ValueEngineering

MethodologyInConstruction

Fadi Elayache, Dubai 2010

Alliances

Overview

What is Value Engineering?

How Do we Apply VE?
When is it used?
Value Engineering Six Steps Plan?
VE Case Studies

Value Engineering the

Forgotten Technique
Originally called Value Analysis by its inventor, Larry
Miles, an engineer in GE's purchasing operation in
1947, VA/VE uses a value equation that says value is
equal to function divided by cost. If, for example, the
buyer wants to get more item value, he/she needs to
either increase the item's functionality at the same time
he/she is containing cost; or he/she needs to reduce cost
while holding or improving its functionality. Either
way, the result is more value for the customer
Ref: Purchasing Magazine - "Value Analysis makes a
comeback," Jim Morgan, November 20, 2003.").
4

What is Value Engineering?

Value Engineering (VE) is an intensive,
interdisciplinary problem solving activity that focuses
on improving the value of the functions that are
required to accomplish the goal, or objective of any
product, process, service, or organization.
VALUE METHODOLOGY
The systematic application of recognized techniques
which identify the functions of the product or service,
establish the worth of those functions, and provide the
necessary functions to meet the required performance at
the lowest overall cost.
Ref: John M. Bryant, VM Standard, Society of American Value
Engineers, Oct. 1998
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Concept of Value

FUNCTION
VALUE =
COST

Concept of Value Desirable

Ideal

Value =

Good

Function
Cost

Acceptable

Passable

Function
Cost
7

Concept of Value
Undesirable

Undesirable but Passable

(cheapening the
product)

Value =

Function
Cost

Function
Cost
8
8

When Value Engineering is

Used

Value Engineering is used to determine the best design

alternatives for Projects.
Value Engineering is used to reduce cost on existing Projects.
Value Engineering is used to improve quality, increase
reliability and availability, and customer satisfaction .
Value Engineering is also used to improve organizational
performance.
Value Engineering is used to improve schedule
Value Engineering is used to reduce risk
Value Engineering is a powerful tool used to identify
problems and develop recommended solutions.
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Potential Saving from VE

Re-Test Feasibility
Drawings Released

Cost

Design Changes

Net Savings from VE

Total Cost of VE Implementation

VE Implementation
beyond this point
results in a net loss.

Concept

Design

Construction
Dwgs Release

TIME

Construction
10

Value Study Diagram

11

Six Steps VE Plan

Information
Information
Phase
Phase

** Clearly
Clearlyidentify
identifythe
theproblem(s)
problem(s)to
tobe
besolved,
solved,and
and
gather
gatherinformation
informationon
onthe
thebackground,
background,functions
functionsand
and
requirements
requirementsof
ofthe
theproject.
project.

Functional
Functional
Analysis
Analysis

** What
Whatmust
mustthe
theproject
projectdo?
do?What
Whatare
arethe
thefunctions
functions
and
andhow
howare
arethey
theyrelated?
related?

Creativity
Creativity
Phase
Phase

** Brainstorm
Brainstormideas
ideason
onhow
howtotoimprove
improvethe
thehigh
highcost,
cost,
broken,
broken,or
orinadequately
inadequatelyperformed
performedkey
keyfunctions.
functions.

Evaluation
Evaluation
Phase
Phase

** Screen
Screenideas
ideasfor
foracceptance,
acceptance,score
scoreremaining
remainingideas
ideas
on
onaascale
scaleand
andgroup
groupideas
ideasinto
intocategories.
categories. Develop
Develop
design
designscenarios,
scenarios,and
andselection
selectioncriteria.
criteria. Rate
Rateand
and
rank
rankideas.
ideas.

Development
Development
Phase
Phase

** Plan
Planhow
how to
tosell
sellideas
ideasto
tomanagement,
management,identify
identifykey
key
recommendations,
recommendations,plan
planmanagement
managementpresentation.
presentation.

Reporting
Reporting
Phase
Phase

** Give
Giveoral
oralpresentation
presentationtotomanagement,
management,or
ordevelop
develop
written
writtenreport.
report.

Information Phase
Facts Finding

What do you need to know about the problem

that you dont know now?
What facts are known?
What are the requirements of the system?
Are these facts, opinions, assumptions, or
prejudices?

Where or how can information be obtained?

13

Functional Phase

1
2
3
4
5
6

Functions - Describe what something does

Functions - Use active verb and measurable noun
FAST (Function Analysis System Technique) - A logic
diagram to describe how a system works.
Examples :
Secondary Functions
Plan
Finishing Material
Magnify Living Room Area
Reduce Wall Thickness
Design Exposure
Minimize Defect
Design Finishing

Key Function :
Satisfy Tenant

14

Function Analysis

1
2
3
4
5
6
7
8
9
10

Secondary Functions
Design Unit Plan
Put
Cavity Wall
Control Temperature
Minimize Exterior Surface
Execute Natural Ventilation
Maintain Cleanliness
Supply Air Conditioner
Keep
View
Install
Insulation
Control Humidity

Key Function :
Maintain Facility

15

Function Analysis

1
2
3
4

Secondary Functions
Supply Pipeline Space
Design Ventilation Space
Provide Elec. Pipe Space
Add
Sewage Space

Secondary Functions
1 Arrange Wall
2 Collect Opinion
3 Install
Art

Key Function :
Install Equipment

Key Function :
Design Interior

16

Creativity Definition
Creativity is the art of
bringing something
new into existence.

