The

Contents

PRESIDENT'S NEWSLETTER 1
S.A.V.E
A.R. Tocco
NOTES FROM THE EDITOR 2
Marvin Kaplan Jou R N A L of
VALUE ENGINEERING IN HEAVY INDUSTRY. . . 3
M.S. Merritt
WHAT'S WRONG WITH VALUE ENGINEERING
TODAY?
F.S. Sherwin
6 Value
VALUE ENGINEERING IN PAPERWORK 8
S. Simon
THE S P E C I A L T Y SUPPLIER IN VALUE Engineering
ENGINEERING 13
A.S. Winthrop
AN EVOLUTION IN DEPTH - L.A. S.A.V.E.
COLLOQUIUM 17
D.O.D. COMMENTS (L.A. S.A.V.E.
COLLOQUIUM) 25 /MS
J . J . Riordan
COMMERCIAL PRODUCTS V . E 27
C . L . Chase & T.H. Redman
MILITARY PRODUCTS V . E 30
Sol Mendelsohn
TECHNICAL NOTES & REVIEWS 34
David M. Natelson
S.A.V.E, CHAPTER NEWS 37
J . Waltzman
S.A.V.E. NATIONAL NEWS 40
J. Waltzman
V . E . CALENDER EVENTS 41
SEMINARS, WORKSHOPS & TRAINING AIDS . . . . 42 December
ENGINEER'S CORNER 43
Clyde Flackbert
196 2

OFFICIAL PUBLICATION o f t h e

SOCIETY of AMERICAN VALUE ENGINEERS

N O . 1 2 - 6 2 - 2
 S O C I E T Y OF A M E R I C A N T H E J O U R N A L OF V A L U E E N G I N E E R I N G
VALUE ENGINEERS
Official Publication of the

SOCIETY OF AMERICAN VALUE ENGINEERS

OFFICERS: 1962-1963

President: EDITORIAL STAFF

Anthony R. Tocco
Space Technology Lab., Inc. Executive Editor - Marvin Kaplan
i
Vice-President, N.E. Region:
Frederick S. Sherwin Associate Editor - Arthur F. de la Parra
Raytheon Company Secretary - Bertha Kaplan
EDITORIAL BOARD
Secretary:
Edward D . Heller Technical Notes & Reviews S.A.V.E. News
Gen. Dynamics/Pomona David M . Natelson Jacob Waltzman
Engineer's Corner Distribution
Treasurer: Clyde Flackbert Ernest L . Kramer
William R. Feichtinger
Dept. of the Navy M i l i t a r y Products VE Advertising
Sol Mendelsohn Ernest Yurman
Ass't. Treasurer: Commercial Products VE Illustrations
Don Redmon, Chief, Value Analysis Ted H . Redman Joseph Tomek
Plans and Programs Branch, Industrial Carl Chase, Associate Donald Connor
Division
U.S. Ordnance

Board of Directors:
Published Quarterly by the SOCIETY OF AMERICAN VALUE
C.W. Doyle
Gen. Dynamics Corp. ENGINEERS. Copyright 1962 by the Society.

George W. Gebhardt Application to mail at 2 n d

class postage rates is pending at
Dept. of the A i r Force New York, N.Y.
Edward O. Greeson
Dept. of the Army S.A.V.E. accepts no responsibility in connection with any
liability which might develop as a result of articles or ad-
Marvin Kaplan
vertising published. The opinions expressed are those of the
Loral Electronics Corp.
authors and advertisers and do not necessarily represent the
Horace R. Lowers Society. Journal written permission required f o r reprints.
Dept. of the A r m y
Subscription Prices: $5.00 per year; single issue $1.25.
Adm. R.S. Mandelkorn (USN Ret.) (Special issues available at additional cost).
Sperry Gyroscope Co. A l l Manuscripts f o r review should be submitted with drawings,
Lawrence D. Miles suitable f o r reproduction, to the Executive Editor.
General Electric Co. Advertising rates, change of address notification, membership
Morgan D. Roderick information, article contributions, and a l l other correspond-
Dept. of the Navy ence should be sent to:
Anthony R. Tocco S.A.V.E. JOURNAL
Space Technology Lab., Inc. c/o Loral Electronics Corp.
825 Bronx River Avenue
General Counsel: Bronx 72, New York
Leonard J. Williams
Attorney at Law Attention: Marvin Kaplan
1625 Eye St., N.W. Executive Editor
Washington 6, D.C.
 President's Newsletter
PLEDGE p F SUPPORT TO DOD
The Honorable Robert S. McNamara November 9, 1962
Secretary of Defense
Washington 25, D. C.

Dear M r . Secretary:

The Society of American Value Engineers is constantly on the alert f o r opportunities to

assist the Department of Defense i n the furtherance of national objectives. In this con-
nection, we have followed with great interest your vigorous efforts to streamline logistic
practices and reduce defense costs. The programs enumerated and steps taken thus f a r
indicate that substantial savings are possible when meaningful cost reduction programs
are f u l l y implemented.

The efforts of the Society of American Value Engineers to create a cost conscious
climate within the defense industry have been gradually taking on specific dimensions.
These e f f o r t s are intended to' complement the energetic activities of your office, as
represented by OASD(I&L). Additionally, we have been privileged to develop data f o r the
Logistics Management Institute's studies i n the area of value engineering.

Your announced major drive on cost reduction through value engineering and the es-
tablishment of a DOD-wide goal of at least 100 m i l l i o n dollars annually constitutes a
personal challenge f o r a l l value engineers. At the same time we recognize that specific
organized actions must be taken i f the f u l l potentialities f o r cost reduction are to be
realized. One such action might be to bring together a small working group of industry-
defense personnel f o r the purpose of outlining and implementing a program f o r attaining
and exceeding the established goals. The meetings of this working group might be a r -
ranged independent of, but not i n conflict with, the current cost reduction studies under
the auspices of the National Security Industrial Association i n cooperation with the DOD.
The essential and distinguishing characteristic of this proposed effort would be an
analysis and tailoring of technical/engineering concepts and methods f o r cost reduction
purposes. There are many areas to be explored, including, f o r example elimination of
"gold plating" through—

. development of rational c r i t e r i a f o r tolerances

. prevention of costly engineering changes
. utilization of modern "design of experiment'' methods i n testing.

With your endorsement, the Society of American Value Engineers would welcome the
opportunity to serve as the focal point f o r establishing an appropriate working group.
It is conceivable that a collaborative e f f o r t of this kind could produce economies well
beyond the established 100 m i l l i o n dollar goal. This effort would require the active
participation and authoritative representation of not only M r . M o r r i s ' office but also
Dr. Brown's office.

La any event, whether or not this communication culminates i n some arrangement be-
tween DOD and SAVE f o r confrontation of the cost reduction problem, I should like to
assure you that a l l the resources of the Society of American Value Engineers are avail-
able to you to promote the national interest.
Respectfully,

A.R. Tocco
President

Society of American Value Engineers

12-62-2 S.A.V.E. JOURNAL

 Notes From The Editor
The report described i n this article shall probably leave the reader speechless and slightly
bewildered. The careful evaluation of an idea requires wisdom and common sense—attributes
which sometimes are not always utilized.
SUBJECT:* Report of Special Technical Committee
to consider the TELEPHONE as an i n -
vestment.
1. The TELEPHONE is so named by its inventor,
M r . A. G. B e l l , who sees f o r i t a vast future as a
means of personal communication by voice. He believes
that one day they w i l l be installed in every residence
and place of business.
2. We note that M r , Bell's profession is that of a
voice teacher, and particularly a teacher of the deaf.
He appears to have no direct experience with the
telephone or any other f o r m of communication,
electrical or otherwise. Yet he claims to have d i s -
covered an instrument of great practical value in
communication, which has been overlooked by the
thousands of workers who have spent years in this
field.
3. M r . Bell's proposal to place his instruments i n
almost every home and business house (and this is
the only way i n which their potential may be realized)
is fantastic in view of the capital costs of installing
the endless numbers of wires and cables that would
be demanded. The central exchanges alone would
represent a huge outlay i n real estate and buildings,
to say nothing of the electrical equipment.
4. M r . Bell expects that the public w i l l use his
instruments without the aid of trained operators.
Any telegraph engineer w i l l at once see the fallacy
i n this plan. The public
simply cannot be trusted
to handle technical
communications equip-
ment. In any home where
there are children, to
mention only one point,
there would inevitably
be a high rate of break-
age and frivolous use
of the Instruments.
2 S.A.V.E. JOURNAL
Furthermore, when making a call, the subscriber must
give the desired number verbally to the operator. No
one on this Committee would like to be that operator,
and have to deal with persons who may be illiterate,
speak with lisps, stammer, have foreign accents, or
who may be sleepy or intoxicated when making a call.
5. While every telegram constitutes in itself a written
record of what has been communicated, M r . Bell's
instrument uses nothing but the voice, which cannot
be captured i n any concrete f o r m , and therefore there
would be no record of what was said or agreed upon.
We leave i t to you to judge whether any sensible man
of business would transact his affairs by such a means
of communication.
6. M r , Bell expects that the subscribers to this
service w i l l pay to have the instruments installed
in their premises and w i l l thereafter pay f o r each
call made, with a monthly minimum even i f no calls
are made. We feel i t very unlikely that any substantial
number of people w i l l agree to such an arrangement,
i n view of the telegraph offices which are now giving
efficient round-the-clock service i n every neighbor-
hood and i n the smallest towns, which charge only f o r
actual messages sent according to length.
7. In conclusion, this Committee feels i t must advise
against any investment whatever in Mr. Bell's scheme.
We do not doubt that i t w i l l find a few uses in special
circumstances, such as between the bridge of a ship
and the engine rooms, but any development of the kind
and scale which M r . Bell so fondly imagines is utterly
out of the question.
*The original source of the report is not known to
the writer.
12-62-2
 Value Engineering
in
Heavy Industry M.S. M e r r i t t , S.A.V.E.
Manager, Value Engineering
Babcock & Wilcox,
Barberton, Ohio
The Value Engineering of a 25 story-high boiler is indeed one of the amazing examples of
commercial products V . E . Compare the height of this item with the "man" in the photograph
below.

T h i s paper describes how a Value Engineering ap-

proach was taken at the Babcock & Wilcox Company's
Boiler division, a heavy machinery, low volume manu-
facturer. The principal product, power boilers, ranges
f r o m the highest capacity, highest pressure public
u t i l i t y units down to the small, completely shop as-
sembled package type boilers. The large u t i l i t y units
range in height f r o m a 15 to a 25 story office building.
The smaller size package boilers can be shipped on
a single railroad flat car. Except f o r small package
size boiler units, there is relatively l i t t l e standardiza-
tion of complete installations. Certain components
are standardized i n a relatively wide range of sizes
f o r both industrial and u t i l i t y boilers. However, each
installation requires a considerable amount of t a i l o r -
made engineering and fabrication of certain com-
ponents to meet building or other space limitations,
operating conditions and physical plant layout.

LOW VOLUME PRODUCTION

The Boiler division of Babcock & Wilcox certainly

cannot be classified as part of a mass production
industry i n which millions, or even hundreds of thou-
sands of duplicate parts are produced annually. In
the fabrication processes we start with basic raw
materials such as plate, tubes, structural shapes,
rough forgings, casting, etc. Quality plate f o r the
boiler drums ranges f r o m 5/8 i n . to 7 in. in thickness,
the larger plates as delivered to our shops weigh
as much as 50 tons each. These plates are eventually
formed into pressure vessels having an inside diameter
of 66 i n . Such drums,
when finished, can be 100
feet long and may weigh
up to 240 tons.

STARTING THE V.E.

