1. Value Engineering
What is
VALUE Engineering

2. Value Value Engineering Function Quality Cost Value =
F + Q C

3. 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

4. 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

5. Value Engineering VE
Definition

6. Value Engineering
Value Engineering
Improving (upgrading) Value is Customizing Quality and optimizing the life cycle cost (LCC)

7. Value Engineering Customize Quality Improve Value Optimize Cost
Not always
Improving Quality
Improve Value
Optimize Cost
Not always
Reducing Cost

8. Value Engineering Is actually coming up with … Useful Ideas

9. Efficiency vs. Effectiveness
Value Engineering
Efficiency vs. Effectiveness
Efficient
Do things right
Useful Idea
Effective
Do the right thing

10. VE
examines
Life Cycle Cost
LCC

11. 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.

12. 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

13. Life Cycle Costing Life Cycle Costing
For a 160 bed Hospital - Life span is 25 years
Case 1 : Initial Cost = SR 124 Millions
17 %

14. Level of Influence on Cost
Life Cycle Costing
Level of Influence on Cost

15. 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

16. Value Engineering
Again
Why VE

17. 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

19. 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

20. 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.

21. Value Engineering
According to KSU , 1999
When asked … after the completion of the facility:-
Q. Are you satisfied with what you’ve got ? A.

22. 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

23. Value Engineering VM
Stages

24. 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

25. 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