It has the art of making,

inventing, or producing
something new and
different.

17
17

Creativity & Innovation

You must blast before you can
create. Blow apart the
misconceptions, skeptics, and
naysayers. Blow-up the
preconceived ideas and
common theories of how
things should be done.
Rather, focus on possibilities.
J. R. Wixson - 2004

18

Imagination
Imagination is more important than
knowledge, for knowledge is limited,
while imagination embraces the entire
world.
Albert Einstein

19

Thought of the Day

When you always do what you have
always done - you always get what
you have always gotten.
Socrates

20

IDEAS Vs Solutions

A solution requires justification &

validation, and idea needs no justification.
A solution is an end point, an idea is just
the beginning.
A solution is solid and self supporting, an
idea is tender and must be built upon.
DONT KILL IDEAS WITH
ROADBLOCKS!!
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Information for Skeptics

INNOVATION
"... after a few more flashes in the pan, we shall hear very
little more of Edison or his electric lamp. Every claim he
makes has been tested and proved impracticable."
[New York Times, January 16, 1880]
AEROSPACE
"Heavier-than-air flying machines are impossible."
[Lord Kelvin, president, Royal Society, 1895]
"Airplanes are interesting toys but of no military value."
[Marechal Ferdinand Foch, Professor of Strategy, Ecole
Superieure de Guerre]
22

Information for Skeptics

COMPUTATIONAL SYSTEMS
"I think there is a world market for maybe five
computers., [Thomas Watson, chairman IBM, 1943]
"There is no reason anyone would want a computer in
their home." [Ken Olson, Chairman and founder Digital
Equipment Corp., 1977]

"640K ought to be enough for anybody." [Bill Gates, 1981]

23

Counter Skepticism

Tilt-up Construction is an
innovative construction
method that will replace
traditional construction of
low and mid rise buildings
in the Middle East within
few years
Fadi Elayache 2010

24

Counter Skepticism
Aluminum Honeycomb System is an Innovative
Solution for Stone Cladding of High Rise Buildings
Vincenzo Portciello, 2010

25

Counter Skepticism
Mateen-bar will replace steel reinforcement in structures
exposed to aggressive environmental conditions in the
Middle-East , Fadi Elayache 2010

26

Rules of Brainstorming

Generate a large number of ideas - quantity,

not quality.
Free-wheeling is encouraged - Listen and
improve on the ideas of others.
Dont criticize - No evaluation of ideas
Encourage everyone to participate
Record all ideas presented
Time to let ideas incubate should be allowed.
Select an appropriate meeting place
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More Creativity

Creative Ideas &

Innovative Solutions Will
be covered in the VE
Case Studies

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Evaluating Ideas

GO - NO GO
Scratch ideas that hold no interest.
CHAMPION
Who will speak for the ideas and support them?
GFI (Gut Feel Index)
Discuss pro/con and vote. GFI is team average.
Combine ideas; add new ideas.
Record all assumptions when voting.
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Performance Comparison
Performance Comparison Matrix
Criteria

Option A

Option B

Option C

Option D

Fire Resistance & Safety

Flexibility in Applying Finishes

Score
Roof Finishes
Maintenance

1
6

2
9

3
15

3
15

Aesthetics
Ease of Installation (skilled
labor requirement)
Score

Total Score

18

24

36

36

Roof Structure
Constructability
Weather Resistance &
Durability
Thermal Resistance

1= Acceptable
2= Good
3= Excellent

30

Cost Comparison
Option A Cost Estimate - Curved Steel Beam +
FRP Cladding
Unit

Quantit
y

Unit
Cost
(AED)

Total Cost
(AED)

Roof Structure: Curved

Steel Beams + Purlins +
Intermediate Steel
Members

ton

120

28,000

3,360,000

Metal Deck

sqm

1,520

350

532,000

CIP Concrete (150mm)

sqm

1,520

80

121,600

Waterproofing + Rigid
Insulation Boards +
Protection

sqm

1,520

85

129,200

FRP Panels

sqm

1,520

400

608,000

F.C. Suspension System

ton

30

28,000

851,200

F.C. Gypsum Board

sqm

1,194

100

119,400

Description

Sub Total
Total (including 15%
Contractor's Prelims,
Overhead & Profit)