PROGRAM

After reading many

stories and articles
about the amazing results

12-62-2 S.A.V.E. JOURNAL 3

achieved through Value Engineering i n other indus-
t r i e s , we decided such a program was certainly worth
investigating.
A Value Engineering consulting f i r m was retained to
conduct a three week seminar and to assist us i n the
implementation of the program i n the Boiler Division.
The consultants gave us a date that was four months
away. I t was fortunate that they did not have an earlier
date available. Much work had to be done to create
the proper atmosphere, select the participants and the
type of project which would give a maximum coverage
of various fabricated parts; including alloy steel,
carbon steel and gray i r o n castings, machinery p r o -
cedures, and a host of purchased items. In addition,
drawings, shop orders, purchase orders, detail cost
estimates and other data had to be prepared i n ad-
vance so that valuable time would not be lost searching
f o r this material during the seminar:.
SELLING MANAGEMENT
Once top management was sold on the need and de-
sirability f o r implementing the V.E. program i n the
Boiler division, the next step was to sell the next
level of management. For this reason, people repre-
senting various departments of the division were
selected f r o m this secondary level to participate i n
the f i r s t seminar. T h i r t y - s i x section heads and
managers f r o m a l l departments of the division p a r -
ticipated on a f u l l time basis and 20 other people
f r o m the same management level were involved on a
part-time basis.
V.E. PERSONNEL
A f t e r the initial seminar, thought and study were
given to the organization of a permanent, f u l l - t i m e
Value Engineering component and to its place i n the
organizational structure of the division. I t was f e l t
f r o m the beginning that to be successful this must
be a continuing program and that a small core of
f i v e or six people, completely divorced f r o m their
current assignments, should devote a l l their time
and e f f o r t to V.E. It was f e l t that these people should
not be preselected, but, after the seminar, they would
be chosen f r o m the participants on the basis of their
demonstrated ability to learn and apply the techniques
quickly, their enthusiasm f o r the program, and their
experience background. If top management and the
second level management were not i n i t i a l l y sold on
the program, i t can be imagined the resistance that
might have been encountered i n getting these people
for a f u l l - t i m e assignment. Even with the f u l l support
of top management, the selection of this group and
assignment was not easy,
V.E. ORGANIZATION STRUCTURE
The next important consideration i n setting up a
f u l l - t i m e Value Engineering department is its position
4 S.A.V.E. JOURNAL
in the organizational structure. Should i t be a line
function of engineering, manufacturing, sales, or
marketing, or should i t be a staff function, reporting
through channels to the executive office of the division?
The conclusion was that the Value Engineering de-
partment, since i t must work through a l l departments
and cross functional lines, would operate most e f -
fectively as a staff function. Accordingly i t was set
up as a section of the Staff Services Section, which
reports directly to the chief executive office of the
Boiler division. Experience to date indicates that
this was the proper decision f o r V.S.
SELECTING A V.E. PROJECT
A f t e r its organization and implementation the Value
Engineering Section selected a project to be reviewed
and to exercise the techniques presented i n the semi-
nar. A Steam Separator which i n many respects
resembles a 5-gallon m i l k can was selected. These
separators are used inside boiler steam drums to
separate the steam and water mixture discharged
f r o m the furnace wall tubes. At the. present rate
of operation, approximately 5,000 separators per year
are required. B&W has been manufacturing these
separators f o r approximately 25 years, a n d f r o m t i m e
to time numerous refinements have been made to
improve operations and to reduce manufacturing costs.
In less than six weeks' time, through the application
of Value Engineering techniques, further cost savings
have been indicated. P r i m a r i l y these cost savings
w i l l result by changes i n fabrication methods.
IMPLEMENTING V . E . IDEAS
Of course, our Value Engineering Section is i n its
infancy. Potential cost savings have been indicated
through its efforts. These potential savings cannot
be realized until the ideas have been implemented.
To implement some of the ideas w i l l require research
laboratory testing and fieldtestingtoprovefeasibility.
Capital expenditures need to be approved to acquire
new tooling, and these must follow a depreciation
schedule before cost savings can be attributed. As
in any program, there are initial costs to be con-
sidered. In evaluating our Value Engineeringprogram
we have found that the budget set up f o r the f i r s t
year of this new section w i l l be covered by the savings
realized f r o m implementation of their ideas.
V.E. TRAINING
While the Value Engineering section w i l l continue
to analyze and evaluate projects, their basic assign-
ment w i l l be the training of additional people i n Value
Engineering techniques and philosophy and consultation
with the engineering, marketing, and manufacturing
12-62-2
departments of new or improved products.
As Value Engineering knowledge, the philosophy of
its concepts cost knowledge, and cost consciousness
are broadened, the potential f o r cost reduction is
proportionately increased.
The boiler industry today is highly competitive, and
the total productive capacity is nearly double the
current demand f o r products. The p r o f i t margin has
been traditionally low f o r the risk- type of business
we are i n , and like many other industries, the Company
finds itself confronted with the problem of economic
survival.
12-62-2 S.A.V.E. JOURNAL
AFFECT OF COMPETITION
While we have a l l been faced to some extent with
foreign competition i n our domestic markets, we
must be prepared f o r increased competition as a
result of t a r i f f adjustments which can be expected,
if not this year, certainly, within the next few years.
In addition, i f we are to expand our foreign markets
and meet foreign competition, we must f i n d ways and
means of increasing productivity of our people and
at the same time furnishing equipment that w i l l p r o -
vide the required functions reliably and at the least
possible cost. This is the f i e l d i n which Value Engi-
neering can play a most important role.
5
 What's Wrong With
Value Engineering
Today?
The many problems associated with Value Engineering are clearly outlined in this article
f r o m the many years of experience of the author.
The main thing wrong with Value Engineering today
is people. Not what people may or may not be doing
in the f i e l d , but the lack of people working in the
f i e l d . Of course, like many other problems, any
problem divides itself into a number of subproblems
and there are many subproblems associated with
Value Engineering—as a profession, as an activity
and as a methodology.
KEY VALUE ENGINEERING PROBLEMS
The problems concerned with the methodology and
activity, however, are mostly a direct result of a
lack of sufficient manpower in the field. Many metho-
dologies have recognized that in order to solve a
problem, one must f i r s t procede through a fact finding,
orientation, information gathering and problem d e f i -
nition phase. In these few words about "What's Wrong
with Value Engineering?'' I hope to inspire those that
are in positions to take action, to plan their programs
and activities so that they are directed toward the
solution of this key problem.
QUALIFICATION VS GROWTH
For the last 15 years, we have witnessed a growth
i n interest and activity i n the f i e l d of Value Analysis
and Value Engineering. This growth has seen an i n -
creasing number of people being exposed to the
principles of V.E., an increasing number of companies
which have established V.E. programs and an increas-
ing number of people designated as Value Specialist,
Value Analyst, Value E n -
gineer, Value Coordinator
and other names which
identify them as p r i m a r i l y
concerned with the f i e l d
of Value.
However, while the growth
in numbers of companies
with value programs and
numbers of people being
6 S.A.V.E. JOURNAL
Frederick S. Sherwin, S.A.V.E.,
Vice-Pres., N.E. Region
Manager, V.E. Services
Raytheon Co., Lexington, Mass.
educated might be considered to be satisfactory, the
growth i n the numbers of people who are qualified,
competent and assigned to c a r r y out Value Engineering
activities has been exceedingly small. Both the r e -
quirements and opportunities f o r capable Value Engi-
neering Specialists exceeds the supply of available
people. For instance, one need only attempt to procure
the services of a competent Value Engineer i n order
to realize this fact. Out of perhaps as many as 10,000
to 20,000 persons who have completed at least 40
hours of Value Engineering training, there is perhaps
today less than 1% who have entered into the f i e l d
and with moderate success carried out a Value Engi-
neering program. An even significantly smaller num-
ber are doing work to develop data, knowledge and
approaches which w i l l make the methodology of Value
Engineering a practical, working tool of every deci-
sion-maker, and an accepted professional pursuit.
EVALUATE VALUE ENGINEERING
In terms of the creative problem solving approach,
I am now attempting to describe the "mess." Some
other factors related to the "mess" are:
1. The profession and industry have failed to
provide the incentive to attract competent
people in sufficient numbers into the Value
Engineering f i e l d .
2. The functional positions which provide the
opportunity and the opening f o r a person to
work i n the f i e l d do not exist i n many organi-
zations or are established on too low a level
to attract the highly competent leader that
is necessary to instigate the program, or the
specialist to c a r r y out the program,
3. Industry has not recognized value as a f u l l -
time responsibility or as one of its prime
functions.
4. Value or cost has been a part-time responsi-
b i l i t y of so many people and different functions
so long that a major or even moderate revision
in organizational structure has not been made
12-62-2
 to accommodate the V.E. function.
5. Each Value Engineering activity springing up
within an industry requires a high level selling
program to convince a l l echelons of business
management that they should invest i n Value
Engineering.
6. Although many companies have Value Engi-
neering programs, the investment in these
programs is usually f a r too little to accomplish
the ultimate potential of an effective program.
7. The combination of talents required to sell
top business management on a Value Engineer-
ing program, plus the ammunition i n the f o r m
of concrete evidence and results, are missing
in many cases.
8. Without sufficient & capable talent in the
f i e l d of Value Engineering, adequate results
& documentation cannot be accomplished,
and without this documentation, management
cannot f u l l y be sold on making the necessary
investment.
From these conditions that describe the situation
surrounding Value Engineering today, one can see
that there are many subproblems associated with
the major problems, and i t is even difficult to deter-
mine the major problem—what is really wrong
with Value Engineering?
Probably i t is not directly connected with the tech-
niques. These have been tried and proven to be ex-
tremely effective as cost prevention and cost reduction
tools when utilized by competent people. Probably,
it is not concerned with the mechanics of implementing
a value program or even with the methods, procedures
and functional responsibilities i n carrying out this
program.
More likely the basic problem centers around people,
both within Value Engineering and within management.
Within Value Engineering the problem is lack of people,
PRESENT SITUATION
Within management the problem is lack of allocating
investment i n the people who w i l l c a r r y out the value
program.
Value Engineering today needs people. To be specific,
MOUSE
Built per Military Specifications.
12-62-2
it needs people with a breadth of experience in a l l
phases of industry. It needs people who have the
technical competence to provide the documented facts,
the information to sell the program and to develop
the state of the art; people with the sales capabilities
to convince business management that the return on
investment would justify the cost; people with the
educational capabilities to teach people to teach Value
Engineering; people to teach Value Engineering to a l l
levels of decision-makers; people who have the
management, administrative & technical capabilities
to organize and c a r r y out the. Value Engineering
program; and people who are dedicated crusaders
in a f i e l d that offers tremendous pioneering oppor-
tunities and the r i c h rewards of personal achievements;
and the satisfaction of having played a key part in
developing the capability of other people to produce
the goods necessary f o r world and national, social
and economic progress.
ONE POSSIBLE ANSWER
The people required f o r Value Engineering are avail-
able. Perhaps a l l the requirements w i l l not be e m -
bodied in one individual. Undoubtedly there w i l l be
large variations of capabilities of people in the V.E.
f i e l d . But what is important is that the Value Engi-
neering profession attract into its ranks individuals
who have the interest, desires and dedication to work
toward the solution of the value problem. The profes-
sion must learn to define its work scope i n such terms
that those with the capability w i l l be attracted to
Value Engineering. It has inherent in the V. E. function
sufficient variety and challenge that there should be
larger numbers interested in pursuing this type of
work.
The Society of Value Engineers w i l l have many areas
where i t w i l l need to devote its attention. It w i l l have
many people within its membership ranks who w i l l
advocate one task or another, but I feel that i f we
are to correct the key thing that is wrong with VE
today—the lack of people—the solution to this problem
should be the number one objective of the society.
This w i l l not come easily and there w i l l be many
roadblocks to its achievement, but i t w i l l be done
and i t w i l l be done when those now i n the f i e l d and
dedicated to the work recognize the problem and take
the steps to solve i t .
S.A.V.E. ~ 1963
National Convention
APRIL 25 & 26, 1963
NEW YORK
Details on Inside Back Cover
S.A.V.E JOURNAL
 Value Engineering
in
Paperwork Sheldon Simon, S.A.V.E.
V.P., Exec. Assistant to the President
L o r a l Electronics Corp.
Bronx, New York
This article pertains to a practical application of Value Engineering to non-equipment
items. It is one of the few examples of indirect overhead cost reductions.

It i s generally assumed that Value Engineering PURCHASE ORDER

has basic application only to the engineering or
manufacture of a product or component i n order to The f o r m s i n this study commenced with the P u r -
achieve a reliable function at the lowest cost. This i s chase Order (Exhibit I) which was typed on a s p i r i t
accomplished through a thorough understanding of the duplicating master and men run through the duplicator.
function to be realized. N? 102699
PURCHASE ORDER
What is not generally realized Is that the same
basic approach can be applied to any task; an analysis
LORALaEcntomcs •
cobpobatioi
tmtamTHMX.

of material control, review of material handling, PREPAY SHIPPING CHARGES

generation of systems and procedures, or appraisal CONTRACT NO.
qOVT.APP. MO.
of c l e r i c a l paper f o r m s should evoke the same analo- ADDITIONAL PROCESSING —

gous reasoning. What is the function to, be performed? BILL 1H TRIPLICATE TO:
SHIP TO ATT. OF:
What i s the simplest and cheapest way of achieving
PLEASE EMTEfi OUR ORDER FOR THE FOLLOWING - SUBJECT TO THE T«SANDCCHPIT1CKSAJPATTACHED RlDERSfJA, Q B . Q C
the result? LORAL PART MO. DESCRIPTION

PAPERWORK ANALYSIS NO PRICE INCREASE OR ENGINEERING CHANCES TO BE MADE UNLESS APPROVEO BY AUTHORS EDPURCHASIHC P E RSONKELj
DELIVERY SCHEDULE

This article w i l l illustrate the Value Engineering

approach applied to an analysis of the paperwork
generated subsequent to the issuance of a purchase „ „ , . , , „ „ , , „ „ « !E
c ™AND
, ™ APPEARING
- „ ™ » , „ON
r
..1 TERMS AND COH-
. ™^™_..~JIED,
RIDERS Al AND MADE A
MFC T HEREOF. SELLER CERTIFIES THAT NO GOVT OWNED FACJU Tl ESWILL BEUSED M
order. We shall follow a complete working cycle of THE PERFORMANCE OF THIS ORDER. IF GOVT FACILITIES WILL BEUSED, CHECK BOX
TO 50 INDICATE. •
LORAL ELECTRONICS CORPORATION

f o r m generation that commences with the preparation MATERIAL MANAGER

of the purchase order and continues with the receipt,
inspection and disposition of the material, including
subsequent issuance of a debit memorandum when
required.
NOTE: l » a ^
W » ^ ^ l i i fc ? £ f „ _ ^
' ^ ^ ' p m M i HAVEXOS P-IOH
t*f*sy inaxfemm ia end noo* pan of rhl» subcontract ot intaraalii ttfotr,
All ImmJcw m l tarry th# (olio-fog carttBam In oroar *»
l» pauadforpaywtt,
"Sail* nfttmarl thot «Hih tmtpta to lha ptoaWkin of lha
orttd** tnvV th* ptrfonaonu of *a xarrtcn CMrad br
wcffen I I naiind prior M iMpnvit from jour plant. Ityi>linll««ngd)>
r. If practicableten(10) dors inttavoncairmnol, rotitf*- Cowm—nt R*p-
—» renaallr sarvices your plant. On ratdpl of iMi ordar, ptwupiV fvmljh a copy
to tho Gwrn—nt RmManlolIva'ahorimolly unrlw yevr |jkinl, of, If rent, to W m H
|W» tnwlc*. It hoi fully «ni>ll«l mi* section (o) ond (Khar
Arwy, Navy, or Air Fort* Inspection oHic* in your locality,
prwtrisnt of tht Fair Lobar SnrKbrdi Act of 1936. a* o-
tha rapraaantoHwor
eint* OUB1 bm loratadoVEoyw should ba notlflad l»™J!of*]y. C«tl fleam of wplienco
a* net occapfobla, Cmiflad t«ii narOt ihowino. ocnnl rtiulti of l o l l . tail neons, Insotc-
aannKBrdj, vandor oyoliiy.iijio of inspection, or orhar variftobl* siutmmti at quelIf/ —y b»
] Sab|Kt <o ronegtalation in oecordtnea wi* SKiien 17 our n r . .
] PI MM nsto Saetion 21 tares if yog do not hoaaffipltlof
MENTSTOBE MADE BY PARCEL POST WHICH SHOULD BE
INSURED FOR FULL VALUE OF MATERIAL SUPPED USING J3aflm*7undtr QMS Ras««=«™
Sabjacl » our Standard
REGISTERED HAIL IF VALUE EXCEEDS S20O.

FUNCTION ANALYSIS EXHIBIT-I

The f i r s t criteria used i n the analysis was to de-
termine the function of
each i t e m and whether
each written f o r m was
necessary. If the d e c i -
sion was i n the a f f i r m a -
tive, the next approach
was to f i n d a way of
simplifying or combin-
ing those f o r m s that
could npt be eliminated.
RECEIVING REPORT
Upon receipt of the material, a Receiving and I n -
coming Inspection Report (Exhibit II) was generated
f r o m the packing slip accompanying the material and
a copy of the purchase order against which the sup-
p l i e r shipped the material. The material, with copies
of this f o r m , was then forwarded to the incoming
Inspection Department who completed the Quality
Control portion of the f o r m .

8 S.A.V.E JOURNAL 12-62-2

 L O R A L ELECTRONICS C O R P O R A T I O N DEBIT MEMO
R E C E I V I N G AND
INCOMING I N S P E C T I O N R E P O R T No.C49899
If they decided that the rejected material was to
be returned to the supplier, a Debit Memo (Exhibit TV)
" " • » • OHC
was prepared utilizing as its source data the i n f o r m a -
BKBVH) FROM
• cornet —
OUR P. O NO.
tion contained i n the Material Review Report.

OAK IO COWIETE MSfECIIOH

SOURCE WSPECTEDi Q YES • NO • NOT R£QUHt£D
D m BgnOICS CMMtfflQI
REMARKS

TOTAL

•.
•.
ACCOUNTMG DtPT W/PACKMG SUP
VENDC* MMTtO NO.
riKCH KTUPJED TO VtMX* DATE

EXHIBIT - H

MATERIAL REVIEW REPORT

IE the result bf inspection indicated that the m a -

t e r i a l was not produced i n accordance with the
specifications given to the supplier, a Material Review EXHIBIT-IV
Report (Exhibit US) was generated. This is a s p i r i t
duplicating master f o r m listing the pertinent data r e -
quired f o r an intelligent disposition of the rejected REWORK FORM
material. The disposition is the result of a decision If the material review committee determined that
of a material review committee. the material was to be reworked i n our own company
because i t was urgently needed, Exhibit V, the Rework
# B MATERIAL REVIEW REPORT Advice and Authorization f o r m , was generated i n order
JtCEIVfctG w o n jruKHMEOKOcitHOL DATE RECEIVED QC [SOURCE KSFtCTIOK IJMNX
|DT-Cr*QN-B->t|
DATE OF MSFECDON to authorize company rework of the material and to
•COR PACK SLIP MOj QUAK JrECVU jSAMTU SZEjNOLtN SAMPLE BE QTT. ACC j QTY. BtL
control the rework costs. Upon completion of the r e -
PART OESOaPTKN J > . n J n « l | LORAL PMT HO. j j REVtSQH DATE
fwork, the Debit Memo (Exhibit TV) was prepared using
REASON FOR REJECTOt
the Rework Advise and Authorization f o r m as the
source document.

APPROVED ST. ptJI

EMCMEXM
I B DOT. EMDOKSCWEHTO RErU**l__ PIECESTOVENDORTORRt?UCEMBtTO**£PM
QACCE»T_ I a WTO* *0« CREDIT. 00 MOT REPLACE.
• *CCEPT_ ONLY MATERIAL COMTRQL SUPERVISORS • VOC
RED FOR THESE CATEGORIES Q It

IT LORAL. CHARGE VEMDO*

ENCMEEPiNG DEPT. EMDORSEMEMT REQDV •

fnjRCKASWG DEPT. EMDOBSEHEHT

MM teJVERr OATE OFj SOtATORE OF EUYER

EXHIBIT-JU EXHIBIT-V
12-62-2 S.A.V.E. JOURNAL
COMMON DATA ANALYSIS of receiving, inspection, material review, rework
advise and authorization, and debit memorandum
The tabular analysis of each of the above f o r m s issuance.
Indicates that a minimum of 50% of common i n f o r m a -
tion was recopied into each f o r m . Also, in each i n -
LORAL PURCHASE ORDER
stance, unless original documents had been used f o r
the source of information, any e r r o r introduced into &
N8| 00002
the f i r s t f o r m generated was perpetuated into a l l
] * CHANGE NO.l I

succeeding f o r m s . TT
T

NOTE:*DENOTES ITEM INDICATES ACTUAL CHANOT~

Data common to
each of the f o r m s P.O. RIIR MRR D M RAA
as indicated Ex I Ex I I Ex I I I Ex IV Ex V

Supplier's name X X X X X
Purchase Order No X X X X
Contract No. X X
Job No. X X X X X
Quantity Ordered X
P a r t No. X X X X X
Description X X X X X
Unit P r i c e X X
Source Inspection X X X EXHIBIT-VTI
Quantity Received X X X ALTERNATE APPROACH - COMBINED
RIIR No. X FIVE (5) FUNCTION FORM
Inspection Results X X X X
% of common data The new combination f o r m is sequentially sec-
per f o r m 75% 75% 75% 58% 50% tioned according to the specific function to be p e r -
formed. It was designed to require either insertion
of a number or an " X " in an appropriate box. A l l
EXHIBIT-VI unnecessary original writing of general information
or usual descriptive conclusions are eliminated since
Our study indicated that each function accom- they are permanently imprinted on the f o r m and r e -
plished through the use of the f o r m s i n the above quire only a check-off notation.
exhibits was required. Therefore, the f i r s t phase of
our work was to reduce the required number of The f o r m accompanies the material through each
copies of each f o r m since this would directly result successive function so that a l l previous processing is
i n a reduction i n f i l i n g time and f i l e space. Phase 2 known.
involved creating a single f o r m which could be used
f o r the generation of the initial Purchase Order with
the resultant means of generating a subsequent f o r m
whose function would be the same as those found i n
each of the individual exhibits outlined above. This
would effect a 258-1/3% reduction (total of Exhibit n ,
UJ, IV, V) i n common f o r m data generation after the
initial Purchase Order was typed.

