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Published byFranklin McKenzie Modified over 6 years ago
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Value Engineering What is VALUE Engineering
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Value Value Engineering Function Quality Cost Value =
F + Q C
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Value = Value Engineering 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
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Example : Value Engineering
Three types of Air Conditioning systems (A, B and C) F + Q V = C AC System Function Quality Cost Value A 8 5 6 2.16 10 B 7 10 1.7 7 C 9 7 2.29
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Value Engineering VE Definition
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Value Engineering Value Engineering Improving (upgrading) Value is Customizing Quality and optimizing the life cycle cost (LCC)
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Value Engineering Customize Quality Improve Value Optimize Cost
Not always Improving Quality Improve Value Optimize Cost Not always Reducing Cost
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Value Engineering Is actually coming up with … Useful Ideas
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Efficiency vs. Effectiveness
Value Engineering Efficiency vs. Effectiveness Efficient Do things right Useful Idea Effective Do the right thing
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VE examines Life Cycle Cost LCC
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Total Cost = Initial Cost + Follow on cost
LCC Life Cycle Costing A technique used during VE approach. If focuses on the total cost Total Cost = Initial Cost + Follow on cost Follow on costs (or Ownership cost) Are all the associated cost of running the facility. It covers energy, maintenance, repair replacement, staffing.. Etc.
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Where are the “ Hidden Costs “ ?
Life Cycle Costing Where are the “ Hidden Costs “ ? The Client Site Cost Capital cost Fees Furnishing Occupancy Cost Energy Cost Maintenance Cost Operating Cost
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Life Cycle Costing Life Cycle Costing
For a 160 bed Hospital - Life span is 25 years Case 1 : Initial Cost = SR 124 Millions 17 %
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Level of Influence on Cost
Life Cycle Costing Level of Influence on Cost
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Pareto’s Law 80 % of Total Cost 20% of the items Makes up
100 80 20% of the items Makes up 80% of the cost % of Total Cost 60 40 20 % of Items
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Value Engineering Again Why VE
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Where senior managers invest their time …
Value Engineering Where senior managers invest their time … What they Say ... Actual Common Sense is not always Common Practice
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Function Analysis Value Engineering Determine Function
Active Verb & Measurable Noun Classify Function Basic, Secondary and Required Secondary Develop FAST Relationship between functions Test Validity of functions Identify Missing functions Comprehend the project
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According to a survey (In Saudi Arabia, 1991)
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.
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Value Engineering According to KSU , 1999 When asked … after the completion of the facility:- Q. Are you satisfied with what you’ve got ? A.
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Reasons for unnecessary Costs:
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
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Value Engineering VM Stages
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1 2 3 The 3Stages of the VM Study Value Management Value Management
Pre-Study Coordination Data Preparation Team Selection Modeling VE Workshop 2 Information Function Analysis Idea Generation Evaluation Development Presentation 3 Post-Study VE Study Report Implementation Plan Follow-Up 1 - 3 Days 3 - 5 Days 1 - 4 Weeks
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The 7 Phases of The VE Workshop
Value Management The 7 Phases of The VE Workshop No Creativity Evaluation Development Value Circle Implementation Follow up Yes Decision Information Function Analysis Presentation VE Job Plan
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