1. Abdulaziz S. Al-Yousefi, CVS TOTAL VALUE MANAGMENT TVM

2. 2 I believe in sharing knowledge with all professionals. This is one of several presentation about Total Value Management. It is part of a 3-5 days course that I frequently offer in Saudi Arabia and the Gulf Area and the Arab World. It is OK to Copy and Distribute this presentation to your collage as long as you mention the source : Abdulaziz S. Al-Yousefi, CVS Certified Value Engineering Consultant Value@alyousefi.com Please remember … the professional Ethics I appreciate your comments and feedback

3. TVM 3 Total Value Management

4. TVM 4 Total Value Management TQM VM TVM Total Value Management

5. TVM 5 Total Value Management TVM TQM VE

6. TVM 6 Total Value Management Total Quality Management (TQM) Concentrate on improving & managing… the quality of the design and the quality of doing business Value Engineering (VE) is used to identify and initiate improvements that establish a TQM attitude and awareness Total Value Management (TVM) is the synergy of both

7. TVM 7 Total Value Management U se VM to improve Value. Use TQM to improve Quality. Use TVM to improve Both. U se VM to improve Value. Use TQM to improve Quality. Use TVM to improve Both. Value = Function + Quality Cost = F + Q C

8. TVM 8 Total Value Management Quality ?

9. TVM 9 Why VALUE Engineering Total Value Management

10. TVM 10 85% Of our income comes from Oil Total Value Management

11. TVM 11 Value Engineering Oil Market Supply & demand on Oil

12. TVM 12 What is VALUE Engineering Value Engineering

13. TVM 13 When do we have " Good Value” ? ! … only if customer requirements are met Fair Cost Customized Quality Functional Efficiency Customer Requirement Results Value Engineering

14. TVM 14 Value = Function + Quality Cost = F + Q C Value Engineering Value Function Quality Cost

15. TVM 15 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 = Function + Quality Cost = F + Q C Value Engineering

16. TVM 16 Value Engineering Example : Three types of Air Conditioning systems (A, B and C) AC SystemFunctionQualityCost Value A 8562.16 B 710 1.7 C 9772.29 F + Q C V =

17. TVM 17 VE Definition Value Engineering

18. TVM 18 Value Engineering Improving (upgrading) Value is Customizing Quality and optimizing the life cycle cost (LCC) Value Engineering

19. TVM 19 Value Engineering Improve Value Value Engineering Optimize Cost Customize Quality Not always Improving Quality Not always Reducing Cost

20. TVM 20 Value Engineering Is actually coming up with … Useful Ideas

21. TVM 21 Efficiency vs. Effectiveness Useful Idea Value Engineering Effective Efficient Do things right Do the right thing

22. TVM 22 VE examines Life Cycle Cost LCC

23. TVM 23 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. LCC

24. TVM 24 Where are the “ Hidden Costs “ ? Life Cycle Costing Fees Capital cost Site Cost Occupancy Cost Furnishing Operating Cost Maintenance Cost Energy Cost The Client

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

26. TVM 26 Level of Influence on Cost Life Cycle Costing

27. TVM 27 Pareto’s Law % of Items % of Total Cost 0 20 40 60 80 100 20 40 60 80 100 20% of the items Makes up 80% of the cost

28. TVM 28 Again Why VE Value Engineering

29. TVM 29 Where senior managers invest their time … Actual What they Say... Value Engineering Common Sense is not always Common Practice

30. TVM 30 According to a survey (In Saudi Arabia, 1991) Q. Are you satisfied with what you’ve got ? When asked … after the completion of the facility:- A. Value Engineering

31. TVM 31 According to KSU, 1999 Q. Are you satisfied with what you’ve got ? When asked … after the completion of the facility:- A. Value Engineering

32. TVM 32  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 Reasons for unnecessary Costs: Value Engineering

33. TVM 33 VM Stages Value Engineering

34. TVM 34 Value Management The 3Stages of the VM Study Value Management 1 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 Days3 - 5 Days1 - 4 Weeks

35. TVM 35 VE Job Plan Value Engineering

36. TVM 36 Value Management The 7 Phases of The VE Workshop Information Implementation Follow up Yes VE Job Plan Decision Function Analysis Presentation Creativity Evaluation Development Value Circle No