ALTERNATE APPROACH - PURCHASE ORDER

The result of the study evolved the following new

system and approach:

A Purchase Order comprising a preprinted original

and acknowledgement copy, is concurrently typed with
a transparent Transafax master f r o m which spirit
duplicator masters are prepared. F r o m one spirit
duplicator master, Purchase Order copies are made.
The second spirit duplicator master is used to dupli-
cate a l l the common data into a new combination p r e -
printed f o r m comprising a l l the functional elements EXHIBIT - VTH
10 S.A.V.E. JOURNAL 12-62-2
RECEIVING DEPT. PROCESSING
Initially, upon receipt of material, the spirit master
is run on the combination f o r m where a l l pertinent
data is automatically duplicated f r o m the o r i g i n a l
Purchase Order typing. This includes a l l the data i n
the following areas of the f o r m : F r o m , Re, Reship to
L o r a l Plant No., Item, Quantity, Part No., Description,
Unit Price and Special Conditions.
The Receiving Department only inserts information
relative to the date the receiving section was f i l l e d
out; the packing slip number, the c a r r i e r s name, FB
no., and the quantity received.
QUALITY CONTROL PROCESSING
The material and f o r m is next forwarded to the -'
Quality Control Department who p e r f o r m the inspec-
tion work. They enter inspection data in the appropriate
section of the f o r m . If the material is found acceptable,
the f o r m is used as the move ticket into stock. Should
the material be rejected, a Material Review Committee
evaluates the inspection results and checks its dispo-
sition in the Material Review section on the f o r m . If
their decision is to return the material, the f o r m is
checked with this notation.
DEBIT MEMO PROCESSING
The f o r m is then sent directly to the Accounting
Department where the Debit Memorandum section of
the f o r m is completed. Copies of the Debit Memoran-
dum are mailed to the customer; one copy accompanies
the material as the packing slip.
ran
EXHIBIT-IX
12-62-2 S.A.V.E. JOURNAL
REWORK PROCESSING
Should Rework Advise and Authorization be r e -
quired, that section of the f o r m is completed and the
material routed f o r action. Provision is made f o r
posting costs, estimated and actual, so that i t serves
as the document f r o m which a Debit Memorandum is
prepared.
CONCLUSION
The new combination f o r m is in reality a progres-
sive f o r m that starts with initial preprinted data.
Subsequent information is sequentially added in the
normal progress of events f r o m receipt of material
through its final disposition. Li addition to eliminating
a l l duplicated information, the f o r m has been designed
f o r maximum utilization of check-off boxes f o r the
majority of usual situations. Original writing is r e -
duced to a minimum. This is the result of analyzing
specific functions with regards to their immediate
outcome i n the sequence of successive events. Under-
standing the function, the simplest combination f o r m
was evolved to eliminate clerical recopying and m i n i -
mize writing.
This same approach can be applied wherever an
end decision is the result of preceeding events, each
of which, requires written conclusions p r i o r to a
succeeding action. There is no multiple paper opera-
tion which is not capable of being evaluated f r o m a
Value Engineering vantage point.
11
 NEW I D E A S IN M A T E R I A L S MANAGEMENT

How Aluminum users cut costs

with Ryerson ideas

Improved design means

savings of
Decorative side panel
improved on drink mixer
A manufacturer of soft drink
dispensing machines was using
soft temper fluted aluminum
sheet .050" thick for decorative
purposes. Scratching from han-
dling in the shop caused some
rej.ects. Ryerson suggested
switching to a h ard temper sheet;
and rejects by customer's con-
trol department virtually dis-
appeared. Added dividend:
higher strength permitted use of
lighter .040" gauge—saving 18%
in material cost, 20% in weight.
The section is now stronger and
has a better finish.
thousands
"Lost" order
-blanket contract w o n
Cosmodyne is a manufacturer
of cryogenic equipment. One of
the designs previously included
an extruded aluminum heat ex-
changer of alloy 6063-T6. Each
part was 6' long and weighed
47.94 lbs.
Ryerson and Cosmodyne
engineers working together
concluded that a change to
aluminum alloy 6063-T5 would
permit greater design flexibility.
Ryerson also made design sug-
gestions that resulted in a re-
duction of weight. The part now
weighs only 13.11 lbs., and costs
72% less than the original part.
On the original order the cost
would have been $5,850 with the
old design. With the new design,
the cost is only $1,600, giving a
savings to the customer of $4,250.
rescued
A metal stamping company
was about to lose an order
for heat sink sections because
the price was too high. A
Ryerson man examined the
print and learned there was
no particular need for the
higher strength and fatigue
properties of 5052-R32, the
aluminum alloy specified. He
recommended a change to
less costly 3003-H14 alumi-
num alloy. After a trial run,
the stamping company re-
ceived a contract to produce
parts at the lower price.

On your next
aluminum order
call Ryerson

R Y E R S O N
JOSEPH T RYERSON & SON. INC . MEMBER OF THE STEEL FAMILY
P L U S V A L U E S IN STEEL • A L U M I N U M • P L A S T I C S • M A C H I N E R Y
 The Specialty
Supplier in
Value Engineering
Sometimes the most obvious commonplace sources of value are overlooked in the scramble
for sophistication i n Value Engineering. This paper is intended as a reminder that specialty
suppliers remain a fundamental feature of the V.E. repertory
Value is difficult to define. We generally think of value
as a matter of comparison with other similar things,
where esteem worth plays an unpredictable but i m -
portant part. Value engineers have yet to assign
quantities to value, i n the way that reliability engi-
neers have embraced MTBF and statistical probability.
The big breakthrough i n value engineering w i l l come
when a f a m i l i a r figure of m e r i t , such as MTBF, can
be conveniently assigned to a specif ic unit of equipment
or a process. Dollars alone are not a sufficient basis
for determining value.
Companies spend a good portion of their budget on
advertising which is intended to stimulate sales and
goodwill. Goodwill has a definite dollar worth on the
balance sheet, and i t is the raw material f o r the
specialty supplier/customer relationship. Aside f r o m
promotional gimmicks, suppliers are a valuable
source of Ideas, Information, Opinions and Advice;
not to mention the f r e e samples that we use to build
our engineering models. It is amazing how much
f r e e engineering, product improvement ideas, service
and cost reduction angles can be gotten just f o r the
asking.
WHAT IS A SPECIALTY SUPPLIER?
Almost any business you can think of is a specialty
supplier; some just specialize more than others. For
the purposes of this paper, we w i l l define a specialty
supplier as one which can provide your f i r m with an
item or offer a service quicker, better and/or more
economically than your
own f i r m can; or, more
familiarly, they are
known as vendors and
subcontractors.
WHY USE A SPE-
CIALTY SUPPLIER?
The basis of good design
is utilization of standard
12-62-2 S.A.V.E. JOURNAL
Arthur S. Winthrop, S.A.V.E.
Member of Technical Staff
Hughes A i r c r a f t Co.
Culver City, California
parts, materials and components wherever possible.
Within a company, a certain stock of tooling is ac-
cumulated through years of doing business. The
products fabricated i n quantity f r o m this tooling can
be considered as standard parts; however, i n a much
wider sense, a standard part is one which can be
found i n someone else's catalog, has a complete
specification, and which can be bought with a minimum
of delay. In large electronic and aero-space f i r m s ,
it is common to find special spacers and brackets
designed and fabricated to close tolerances where a
search through the design room catalogs would turn
up a satisfactory purchased substitute. Here is where
a specialty supplier can save time, money and effort.
I recall a design review where the engineer actually
designed two contacts f o r a wireless keyer. A local
machine shop charged $2 each for these close tolerance
parts. A f t e r the meeting we phoned a local contact
specialist who quoted a dime apiece, with immediate
delivery, f o r an acceptable substitute f r o m his catalog.
For the designer i t was easier to design these contacts
than to search f o r a standard part; perhaps he never
thought of i t , but the cumulative effect on a company
or project level is enormous. Designers and engineers
must be made aware of the high cost^of'designing
and fabricating a piece of ordinary catalog hardware.
On the working level, three different activities of the
typical company can take advantage of a l l this f r e e
information—the engineer, the manufacturing super-
visor and the purchasing agent, or Materiel.
THE ENGINEER BENEFITS
The engineer grows professionally f r o m his contacts
with suppliers. They contribute to his store of know-
ledge and he becomes a more valuable employee.
His decisions to make-or-buy are made i n the con-
ceptual stage of the design. Shall he use a standard
cabinet or fabricate a special cabinet; use etched
c i r c u i t r y or hand wired terminal boards; hog out
parts f r o m solid stock or cast them? In a l l these
13
make-or-buy decisions he can be assisted by specialty
suppliers—either through their catalogs, publications
or by personal contact with representatives. Some
specialty suppliers maintain progressive research
programs i n order to keep ahead of competition,
and a l l this industrial research activity is available
to the engineer f o r practically nothing. Technical
people tend to get heavily involved i n details and
overlook the fact that most people are flattered when
you ask their opinion or advice. Even i f you don't
buy, a technical representative is usually eager to
help you with your problem. The engineer must
consult with suppliers and read as many of their
publications as time permits i n order to a r r i v e at
the right decisions.
THE MANUFACTURING SUPERVISOR BENEFITS
When engineering drawings are released f o r manu-
facturing, someone i n the plant must decide whether
to make-or-buy the individual detail parts and sub-
assemblies. Castings and moldings generally go to
specialty suppliers, but where extensive welding,
anodizing, plating, and etched c i r c u i t r y are involved,
perhaps the "make internally" decision would involve
purchase of additional machinery or equipment, and the
temporary hire and training of more men f o r the
duration of the production run. Circumstances w i l l
often dictate that the best course would be to "buy*
or subcontract the job to a specialty supplier.
Additionally, many parts and assemblies that theo-
retically could be fabricated internally with existing
plant facilities and manpower have to be subcontracted
in order to meet tight delivery schedules.
MATERIEL'S VIEWPOINT
The purchasing agent must treat the company's money
as he would his own. He stands at the door of the
company's safe and every order he places is i m -
portant. Just as the specialty supplier depends on
buyers f o r his livelihood, the buyer derives much
of his professional growth f r o m his relationship with
specialty suppliers. In order f o r the buyer, or any
other person i n the Materiel organization, toprogress
within his own f i r m , he must demonstrate that he
understands not only how to analyze a l l purchases
for the best advantage, but he must also be able to
recommend alternatives to engineering and other
activities with whom he deals.
A purchasing agent recently questioned the need
for expensive gyro-type ball bearings i n a low duty
cycle application. On his own initiative he reviewed
the prints i n that subassembly and recommended to
the cognizant engineer that oilless sintered bronze
bearings, be substituted. The initial cost of the bronze
bearings i s a t h i r d of the ball-type, but the cost of
incoming inspection of the ball bearings to very tight
specifications easily doubled the cost again. Of course
the designer did not realize that these ball bearings
14 S.A.V.E. JOURNAL
were inspected f o r use i n gyros.
Returning to the example of the contacts on the keyer,
the purchasing man had a good opportunity to question
the custom designed contacts and suggest to the
designer several sources of standard catalog contacts.
This is a straightforward,' simple way to demonstrate
diligence and initiative to supervision.
HOW DO YOU FIND THE RIGHT SUPPLIER?
Experience i s an invaluable asset i n an engineering
company. Proposals f r o m electronics and aerospace
companies play heavily on the experience theme, citing
example after example of corporate and individual
personnel's experience. Today's complex systems
are actually being built i n spite of inexperienced
personnel. Fortunately, there is a large reserve
of experience available inpublicationsandthe supplier
industry. It is an education to leaf through a trade
magazine. Progressive companies pride themselves
on their ability to suggest novel as well as standard
uses f o r their products. The advertising ethics of
f i r m s dealing i n electronic and mechanical parts
and equipment are commendably high. Advertising
in trade journals i s prepared f o r an informed, c r i t i c a l
group of specialists. Most good designers, engineers,
production men or purchasing men make a point of
reading journals and magazines devoted to their
specialty i n order to keep pace with developments.
The trade magazines, then, are an important source
of information on specialty suppliers.
The engineering departments of most large f i r m s
maintain a group of specialists i n Materials, Proc-
esses and Components. These specialists make up
for a possible lack of experience on the part of the
design group, as well as.keepingthe line organizations
informed of latest developments. They know their
suppliers and should be among the f i r s t people to be
consulted during the initial concept and design phase.
Working closely with the Materiels, Processes and
Components people are the buyers. They should know
how to find the right supplier to help solve a design or
engineering problem. The Value Engineering oriented
buyer w i l l usually ask engineering "Why do you want
this part, or service"?, "what is its function"? Using
this background information, he should be able to
recommend a specialty supplier.
A trade show or convention, sponsored by a technical
society or trade association, i s a very effective and
pleasant means of bringing supplier and customer
together. It i s a market place where you not only can
see and feel and price products of interest, but you
can compare and evaluate your competitor's products,
just as he i s evaluating yours. A trade show serves
to refresh your idea generator and re-ihtroduce you
to the world of specialty suppliers.
12-62-2
Many large engineering companies circulate New
Product bulletins. These should be f i l e d away f o r
reference, i f not of immediate interest. One bulletin
item caught our assembly supervisor's eye i n the
recent past. It was a set of finger tip wrenches f o r
a l l the common sizes of nuts used i n electronic
assembling. These are shaped like thimbles with a
hexagonal cut-out on the side corresponding to the
place you usually place a nut when starting a screw.
This simple, low cost tool cuts assembly time when
you consider a l l the fumbled and dropped nuts lost
in inaccessible places.
A most common fault of inexperienced designers
and engineers is that they roar off to the drawing
board to* design a part that can be found i n a catalog.
The shorter the production run, the more horrible
the crime, because tooling, planning, inspection, etc.,
can not be amortized. The experienced man starts
the design with a thorough catalog search. When the
designer has designed himself into a corner i t i s
generally too late to suggest standard purchased
parts, especially after tooling is ordered. There is
no substitute f o r a good catalog l i b r a r y and a telephone.
An interesting catalog service which uses m i c r o f i l m
technique is now available to industry. This i s an
organized approach at maintaining a complete and
current catalog f i l e , a task which is virtually i m -
possible, as we a l l know. This f i l e consists of a series
of m i c r o - f i l m cartridges which can be selected by
index and scanned on a viewer at any chosen speed.
The entire catalog i s updated and replaced quarterly.
This new catalog technique is a significant step i n
eliminating the void created by missing and out of
date catalogs, and can be an important aid to the
technical man i n finding the right supplier.
BETTER VALUE FROM IMPROVED SUPPLIER-
CUSTOMER RELATIONS
A novel department i n the drive towards greater
cost effectiveness i s the highly organized corporate
appeal to the supplier. For example, cost reduction
conferences and symposia have been held at Republic
Aviation, Loral Electronics, Collins Radio, Autonetics
Division of North American, Tapco Group of Thompson
Products, Eclipse-Pioneer Division of Bendix, Fort
Worth Division of General Dynamics and many other
concerns. The conference is generally organized and
conducted through the office of the director of Materiel
who invites a l l the suppliers and sub-contractors on
a specific project to discuss ways and means of cutting
the cost of the parts that go into the final assembly.
Request For Articles - see page 44
12-62-2 S.A.V.E. JOURNAL
Symposia can take place at several levels. Republic
Aviation, a prime contractor has held one f o r the
entire F-105 airplane; on the other hand, Collins
Radio, a subcontractor f o r the F-105's Cummunication-
Identification-Navigation systems has held a confer-
ence f o r suppliers on only f i v e relatively small "black
boxes". Reviewing Value Engineering techniques, the
conference usually lasts f o r one day, and selected
speakers, including representatives f r o m the m i l i t a r y ,
discuss the problems, goals and methods of reducing
costs i n each of their areas of interest.
The improvement of supplier understanding of cost
reduction is not only desirable, i t is imperative be-
cause the supplier prospers only when the customer
prospers.
THE VALUE ENGINEER AND THE SUPPLIER
Since Value Engineering i s an important member of
the industrial management team, we would expect
Value Engineers to maintain a close liaison with
suppliers. This assumption is true, but must be
qualified, since there may be problems of overlapping
jurisdiction within a company or divisional organi-
zation. Value Engineering functions best when i t
stimulates, educates, innovates, trains, advises, as-
sists, and encourages others, but its chief function
is that of a catalyst. Contacts with specialty suppliers
are best arranged with the approval of the Materiel
organization. The Value Engineer may consider i n -
viting a supplier to give an in-plant demonstration
of investment casting or a new type of fasteners.
He w i l l accomplish his goal by acting as an inter-
mediary, and suggest to Materiel that the supplier
be invited by Materiel to demonstrate his product
before a group of engineers and designers. Perhaps,
the demonstration can take place i n the Value Engi-
neering office. Working through, and with, Materiel
makes f o r the best human relations.
Value Engineering is built on a foundation of well known
principles sometimes r e f e r r e d to as the Twenty Keys
to Value. Making Better Use of Specialty Suppliers is
one of these twenty foundation stones. No single Key
outranks the other i n importance. The understanding
and appreciation of the role of the specialty supplier
is essential to the successful implementation of a
Value Engineering program.
15
 S.A.V.E. 1963
•s j P R O O F
! o f h o w t h e

National Convention
s h o w s t h e w a y t o
April 25-26,1963 h i g h e r v a l u e
New York o f s m a l l p a r t s . . .

DETAILS ON INSIDE BACK COVER

Shown actual size

Take, for example,

this part which
previously had
been produced 3
different ways . . .

METHOD A. METHOD B the GRC

Books & ASSEMBLY OF
2 SCREW MACHINE
CONVENTIONAL
DIE CAST AND
m e t h o d

Manuals
WANT TO ECONOMIZE?
PARTS MACHINED PART AUTOMATICALLY
DIE CAST

Screw Machine Part

As Cast
We can save you as much as
Mill Slot
50% on typesetting costs.

Why not get our price f o r repro Machined Extrusion

Machining for
copy, printing, binding? Undercut and

1
Assembly Sizing of Diameters
The S.A.V.E. Journal is an Production
Step
Production Production
example Of our work. Modern,
speedy methods used i n our 4 Steps

- f - 3 inspections 1
3 Steps

- f - 2 inspections
plant are eminently suitable —only one inspection
Now take a look at these comparative figures . . .
f o r the complete production of
manuals, price lists, periodi- Purchased Scrap Cost in lots of
Material Cost/M Generation 100 M 500 M
cals, and catalogs.
Method A Brass $30 30% $70/M $69/M
Low Prices Method B Zinc Alloy $3.82 5% $30/M $28/M
Speedy Delivery
GRC
KENT ASSOCIATES, INC. Method Zinc Alloy $3.64 None $15/M $11.50/M
<L>*^ Offset Printing P^_s
60 EAST llth STREET NEW YORK S. N.Y.
Check the chart; you'll see clear proof of how GRC's MAXIMUM SIZES:
GRamercy 7-3133 2 " long, % oz.
DIE CASTING METHOD offers substantial savings on
your small parts. The Gries Method delivers parts of NO MINIMUM
high uniformity, with close tolerances . . . ready for
use. Assembly and most other secondary operations
16 are eliminated. Writ; wire, phone NOW for GRC's bulletin
"Small Die Castings Exclusively"; tend prints for quotation.

