VALUE ENGINEERINGMiguel Cabezudo

Nicolas LaflesselleNiklas Wilkens

HISTORYBegan 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”.

Definition of Value AnalysisValue 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

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

How is the Value Engineering done ?Approach & Team

VE Team

Team Leader : Certified Value Specialist

Cost Estimator

Team Member – Expert in X

Team Member – Expert in Y

Team Member – Expert in Z

4 Steps

1. Information gathering2. Alternative creation3. Evaluation4. Presentation

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)

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

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.

4. Presentation

Work on the chosen solution in greater detail and prepare the realization

What are the outputs of a VE study, and how are the findings implemented?

VE Team

VE report:• Identifies basic,

secondary and unnecessary functions in

the project• Recommends most efficent way to achieve

project’s functions

Implementing Agency

Value ManagerExecutive Review

Board

VE Final Report:Which

recommendations will be implemented

Design Team

Finalizes design, incorporating recommendations accepted by IA

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

Example: Project Objectives and components

StrategicObjective

Infrastructure projects achieve development target and deliver value for money

How does this project help ?

Increase quality of projects

Strengthen evaluation

process

Reduce submission, number and size of changes in scope, cost and

delaysHow?

Strengthen the institutional framework and technical capacity for value engineering and risk management in the development of infrastructureDevelop standardized contract and bid documents for the project

Develop project ex-post management and performance monitoring systems

REFERENCEShttp://www.authorstream.com/http://ve.ida.org/ve/ve.htmlhttp://www.12manage.com/methods_miles_va

lue_engineering_fr.html