37. TVM 37 Function Analysis Conventional Method VE Technique Example AC system Function is Control Temperature Alternative “Insulation” A A’ B Basic Function Value Management A

38. TVM 38 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 Function Analysis Value Engineering

39. TVM 39 اكتشاف المشكلة وحلها بعد التصميم اكتشاف المشكلة وحلها في حينها أي إثناء التصميم حل المشكلة أثناء الإنشاء 1 10 100 The 1- 10 - 100 Rule Total Value Management

40. TVM 40 Total Value Management The 1- 10 - 100 Rule The 1-10-100 rule states if a problem is not fixed when it occurs, it will only become more costly to fix later …. in terms of both time and money. 1 Preventing the problem 10 Fixing the problem before it get to the customer 100 Fixing the problem After it gets to the customer Time Cost

41. TVM 41 When to apply VE ? VEP VE DR Saving From VE Acceptance Line The 1- 10 - 100 Rule Cost & Effort Planning & Analysis Schematic Design Development Working Drawings Construction Documents Construction Operation & Maintenance Cost of Implementation Value Engineering Project Life Cycle 100 10 1

42. TVM 42 VE is Creative Team Work Value Engineering

43. TVM 43 INDIVIDUAL EFFORTS SOLUTION VE TEAM EFFORT VE APPROACH PM DesignerOwner User Engineers Value Management

44. TVM 44 Create as many ideas as possible Quantity not quality ( at this stage ) Absolutely no judgments or discussion Go Wild !! Challenge every thing (…. Even your standards ) Creativity in VE Value Engineering

45. TVM 45 Have you heard these lately ….  That’s impossible !  We don’t things that way !  We tried something like that before, and it didn’t work !  We would be laughed at !  It’s against our !  Please, be serious !  It can’t be done !  It’s my job !  We’re different !  I know that boss won’t like it !  We have been do it successfully for that last 15 years, why change! Value Engineering

46. TVM 46 Eliminate Nonsense Establish “ Evaluation Criteria “ Use “ T - Chart “ Identify Pros & Cons Rank ideas “ Out of 10 “ Select best ideas for development Ideas Evaluation Value Engineering

47. TVM 47 Idea Evaluation ACBDACBD Potential Impact HighLow Implementation Easy Hard Method 1

48. TVM 48 Idea Evaluation Method 2 : Weighted Evaluation Matrix Method 3 : 5+ system Rank out of 10, based on vote Method 4 : Conceptual Ranking High, Medium and Low Rank out of 10, based on weight

49. TVM 49 Introduction Introduction of the VE Team Members Define Scope Main topic discussed Function Analysis & FAST Diagram Presentation Format Body List of Ideas & Recommendations ( 20-30 ideas ) Total Saving (Addition ) Talk about 10 VEP Present at least one WEM and one LCC Conclusion Value Engineering

50. TVM 50 Relax and talk informal ( Conservation mode ) Speak rapidly ….but not quickly Face the audience, look in the eye ( 3-5 seconds ) Learn your presentation point by point Be excited and enthusiastic Use clear good AV You do not have to answer all the questions. Face the people concerned ( Decision maker ) Practice, Practice, Practice …see your self. How to present Value Engineering

51. TVM 51 Management Doing a good VE Study is not enough If the VEPs are not Implemented We have done nothing

52. TVM 52 Value Management In life … Every thing is created 3 times Idea VEP Solution

53. TVM 53 Management ???

54. TVM 54 A problem-solving process of effectively achieving organization objective through the efficient use of scarce resources in the changing environments What is Management ? Source : Management : a problem solving process It can be defined as … Management This is … actually Value Management

55. TVM 55 “ The application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectation from the project “ What is Project Management ? Source : PMPOK Management

56. TVM 56 Value Management (FITT Program ) How to assure the success of the VE Program Management We need the right Leader or Facilitator F Information I Timing T Team T

57. TVM 57 Total Quality Management Total Quality Management TQM

58. TVM 58 Quality Philosophy  InspectionProblem to be solved  QCProblem to be solved  QAProblem to be solved  TQMStrategic Quality Management Total Quality Management

59. TVM 59 Total Quality Management What is TQM ?  There is no agreeable definition exist.  Different authors tried to define it differently.  A group of thoughts and principles. It consists of methods, tools and techniques and years of experience.