G R I E S R E P R O D U C E R
Worlds Foremost Producer ot Small Die Castings
6 4 Second St., New Rochelle, New York * NEw Rochelle 3-8600
 An Evolution in Depth

I Los Angeles Chapter

Society of American Value Engineers
The following important questions, answers and comments are part of the abstracts f r o m
the proceedings of the L . A . Chapter's recent a l l day V. E. symposium. A l l material has
been edited f o r publication space limitations and compilation of s i m i l a r information

LIST OF SUBJECTS AND DISCUSSION LEADERS

A Contractual Aspects of Value Engineering V. M. Best,
B STL
Responsibilities of the Full Time V. E. H. K. Davidson, Norvair/Northrup
C Value Engineering Cost Target Programs E. A. Green,
D Lockheed - Calif.
Evaluating the Function W. M . Thompson,
E Bendix-Pacific
Identification and Promotion of V. E. R. L . Denig,
F Aerojet General
General Questions and Answers A. R. Tocco, STL
J. J. Riordan, D.O.D.
R. S. Mandelkorn, Sperry Gyroscope

A - Contractual Aspects of Value Engineering

QUESTION - GOVERNMENT ATTITUDES
A number of questions were asked about the
m i l i t a r y attitude, requirements, incentives, enforce-
ment, implementation, application, administration,
measurement, effectivity, maintenance, obligations,
and cost-sharing trade-offs of Value Engineering
clauses in government contracts. M a j . W. O. Castle-
berry, HQ BSD (BSKR) recommended the bracketing
of a l l problems into three (3) types of m i l i t a r y con-
tracts with consolidated replies to questions.
ANSWERS - CONTRACT CONSIDERATIONS
1. In Cost Plus Fixed Fee (CPFF) type contracts
—normally the f i r s t type of contract received
in the progression of a Weapon System. Value
Engineering has been and probably w i l l continue
to be a level of effort type program, i n which
the contractor w i l l expend effort, and i n which
the m i l i t a r y presumes the contractor is estab-
lishing and adhering to good value engineering
principles early in the weapon system program.
The m i l i t a r y can judge whether or not the con-
tractor is practicing value engineering p r i n -
ciples by reviewing his administrative func-
tions. This then would be the best the Government
could determine on this type of contract.
2. Cost Plus Incentive Fee (CPIF) contract —
incentive type and a cost reimburseable type
contract. This is where you get into the value
engineering type problems that are mostly
confronting the contractor and the Government
today.
3. F i r m Fixed Price or Fixed Price Incentive
(FFP or FPIF) Contracts. Here we are getting
into the most complex value engineering con-
tractual problems-cost saving sharings. Gen-
eral concurrence f r o m the group -was that
contractors do not have problems with CPFF
type contracts but that the problems did lie i n
CPIF, FFP and FPIF type contracts.
Maj. Castleberry, of BSD, indicated that the A F
Procurement Circular No. 16, which had been c i r -
culated by the A i r Force as a general guide concern-
ing value engineering requirements, has f o r m a l l y
been incorporated into A F P I this past week. This is
a step i n the direction of establishing f i r m value
engineering requirements f o r A i r Force Contracting
Officers and Buyers. The Major indicated that recent
MMRB Contracts included sixteen VE clauses peculiar
to MMRB.
He further stated that contracts over $100,000.00,
but less than $500,000.00, were subject t-o review by
the responsible A F Procurement Contracting Officer

12-62-2 S.A.V.E. JOURNAL 17

(PCO) to either include a value engineering clause
or the PCO had to submit reasons why he was not
including a value engineering clause. The PCO i n the
latter case is subject to veto by the Procurement
Committee which includes M a j . Castleberry and
others who are responsible f o r specific areas i n the
contract, hi the case of a $500,000.00 or larger con-
tract, a value engineering clause must be included.
QUESTION - AFPC 16 COST SHARING
"On a f i r m fixed price (FFP) contract, i f a Con-
tractor can achieve a cost savings, e.g. $1,000,000.00,
through a new manufacturing process and this change
in no way effects the performance, or interchange-
ability, reliability, etc. of the component i n question,
would the Contractor, i n accordance with Section (6)
of AFPC 16, have to share this cost savings with the
government?"
ANSWER - AFPC 16 COSTS SHARED
Major Castleberry's reply was: "Yes." It was
concluded that this type of occurence on a FFP Con-
tract would be rare. By the time a Contractor and the
Government entered into a FFP Contract, i n the
normal chain of events e.g., CPFF, CPIF and then
FFP, the Contractor should know his product so well
that he would not be faced with this situation.
COMMENT - V.E. AND LETTER CONTRACTS
Major Castleberry stated that he f e l t that perhaps
one of the biggest problems concerning Value Engi-
neering was the fact that Value Engineering now comes
into effect much too late in the present course of events
in the acquisition of a weapon system. Hardly any
letter contracts that he had reviewed made any r e f e r -
ence to Value Engineering. Normally the f i r s t mention
of Value Engineering is made several years after the
weapon system has been under development and has
reached the definitive contract stage.
His solution was to implement Value Engineering
clauses at the letter contract stage. This would cause
the Contractor to make the decision then concerning
Value Engineering. BSD recognizes that there is lack
of definition at this point in time (letter contract stage)
but the entire weapon system is indefinite at this time,
therefore, Value Engineering shouldn't be given any
less consideration than any other facet of the program.
Major Castleberry concluded his remarks by stating
that he personally was going to insist that every new
letter contract crossing his desk have a Value Engi-
neering clause incorporated i n i t .
COMMENT - DEFINITIVE CONTRACT PROBLEM
Several members of industry then noted that at the
letter contract stage, we cannot establish a f i r m cost
platform f r o m which we can measure any cost savings.
Particular attention was given to production type
18 S.A.V.E. JOURNAL
contracts which start out as letter contracts, are then
definitized and then encounter equipment changes.
There i s no f i r m cost platform until a definitive con-
tract is signed. How do we t r y to initiate a cost
savings proposal (VECP) or determine the extent of
the Value Engineering savings at the letter contract
stage? What incentive does a Contractor have on a
letter contract to write a VECP without this f i r m
cost platform?
We must press on to definitize contracts at an
earlier point i n time (and thereby establishing a f i r m
cost platform) and i f there are exact value engineering
principles at the outset of a weapon system program,
the resultant dollar savings to the Government would
i n itself cause more funds to be available f o r further
procurements, etc. Those Contractors who had demon-
strated good faith and sound Value Engineering policies
would be i n a more favorable position to partake i n
the expected increased procurement i n the follow-on
contracts.
COMMENT - U.S. ARMY CONTRACTS
Col. F. K. Whitborn of the U. S. A r m y Ordnance
District, Los Angeles offered some remarks con-
cerning the A r m y ' s experience i n value engineering.
The A r m y has been giving particular attention to
VE/VA lately and has issued a directive that A r m y
Value Engineering Clause 143 was to be incorporated
in a l l A r m y Contracts. He went on to indicate that he
had contracts with six f i r m s i n the Los Angeles P r o -
curement District who have value engineering clauses
incorporated into their contracts.
QUESTION - ARMY V.E. REQUIREMENTS
M r . V. Best asked Col. Whitborn whether or not
the A r m y required their Contractors to have value
engineering organizations, reports, procedures, etc.
and did the A r m y require the Contractors to identify
their value engineering organizations as to the types
of people that would staff them, and the training they
would receive?
ANSWER - CLAUSE 143 DEFINITION
Col. Whitborn replied that although Clause 143 did
not require a definition of the Contractor's organiza-
tion, etc., the A r m y had and does send letters to the
Contractor's requesting this type of information i n
connection with the performance of their contracts.
COMMENT - NEED FOR V.E.
M r . J , Adams of the Boeing Company stated he
f e l t the Contractors didn't need value engineering
clauses as such. The remainder of the members of
Industry f e l t that i f the Government did away with
value engineering clauses, i t would hurt the cost
effectiveness drive more than help i t . A good tie-off
comment on this subject was: those companies that
12-62-2
are i n need of business would be pressing f o r value
engineering clauses, and those companies that were
fat with contracts would probably put up the hardest
resistance to value engineering clauses.
COMMENT - V . E . C P . TIME DELAY
Another comment f r o m industry was to revive the
argument that the Government couldn't apparently be
very interested in value engineering because of their
slow reaction time in processing VECP type changes,
resulting in loss of incentive and failure to effect the
cost savings. BSD countered f o r the Government and
stipulated that this was a two-way street. The Con-
tractors discount the time they expend in preparing a
VECP or f i r m cost proposal, etc. dragging out letter
contracts, making i t difficult to establish good basic
cost platforms, and/or enhance orderly value engi-
neering practices.
QUESTION - GOVERNMENT DEFINITION OF
V.E. ORGANIZATION
M r . Best asked contracts about requirements f o r
establishing and defining V.E. organizations.
ANSWER - INCLUSION IN PROPOSALS
Major Castleberry stated that the Contractor
should provide a checklist of value engineering r e -
quirements, methods of implementing these require-
ments i n his organization, etc., i n the initial proposal
stage of even CPFF type contracts. He also indicated
that the inclusion of this information in a proposal
would effect a more favorable outlook by the Govern-
ment, especially i n competitive proposals.
QUESTION - MILITARY WEIGHING OF V.E.
CLAUSES IN PROPOSALS
Members of industry then questioned Major Castle-
b e r r y as to how much weight the m i l i t a r y was going
to put on these value engineering clauses inproposals.
He indicated they couldn't prescribe a percentage.
Industry countered then that i t wasn't f a i r f o r the
Government to expect value engineering consideration
i n proposals i f the Government didn't advertise their
value engineering requirement and the weight factor
i t carried i n a proposal.
ANSWER - SPECIAL CONSIDERATION POINTS
Major Castleberry indicated as a point of c l a r i f i c a -
tion, that the Government w i l l give special considera-
tion to these three main points when considering future
contracts i n their source selection process:
1. Contractor's past performance
2.. Value Engineering Clauses
3. Make or buy structure
12-62-2 S.A.V.E. JOURNAL
COMMENT - MILITARY DELAY IN V.E. RESPONSE
The discussion then centered on the problem p r e -
sented by Industry on the lack of timely response by
the M i l i t a r y in reacting on Value Engineering require-
ments. It was suggested that the customer accept a
time l i m i t of 30 to 60 days after receipt of a proposal
f r o m Industry.
QUESTION - BSD EXHIBIT 62-21
M r . J. Weber then brought up the point that he was
f a m i l i a r with BSD Exhibit 62-21 which established a
Value Engineering Program f o r MINUTE MAN Con-
tracts. He wanted to know i f this Exhibit would be
applicable to other contracts such as MMRBM.
ANSWER - BSD 62-21 APPLICATIONS
Major Castleberry commented that BSD 62-21
would not apply to MMRBM Contracts but that some
separate Exhibit would be created and would apply to
a l l MMRBM Contracts.
Major Castleberry listed the following significant
points of the meeting:
1. "There seemed to be a general consensus of
opinion on the part of the members of industry
that i n Incentive Type Contracts, that no special
VE incentives sharing clauses need be added.
They believed that the normal incentive features
of this type of contract are sufficient motivation
to enforce V.E. principles without having special
clauses added.
2. "To be really effective, we need V.E. clauses
at the very inception of a weapon system p r o -
gram i n the initial letter contracts.
3. "It appears as i f i n a CPFF Contract, V.E.
doesn't pose any particular contractual p r o b -
lems because the Contractor can be paid f o r
his expenditure indicated as a level of effort
rather than having to measure performance
against a cost platform. Contractors should
normally accept CPFF value engineering
clauses without any problems.
4. Finally, the conclusions reached about incentive
features of V.E., (namely, the Contractor always
share i n cost savings by incentive arrange-
ments,) implies that we appear to have no
further road blocks l e f t to implementing value
engineering.
19
B-Responsibilities of the Full Time Value Engineer
QUESTION - WHY ARE F U L L TIME VALUE
SPECIALISTS NECESSARY?
ANSWER - PRODUCT COMPLEXITY
The products manufactured today are very complex,
and a design engineer needs and demands this help.
He concentrates on design applications and does not
have the time f o r a V E. function.
ANSWER - MANUFACTURING KNOWLEDGE
Design engineers do not understand (in many cases)
machinery or manufacturing operations. On the other
hand, we cannot expect a design engineer to know a l l
this.
ANSWER - COMPETENT DESIGNERS
The one thing we t r y to rely upon is "competent"
designers. With competency we need less specialists.
ANSWER - COSTS
The designer does not have the tools to know where
the high cost areas are.
QUESTION - SHOULD THE V.E. BE A F U L L TIME
JOB?
ANSWER - COST vs FUNCTION
It depends on the size of your operation. In one
plant the activity is gaged around the cost of the opera-
tion. You need to specifically analyze the value engi-
neer's function to know how much time is needed.
QUESTION - DO WE NEED ONE OR MORE VALUE
ENGINEERS IF THE OPERATION CAN
SUPPORT IT?
ANSWER - MONITORING vs. AUTHORITY
A - It should be a monitoring function preferably
at the layout stage. Monitoring is a continued
surveillance of layouts i n coordination with
the engineer.
B - An objection was made to the monitoring role.
The V.E, needs to take action and, i f he needs
to, he should go a l l the way to the top,
QUESTION - DOES THE FUNCTION OF A V.E. END
IN ENGINEERING?
ANSWER - NO
V.E. departments are equal and have as much to
contribute as Engineering. Li fact - few engineers
could make their product f r o m their own design.
20 S.A.V.E. JOURNAL
QUESTION - WHAT ARE THE V.E. RESPONSIBILITIES
IN MANUFACTURING AND TOOLING?
ANSWER - COORDINATOR TO A L L DEPARTMENTS
This results i n a question of trying to get Pur-
chasing i n the act to feret out the vendors and eventu-
ally get a l l the services at the board, f r o m all de-
partments.
The duty of V.E. is to coordinate a l l the activities
and specialists, and not stop at design. Tooling is
important too. There are times when the design can
best be made with a different tool than was planned.
QUESTION - DOES A VALUE SPECIALIST NEED TO
BE A TRAINED MAN? OR, QANWESAY
ANYONE IS A VALUE SPECIALIST WHO
IS ASSIGNED TO THE FUNCTION?
ANSWER - NO
A Value Engineer or Value Analyst must be a
trained individual. He must be a graduate so to speak,
of some training program, seminar or some recog-
nized training program. He must be mature with a
good knowledge of his company and its product. He
can only become a value specialist after full<;oncen-
tration on the f i e l d of Value.
QUESTION - SHOULD A V.E. BE A SPECIALIST OR
A GENERAL PRACTITIONER?
ANSWER - BOTH PLUS OTHER ATTRIBUTES
He should definitely be a specialist. The V.E.
Administrator could be a general practitioner. The
more rounded out knowledge he has the more efficient
he may be.
He should be a salesman and an educator.
QUESTION - WHAT ARE THE DUTIES OF V.E. IN
PURCHASING?
ANSWER - MULTIPLE DUTIES
In Purchasing the V.E. has the job to challenge
Vendors. To get as much information f r o m them be-
cause they are experts and Specialists in their respec-
tive fields.
C - V . E . Cost Target Programs
Through initial discussion a definition of 'Target
Cost' was developed. A target is a level of performance
established i n the conceptual stage of a product or
activity to strive f o r , e.g. a cost level. Further d i s -
cussion led to individual concepts such as product
cost or bid cost being the targets.
12-62-2
QUESTIONS - NEED AND IMPLEMENTATION OF
TARGETS
The question was raised as to the need f o r Target
Costs. Also questions as to when needed; how to e s - '
tablish them, where does i t f i t into a company's
organizational structure; and how is i t to be tracked?
There was a division of thought as to whether Target
Cost should be part of V.E. or part of management.
Some questioned the relationship of Target Cost to
V.E.
ANSWERS - GENERAL NEED FOR TARGETS
Target savings can be obtained i n an existing de-
sign or more can be obtained i n the conceptional
stage of a design. Consensus was f o r Target Cost
in either situation.
QUESTION - TARGET BASE LINE
What is the base line f o r a Target Cost?
ANSWER - TARGETS CAN BE AIDS
A participant commented that "Target Cost P r o -
grams'* (by other names) are old time. Concensus of
the discussion was that Value Engineering could help
management understand and f u l l y use Target Cost,
and would provide the designer with a useful tool
along with stress analysis, weight analysis, functional
requirements, etc. Only a few companies are presently
providing this tool to their design personnel.
QUESTIONS - STARTING POINTS
Where does a company start f r o m to establish a
Target Cost Program? What data does each company
have?
ANSWERS - USE OF DATA WITH ADEQUATE
CONTROLS
Costs of material, tooling, planning, engineering,
fabrication, processing, assembly, quality control,
functional and qualification testing, inventory and
G and A. are on hand but not readily available, de-
pending upon company policy. Many agreed i t was
possible (but few companies do it) f o r a designer to
exercise control over these cost items (except G and
A, overhead and p r o f i t ) . The point was also made that
V.E. should influence a l l departments and branches
to meet a Target Cost and not by virtue of the hard-
ware alone but by application of Value Engineering
techniques to a l l operations, directives and p r o -
cedures.
QUESTION - TARGET MONITORING
When should design be evaluated to know i f the
target w i l l be reached?
12-62-2 S.A.V.E. JOURNAL
ANSWER - PERIODIC REVIEW
The concensus seemed to be that the evaluation
should be done in preliminary design and periodic
reviews afterwards depending upon peculiarities of
individual companies. Monitoring or tracking can
use several methods, e.g., cost data provided in
design review and costs of design alternates by
periodic estimates i n some f o r m of chart.
SUMMARY
In Summary: A target is a level of performance
established in the conceptual stage of a product or
activity to strive f o r , in the VE case, a cost level.
The Target Cost must be realistic and attainable with
effort, but when reached i t may be lowered. Even with
a Target Cost on the overall end product there is
need to break i t down to sub-targets f o r the designer
to use as a tool and a goal. With intensive V.E. par-
ticipation both sub and overall end product Target
Costs are achievable. A method of tracking or
monitoring, adaptable to each company, is necessary
to p e r m i t remedial or corrective action as design
progresses to achieve the target before i t is too late.
D - Evaluating the Function
The Chairman introduced the discussion by ob-
taining agreement regarding the basic concepts of the
subject under discussion. This introduction included
identification of the six types of value and the isolation
of one of these types — economical — as the only one
which may be directly measured i n dollars. We f u r -
ther explored economical value and identified its four
elements, namely; cost value, exchange value, esteem
value, and use value. Following agreement on this
point, these were condensed into a single definition
f o r value paralleling L a r r y Miles i n his book. The
group then agreed upon a definition f o r function as i t
relates to esteem and use value; i.e., "that quality
which makes a product work or sell."
IDENTIFYING THE FUNCTION
It was then established through discussion that no
evaluation of function can be accomplished without
f i r s t completing the process of identifying the function
and establishing its condition as either p r i m a r y or
secondary. The discussion also brought out the i m -
portance of simplifying identification consisting of a
verb and a noun, and further recommending that, i f
possible, the noun be a measurable parameter. Other
conditions f o r complete identification included asso-
ciated factors such as quantity involved and the break-
ing down of the item being identified into its smallest
increments.
EFFECTIVE METHODS
With regard to the actual evaluation of function,
the group agreed that the statistical and the com-
21
parative approaches were the two methods most H. Education, Publicity and Contract requests.
effective, and particularly indicated the comparison
method as being the most desirable and efficient. I . Get active support f r o m Top Management-plan
a f u l l V / E Program with design manuals and
EXAMPLE OF FUNCTION cost handbooks, then establish acceptable steps
of application leading to f u l l utilization of V / E .
As a means of illustrating the relationship of Provide or support V / E training and education
added labor to function, a brief case study of a of key personnel f i r s t , then a l l affected p e r -
mouse trap was explored with the group identifying sonnel.
the function, establishing a value by comparison and
adding work without adding functional value. J . Engineering product management and Support
areas.
E - Identification and Promotion of V.E.
CONCLUSION
QUESTION
F r o m the variety of comments and opinions ex-
What subjects comprise a complete Value Engi- pressed i t can be stated that those present did not
neering program? have a common definition of V / E nor did any one
have a f u l l realization of what made up a complete
DISCUSSION V / E Program. In addition i t was brought out that
V / E requires proper organizational placement as
It was apparent early i n the discussion that most well as recognition by decision making personnel to
everyone present has a different idea as to the scope be effective.
of Value Engineering. Some thought that i t should only
be applied in the design phase, others to design and PROMOTING A V.E. PROGRAM
production while s t i l l others said that Value Engineer- PROMOTION RECOMMENDATIONS
ing applied only to hardware analysis. Some believed
that paper work studies were not problems f o r Value Advertising Technical Society
Engineering but were subjects to be investigated by Publicity Dist. Literature
Industrial Engineers. Education Competition
Recognition Target Costs
V.E.PROGRAM FACTORS Achievement Awards Cash Incentives
Reporting Lower P r o f i t s
A. Develop a plan - This needed to reach stated Selection of Personnel Indoctrination
objectives, namely to p e r f o r m V / E on the Dramatize Past Customer Participation
companies products. Setting up and training an Publicize Problem Vendor Participation
organization to accomplish the stated objec- Show Results P r o f i t Sharing
tives. Providing the means of controlling the Contractural Reqs. Cost Manuals
V / E operations: schedule; budget; reporting;
etc. DEVELOPING ACTIVITIES
B. Cover a l l areas of a company or organization The promotional methods listed above were d i s -
where costs are incurred: Engineering p r o - cussed and the following topics were selected as areas
jects; Production or manufacturing; Procedures of activity to develop a program.
i n purchasing, accounting, etc,.
1. PUBLICITY - i t must reach "middle manage-
C. Making the Plan, Management go-ahead ( i n - ment" favorably to obtain their support,
cluding finance) and Working the plan.
2. EDUCATION - In-plant education directed t o -
D. Communications, Staffing and Promotion. ward higher supervision and decision making
personnel was given top importance. The cus-
E. Use operation and technical personnel trained tomer and vendors should also receive training.
in V / E Techniques i n areas of: Engineering,
Materials, Quality Control, Production, F i - 3. ACHIEVEMENT AND INCENTIVE AWARDS -
nance, Education Services, and Tooling. Some f o r m of personal recognition should be
given to the individual, i.e., "letter in personnel
F. Operational Plan, Training and Promotion, folder," as well as national recognition to
Implementation of V / E Program and Measure- groups and plants.
ment of the program.
4. PERSONNEL - Selection is c r i t i c a l , and i n d i v i -
G. Program a Plan, Organization, Training, and duals should possess tact as well as experience
Implementation of Programs. in many fields.

