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VALUE ENGINEERING

VALUE ENGINEERING. Miguel Cabezudo Nicolas Laflesselle Niklas Wilkens. HISTORY. Began at General Electric Co. during World War II. Because of the war, there were shortages of skilled labour, raw materials, and component parts.

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VALUE ENGINEERING

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  1. VALUE ENGINEERING Miguel Cabezudo Nicolas Laflesselle Niklas Wilkens

  2. HISTORY • Began at General Electric Co. during World War II. • Because of the war, there were shortages of skilled labour, raw materials, and component parts. • Lawrence Miles, Jerry Leftow, and Harry Erlicher at G.E. looked for acceptable substitutes. • What started out as an accident of necessity was turned into a systematic process. They called their technique “value analysis”.

  3. Definition of Value Analysis • Value engineering is : • An analysis of the functions of a project or service; • Directed at lowering direct and life cycle costs, without affecting performance, reliability, quality and safety. • It seeks to eliminate unnecessary costs, while maintaining or improving the functionality of the project. • It can be applied to any type or product, project or investment. It is commonly use in public works, especially infrastructure investment. • VE uses a multidisciplinary team to cover all possible needs of experience • Usage of substitutes

  4. How does it work ? • First of all: Understand the product! • Define the product by purpose, as widely as possible. Normally by combining action and addressed object. i.e. Something to ”house students” • Identify your priorities (together with your client) • ABC-rating. A = high priority, C = low priority • Percentile rating: give numbers for priorities and then compare them with the total value given • Gather possible solutions. Use an appropriate grade of abstraction. • Compare all solutions with your priorities

  5. How is the Value Engineering done ?Approach & Team VE Team Team Leader : Certified Value Specialist Team Member – Expert in Z CostEstimator Team Member – Expert in X Team Member – Expert in Y

  6. 1. Information gathering 2. Alternative creation 3. Evaluation 4. Presentation 4 Steps

  7. 1. Information gathering • Find out the essential needs • Investigate interests in the product (high functionality, low cost, sustainability and reliability, attractiveness) • Find out what the priorities are • For example: Low cost A, functionality C, sustainability C, reliability B, attractiveness B)

  8. 2. Alternative creation • Brainstorm to find ideas. • DO NOT discuss the ideas in large detail! • Orientate yourself on the essential needs. • For example: house students • Idea: Japanese box hotel • Idea: number of bungalows • Idea: old-style USSR tenement • All of these ideas are extreme in their way, but all fit the demand, so they are worth being investigated in detail

  9. 3. Evaluation • Compare your priorities with the capabilities of your ideas. • First all A priorities. Every idea not fulfilling these HAS to be declined • B priorities. Every of the remaining ideas has at least to match 50% of these. Otherwise decline it. • C priorities. The remaining ideas are to be compared with each other considering their ratings here.

  10. 4. Presentation • Work on the chosen solution in greater detail and prepare the realization

  11. What are the outputs of a VE study, and how are the findings implemented? Implementing Agency Design Team Finalizes design, incorporating recommendations accepted by IA VE Team Value Manager Executive Review Board • VE report: • Identifies basic, secondary and unnecessary functions in the project • Recommends most efficent way to achieve project’s functions VE Final Report: Whichrecommendationswillbeimplemented

  12. Different ways • There are different ways to do the value management. Nearby every book will show you different steps and milestones • However the general idea always is the same: Think alternative and use what fits best even if its totally strange

  13. Example: Project Objectives and components Strategic Objective Infrastructureprojectsachievedevelopmenttarget and delivervalue for money How does this project help ? Increasequalityofprojects Strengthenevaluation process Reduce submission, number and size of changes in scope, cost and delays How? Strengthen the institutional framework and technical capacity for value engineering and risk management in the development of infrastructure Develop standardized contract and bid documents for the project Develop project ex-post management and performance monitoring systems

  14. REFERENCES • http://www.authorstream.com/ • http://ve.ida.org/ve/ve.html • http://www.12manage.com/methods_miles_value_engineering_fr.html

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