60. TVM 60 Total Quality Management  Total Overall integrated and continuous effort from the CEO to the labors (all departments involved)  Quality Meeting the customer needs, desires and expectations  Management The process of performing activities through the efficient use of resources Total Quality Management

61. TVM 61 Total Quality Management TQM is : A cooperation form of doing business that relies on the capability of both labor and management, using teamwork, to continuously improve quality, economy and productivity to the complete satisfaction of the customer. Source: Dick Sharad

62. TVM 62 Total Quality Management Continuous Quality Improvement Act Plan Do Check TQM Maintain momentum, give recognition Report progress, keep score, communicate result Organize to reach the goals,train, solve problem Build awareness of needs, set goals

63. TVM 63 Total Value Management Total Value Management TVM

64. 64 Total Value Management Owner Designer Constructor CustomerSupplier Requirements Supplier Customer Plans Specs Codes etc. Facility $$$$$ Customer-Supplier Loop

65. TVM 65 CSCS CSCS CSCS CSCS SCSC SCSC SCSC SCSC SCSC SCSC Total Value Management Customer Network

66. TVM 66 Total Value Management Cost of Quality Management  Crosby: “ What costs money are the unquality things … all the actions that involve not doing jobs right at the first time”  Deming : “Inspection does not improve quality, nor guarantee quality. Inspection is to late”  Juran: “20-40% of the companies efforts are spent in redoing things that went wrong because of poor quality”

67. TVM 67 Total Value Management Who is responsible of Quality Problem ?  Crosby :Senior management is.  Deming:Senior manager is responsible for 94% of quality problem.  Juran:Senior manager is responsible for 80% of quality problem

68. TVM 68 Total Value Management Total Value Management (TVM) Can be defined as … An organizational improvement methodology that focuses on needs & processes in order to customize quality, optimize cost, integrate work, increase functional efficiency and shorten process cycle time.

69. TVM 69 Total Value Management Cause-and-effect Diagram by Ishikawa Also call the fishbone Diagram TimeMaterialsMethodMachine Energy Environment Personnel Measurement Major Defect Cause Effect

70. TVM 70 Total Value Management TVM Principles Customer Focus Communication On going Improvement Decisions Based on Facts

71. TVM 71 Total Value Management Level of Communication Defensive (Win/Lose or Lose/Win ) Respectful (Compromise) Synergistic (Win/Win ) High Trust Low HighCooperation

72. TVM 72 TVM Total Value Management TVM Role Out Are the desired and actual the same ? If not recycle Is it effective ? Is it efficient ? What is the actual ? What is desired ? What are the causes for the deference ? Analyze & Synthesize Value Engineering Vertical Thinking Lateral Thinking Systematic Thinking Intuitive Thinking ImproveIdentify MeasureThink

73. TVM 73 Total Value Management Many of unacceptable quality due to … the approach taking during design and … in management Total Quality Management (TQM) Concentrate on improving & managing… the quality of the design and the quality of doing business Value Engineering (VE) is used to identify and initiate improvements that establish … at TQM attitude and awareness Total Value Management (TVM) is the synergy of both used to identify and initiate improvements that establish … at TQM attitude and awareness

74. TVM 74 Total Value Management VE and TQM Integration Integrating VE with TQM would results in the involvement of managers and engineers in a totally integrated effort toward improving performance at every step. Application of VE with the TQM approach will more closely achieve the desired concept of the owner and the end user.

75. TVM 75 Total Value Management U se VM to improve Value. Use TQM to improve Quality. Use TVM to improve Both. U se VM to improve Value. Use TQM to improve Quality. Use TVM to improve Both. Value = Function + Quality Cost = F + Q C

76. TVM 76 is a Systematic Approach to manage cost through Innovative Change is a Systematic Approach to manage cost through Innovative Change VALUE ENGINEERING Change

77. TVM 77 Change is to Progress Change The only constant thing is Change VE makes Change on purpose

78. TVM 78 Total Value Management Conclusion  It is time to expand the concept of Value & Quality and VE/VM/VA.  Treat the way we think & see things … as variable.  Without discontent, there is no change.  TVM challenges the status quo.  TVM create quality culture.

79. TVM 79 For more information SAVE International www.value-eng.org value@value-eng.com TVM Serviceswww.alyousefi.com Value@alyousefi.com Engineering CommitteePresident SAVE International Arabian Gulf Chapter www.saudieng.org