22 S.A.V.E. JOURNAL 12-62-2

 5. PUBLICIZE PROBLEMS - Use means within
plants to motivate a l l personnel to suggest and
participate i n V / E Programs.
6. PUBLICIZE RESULTS - Use newspapers and
national publications (V/E Weekly - Purchasing,
etc.) f o r favorable publicity.
7. CONTRACTUAL REQUIREMENTS - W i l l force
V / E acceptance i n much of industry, w i l l supply
dollar incentives and support t r u l y competitive
bidding.
8. TECHNICAL SOCIETIES - S.A.V.E. shouldcor-
relate with other socieities, exchange speakers
and data, thus gain wider acceptance.
9. TARGET COSTS - Properly established and
used, i t w i l l : Give Design Engineer costs; force
Design Engineer to meet costs; provide a means
of pointing out areas where V / E is needed;
control tools and provide records.
CONCLUSION
Promotion methods employed must be able to
motivate "middle management" into accepting and
using V.E., This "middle management" was defined
as decision making personnel with responsibilities in
one or more of the following: Budget, Task and
Schedule.
F - General Questions and Answers
QUESTION - CONVINCING GOV'T AUDITORS
How do you convince the Government audit p e r -
sonnel that value savings have been realized i f they,
the Government auditors, have not been trained i n
value techniques?
ANSWER - DOD PLANS (A.R. TOCCO)
The individuals who audit your books have not
been trained to recognize the value engineering dollar.
However, there is a r a y of hope. We have been i n -
formed that there w i l l be i n the future, a DOD Value
Engineering Training Program. This is something
that is going to cut across, not only the more easily
recognizable elements of the DOD, such as A r m y ,
Navy, and A i r Force, but also outside of the DOD
there w i l l be people i n the GAO and i n the Renegotia-
tion Board brought i n closer to the picture. We hope
to have, within the next month or so, an official policy
statement f r o m the Renegotiation Board which says
i n effect that value engineering savings w i l l not be
challenged i n the manner that other p r o f i t s are
challenged i n renegotiation procedures. They have
given verbal approval to this already. Your question,
however, is s t i l l valid. How w i l l they know a dollar
that's a value engineering dollar when they see one?
12-62-2 S.A.V.E. JOURNAL
This is something that is not going to be resolved
overnight. I think the only hope we have is i n the fact
that a broad training and orientation program is on
the threshold of being implemented and that these
people w i l l be invited to sit i n and learn what the
difference is between the value engineering effort and
other cost reduction efforts.
QUESTION - DEVELOPING DISCIPLINES
Mr. Riordan, just what do you mean when you
make the ominous statement that techniques and d i s -
cipline must be developed'soon or the management
of both Government and industry w i l l become d i s -
enchanted with value engineering? What recommenda-
tions do you make to accomplish this task, what and
how should i t be done?
' ANSWER - EXPLANATION OF "VALUE
ENGINEERING" (J. J, RIORDAN)
I think the quotation is correct that, in my opinion,
management w i l l be disenchanted unless the techniques
that support the objectives of value engineering are
strong enough to do the job that value engineering holds
as possible of accomplishment. Now, why do I say
this? My answer f o r making this statement is two-fold.
F i r s t , m y own personal review of the literature of
value engineering, what I would call some of the
propaganda, i f you w i l l forgive that word; secondly,
the reactions of people i n respectable and highly paid
levels of management who ask the same question.
Everyone says that they want value engineering: "Tell
me exactly how you do value engineering" ?
Sometimes we end up by somebody saying, " I saw a
paper this afternoon listing certain things i n value
engineering, one of them was "Creative Thinking". In
fact, there is a f i l m equating value engineering with
creative thinking. Another f i l m we showed to the DOD
last week, titled "Value Engineering" which had the
sub-title of "Brainstorming." Now, brainstorming i s ,
to my mind, something by which people sit down and
f o r a moment concentrate on a problem and hopefully
come up with something. But this is not, what the
manager wants. What the manager wants i s , "Tell
me exactly, procedurally, how you go about this job."
So the question he is asking me is what am I asking
for.
I am saying that the V.E. objectives outrun the
V.E. methodology. The methodology exists i n various
fields of physics, chemistry, industrial engineering and
reliability, but these techniques have to be tailored to
f i t the cost objectives of the value engineers. This work
has not been done. But i f this work were done, we
could go to the managers and say, "Here is an objec-
tive and i n the area of testing (e.g.) here is the way
we do i t . "
QUESTION - STANDARDS
Can you give some examples of the type of stand-
ards you feel must be established?
23
ANSWER - DEFINITION AND MEASUREMENT
(R.S. MANDELKORN)
One type of standard which I think I made quite
clear, as a requirement, is the standardization of
definition. A second type of standard which is required
certainly to meet M r . Riordan's c r i t e r i a , is some
standard f o r measurement. To derive these, Ibelieve,
w i l l take serious, concentrated, organized work on the
part of people representing the various agencies i n -
volved. I mentioned that the American Standards Asso-
ciation should be brought into this picture. I feel I can
say f r o m m y own communication with management
people f r o m other companies is that this is a "gaposis"
that bothers them very much. There is no calibration.
QUESTION - INADEQUATE TRAINING METHODS
M r . Tocco, you implied that present training of
methods are inadequate. By this, I assume you mean
the workshop approach in conjunction with lectures,
etc. What type improvement do you propose?
ANSWER - WORKSHOPS (A. R. TOCCO)
I think that the workshop approach is excellent.
Where the programs are deficient, i n my opinion, is
that we have not developed anything new since the
early days of the General Electric main approach to
training. This is not to say that what was originally
put together was inadequate f o r the purposes intended.
I merely say that that training program, that formula,
was not put together f o r training value engineers f o r
the defense weapons system acquisition environment,
and that we need to add to that body of knowledge some
new training techniques and some new material. That
is why we are pushing for these areas of mathematical
models, quantitative assessment of design, an approach
to the specifications problem i n weapons systems de-
sign, the establishment of target costs.
QUESTION - V.E. WEIGHT FACTORS IN PROPOSALS
NEW SHRINKABLE PVC TUBING
SIMPLIFIES CABLE JACKETING
Alphlex® FIT-105 i an easy-to-use irradiated PVC tubing that shrinks 50% upon
s
application of heat (325°F), to provide a snug, yet flexible cable covering. Supplied in
expanded form so that cable cores may easily be pulled through. Has all the qualities
of the finest extruded plastic jackets. Available at your electronics distributor.
ALPHA WIRE
CORPORATION
200 Varick Street, New York 14, N. Y.
24
Will the Defense Department stipulate a "weight"
factor in the request f o r bids f o r evaluating the value
engineering portion of proposals? Will this be laid
down as a "must" requirement f o r the various de-
partments? Will the Defense Department stipulate that
value engineering shall be considered i n evaluating
proposals on new business contracts?
ANSWER - V.E. CAPABILITY AS A CONTRACT
CONDITION (J. J. RIORDAN)
When I answer this question, actually I ' m answering
i t f r o m a Department of Defense point of view, mean-
ing f o r the whole Department of Defense. Therefore,
what I say may not be true f o r any particular depart-
ment or any particular command, as each of these
commands or departments have considerable autono-
my. It w i l l be a policy of the Department of Defense,
as f a r as possible, to put value engineering require-
ments into contracts but, in my opinion, I don't think
i t would be correct to say, at the present time, that
i t w i l l be a requirement f o r value engineering cap-
ability as a condition f o r a contract.
QUESTION - ASPR RESTRICTIONS
Why not make the contractual clauses of ASPR
more usable by imposing restrictions on the services,
such as a time l i m i t f o r reviewing value engineering
change proposals? So much time is often lost that the
total advantages are lost.
ANSWER - CHANGE PROCEDURE TIME L I M I T
(J. J. RIORDAN)
I agree that the contract change procedures is i n
need of some action, and probably a time l i m i t of 30
days or 60 days would be a desirable thing. The
whole contract change procedure is under study by
the OSD in cooperation with Logistics Management
Institute. The problem of simplifying the contract
change procedure is definitely under intensive review.
VALUE
ENGINEERED
PRODUCT
S.A.V.E. JOURNAL 12-62-2
D.O.D. Comments at the
S.A.V.E. Los Angeles
V. E. Colloqium
Mr. Riordan indicates the interests, attitudes, progress and endorsement of value engi-
neering i n D.O.D. His comments should be of special interest to management
in m i l i t a r y products companies.
Two or three years ago, I was under less obliga-
tion to be restrained than I am this evening. At that
time, value engineering had not had the vigorous and
official sanction of the Department of Defense that i t
has today. Since that time, the Secretary of Defense,
Mr. McNamara and the Assistant Secretary of De-
fense, M r . M o r r i s have taken a personal interest i n
Value Engineering. Therefore, I think I would be well
advised to speak more austerely and with less per-
sonal opinion than back i n 1960.
DOD INTEREST
It may be well, f i r s t , to say that my purpose i n
being here is to accept the invitation of M r . Rensen
and this organization to l i t e r a l l y participate i n a
critique, and I accept the definition of "critique" as
a constructive analysis of a problem or group of
problems. Secondly, I am here to indicate that the
Department of Defense is seriously and aggressively
interested i n Value Engineering and to advise you on
the current status of Value Engineering i n the De-
partment of Defense.
ASPR CONTRACTS
The environment i n which value engineering exists
is suggested by a few recent developments - even
though these may not pertain specifically and ex-
clusively to value engineering. The f i r s t of these is
an important revision of "ASPR" pertaining to con-
tracting. (Incidentally, I don't want to indulge i n
Pentagon verbiage.
Nonetheless, i n meet-
ings of this kind, i t is
at times necessary to
refer specifically to
policies and documents
with their proper iden-
tifications.) The word
"ASPR" means Armed
Services Procurement
Regulations. These are
12-62-2 S.A.V.E. JOURNAL
J.J. Riordan
Office of the Assistant Secretary of Defense
(Installations and Logistics)
personnel
the regulations that guide Government contracting o f -
fices in their relations with business. Revision4, Sec-
tion 3 of ASPR is really an historic statement. The
Department of Defense said therein that p r o f i t s in i n -
dustry should be related to performances. It f u r t h e r
set up a hierarchy of preferred contractual arrange-
ments. The most desirable contract is the f i x e d -
price type. The next most desirable type is of the
incentive variety.
Those of you that are acquainted with the situation
i n the Department of Defense know that since the pub-
lication of that ASPR provision there has been a p e r -
ceptible change in contracting. More and more con-
tracts are being written i n terms other than the cost-
plus-fixed-fee type. In the light of this fact, value
engineering takes on increasing import. Pressure is
definitely "on" to procure things less expensively
without compromising reliability of quality. It would
appear to me, therefore, that value engineering w i l l
f i n d acceptance more extensively i n industry because
i t has potential f o r making industry responsive to a
more competitive and incentive-oriented kind of
Government-industry relationship.
SECRETARY McNAMARA'S
REPORT TO THE PRESIDENT
Another background consideration pertinent to this
discussion is the report of M r , McNamara to the
President on 5 July 1962. This was a report of the
progress of the Department of Defense during the
previous six months. It was widely publicized. You
w i l l recall that M r . McNamara held out to the P r e s i -
dent the possibility of reducing the defense costs by
3 billion dollars i n 4 or 5 years.
$100 MILLION VIA E.E., ETC,
With respect to value engineering - no minor part
to this report - M r . McNamara stated that the De-
partment of Defense would soon be reducing defense
costs by 100 m i l l i o n dollars a year by using value
engineering techniques, disciplines and concepts.
25
 A t h i r d background consideration - getting away
f r o m the Department of Defense - is the President's
radio trade message of last A p r i l . This was i n con-
nection with the President's request to Congress f o r
the authority to adjust t a r i f f s to meet the new situation'
in Europe regarding the Common Market. In that
message, the President did say that he was confident
that the U.S. could meet competition and could do this
by reducing costs through more economical operations.
ROLES OF V . E .
In the technical area, value engineering has made
considerable progress i n the last two or three years.
But i t would be misleading to claim that value engi-
neering has adequately created or made available to
industry and to Government the tools f o r achieving the
objectives f o r which value engineering exists.
INADEQUATE V.E. CAPABILITY
It seems to me that, unless value engineering very
quickly develops fundamental discipline and techniques
there is going to be unhappy recrimination later on.
We are dealing with a very serious situation because
of the urgent need f o r cost reduction both i n industry
and i n the Department of Defense, At present, value
engineering does not have an adequate capability,
technologically, administratively and conceptually, of
f u l f i l l i n g the objectives that i t had set f o r itself. Con-
sidering comments I made two or three years ago,
my opinion tonight is that i n the intervening years
since I960,,progress i n value engineering has been
substantial. But management is not concerned with
how much progress has been made. Management is
concerned with what capability we have today. May I
ask you, does value engineering have the capability
of f u l f i l l i n g or satisfying the objectives, the hopes that
it is holding out f o r itself, to industry and the Depart-
ment of Defense? I don't think so. Methodology is
either inadequate or inadequately articulated.
Now, i n the economic realm, let us look at value
engineering. Incidentally, the economic, technical and
social are itermixed. I am only using these categories
for a neat and orderly discussion of a problem.
ECONOMIC ASPECTS OF V . E .
When I speak of the role of value engineering on
the economic scene, what I ' m confronting here is the
role of value engineering i n motivating more eco-
nomical production or, in the case of the Department
of Defense, making possible more economical p r o -
curement. In the ordinary competitive environment,
we would expect that value engineering would be
adopted eagerly and applied enthusiastically. A f t e r
a l l , competition has to do with making things as i n -
expensively as possible i n order to realize a reason-
able p r o f i t on sales. Whether or not value engineering
has been adopted eagerly i n the civilian industry I
cannot say. I would leave that question toother people
26 S.A.V.E. JOURNAL
who are more informed. But in the Department of
Defense that i s , as reflected in the patterns of De-
partment of Defense - industry relationships, value
engineering has not developed techniques that motivate
industry to cost reduction. We have not, f o r example,
developed patterns of sharing between Government and
industry so that i f industry moves ahead and does a
good value engineering job i t w i l l be rewarded. The
degree to which "sharing" is possible is determined
by many considerations - one of which is methodology.
It's also conditioned by the broader environment of
incentive contracting and the degree to which we can
technically draft incentive contracts. But for purposes
of this critique, I do want to say that I don't think, as
of now, we have developed approaches by which indus-
t r y can be motivated to move ahead aggressively in
value engineering. In other words, VE is not supported
by a strong conceptual structure of economic theory.
V.E. STATUS IN DOD
Now let's look at where we stand in Value Engi-
neering in the DOD. The Department of Defense has
drafted provisions f o r inclusion i n ASPR f o r sharing
cost reductions with industry. This is a very involved
subject, as you know. It is impractical to discuss a
subject like this except i n terms of the different kinds
of contracts. Broadly, the Department of Defense is
considering the idea that value engineering w i l l be
supported or encouraged i n two ways. One, by straight
funding. In certain types of contracts, f o r example,
cost-plus-fixed-fee contracts, there may be a funding
arrangement - a certain amount of money set aside
f o r a straight value engineering effort. The other type
of arrangement w i l l be f o r sharing specific cost r e -
ductions on each of the various types of contracts.
What the percentage of sharing w i l l be, I can't say.
But very likely sharing w i l l be on a 50-50 basis. But
i t may go up to as high as 75 percent. This is at least
the present thinking. Later on, when we get questions
f r o m the f l o o r , we might pursue this more exhaustively.
DOD F I L M AND MANUAL ON V.E.
The DOD is currently developing a f i l m to explain
VE objectives and methods. This is being accomplished
by the A i r Force f o r the Department of Defense, Most
important, a manual is under preparation under the
direction of the Bureau of Ships and i n cooperation
with the A r m y , A i r Force and Defense Supply Agency.
Hopefully, this manual w i l l provide some of the needed
substructure of economic theory and engineering meth-
odology that appear to the essential prerequisites f o r
the continued progress of VE.
I think i t would be well f o r me to terminate m y
comments at this point and hope that i n the "give and
take" later on, that specific topics can be developed
more adequately. We can look ahead with confidence
to progress provided the strong hopes held out f o r
VE are matched with an equally robust structure of
concepts and techniques.
12-62-2
 Commercial Products
This issue of the Journal contains a comparison between M i l i t a r y and Commercial
Products Value Engineering. The M i l i t a r y counterpart of this article appears i n the next
section. Topics are:
MOTIVATION
ORIGINATING THE PROGRAM
PRESENTING & SELLING THE PROGRAM
IMPLEMENTATION OF THE PROGRAM
MOTIVATION
The basic reason f o r a Value Engineering program
i n a commercial company i s simple and uncomplicated
- money. Whatever gains are made through the use of
Value Engineering techniques accrue directly to the
company. The basic techniques f o r reducing costs can
reflect themselves i n a number of ways:
a) Increased p r o f i t .
b) Lower selling price to meet domestic or foreign
competition, or to increase volume and thereby
provide a broader p r o f i t base.
c) Product improvement without cost increase f o r
same reasons as (b) above.
These relatively simple statements do not, of
course, t e l l the complete story, but they do give the
key to why a company would, or should, install a VE
program.
ORIGINATING THE PROGRAM
Usually a company looks f o r aid, or i s counseled
to look f o r aid f r o m VE if i t is i n an unfavorable posi-
tion on any of the areas mentioned above. Here are
some typical ways a company makes its f i r s t contact
which leads i t to consider VE: Advice of Management
Consultants, Cost Accountants, Interlocking Directors;
personnel coming f r o m other companies; technical
societies; publications; copying successful competi-
tors; suggestions f r o m staff or middle management;
employees; information f r o m vendors; help and p r e s -
sure f r o m customers.
The means of bringing about the initial contact are
unimportant, but i t should be borne i n mind that a l -
most every one of these reflects a basic need within
the company to attack existing problem areas. Once
the existing problem area is recognized, the best
means of attack follow quite logically. Since we are
p r i m a r i l y concerned with the role of the Value Engi-
neer and how he might best help get the program
12-62-2 S.A.V.E. JOURNAL
V. E.
COMPANY-WIDE PARTICIPATION
HUMAN RELATIONS
MEASUREMENTS OF EFFECTIVENESS
LIST OF COMPANIES WITH V.E.
started, a few pointers are i n order: F i r s t , make sure
that you know and understand f u l l y what the problem
i s i n your company. Second, be sure that you build
your solution around the problem. If the company is
enjoying good business on its existing product line but
not making the right kind of p r o f i t , concentrate on
attacking costs. On the other hand, i f the company is
losing its market because a competitor's product is
functionally superior, concentrate on improving func-
tion. Usually, you w i l l f i n d a mixture of the two, plus
a need to reorganize and reorient the company's p r o d -
uct line toward a more profitable overall operation.
PRESENTING AND SELLING THE PROGRAM
Assuming that you have now decided what i t i s that
the company needs, you now have to f i n d the right
audience and the right method of presentation. This
must be the man who i s responsible f o r seeing to i t
that the company makes a profit. His title i s u n -
important, but he i s generally a line rather than a
staff officer. He may be called Owner, President,
Division Manager, General Manager, or Executive
Vice President. His function is what counts and p r e -
sumably, we know how to evaluate function. Now that
we have found our audience, we have to decide on
how to present our material and what, we hope to
accomplish by this presentation. The mechanics of
the presentation must be tailored around the type of
audience, the nature of the material you have, and
your own capabilities. Don't t r y to make a dramatic
personal appeal i f you are not the kind of person who
can bring this off successfully. Don't t r y to present
a wealth of d r y statistics to a manager who i s known
to have no patience f o r this type of information. Here
are some typical ways of dealing with the mechanisms
of the presentation:
a) One man demonstration — reinforced by charts
and slides.
b) Group demonstration.
c) Bring i n known outside experts who can speak
f r o m experience.
27
 d) Arrange f o r a visit to a company that has a
successful VE program.
Be sure you are well prepared, and include i n your
presentation the anticipated costs as well as the po-
tential gains of the program.
A f t e r convincing your audience of the desirability
of the program and its potential gain to the company,
then present a solid proposal f o r implementation i n -
cluding a budget and a schedule f o r monitoring p e r -
formance within the company. It is most important that
VE report directly to a high level of management so
that i t w i l l be divorced f r o m inter-departmental r i -
valries. It is also important that VE be treated as a
staff function rather than a line function, so that i t can
operate as an advisory service to a l l affected depart-
ments. Having now, f u l l management blessings f o r our
program, we are now ready f o r the next step.
IMPLEMENTATION OF THE PROGRAM
Depending on the nature and scope of the program,
we now have to consider the question of personnel.
This may range f r o m a one man "group'', to a staff
involving several hundred people. We have the choice
of selecting in-plant personnel and training them f o r
the specific job, or h i r i n g trained outsiders. Both
approaches have advantages and disadvantages. Since
we are starting something new and radical, some of
our in-plant people may give us the kind of stumbling
blocks we are t r y i n g to avoid. They may also have
existing departmental loyalties and/or animosities
which w i l l interfere with good relations a l l around.
The outsider, of course, w i l l be accused of under-
mining existing company personnel, and often treated
with scorn. The ideal situation would seem to be a
mixture of the two. With notable exceptions, there
seems to be a strong trend i n favor of training r e -
latively young people with good academic backgrounds
and f a i r l y broad experience. T r y to get the engineering
oriented buyer, the cost oriented engineer, and the
open minded enthusiast who is not so enthusiastic that
he becomes tactless. There are several means of
training available, depending upon your budget, i n -
cluding the use of outside consultants, internal and
outside seminars and guidance f r o m S.A.V.E. Inaddi-
tion to training your own staff, you w i l l have to con-
sider informing, training, or indoctrinating the rest
of the organization with just what you are trying to
accomplish, both f r o m the point of view of getting
their help or t r y i n g to forestall the inevitable r e s i s -
tance f r o m some quarters.
COMPANY-WIDE PARTICIPATION
You are going to have to work with, and through,
just about every channel of command i n the company
so you w i l l need to establish. good relations i n a l l
Departments. F i r s t o f . a l l , i n order to do an intelligent
job on anything you undertake, you are going to need
28 S.A.V.E. JOURNAL
true costs. This is often very difficult. Many com-
panies have a r b i t r a r y and unrealistic methods of cost
accounting, which are the result of either management
preferences or outmoded practices. One well known
national company uses the same average cost per
pound f o r a l l items of steel, starting with structural
f o r machine elements at a few cents a pound, a l l the
way to specialty steels i n odd sizes and shapes at
dollars per pound. When you are given a report on
cost f o r a specific i t e m or product, be sure that the
costs are real and not based on some a r b i t r a r y
formula. Check up on the factors used i n a r r i v i n g at
costs. What is the overhead percent on this product,
and how does i t compare with overhead percent on
other products? How does this compare with what you
know the practice to be i n other companies? If i t is
radically different, f i n d out why. You may think that
this w i l l get you i n trouble with the Cost Accounting
Dept. Chances are that they are keenly aware of some
of the anachronisms, and w i l l bend over backwards to
help you because you w i l l be helping them i n their
battle f o r more realistic costings.
HUMAN RELATIONS
Sufficient material has been published on human
failings, resistance to change, and a l l the other stumb-
ling blocks which are i n the path of the Value Engineer.
Suffice to say that diplomacy is one of the key a t t r i -
butes of your program.
MEASUREMENTS OF EFFECTIVENESS
In spite of a l l our problems, we have now reached
a point where we know we have accomplished some-
thing f o r the company; that is to say, we know but we
have to prove i t i n order to justify continuing the p r o -
gram. The most effective method is a periodic report
to management. Several parameters are applicable,
and should be used:
a) Savings i n relation to VE budget. This should
be a quotient: so many dollars saved over so
many dollars spent.
b) Percent savings realized on projects completed.
c) Total dollar saving per annum, both f o r i n d i v i -
dual projects, and the company as a whole.
In addition, you w i l l want to report on intangibles,
or things that are difficult to measure directly; such
as, product improvement, service improvements,
sales increases, etc.
C.L. CHASE
T.H. REDMAN
12-62-2
 COMMERCIAL PRODUC S COMPANIES WITH V.E.