5,721,400
6,579,610

Option D Cost Estimate - PT Concrete Slab + FRP

Cladding
Unit
Total
Quantit
Description
Unit
Cost
Cost
y
(AED)
(AED)
Roof Structure:
Post Tension
cum
389
3,100
1,205,900
Concrete Roof
Slab
Waterproofing +
Polyurethane
sqm
1,520
85
129,200
Foam Insulation
+ Protection
FRP Panels
F.C. Suspension
System
F.C. Gypsum
Board
Sub Total
Total (including
15% Contractor's
Prelims, Overhead
& Profit)

Cost Saving of 4 million AED

sqm

1,520

400

608,000

sqm

1,194

100

119,400

sqm

1,194

100

119,400
2,181,900
2,509,185

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Development Phase

Planning
What is recommended?
Who has to approve it?
What is the implementation plan?
Are mockups or prototypes required to
verify final decisions?
What are the cost, schedule, and
deliverables?
ROI?
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Action Plan

What needs to be done?

Who should be assigned the action?

Assign a team member.

Assign a completion date for the action.

When should the task be completed?

Plan regular team status meetings.

Anticipate 4-6 weeks to complete the actions.

33

Plan for Roadblock

34

Reporting
Give

oral presentation.
Support it with written executive brief.
Be clear, concise, and positive.
Anticipate roadblocks
Use good human relations.

35

Follow up Activity

h
h
h

Recognize the participants.

Publicize the results.
Audit the performance of the
implemented actions.
Close out the project.

36

Case Studies
Replacing Piles with Footings
Worked Performed:
Replacing 43 piles
with isolated footings
outcome

1- Cost Savings = 1,119,000 AED

2- Time Saving = 2 months
3- Easier, tidier and safer
construction

37

Case Study- Resizing &

relocating Water Tank
Worked Performed:
1- Reducing size from 14,384 to 7000 m3
2-Remove 100 piles
3- Minimize depth to avoid excessive
excavation in sandstone layer
4- Relocate WT Under footprint of Bldg
outcome
1- Cost Savings = 7,930,000 AED
2- Time Saving = 3 months
3- Easier, tidier and safer construction
4- Regain Land space
38

Case Study- Lagoon Depth, walls

& liners
Worked Performed:
1- Reducing depth by 1.25 m about 50000 m3
2- Replace CIP Reinforced Concrete walls with Pre-cast panels
3- Incorporate underwater theming within pre-cast panels
4- Use Double liners instead of concrete floor with 2 stages installation
5- Introduce leakage detection system in lagoon bottom and behind
wall
outcome
1- Cost Savings = 8,338,600 AED
2- Time Saving = 2 months
3- Easier constrction
39

Case Study- Lagoon Depth

Five pits were used instead of one To reduce
Lagoon Depth by 1.25 m and achieve more
effective collection of sediments

40

Case Study- Lagoon Walls

Recommendations for the 1675

m long lagoon perimeter:
1- To Use Gravity Precast panels
Instead of CIP reinforced
concrete walls
2- To use 6 Deg tilted walls
instead of vertical walls to
reduce footing sizes
3- Incorporate theming in
Underwater precast Panels to
reduce cost
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Case Study- Floor Liners

Recommendations for the 40000 m2

Floor 2 liners instead of one liner and
concrete floor:
1- To Use double liners, one 1.5 mm
and the 2nd 0.5mm thick separated
with granular layer
2- To provide leakage detection
system as shown
42

Case Study- 40 m Dome

Structure
Recommendations for the 30 and
40 m LH Domes
1- To use PT Concrete curved Roof
instead of Steel
2- Eliminate Fire Proofing
3- Reduce Thermal Insulation
4- Reduce Suspension System of
False Ceiling.
outcome

1- Cost Saving of 4,385,065 +

2,466,600 for the 40 and 30 m
Domes respectively
2- No Time impact
3-Similar construction Risk
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Case Study Displaced Cooling

Recommendations for Air Displacement

System
1- To use Conventional Ventilation
Instead
2- To reduce interference Among trades
3- To manage risk of potential
scheduling conflict
outcome
1- Cost Saving of 891,625
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Our VE Services
We Partner With Consultants & Developers to provide:
Value Engineering Services for all project Phases,
Conceptual, Design, & construction
In House Training of Project Team for Value Engineering
Analysis

We partner with Contractors for:

Preparation of value Engineered alternatives
proposals at the tender stage
Proposing Value Engineered alternatives during
construction.
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References
1. Value Standard and Body of Knowledge ; Save International, June
2007
2. J.R. Wixon, Value Engineering The Forgotten Lean Technique,
University of Idaho, Industrial Technology Program.
3. J.Jerry Kaufman & Jimmie L. Carter Evaluating Brainstorming Ideas
1994
4. Chi-Sung in et al, Hierarchical Concept Modules for improving Function
Analysis of Construction VE Process,
5. Fadi Elayache, work Experience with Parson Brinkerhoff ME, Sr. PM
Theme Park, 2008

Thanks
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