Webinar Value Engineering March 28 2019

3/28/2019
VALUE ENGINEERING WEBINAR
1 PDU, March 28, 2019 (12:00 Noon to 1:30 PM)
DR. MANAR SHAMI, PMP

MANAGER, TRAINING & DEVELOPMENT
CCC
“PMI, Project Management Professional (PMP), Project Management Professional, PMP, the Registered Education Provider logo, PMBOK,
PgMP, PfMP, CAPM, PMI‐SP, PMI‐RMP, PMI‐ACP, PMI‐PBA, PM Network, PMI Today, Pulse of the Profession, the PMI logo, the PMP logo,
PMI Talent Triangle and PMBOK are marks of the Project Management Institute, Inc.”
Consolidated
Contractors
Company S.A.L.
© 2019 CCC TRAINING DEPARTMENT
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3/28/2019
DR. MANAR SHAMI

Manager, Training & Development‐ CCC (12 years)
Internationally know Mgt Consultant, Trainer, & Author
PhD, MEng, MSc. BSc. in Civil/Construction Mgt
University of California‐Berkeley
20 years in construction industry (US, Middle East, Europe)
10 years University Professor (civil) in the U.S. & Singapore
42 Journal papers, books and Int’l publications
Worked on projects for NASA, DoD, NGO, US Contractors
PMP, OSHA Authorized Trainer, Lean const. Consultant
Hobby: Flying, Boating, & Music
Married, Two boys! 4
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1 PDU from PMI for this course
This webinar
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Affiliations
Recommended Reading
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Handouts
PLEASE DOWNLOAD:
1. Slide deck
2. Job Plan
OBJECTIVES & TAKEAWAYS
Created using: www.wordle.net ‐ © Manar Shami
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WEBINAR SCOPE (1)
Get introduced to the concepts and techniques of VE
Learn innovative techniques to enhance project performance
Apply VE methodology to your projects
Use and benefit from function Analysis Systems Technique
Scientifically compare alternatives using WEM
WEBINAR SCOPE (2)
Integrate VE in the design process
Develop a systematic approach to reduce unnecessary
cost
Develop effective teams
Understand VE vs. other methods (TQM, Taguchi, DFA,
QFD,..)
Learn about VE certification and advancement
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OUTLINE
Module I: Definitions,
History, & Module II: The Job Plan
Fundamentals
Pre‐Study/Preparation
Information
Function Analysis
Creativity
Evaluation
Development
Presentation
Post Study/Implementation
Module I
Definitions, History, &
Fundamentals
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THE CONSTRUCTION INDUSTRY!

 Largest Industry
 Large number of companies
 High failure rate
 High risk
 Project-based
 High liability
 Weather susceptible
 Volatile
Value Engineering
Course Number: 2756-PM 350 ©2018 Dr. Manar Shami, PMP – All Rights Reserved 15
What is Value Engineering?
A proven technique using
systematic approach to seek out
the best functional balance
between cost, reliability, and
performance of a project,
product, or a service!
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What is Value Engineering?
An organized study of functions
to satisfy the client’s needs and
expectations with quality
products at the lowest life cycle
cost (LCC) through applied
creativity and innovation
What is NOT Value Engineering
Cost Cutting
Design Review
Scope Reduction!
Project Elimination
Quality Reduction
Detailed Cost Estimating
Re‐design
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History of VE
Lawrence D. Miles at General Electric, early 1940’s
Shortage of Materials during and after WWII
Substitutes or alternatives for lower cost and equal performance
Miles established FAST
VA then called VE was established by Miles as a systematic approach
US Navy and Army adopted VE from Miles
1959, the “Society of American Value Engineers” was incorporated in D.C.
SAVE International” in 1996
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TOOLS FOR THE TOOLBOX