ACME ELECTRIC CORP. • M A R L I N ROCKWELL

AIRTEMP DIV., CHRYSLER CORP. • M . B . ELECTRONICS
ALSO PRODUCTS, INC. •McGRAW EDISON
ALLIS CHALMERS CO. METALS & CONTROLS, INC.
•AMERICAN LAUNDRY & MACHINE M I L L POLISHING CORP.
AMERICAN SEALANTS CO. MINNEAPOLIS-HONEYWELL REGULATOR CO.
THE BABCOCK & WILCOX CO. •MOTOROLA
BENDIX RADIO DIV. NATIONAL CASH REGISTER CO.
•BRYANT MFG. CO. •NATIONAL ELECTRIC COIL
CARRIER CORP. •OVERHEAD DOOR CORP.
*COOPER-BESSMEN CORP. OWENS-CORNING FIBERGLAS CORP.
CROSBY VALVE & GAGE CO. •OZALID
DAY & NIGHT MFG. CO. THE PFAUDLER CO.
•DELCO REMY PIONEER ENG. & MFG. CO.
DIEHL MFG. CO. *RCA
•DUNCAN ELECTRIC ROBERTSHAW-FULTON CONTROLS
E.L DUPONT DeNEMOURS & CO. RYERSON STELL & A L U M .
•ELECTRO MOTIVE SINGER MFG.
• E L L I O T T CO. SPAULDING FIBER CO., INC.
EMERSON ELECTRIC MFG. CO. •SMITH & LOVELESS DIV.
•FORD MOTORS SOUTHERN CALIF. GAS CO.
•FREUHAUF TRAILER THE STANLEY WORKS
GENERAL ELECTRIC CO. SYLVANIA ELECTRIC SYSTEMS, INC.
GENERAL MOTORS CORP. TYPEMASTER INC.
GENERAL RADIO CO. WALTER KIDDE & CO.
•THE GLEASON WORKS WESTERN GEAR CORP.
GREGORY IND., INC, WESTINGHOUSE AIR BRAKE CO.
•GRAFLEX, INC. WESTINGHOUSE ELEC. CORP.
GRIES REPRODUCER CORP, •WHITE ROGERS
•HAMILTON WATCH •WORTHINGTON
•HENRY PRATT CO. WHIRLPOOL CORP.
•HYSTER CO. UNION ASBESTOR & RUBBER CO.
I.B.M. UNION SWITCH & SIGNAL
•INGERSOLL RAND US ELEC. MOTORS, INC.
I T T FEDERAL LABS, US RUBBER CO.
LINE MATERIAL IND.
LIQUIDOME TER CORP. •Companies without S.A.V.E. Members.

SOCIETY OF AMERICAN VALUE ENGINEERS

OBJECTIVES
To create, stimulate and promote interest i n the advancement and diffusion of knowledge of value
engineering and value analysis, and its application to the research, design, development,- test evalua-
tion, engineering, production, purchasing and distribution phases i n government, private industry
and commerce.
For membership information please write to:

W.G. McMURRAY
S.A.V.E. NATIONAL MEMBERSHIP CHAIRMAN
c/o MILITARY ELECTRONICS DIVISION
MOTOROLA, WESTERN CENTER
SCOTTSDALE, ARIZONA
OR
The nearest S.A.V.E. Chapter listed on Pages 37-38 i n this Journal issue.

