post Study

VM




Value Study Development Phase Create Benefit Analysis Review Technical Criteria Complete Descriptions

• Original and Proposed Produce Support Material

• Charts, Graphs, Drawings Perform Cost Analysis

• Original and Proposed Determine Life Cycle Costs Generate Implementation

Plan

Pre Study

ValueStudy

Post Study

VM




Value Study Presentation Phase

Present Study Results

Issue Report

Determine Next Steps

Obtain Commitments to Implement Alternatives

Pre Study

ValueStudy

Post Study

VM




Post Study Complete Changes

Implement Changes

Monitor Status

Pre Study

ValueStudy

Post Study

VM




Example Applications: Construction

Criminal Court Complex New York, NY Improved Function Reduced Required Area Enhanced Operations Added New Technology Improved Master Planning $412 million LCC savings

Veterans Administration Hospital, Dayton, Ohio Improved Layout No Functional Reduction $3.8 million LCC savings

VM




Example Applications: Manufacturing / Industry

Heat Pump Project Changed design so that all

parts were at 90o to others $229,655 savings Reduced material needed

Catenary Anchor Leg Moored (CALM) Oil Transfer Buoy Survive Accidents Better $17,000 savings per unit Doubled no. of bulkheads

VM




Example Applications: Transportation

U.S. Highway 31, Miles, Michigan

Eliminated Unnecessary Functions

Reduced Costs of Required Functions

Made Design more Cost Effective

$1,000,000 savings

VM




Example Applications: Government

Targeting Navigation System for U.S. Army’s Apache Helicopter Reduced Maintenance Simplified Assembly Improved Durability $390 million savings

Patriot Missile Improved Reliability Enhanced Useful Life $134 million savings

VM




International Affiliates Japan 40 year History Industry, Management,

Construction, Electronics India

25% of Companies use VM Hungary

Newest Affiliate Additional Members in 30

countries

VM




Reasons for Low Value:

Pride

Built-In Resistance

Lack of Time

Habits (comfort factor)

Customers Priorities

Lack of VM Budget

VM




Improving Value Increase Awareness of VM

Involve all Participants

Schedule VM as Routine Activity

20:1 Improvement

Innovative Solutions

VM




VM in the Next Millennium:

Expanded Role Technological Advancements More Strategic Applications Expanded Focus on New

Markets & Businesses Worldwide Team of Experts Comprehensive Use Improved Customer

Communications

Goal: World Class Value

VM




VM in the Next Millennium:

“VM is moving into a new cycle of high visibility, and we (SAVE International) must be proactive rather than reactive to this move.”

Joe Lambert, CVS, President, SAVE

International

VM




Closing Statement

Value Methodology

is a Value Added service that demonstrates your organization’s

commitment to be:

“Customer Focused” and

“Responsive to Emerging Needs”

save international introduces “ value methodology ” presentation version 1

Documents