Value Improvement Practices

(VIP’S)

Handbook

By Kurt J Huber, CVS, Pr Tech (Eng)

VM Services Pty Limited

INDEX

1
1 Scope and Purpose of this Document.............................................................................4
2 Introduction to Value Improving Practises.......................................................................4
2.01 What is it? – Description...........................................................................................4

2.02 What is it for? – Purpose..........................................................................................6

2.03 Why VIP’s? – Justification........................................................................................6

2.04 Who does what? – Responsibilities & Ownership....................................................6

2.05 How many VIP’s need to be applied? – Quantity.....................................................7

2.06 When is the selected VIP applied? – Timing............................................................7

3 Overview......................................................................................................................... 8
4 Summary of Key Elements..............................................................................................9
5 Key Element Details......................................................................................................13
5.01 Key Element 01 - Technology Selection.................................................................13

5.02 Key Element 02 - Process Simplification................................................................15

5.04 Key Element 04 - Process Reliability Simulation:...................................................19

5.05 Key Element 05 - Customising Standards & Specifications....................................21

5.06 Key Element 06 - Design-to-Capacity....................................................................23

5.07 Key Element 07 - Classes of Facility Quality..........................................................25

5.08 Key Element 08 - Value Engineering......................................................................28

5.09 Key Element 09 - Constructability Reviews:...........................................................31

5.10 Key Element 10 - Energy Optimisation:..................................................................33

5.11 Key Element 11 - Waste Minimisation:...................................................................35

5.12 Key Element 12 - 3D CAD:.....................................................................................37

6 Planning and Execution.................................................................................................39

6.01 Base Line Data – Appropriate VIP Selection..........................................................39

6.02 Motivation / Justification and Timing (example)......................................................39

6.03 VIP Implementation Schedule (example)...............................................................40

6.04 VIP Champions......................................................................................................40

6.05 Incorporating Lessons Learned..............................................................................41

7 Application Examples....................................................................................................42
7.01 Energy Optimisation (Value Management).............................................................42

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 7.02 Value Engineering..................................................................................................46

FAST Diagram.............................................................................................................. 46
Function / Cost Analysis................................................................................................47
8 Glossary of terms.......................................................................................................... 48

3
1 Scope and Purpose of this Document

Purpose of the Document

To serve as a reference to twelve out of the ordinary project best practises that are
designed to improve cost, schedule or operational performance of a capital project.
To provide an overview of the key principles involved, and essential elements of a
structured approach to value improving practises (VIPs) which apply to all development
stages of a capital project.
To promote the use of value improving practices.
To set out the minimum extent of best practise associated with value improvement.

Scope of this Document

This document; sets out the applicability / appropriateness of VIPs on capital projects
and provides a basis for measuring the value added to projects by VIPs.
The standards set out in this document are considered applicable to all capital projects.
Capital projects that are subject to IPA independent review, will be required to demonstrate
compliance.

2 Introduction to Value Improving Practises.

2.01 What is it? – Description

VIPs are out of the ordinary practises which can provide measurable and statistically
demonstrable effects on cost, schedule and/or reliability of the constructed asset.
 Each VIP must follow a distinct and defined work process
 The VIP is not merely a detailed review of any given aspect of the project
 The results of VIP exercises must be recorded such that it is possible to assign
accountability for the incorporation of those results in a project.
The generic criteria for maximum impact and success in the use of VIPs are:
 VIP activities should be scheduled and resourced early during a projects
development life cycle. (NB this may need to include resources external to the
project team)
 VIP practises must be thoroughly done. i.e. use of best available technology –
from wherever this can be sourced.
 VIPs must be applied across the full scope of the project. Arbitrary application
will limit benefits.
 Guidelines and procedures must exist in the BU (Business Unit) project business
system to ensure that each VIP is applied consistently.

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  The results of VIP application must be documented. This provides a basis
a) for team alignment of resultant objectives
b) against which the project team can evaluate the effectiveness of the
practise, and
c) for lessons learned and root cause analysis
D) for gate release approval (FEL)

The key categories of VIP’s are defined as follows:

1. Technology selection
2. Process simplification
3. Predictive maintenance
4. Reliability Simulation and modelling
5. Customising standards and specifications
6. Design-to-capacity.
7. Classes of Facility Quality
8. Value Engineering
9. Constructability Reviews
10. Energy Optimisation
11. Waste Minimisation
12. 3D CAD

Full Handbook available during actual training