12-62-2 S.A.V.E. JOURNAL 29

 Military Products
This issue of the Journal contains a comparison between m i l i t a r y and commercial
products value engineering. The commercial counterpart of this article appears i n the p r e -
ceding section. Topics are:
MOTIVATION
ORIGINATING THE PROGRAM
PRESENTING & SELLING THE PROGRAM
IMPLEMENTATION OF THE PROGRAM
MOTIVATION
In the last decade the m i l i t a r y products f i e l d has
experienced a period of tremendous change i n both
technology and corporate growth. This growth is the
direct result of the need f o r more complex weapons
systems and improved performance; coupled with the
need f o r greater reliability, quality, maintainability
and reduced flow time f r o m R&D phase to the produc-
tion of operational hardware.
During this same time period defense expenditures
have been mounting to unprecedented heights, creating
a national concern f o r economy and closer govern-
mental control i n the area of defense expenditures.
Today the "cost dimension" is taking its rightful
place i n m i l i t a r y contracting along with the multitude
of other specifications and requirements.
Value Engineering is emerging as another d i s -
cipline thrust upon the m i l i t a r y contractor at a time
when the company organization charts are not quite
over the impact of such requirements as Reliability,
Quality Assurance, and Operations Research. In addi-
tion, every contractor i n the m i l i t a r y products f i e l d
has assumed that cost prevention and cost reduction
were being adequately covered by existing techniques
such as: Product Improvement, Methods Improvement,
Tool Improvement, Producibility, Conservation, etc.,
and therefore, find i t difficult to believe that Value
Engineering is not i n essence a redundant requirement
which w i l l have the affect of adding more cost to
m i l i t a r y systems and f u r t h e r complications organiza-
tion-wise.
It i s , therefore, necessary to provide strongmedi-
cine i n the f o r m of "incentives" to motivate the m i l i -
tary contractor to use Value Engineering, and thereby
prove conclusively that V.E. is by f a r the most effec-
tive tool available to produce weapons systems of
proven value.
V.E. meets the demand f o r a well defined set of
management disciplines which can be introduced at
the conceptual stage of a weapons system and con-
30 S.A.V.E. JOURNAL
V. I
COMPANY WIDE PARTICIPATION
HUMAN RELATIONS
MEASUREMENTS OF EFFECTIVENESS
LIST OF COMPANIES WITH V . E .
tinually applied throughout development, design, test,
production, and f i e l d maintenance phases i n the l i f e
cycle of a product.
Without the "profit motive" which is the underlying
principle behind our past economic growth, as well as
that of the f u t u r e , V.E. could very well stagnate, or
be reduced to the status of a " l i p service" device to
appease the m i l i t a r y . The D.O.D. is well aware of the
need f o r V.E. incentives and is working constructively
to establish such incentives to harness the p r o f i t
motive.
The m i l i t a r y contractor is also motivated to reduce
costs and thereby provide our national security with
"More Defense f o r Less Dollars"; as such they are
obligated to utilize any new management techniques
which are introduced; however, the extent of the
utilization of a technique is s t i l l dependent upon the
individual contractor and the management who are
assigned that functional and administrative responsi-
bility.
Another motive which is gaining support f o r V.E.
in the m i l i t a r y products f i e l d lies i n the mounting
pressure of competition; both f r o m this country and
f r o m abroad. Managements are beginning to recognize
that although a technological revolution exists, there
is currently more capacity and capability i n the
Aerospace industry than there is a demand f o r i t .
Each company is competing with others who offer
products and services that appear substantially alike
i n performance. Small differences i n price, services,
and i n the customers image of you can make the d i f f e r -
ence. A company that has an established reputation f o r
true cost effectiveness is bound to have a strong i n -
tangible factor on the plus side of his proposals.
The role played by Value Engineering in improving
a company's competitive position has been proven by
a number of large corporations who have introduced
V.E. programs i n a few of their autonomous divisions
and have set up controls to measure the impact i n
terms of cost reduction, p r o f i t improvement and the
ability to obtain new business. These results could
then be compared against similar c r i t e r i a i n other
12-62-2
divisions within the corporation.
ORIGINATING A V . E . PROGRAM
In the m i l i t a r y products f i e l d the responsibility
f o r originating a Value program rests with the
company management. The basic problem area is one
of recognition and association with the basic concept
and effectiveness of Value Engineering as a manage-
ment technique and subsequently to associate the
technique with specific application towards ones own
company and product line.
When we consider the amount of publicity that has
been given to V.E. i n recent years and the results
which have been obtained and documented by the
companies using V . E . techniques, we cannot help but
wonder why V . E . has not gained wider acceptance.
The answer basically lies i n the refusal of manage-
ment people to f u l l y understand V.E. and to recognize
that the need exists i n their company as well. Manage-
ment finds i t easier to shrug off V . E . and convince
themselves and other members of their staff that
V.E. does not have application within their company,
or to their product line.
The question of whom to approach to gain accept-
ance f o r a V.E. program is simply, top management.
They are directly concerned with the ability of the
company to produce systems of true value and a l l of
the objectives of an effective V . E . program, which
include: cost reduction, increased p r o f i t s , improved
r e l i a b i l i t y and quality, and finally the enhancement of
a company's ability to compete effectively i n world
markets.
As to the question of "who is responsible f o r the
preparation of such a proposal'', let me say that experi-
ence has indicated that management people i n such
departments as Purchasing, Engineering, Sales, Manu-
facturing Engineering, and Industrial Engineering,
have a l l been effective i n this area. There is no one
individual within a company to pin down to this r e -
sponsibility, p r i m a r i l y because V.E. is a discipline
that has widespread application within a company and
secondly, because there is r a r e l y a "focal point*
within a company f o r cost reduction, which is one of
the p r i m a r y goals of a V.E. program.
PRESENTING & SELLING THE PROGRAM
This phase i n the introduction of a Value Program
is perhaps the most c r i t i c a l since i t requires a good
knowledge of V.E. techniques and application, as well
as a sales approach which indicates insight into the
close relationship which must exist with a l l the r e -
lated functional areas within a company. Unless hu-
man relations are carefully exercised during this
phase, the V.E. program is doomed to f a i l u r e f r o m
the very beginning.
12-62-2 S.A.V.E. JOURNAL
Using the "team approach" in the preparation and
selling of a V . E . program w i l l help overcome many of
the roadblocks which would exist i f one segment of the
organization were to attempt to dictate a program
without the knowledge of the other managers who w i l l
be called upon to support the program on a daily
basis.
The initial program approach must be directed to:
Demonstrate the effectiveness of the V.E. discipline;
Gain the support of a l l of management; Show the bene-
f i t s which can be derived by use of the team approach;
and finally; Help to point up the advisability of p r o -
viding a budget f o r the V.E. effort. The seminar
approach is an excellent vehicle f o r the introduction
of V.E. because i t provides management the oppor-
tunity to evaluate the V.E. approach f i r s t hand in
specific application to their own product line.
Another invaluable aid i n selling your program is
to obtain data regarding V.E. activity i n companies
working i n your f i e l d . Perhaps your competition can
effectively help you sell your program. In this area
societies such as: S.A.V.E., E . L A . , N.A.P.A., etc.
have periodically conducted surveys and published
their findings to help promote the adoption of V . E . on
a nationwide basis.
IMPLEMENTATION OF THE COMPANY PROGRAM
Regardless of the method used i n getting a Value
program underway, the m i l i t a r y contractor must target
his program objectives to meet the requirements as
specified by the customer. The basic objectives of a
m i l i t a r y products V.E. program is to focus a propor-
tionate amount of attention toward the simplification
of design and the elimination of features which burden
an items cost, but are not functionally necessary. To
meet this objective requires the integration of V . E .
in a l l functional areas within a company beginning with
a major e f f o r t within the engineering organization.
Educating the middle management people i n the
techniques, aims and objectives of V.E. i s ' a must.
These are the management people who w i l l be called
upon to support the program manpower-wise and
ultimately to "buy off" Value Proposals effecting
their specific area of responsibility. Even though
your program has top management backing, program
effectiveness w i l l r e l y heavily on the proper applica-
tion of human relations i n working with the middle
management.
In the area of selecting the personnel wno w i l l be
working either f u l l time or part time i n the V.E. f i e l d ,
care must be exercised to select high caliber p e r -
sonnel. The nucleus of the various groups basically
should include people f r o m Engineering, Manufacturing
Engineering, and Tooling, Purchasing and Industrial
Engineering. Other functional areas i n the company
31
should be trained to assist V . E . personnel on an "as
required" basis.
The use of high caliber personnel i n the V.E. f i e l d
tends to keep the size of the group down. Such i n d i v i -
duals working i n the Value f i e l d stimulate greater
efforts and achievements f r o m a l l the operating de-
partments through their continual emphasis on the
importance of lower cost, the promotion of Value
techniques, and by demonstrating Value through ex-
amples and case histories.
B r i e f l y , the personnel selected f o r V.E. work
should possess the following qualifications: be tech-
nically competent; be creative; be a self starter; be
aggressive but not obnoxious, be diplomatic; be a good
salesman; be a good listener, and evaluate i n the ob-
jective rather than the subjective.
The m i l i t a r y contractor is required to provide
V.E. training f o r representatives f r o m a l l the areas
within the company whose decisions affect the overall
cost of the weapons system. The problems existing i n
this area are briefly; that of selling the seminar ap-
proach; obtaining budget approval; finding competent
instructors; selecting "key" personnel f o r training,
and finally, scheduling the seminar without widespread
disruption to the organization. V E. training material
developed to date has proven to be extremely effective
in demonstrating V.E. techniques. For the m i l i t a r y
contractor special emphasis must be placed on D.O.D.
V.E. Spec. Requirements, Incentive Contracts, V . E .
Change Proposals, and Periodic Progress and Status
Reports.
The use of professional assistance has been found
to be very effective i n overcoming the problem areas
I have pointed out by applying one of the twenty keys
to Value, namely to "Obtain Information f r o m the
Best Sources".
COMPANY-WIDE PARTICIPATION
V.E. is a total company e f f o r t , and as such, r e -
quires careful integration corporate-wise. This prob-
lem area can be overcome by the establishment of:
Organization Charts Showing Company V.E. Effort;
Operating Flow Plans and Procedures; Corporate
Policies Relative to the Goals of the Company-wide
Program, and to Establish Basic Ground Rules Which
Will A i d in Making Decisions Affecting Costs.
AH these aids w i l l enhance the area of company
communication and provide a focal point within the
company f o r cost reduction activity.
One of the most vital links i n an operating V.E.
program is that of Economic Analysis, without this
competence we would not be able to: "Evaluate the
Function"; Establish Cost Targets to Assist the Engi-
neer; Evaluate Alternative Designs, Processes, Plans,
32 S.A.V.E. JOURNAL
Policies or Procedures. In effect, we could not do
Value Engineering.
The problem of obtaining reliable cost information
should be given special emphasis to provide personnel
doing Value work with readily available costs and
timely cost evaluations. Management can greatly aid
in this area by the establishment of the necessary
"ground rules" regarding such parameters as:
1. Production quantities and Projected Quantities
2. Policies concerning use of Forgings, Castings,
Weldments, etc.
3. Policies regarding Weight Increases or De-
creases.
4. Etc.
Effective V . E . work w i l l show the need f o r change
and, as such, is destined to be subjected to close
scrutiny, resistance, and negative attitudes f r o m a l l
areas affected. To overcome these roadblocks r e -
quires that:
a) Management establish a proper climate within
the company f o r the V E. e f f o r t and provide a
place i n the organization f o r resolving problem
areas.
b) Care be exercised to select personnel who are
skilled in the use of human relations in doing
their everyday job in the Value field.
c) Value proposals are carefully documented with
the necessary facts to dispel any problems which
may arise of a technical nature and that the
affected areas are cognizant of the proposed
change and effectively are a part of i t .
d) Value proposals are properly presented, timely
in nature, and show the decision maker s u f f i -
cient evidence of the advantages, as well as i n -
sight into the disadvantages that may exist.
MEASUREMENTS OF EFFECTIVENESS
If Value Engineering is to exist and grow within the
corporate f r a m e work, consideration must be given
towards effectively measuring the results of the com-
pany's e f f o r t i n this f i e l d of activity. Value Engineer-
ing has prime responsibility regarding the necessary
documentation, reports and activities, indicating:
a) Manhour expenditures and activities of a l l the
personnel directly i n the V.E. program.
b) Summaries of a l l Value proposals and the action
taken f o r implementation. These summaries
should be broken down to indicate categories
such as: Spec, changes, contractual changes,
12-62-2
 company changes not affecting contracts or
specifications, and f i n a l l y summarize possible
improvements in reliability, quality, maintain-
ability, etc.
c) Records must be kept showing the savings which
have resulted f r o m the various activities i n -
dicated i n the summaries.
d) Finally, status reports must be maintained and
distributed periodically to show company man-
agement and the customer the status of work-
in-process.
The problem area here is to keep the reporting
and documentation f r o m growing into a time consuming
and costly operation. The use of aids, such as: charts,
graphs, etc. w i l l go a long way towards relieving this
potential problem area.
hi instances where cost controls exist i n the f o r m
of the Pert/Cost or Cost Target System, the m i l i t a r y
contractor is required to submit periodic reports
indicating their activity against the programmed
objectives.
SOL MENDELSOHN

MILITARY PRODUCTS COMPANIES WITH V.E

AEROJET GENERAL CORP. FAIR CHILD CAMERA & SPACE TECH. LABS., INC.
AIRBORNE INSTRUMENT L A B . INSTRM. CORP. SPERRY GYROSCOPE CO.
A IRE SEARCH MFG. CO. GATES ENG. CO. SPERRY UTAH CO.
AIR TECHNOLOGY CORP. GENERAL DYNAMICS SOUTHWESTERN ENG. CO.
ALCO PRODUCTS, INC. GENERAL INSTRUMENT CORP. TAFFET E L E C , INC.
AMERICAN STANDARDS ASSOC. GENERAL PRECISION, INC. TEXAS INST.
AOMC GIBBS CORP. THIOKOL CHEMICAL CORP.
ARIZONA STATE UNIVERSITY GOODYEAR AIRCRAFT CORP. THOMPSON REMO
APOGEE ENG. SERVICES . GRIBERSON CORP. WOOLREDGE, INC.
ATOMICS INTERNATIONAL HERCULES POWDER CO. TODD SHIPYARDS, INC.
AUTONETICS HOFFMAN MILITARY PRODUCTS UNITED AIRCRAFT CORP.
AVONDALE SHIPYARDS, INC. HUGHES AIRCRAFT CO. US SCIENCE CORP.
BARRY WRIGHT CORP. HUYCK SYSTEMS VALUE ANALYSIS, INC
B E L L AEROSPACE SYSTEMS IND. ELECTRONICS DIST. VITRO ELECTRONICS
B E L L HELICOPTER CO. IND. REPORTS, INC. VALUE ENG. CO.
BENDDX CORP & DIVISIONS JOHNS-MANVILLE VALUE PROGRAMS FOR
BETHLEHEM STEEL CO. KAMAN AIRCRAFT CORP. IND., INC.
BESTWELL-CERTAIN-LEED KINETICS CORP. WARREN J. STEWART
SALES CORP. LITTON SYSTEMS, INC. WATERS MFG. CO.
BOEING CO. LOCKHEED AIRCRAFT CORP. W I L L I A M UNDERWOOD CO.
BOGART MFG. CO. LORAL ELECTRONICS CORP.
BOLT BERANEK & NEWMAN, INC. LUNDY ELEC. & SYSTEMS INC.
BOSTON UNIVERSITY MacINTOSH & SHERIDAN, INC.
BURROUGHS CONTROL CORP. MARQUARDT CO.
BULOVA RESEARCH & DEVEL. LABS. MARTIN CO.
CALIF. GENERAL INC.
S.A.V.E. 1963
MCDONNELL AIRCRAFT CO.
CANNON ELEC. CO. MELABS
CHANCE VOUGHT CORP. NATIONAL INSTITUTES OF HEALTH NATIONAL CONVENTION
CHICAGO AERIAL IND. NORTH AMERICAN AVIATION
CONCORD CONTROLS, INC. NORTHEASTERN UNIVERSITY
COOPER-BESSEMEN NORTHROP CORP. APRIL 25 & 26, 1963
CRAIG SYSTEMS, INC. RAYTHEON CO.
CURTISS WRIGHT CORP. REPUBLIC AVIATION CORP. NEW YORK
DAVID EHRENPREIS CONSULTING REPUBLIC ELEC. IND., CORP.
ENG. REMINGTON RAND UNIVAC
DIAMOND ORD. ROCKETDYNE
DON CAFFERY GLASSIE CO. ROFRAN DESIGN
DORR-OLIVER INC. ROHR CORP.
DOUGLAS AIRCRAFT CO., INC. RYAN AERONAUTICS CO.
S.L.M. SALES CO.
Details on
DRESSER IND., INC.
EMERSON RESEARCH LABS. SAN DIEGO STATE COLLEGE Inside Back Cover
EMERTRON, INC. SOLAR
ENG. RESEARCH & DEVEL LABS. SOLID ROCKET PLANT

