VM SAVE International providing value ….. to the world VM Briefing SAVE International introduces...
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VM
SAVE InternationalSAVE InternationalSAVE InternationalSAVE International
providing value ….. to the worldproviding value ….. to the world
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SAVE International
introduces
“Value Methodology”
Presentationversion 1
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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:
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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.
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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
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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
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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
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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
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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
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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
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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 ?
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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
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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
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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
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Value Study Presentation Phase
Present Study Results
Issue Report
Determine Next Steps
Obtain Commitments to Implement Alternatives
Pre Study
ValueStudy
Post Study
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Post Study Complete Changes
Implement Changes
Monitor Status
Pre Study
ValueStudy
Post Study
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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
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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
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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
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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
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International Affiliates Japan 40 year History Industry, Management,
Construction, Electronics India
25% of Companies use VM Hungary
Newest Affiliate Additional Members in 30
countries
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Reasons for Low Value:
Pride
Built-In Resistance
Lack of Time
Habits (comfort factor)
Customers Priorities
Lack of VM Budget
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Improving Value Increase Awareness of VM
Involve all Participants
Schedule VM as Routine Activity
20:1 Improvement
Innovative Solutions
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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
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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
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Closing Statement
Value Methodology
is a Value Added service that demonstrates your organization’s
commitment to be:
“Customer Focused” and
“Responsive to Emerging Needs”