 Management techniques
 Benchmarking
 The Theory of Inventive Problem Solving (TRIZ)
 Kaizen
 Quality Function Development (QFD)
 Design for Assembly (DFA)
 Taguchi Methods (TM)
 Constructability
 Simultaneous Engineering (SE)
 Total Quality Control
 Zero based Budgets
 MBO ……
[Source:
Richard Park –
 Value Analysis/Value Engineering
page 9]
Value Engineering
Leaders believe that the "way” it is ..... is

in the way."
Strives for 100% of their energy
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The entire organization in KAIZEN, from

the top down, understands that your
company and its processes are NEVER
GOOD ENOUGH
Definition of Constructability
26
 The optimum use of construction

knowledge and experience in planning,
design, and field operations to achieve
overall project objectives.
 Maximum benefits occur when people

with construction knowledge and
experience become involved at the very
beginning of a project
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VE, VA, VM?
Value Engineering (VE): This term is used in the
construction industry or industrial design
Value Analysis (VA): This term is used for concept
planning or process applications
Value Management: For administration and management
applications
Definitions
Function: Is the specific purpose or use intended for
something. Expressed as verb and now
Worth: The least cost required to provide the functions
that are needed by the user of the finished project.
Established by comparison!
Cost: The total amount of money required to obtain and use
the functions that have been specified
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Definitions
Value: The most cost effective
way to reliably accomplish a
function that will meet the
users’ needs desires, and
expectations
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Basic “VE” Questions
What is the purpose of the project?
What does it do?
What does it cost?
What is it worth?
What alternatives would do the same job?
What would the alternatives cost?
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Lever of Value
Project
Strategy
Project
Objectives Project
Functionality
VALUE
Project
Operations
Types of value
Use Value
Esteem value
Cost Value
Function
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FUNCTION AND WORTH

35
FUNCTION WORTH
 Is the specific purpose  Is the least cost
or use intended for required to provide the
something: functions that are
 Verb – Noun needed by the user of
the finished
project/product:
 Established by comparison
©2018 Dr. Manar Shami, PMP – All Rights Reserved
COST AND VALUE

36
COST VALUE
 Total amount of  The most cost effective
money required to way to reliably
obtain and use the accomplish a function
functions that have that will meet the
been specified. client’s/user’s needs,
desires, and
expectations!
©2018 Dr. Manar Shami, PMP – All Rights Reserved
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REASONS FOR HIGH COST (LOW VALUE)

Lack of information or ideas
Lack of time
Attitudes
Politics
Poor coordination among designers
Failure to connect with clients to understand their needs/wants
Design is based on habitual thinking or wrong beliefs
Outdated or inappropriate design standards
Incorrect assumptions based on poor information
Fixation with previous design concepts!
Value Engineering
Course Number: 2756-PM 350 37
VE TEAM
Must be multidisciplinary!
Include experts
Well balanced
[Source: Thiry – page 14]
Value Engineering
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TEAM APPROACHES
39
CONVENTIONAL TEAM
VE TEAM APPROACH
APPROACH
Source:
Dell’Isola –
page xxv
POTENTIAL SAVINGS FROM VE

40
APPLIACATIONS
Source:
Dell’Isola –
page xxiii
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Road Blocks to New or Different Ideas
Value Engineering
Road Blocks to New or Different Ideas
Value Engineering
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IT CAN’T BE DONE!
Value Engineering
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OUTCOMES OF VE IMPACTS IN
GOVERNEMNT & INDUSTRY (Million U.S. $)
45
[Source:
Dell’Isola –
page xxxiii]
Module II
The Job Plan
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VE JOB PLAN PHASES

47
[Source:
Dell’Isola –
page 369]
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Six Phases of VE JOB PLAN
1. Information
2. Function Analysis
3. Creativity
4. Evaluation
5. Development
6. Presentation
50
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1. Information
3. Creativity
4. Evaluation
5. Development
6. Presentation
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INFORMATION PHASE
Budgets and Budgeting Techniques & Cost Control Issues
Project Scope Issues
Parameters for Cost
CIAPB Objectives and Key Concepts
Preparation of Cost Models
Value Engineering
THOUGHTS
 Expose yourself to the best things
humans have done and then try to bring
those things into what you are doing. –
Steve Jobs
Value Engineering
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[Source: Dell’Isola
– page 39]
[Source: Dell’Isola –
page 48]
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QUALITY MODEL
(GENERAL FORMAT)
[Source: Dell’Isola – page 54]
Value Engineering
QUALITY MODEL
(EXAMPLE : RESEARCH BUILDING)
[Source: Dell’Isola –
page 56]
Value Engineering
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1. Information
3. Creativity
4. Evaluation
5. Development
6. Presentation
TYPES OF FUNCTIONS
 Basic Function: “What must it do?”
 Required Secondary Function
 Secondary Function: “What else does it do?”
 Unwanted?
Value Engineering
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CASE STUDY
Change attitudes
Communicate ideas
Transmit Thoughts
Record Data
Make Marks
[Source: Robert B. Contrast colors

