From PMBok (Project Management Body of Knowledge) Guide Value Engineering is a creative approach used to optimize life-cycle costs,

save time, increase profits, improve quality, expand market share, solve problems, &/or use resources more effectively From SAVE International (Society of American Value Engineers) Value Engineering is a systematic application of recognised techniques which identify the function of a product or service, establish a monetary value for that function, and provide the necessary function reliability at lowest overall cost. What is Value Engineering? Value Engineering is a fuction oriented, systematic team approach and study to provide value in a product, system or service. Often, this improvement is focused on cost reduction; however other important areas such as customer perceived quality and performance are also of paramount importance in the value equation. Value Engineering techniques can be applied to any product process procedure system or service in any kind of business or economic activity including health care, governance, construction, industry and in the service sector. Value Engineering focuses on those value characteristics which are deemed most important from the customer point of view. Value Engineering is a powerful methodolgy for solving problems and/or reducing costs while maintaining or improving performance and quality requirements. Value Engineering can achieve impressive savings, much greater than what is possible through conventional cost reduction exercise even when cost reduction is the objective of the task.

When to use it Use Value Analysis to analyze and understand the detail of specific situations. Use it to find a focus on key areas for innovation.

Use it in reverse (called Value Engineering) to identify specific solutions to detail problems. It is particularly suited to physical and mechanical problems, but can also be used in other areas.

How to use it Identify and prioritize functions Identify the item to be analysed and the customers for whom it is produced. List the basic functions (the things for which the customer is paying). Note that there are usually very few basic functions. Identify the secondary functions by asking How is this achieved? or What other functions support the basic functions?. Determine the relative importance of each function, preferably by asking a representative sample of customers (who will always surprise you with what they prefer). Analyze contributing functions Find the components of the item being analyzed that are used to provide the key functions. Again, the question How can come in very useful here. Measure the cost of each component as accurately as possible, including all material and production costs. Seek improvements Eliminate or reduce the cost of components that add little value, especially high-cost components. Enhance the value added by components that contribute significantly to functions that are particularly important to customers. How it works Value Analysis (and its design partner, Value Engineering) is used to increase the value of products or services to all concerned by considering the function of individual items and the benefit of this function and balancing this against the costs incurred in delivering it. The task then becomes to increase the value or decrease the cost.

The Job Plan Value engineering is often done by systematically following a multi-stage job plan. Larry Miles' original system was a six-step procedure which he called the "value analysis job plan." Others have varied the job plan to fit their constraints. Depending on the application, there may be four, five, six, or more stages. One modern version has the following eight steps: 1. 2. 3. 4. Preparation Information Analysis Creation

5. 6. 7. 8.

Evaluation Development Presentation Follow-up

Four basic steps in the job plan are: Information gathering - This asks what the requirements are for the object. Function analysis, an important technique in value engineering, is usually done in this initial stage. It tries to determine what functions or performance characteristics are important. It asks questions like; What does the object do? What must it do? What should it do? What could it do? What must it not do?

Alternative generation (creation) - In this stage value engineers ask; What are the various alternative ways of meeting requirements? What else will perform the desired function?

Evaluation - In this stage all the alternatives are assessed by evaluating how well they meet the required functions and how great will the cost savings be.

Presentation - In the final stage, the best alternative will be chosen and presented to the client for final decision.

How it works VE follows a structured thought process to evaluate options as follows. Gather information 1.What is being done now? Who is doing it? What could it do? What must it not do? Measure 2.How will the alternatives be measured? What are the alternate ways of meeting requirements? What else can perform the desired function?

Analyze 3.What must be done? What does it cost? Generate 4.What else will do the job? Evaluate 5.Which Ideas are the best? 6. Develop and expand ideas What are the impacts? What is the cost? What is the performance? 7.Present ideas Sell alternatives

TEAM SELECTION 1. TEAM STRUCTURE The District Value Engineer (DVE) shall review potential team members and coordinate the selection of team member disciplines with the Project Manager. Teams should be structured to include appropriate expertise to evaluate the major areas anticipated within the project. At a minimum, design, construction, and maintenance shall be represented on the team. In the event of specialized projects, individuals with specific expertise necessary to perform a proficient value engineering study should be included in the team makeup. For federal-aid projects, anyone directly involved in the design of the project should not be a team member, but is expected to participate as an information source. The VE study shall be independent of other design reviews.

The districts shall determine whether to utilize Department personnel, consultant personnel, or a mixture of both to form the team. 2. DEPARTMENT TEAM LEADER/MEMBER CRITERIA Department employees serving as team leaders, under the supervision of the DVE, shall have the responsibility for conducting the assigned project review in accordance with these procedures. Prior to leading a team, employees must have served as a team member on at least two VE studies, must have attended a VE team member training workshop, and must have attended a team leader training course. Team members who have not received formal VE training or participated on a previous VE study led by a CVS or DVE may participate on a team; however, they should not be the primary team member responsible for one of the required disciplines. 3. CONSULTANT TEAM LEADER/MEMBER CRITERIA Consultant team leaders must meet the following qualifications: 1. A CVS with experience in the value engineering process for transportation system facilities. 2. A Professional Engineer registered in the State of Florida with proficient knowledge and experience related to the design and/or construction of transportation system facilities.. The role as consultant team leader may be filled by one individual or by two individuals serving as co-team leaders; however, those individuals fulfilling the above qualifications shall be from the contracted consulting firm or their sub-consultants. A consultant team member shall be a technical person with proficient knowledge and experience in the required discipline.

Some benefits provided by Value Engineering are: High return on investment Reduced capital costs Improved project schedules Value Engineering creates an environment in which your teams can find creative solutions to complex problems Develops common objectives Changes problems to opportunities Team building Creates cost awareness Improved personal thinking skills Decreased costs Increased profits Improved quality Effective use of time Problem solving More effective use of resources Value Engineering Benefits Value Engineering ensures the following benefits, using CSI's proven methodology and a cross-functional team approach:

VE is a proactive results oriented methodology that "adds value" to products and services. It is not a suggestion program. VE provides high returns on your investment. VE reduces capital and life cycle costs. VE provides "Performance / Productivity / Quality" improvements. VE reduces time to market / improves project schedules. VE provides a step change rather than just an incremental change in your business. VE methodology provides the tools and creates an environment for your project teams to find creative and cost effective solutions to complex technical and organizational problems.

VE improves Managements decision-making capabilities by presenting alternative solutions to a problem. You are not stuck with one solution to a problem. VE is an effective means to promote and manage change within an organization. VE is a powerful team building process and participants to think, outside-the-box. creativity tool. Conditions

VE is an excellent alignment tool between your customers needs and the design teams. VE teaches you to do the "Right" job, TQM helps you to do the job "Right." VE is the key to Best-in-Class performance.

What are the benefits of Value Engineering ? Value Engineering helps your organization in :

Lowering O & M costs Improving quality management Improving resource efficiecy Simplifying procedures Minimizing paperwork Lowering staff costs Increasing procedural efficiency Optimizing construction expenditures Developing value attitudes in staff Competing more sucessfully in marketplace

Value Engineering helps you to learn how to :

Improve your career skills Separate "Symptoms" from "problems" Solve "root cause" problems and capture opportunities Become more competitive by improving "benchmarking" process Take command of a powerful problem solving methodology to use in any situation