Stewart – page 172]
Value Engineering
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1. Information
3. Creativity
4. Evaluation
5. Development
6. Presentation
THOUGHTS
 Imagination is more important than
knowledge –
Albert Einstein
Value Engineering
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CREATIVITY AND THE JOB PLAN

Pre-study: (Organization, Project & Team Selection)
Information Phase
Function Phase
Creative Phase
Evaluation/Analysis Phase
Development Phase
Presentation Phase
Post-study Phase (implement changes, monitor status)

Value Engineering
Creativity Phase – Introduction

66
 The goal is to
create quantity of
ideas by functions
 Creativity and
rules, formal
education, work
experience, age!
 Three Levels of
creativity
 Creativity vs.
innovation!
[Source: Dell’Isola – page 92]
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[Source:
Richard Park –
Example: page 296]
70
 How many
squares do
you see ?
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[Source:
Richard Park –
Example 4: page 296]
71
4
 Connect like
numbers
without 1 1
crossing lines 5
or leaving the
2 2
perimeter of
the figure! 4
3 3
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CREATIVITY : OTHER TECHNIQUES

 Analyzing the environment (4)
 Recognizing problems (9)
 Identifying problems (12)
 Making assumptions (1)
 Individual techniques for
generating alternatives (38)
 Group techniques for generating
alternatives (32)
 Techniques for choosing,
implementation & control (5)
Value Engineering
1. Information
3. Creativity
4. Evaluation
5. Development
6. Presentation
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CASE STUDY - Source: VALUE ENGINEERING MANUAL, WEST VIRGINIA DEPARTMENT OF

BRIDGE TRANSPORTATION DIVISION OF HIGHWAYS ENGINEERING DIVISION,
January 1, 2004
Value Engineering
EVALUATION PHASE
WEIGHTED EVALUATION
Example:
Car Purchase
[Source: Dell’Isola
– page 133]
Value Engineering
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1. Information
3. Creativity
4. Evaluation
5. Development
6. Presentation
MODULE VII: (DEVELOPMENT PHASE)

 Recommendations
 Key questions
- Will it improve value?

- Will it meet all requirements?
- Are there implementation problems?
- What are the advantage and disadvantages?
- What are the differences?
[Source :Dell’Isola
Page: 398]
Value Engineering
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Value Engineering
Course Number: 2756-PM 350
1. Information
3. Creativity
4. Evaluation
5. Development
6. Presentation
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81
Tell them what
they need to know
and don't tell
them what they
don't want to hear
1. Information
3. Creativity
4. Evaluation
5. Development
6. Presentation
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THOUGHTS
 A fashion that does not reach the street

is not fashion. –
Coco Chanel
Value Engineering
VE AND RISK MANAGEMENT

 “There’s never enough time to do it right the first time, but
there is always enough time to do it over if it’s wrong.”
R. Max Wideman, Fellow, PMI
 Types of Risks
 Risk Probability Impact Matrix
 Risk processes:
[planning, identification, assessment: qualitative/quantitative,

response planning, monitoring & control]
Value Engineering
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3/28/2019
VALUE ENGINEERING APPLICATIONS AT CCC

[Source: Mr. Munif Mahmoud, Managing Director]
A. Requested By Client
 When Tender Price exceeds the budget, clients usually
ask the Contractors to come up with alternative /value
engineering in order to meet the budget price.
 Clients either ask the lowest 2 bidders to give V.E. for

items determined by the Client/Consultant or they leave
to the contractor to choose the items that can be altered
and at cheaper price provided that these items can
give the same function and does not affect the design
intent.
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b. Proposed By contractor
I. Design Change
 Post-tensioned Floors to Conventional Concrete
 Conventional slabs to P.T. Slabs
 Solid Slabs to Hollow Core slabs or vice versa
 Box Girders section to I-beam section (NBT)
 Cast in-situ slab to precast slab (Aeration tanks A.S.T.P), (NBT)
 Add no. of floors (A/D Central Market) by reducing floor height
from 3.5m to 2.5m (5 stories →7 stories)
 Re-design of J.I.H.A (structure) from drop beam → flat slab will
reduce the reinforcement from 230 kg/m3 to 150kg/m3
(concrete quantity = 113,000m3), Steel Reinf. Price = 7400
Dhs/T
Case: College of Business and Computer Science (Qatar)
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Case: College of Business and Computer Science (Qatar)
II. Change in Method Statement (Constr.)
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II. Change in Method Statement (Constr.)
III. Change the Source
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CERTIFICATION LEVELS
[Source: Project Management Consulting and Training :

www.PMCTQuest.com]
Value Engineering
OBJECTIVES & TAKEAWAYS

Created using: www.wordle.net - © Manar Shami
47
3/28/2019
Congratulations
95
You have earned 1 PDU

from PMI
Your pdf certificate of

completion will be sent to
you after one hour
Consolidated
THANK YOU
Contractors
Company S.A.L.
Time for your questions
© 2019 CCC Training – Dr. Manar Shami
48

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3/28/2019

DR. MANAR SHAMI, PMP

© 2019 CCC TRAINING DEPARTMENT

DR. MANAR SHAMI

THE CONSTRUCTION INDUSTRY!

 High failure rate

TOOLS FOR THE TOOLBOX

 The Theory of Inventive Problem Solving (TRIZ)

 Quality Function Development (QFD)

 Design for Assembly (DFA)

 Taguchi Methods (TM)

 Simultaneous Engineering (SE)

 Total Quality Control

 Zero based Budgets

Leaders believe that the "way” it is ..... is

Strives for 100% of their energy

The entire organization in KAIZEN, from

 The optimum use of construction

 Maximum benefits occur when people

FUNCTION AND WORTH

©2018 Dr. Manar Shami, PMP – All Rights Reserved

COST AND VALUE

©2018 Dr. Manar Shami, PMP – All Rights Reserved

REASONS FOR HIGH COST (LOW VALUE)

POTENTIAL SAVINGS FROM VE

Road Blocks to New or Different Ideas

Road Blocks to New or Different Ideas

The Job Plan

VE JOB PLAN PHASES

Six Phases of VE JOB PLAN

Project Scope Issues

Parameters for Cost

CIAPB Objectives and Key Concepts

Preparation of Cost Models

[Source: Dell’Isola – page 54]

 Required Secondary Function

 Secondary Function: “What else does it do?”

[Source: Robert B. Contrast colors

CREATIVITY AND THE JOB PLAN

Post-study Phase (implement changes, monitor status)

Creativity Phase – Introduction

[Source: Dell’Isola – page 92]

CREATIVITY : OTHER TECHNIQUES

CASE STUDY - Source: VALUE ENGINEERING MANUAL, WEST VIRGINIA DEPARTMENT OF

MODULE VII: (DEVELOPMENT PHASE)

- Will it improve value?

 A fashion that does not reach the street

VE AND RISK MANAGEMENT

R. Max Wideman, Fellow, PMI

[planning, identification, assessment: qualitative/quantitative,

VALUE ENGINEERING APPLICATIONS AT CCC

 Clients either ask the lowest 2 bidders to give V.E. for

Case: College of Business and Computer Science (Qatar)

Case: College of Business and Computer Science (Qatar)

[Source: Project Management Consulting and Training :

OBJECTIVES & TAKEAWAYS

You have earned 1 PDU

Your pdf certificate of

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