12-62-2 S.A.V.E. JOURNAL 33

 Technical Notes And
Proceedings of 1962 T h i r d EIA Conference on Value Engineering, held October 1st and 2nd,
1962 at the Statler-Hilton Hotel, St. Louis, Missouri, published by Electronic Industries
Association, 11 West 42nd Street, New York, N.Y., 173 pages, $4.00.
Because of the tremendous interest generated by
the recent T h i r d National EIA Conference on Value
Engineering, the column this issue is being devoted to
some "capsule comments" on various papers p r e -
sented. This w i l l permit a painless perusal of the
tremendous wealth of technical material available as
an entree to a more detailed study of specific papers.
Selected papers, contained i n the proceedings,
have been grouped by session letter into three basic
groups: A - Management, B - Advanced Techniques,
and C - Education, with a fourth group containing
additional papers which were not presented at the
conference because of time restrictions.
A l l i n a l l the scope of the papers i n the proceed-
ings and the counterpoint supplied by presenting the
industry and governmental concepts i n tandem make
f o r an interesting and informative group of papers
which should be an asset to any V.E. l i b r a r y .
SESSION A - MANAGEMENT
1. "Definition of Value Engineering to Avoid Man-
agement Confusion," H Newman, Autonetics,
A Division of North American Aviation, Inc.,
Downey, California.
In f u l f i l l i n g the intent of the title the author
considers such aspects of V.E. as its scope i n
the management control e f f o r t , its relationship
with other staff groups (such as Reliability) and
the organizational position and qualifications of
the professional V.E. These factors are a l l
considered as part of an approach toward c l a r i -
fying the V . E . function f o r management.
2. "Total Value Improvement Program," E. Lesh-
ner, RCA, Camden, N.J.
The author describes RCA's Defense Elec-
tronic Products Value Improvement Program
(VIP). The description of the V.E. organization
is developed as answers to the following ques-
tions:
a. What i s the function of the Value I m -
provement Program?
b. What makes a VTP?
c. Who does the work?
d. Why should they want to do the work?
e. What do they do?
34 S.A.V.E. JOURNAL
Reviews
3. "Contractual Aspects of Value Engineering,"
L.J. Haugh, Navy Procurement Policy M e m -
ber, ASPR Committee.
This paper discusses cost plus incentive fee
(CPIF) vs. cost plus fixed fee (CPFF) contracts
relative to V.E. and indicates the government's
intention in this contractual area.
4. "A Hard Core Program f o r Value Engineering,"
E . L . C a r r i e r , Aeronautical Systems Division,
USAF, Wright-Patterson AFB.
The author presents the Aeronautical Sys-
tems Division (USAF) approach to V.E. as part
of the A i r Force's implementation of ASPR
3-407.3. This approach requires future con-
tractors to establish and maintain organized
V.E. programs, and emphasizes the application
of V.E. principles during the conceptual phase
of hardware development. Potential morale
factors, manning ratios, organizational r e l a -
tionships and substantiating documentation are
recognized and discussed.
SESSION B - ADVANCED TECHNIQUES
1. "PERT & V.E. Integration - A Dynamic System
f o r Program Efficiency and P r o f i t Enhance-
ment," A . F . Morance & R.D. Joyce, Operations
Research, Inc., Santa Monica, California.
This paper examines the possibilities of i n -
tegrating the methods and effects of V.E. into
PERT (Program Evaluation and Review Tech-
niques) systems to create an even more power-
f u l tool f o r management decision-making. Brief
summaries are given f o r each technique before
being considered i n tandem.
2. "New Techniques of Cost Analysis," C P . Smith,
Chance Vought Corporation, A Division of L i n g -
Temco-Vought, Inc., Dallas, Texas.
This paper discusses the dollars per pound
method f o r making comparative cost studies of
alternate configurations during the early stages
of a new product program. The method p r e -
sented is one that is tailored to meet the ac-
celerated time requirements that are always
present during preliminary design - the studies
are quick and general i n nature but do provide
comparative cost figures on a scale thatisuse-
12-62-2
 f u l during this phase of a new design. A typical
example i s also presented illustrating the tech-
nique.
3. "Use of Target Cost Program," F.J. Sauter,
Martin Marietta Corporation, Baltimore, Md.
The author presents a Target Cost Program
technique used by the Martin Marietta Corp. to
control the costs on a ballistic missile program.
This approach resulted i n a substantial reduc-
tion i n cost to the customer f r o m the original
price established at contract negotiation. The
objective is to prevent overruns through a closed
loop system of budgetary control that demands
rapid feedback of the actual cost of work p e r -
formed f o r comparison with the initial target,
cost.
4. "Some Ground Rules f o r Pricing & Appraising
Engineering Change Proposals Proposed f o r
Economic Reasons," R.H. Cohen, Litton Indus-
t r i e s , Inc., Woodland H i l l s , Calif.
The author discusses a number of problems
associated with deciding whether or not to make
engineering product changes suggested by p r o -
posals f o r improvement i n the "value" of the
product. A detailed discussion of a breakdown
technique i s presented with particular attention
given to the problem of incorporating estimates
of purchased material costs. Also discussed are
those elements which make up the implementa-
tion costs of change and the all-important cost
savings associated with the proposed change.
SESSION C - EDUCATION
1. "The Value Engineering Digest," M . Kaplan,
L o r a l Electronics Corp., New York, N.Y.
The paper describes an inexpensive, unusual
and widely distributed bi-monthly V.E. Digest
used to disseminate V.E. information among the
engineering, supervisory and administrative
personnel of Loral. The information presented
i n this loose-leaf reference manual (which is ob-
tained f r o m both internal and external sources)
is grouped into four basic sections (materials,
outside techniques, equipment and L o r a l tech-
niques) within which are considered such factors
as cost, advantages, disadvantages, availability;
etc.
2. "A Comprehensive V.E. Training Program,"
J.W. Bryant, GE Company, Syracuse, N.Y.
The author discusses a comprehensive V.E.
training program i n terms of three basic areas
of activity he feels they most encompass. These
are:
a. Training the professional personnel of a
department or company i n the techniques
of V.E.
b. Providing an orientation to management
12-62-2 S.A.V.E. JOURNAL
and other departments (i.e., Q. C ) , cus-
tomers and vendors on how they f i t into
the VE program,
c. Industry-wide promotional efforts thru
such organizations as S.A.V.E. and/or
EIA and also working with educational i n -
stitutions to upgrade the level of V.E.
training and indoctrination.
3. "Bridging the Gap," A . E . Mudge, Value Engi-
neering, hie., Boston, Mass.
In this paper a parallel has been drawn be-
tween the building of a VE organization and the
construction of a bridge across a chasm f r o m
no V.E. to a f u l l V.E. program. The author
shows how to establish a f i r m foundation, build
a good working platform and then cut, f i t and
lay each conceptual stone until the bridge has
been completed.
4. "Centralized Value Analysis Training f o r the
Federal Government," W.S. Shallman, U. S.
A r m y Ordnance Weapons, Command, Rock
Island, Illinois.
The p r i m a r y purpose of the paper i s to p o r -
tray how one government organization, the
Ordnance Management Engineering Training
Agency (OMETA) met the challenge of centrally
training potential Value Analysts, Managers and
other related staff groups i n the techniques,
concepts and philosophy of Value Analysis. The
results obtained i n the past three years during
which the agency trained 300 Value Analysts,
and conducted orientation sessions f o r approxi-
mately 1,000 managerial and technical person-
nel, are also presented.
D - ADDITIONAL PAPERS
1. "Computation of Process Break Even Points,"
L.R. Sheppard, RCA, Camden, N.J.
The author presents a technique developed
at RCA, Camden, f o r the computation of p r o -
cess "Break Even Points." It was found that
using the traditionally accepted graphical solu-
tion process, plotting calculated cumulative
average unit costs f o r various quantities of each
of the processes under consideration and con-
necting them with a "smooth" curve f o r each
process, made i t evident that discrepancies
were possible i n the process of graphical solu-
tion. The paper presents an algebraic approach
which considerably simplifies and improves
the process.
2. "Value Engineer Your Target Cost Program,"
J.M. Andrake, T . T . Tobin and J.F. Coulon,
Lockheed-California Company, Burbank, Calif.
A target cost system ideally targets and
monitors a l l elements that contribute to the
total cost, of a product. However, the authors-
35
 point out that a detailed target cost program of
this magnitude may cost more than management
considers a wise investment. This depends on
the complexity of the product and the nature of
the company business. To help solve this prob-'
l e m the authors show how to reduce the price
of a target cost program by applying the p r i n -
ciples of V . E .
3. "Experiences of a Project Leader i n Value
Engineering Educational Programs* by Y . M .
Hoag, General Electric Company, Utica, N.Y.
In this relatively short paper, the author
attempts to pass along some of the more salient
points that have developed during his activity as
a project leader i n Value Engineering educa-
tional programs. The importance of the author's
recommendations lies i n the fact that each of
these points have been proven by his personal
experiences over a period of time.
4. "Design Creativity Performance," R.J. G i l l e s -
pie, Sylvania Electric Products, Inc., Waltham,
Mass.
One of the basic problems in Value Engineer-
ing is measuring creative ingenuity and intuition
before and after V.E. training. In this paper the
author presents several sets of "creativity*
tests which have been used by Sylvania toprove
that the tangible types of problems used i n V.E.
training offer an exceptionally good vehicle f o r
the development of creativity which once de-
veloped can be used i n any phase of Product
Design and Development.
5. "Value Engineering and Product Evaluation as
Management Controls," R.A. Murray, Goodyear
A i r c r a f t Corporation, Akron 15, Ohio.
INDUSTRIAL VALUE
1405 N O R T H E R N B L V D . , R O S L Y N , L . I . , N . Y .
VALUE ENGINEERING
and
VALUE ANALYSIS
IMPLEMENTATION
PROCEDURES
ESTIMATING
EDUCATION
FORMS
METROPOLITAN NEW YORK's ONLY
36 S.A.V.E. JOURNAL
The author discusses the possibility of the
incorporation of V.E. and some other autono-
mous elements of management (Reliability, Q.
C , etc.) into a single staff product evaluation
organization. The paper suggests how such a
complete product evaluation program can attack
product cost with both foresight and hindsight:
the f i r s t , a Product Assurance e f f o r t during de-
sign conception, the second, a product improve-
ment e f f o r t with the rest of the organization to
catch that which has been missed during design
conceptions.
6. "Standardization and Value Engineering," W.S.
Schoomer and David F r a m , Sperry Gyroscope
Company, Great Neck, N.Y.
In this paper the authors show the i n t e r -
relationship of standardization and V.E. and the
importance of these techniques*ln centralizing
product costs. Specifically, they discuss each of
these functions separately and then show how
standardization specialists have been activated
in V.E. programs at Sperry Gyroscope Co.
7. "A Key to Successful Economic Competition,"
Arthur E. Harvey, Jr., U. S. A r m y Ordnance
Missile Command, Redstone Arsenal, Alabama.
The author discusses various possible ap-
proaches that could be used by the United States
to compete with the current Sovient economic
offensive. The discussion leads to the logical
conclusion that Value Analysis is one of the
most f e r t i l e fields f o r the creative activity that
is so urgently needed to meet the challenge of
competition both at home and abroad.
DAVID M . NATELSON
SERVICES, INC.
516 OVerbrook 1-1617
Sol Mendelsohn
PRESIDENT
V. E . CONSULTING SERVICE
12-62-2
 5. A. V. f. Chapter News
LIST OF CURRENT CHAPTERS

National Capital Chicago

John B . Toomey, Chairman Robert L . Bartlett, Chairman
Value Engineering Co. Mgr. Value Control
2320 Jefferson Davis Hwy., Alexandria, Va. G.E. Co., Hotpoint Div.
227 S. Seeley Ave., Chicago, m .
Mid New York State
James E. Kushner, Chairman Dallas-Fort Worth Texas
Light M i l i t a r y Electronics Dept. Harold I . Knight, Chairman
General Electric Co. Supervisor, V.E.
901 Broad St., Utica, N.Y. Vought Aero., Chance Vought
P.O. Box 5907, Dallas, Texas
Metropolitan New York
Arthur de la Parra, Chairman Los Angeles
Staff Mgr. Mfg. Eng. Edward H. Simpson, Chairman
L o r a l Electronics Corp. Mgr. V.E.
825 Bronx River Ave., New York, New York Hughes E l Segmido
P.O. Box 90426, Los Angeles, Calif.
Paul Revere San Diego
Robert J. Gillespie, Chairman Howell P. Williams, Chairman
Div, V . E . Coordinator Mgr. Value Control
Sylvania Electronics System General Dynamics/Convair
40 Sylvan Rd,, Waltham, Mass. 3302 Pacific Hwy., San Diego, Calif.

Delaware Valley Salt Lake Area

Robert J. Davidson, Jr., Chairman CS. Grey, Chairman
Chief Prod. Eng. Branch Sperry Utah Eng. Labs.
Hq. PAAFCMD, A t t : REHPPE 322 North 21st. West., Salt Lake City, Utah
1411 Walnut Str., Philadelphia, Pa. San Francisco Bay Area
R.L. Deneg, Jr., Vice Chairman
MohawK Berkshire Manager Value Engineering
R.J. Spenard, Chairman Solid Rocket Plant
V.A. Education & Training Aerojet-General
Watervliet Arsenal Ord,, Watervliet, N.Y. P.O. Box 1947, Sacramento, Calif.

LIST OF CHAPTERS BEING FORMED

Atlanta Detroit
Frank J. Johnson, Chairman Michael Pinto, Chairman
Mgr. V.A. Pioneer Eng. & Mfg. Co.
Lockheed A i r c r a f t Co. 19669 John R. St., Detroit, Mich.
Georgia Div., Marietta, Ga.
Grand Rapids
Buffalo/Roche ster Edward H. Hutton, Chairman
Merton E. Davis, Jr., Chairman Chief Prod. Eng.
V.A. Specialist Lear, Inc.
Spaulding Fibre Co. 110 Ionia N.W., Grand Rapids, Mich.
310 Wheeler St., Tonawanda, N.Y.
Minneapolis
Cleveland Robert L . Crouse, Chairman
Dr. C,C. Van Vechten, Chairman Mgr. V . E . , Aero. Div.
Tapco Group, Eng. Div. Minneapolis-Honeywell
Thompson Ramo Wooldridge, hie. 2600 Ridgway Rd., Minneapolis, Minn.
23555 Euclid Ave., Cleveland, Ohio

12-62-2 S.A.V.E. JOURNAL

North Jersey or Newark Mount Vernon
Arthur Wojtowicz, Chairman Donald W. Summerhayes, Chairman
V.E. Coord. Cooper-Bessemer Corp., Mount Vernon, Ohio
The Bendix Corp., Eclipse-Pioneer Div.
Williams Ave. & Route 46, Teterboro, N.J. New Orleans
William F. Smith, Chairman
Orlando, Florida Avondale Shipyards, Inc.
Robert L . Bidwell, Chairman P.O. Box 1030, New Orleans, La.
Mgr. V.A. Administration
Martin-Marietta Corp. Sacramento
P.O. Box 5837, Sand Lake Rd., Orlando, Fla. R.L. Denig, Jr., Chairman
Mgr. V.E.
Pittsburg Solid Rocket Plant
G.C. Wilburn, Chairman Aerojet General Corp.
Westinghouse Electric Corp. P.O. Box 1947, Sacramento, Calif.
469 Sharpsville Ave., Sharon, Pa.
Seattle
Portland Area Charles E. Brewster, Chairman
L. James Levisee, Chairman V.E. Staff, The Boeing Co. *
Corporate Director of Procurement P.O. Box 3707 (MS 15-53), Seattle, Wash.
Hyster Co.
P.O. Box 4318, Portland, Oregon Tucson/Phoenix/Scottsdale
W.G. McMurray, Chairman
Redstone Arsenal M i l i t a r y Electronics Div.
Arthur E. Harvey, Chairman Motorola, Western Center, Scottsdale, A r i z .
Chief, V.A. Office
A r m y Ballistic Missile Agency
Attn: ORDAB-IV, Redstone Arsenal, Ala.

CHAPTER ACTIVITIES

The Dallas Fort Worth Chapter New York

This Chapter's future plans include:
Jan. 10 Installation of Officers
Feb. 7 VE i n Procurement - J. Edwards of Guiberson
Corp.
Mar. 7 VE atABMA - A. Harvey, Chief Value Analyst
Los Angeles
At the Dec, 11 meeting, Target Cost Programs w i l l
be discussed. Speakers w i l l include:
E.D. Heller, Value Control Coordinator, General
Dynamics
E.A. Breen, Division Manager, VE Division,
Lockheed, Calif.
J.F. Fisher, Management Consultant; Cresap,
McCormick & Paget
This meeting w i l l be held at the Brown Bottle,
Joseph Schlitz Brewery, Van Nuys, Calif.
Salt Lake
This Chapter has now been formed and is holding
monthly meetings.
The planned programs f o r this Chapter are as
follows:
Jan. 8 The IRE is being invited to a "Presentation
of Value Engineering in the Commercial
Electronics Industry".
Feb. 13 The AIIE has been invited to a presentation
on "The Relationship Between Value Engi-
neering and IndustrialEngineering". Speak-
er A.W. Dover, Industrial Eng. Div. Re-
public Aviation Corp.
Mar. 12 The Standards Engineering Society is i n -
vited to a presentation on "The Role of
Value Engineering i n the Field of Stand-
ards and Specification Reviews".
Boston
Dec. 6 Small Business Night
Jan. 3 Top Management Night
Feb. 7 IRE Product and Production Eng. Profes-
sional Group Night
Mar. 7 VE Commercial Products Night
Apr. 4 ASME Visitation Night

38 S.A.V.E. JOURNAL 12-62-2

VALUE J P R O O R AJVES F O R IlSrjDXJSTRY, I N C .

PROFESSIONAL VALUE ENGINEERING TRAINING

- and -
CONSULTING SERVICES
... #

SERVING GOVERNMENT AND INDUSTRY

• • Selected by the m i l i t a r y to conduct specialized value

t r a i n i n g services
• 12 80-hour value workshops for research and devel-
opment personnel
• 13 16-hour value orientation c l i n i c s for technical
management
• 2 40-hour advance practices seminars
• • Selected by industry for specialized value training i n
broad product and process areas*

• Boilers Chemicals Dairy equipment

Tires Launchers Fabricated assemblies
Strainers Locomotives Power hand tools
Drones Paperwork Metal products
Rockets Processing Vacuum cleaners
Sinks Electronics Rocket motors
Motors Compressors Cash registers
Castings Packaging Rubber products
Plastics Doppler radar Transformers
Turbines Procedures Diesel engines
Missiles Industrial TV Vibration equipment
Footwear Sewing machines Business bachines
Airplanes Battery chargers Ejection equipment

""Complete l i s t of c l i e n t s , with references, available upon request

R. E . Fountain, President
V
ALUE ^ > r o
S r a m s 01
f" > tmt
tod"** !' 1
J , F . Prendergast, Vice President
12 Jay Street • Schenectady, N.Y. Treasurer
Telephone 372-5671
A r e a Code 518

12-62-2 S.A.V.E. JOURNAL 39

 S. 4. V. E. National News
S.A.V.E. CHAPTER/STATE REGIONS

Northeast North Central South Central

Maine North Dakota New Mexico
Vermont South Dakota •Texas
New Hampshire Nebraska Oklahoma
•New York Colorado Arkansas
•Massachusetts Kansas Louisiana
Connecticut Minnesota
Rhode Island Iowa Northwest
New Jersey Missouri Washington
•Pennsylvania •Illinois Oregon
Delaware Indiana Idaho
Michigan Montana »
Southeast Ohio Wyoming
•Washington, D. C Wisconsin Alaska
West Virginia
Virginia
Southwest
Kentucky
•California
Tennessee
Nevada
North Carolina
•Utah
South Carolina
Arizona
Georgia
Hawaii
Mississippi
Alabama •Present Chapter i n these areas
Florida
Maryland

LIST OF NATIONAL COMMITTEES WITH CHAIRMEN

Auditing Historical (Ad Hoc)

J.J. Kaufman H.K. Davidson
Aerospace Div., Martin-Marietta Co. Head, V.A. Serivces
Baltimore, Md. Northrop Corp., Norair Div.
Hawthorne, Calif.
Chapter Development
Robert L . Crouse Membership & Chapter Development
Mgr. V . E . , Aero. D i v . , Minneapolis-Honeywell W.G. McMurray
2600 Ridgway Rd., Minneapolis, Minn. M i l i t a r y Electronics Div.
Motorola, Western Center
•Commercial Products Scottsdale, A r i z ,
T.H. Redman
Director, V . E . C.W. Doyle
Rochester Prod. D i v . , G.M. Value Control Coordinator
1000 Lexington Ave., Rochester, N.Y. General Dynamics Corp.
Ft. Worth, Texas
Rules & By-Laws
E.T. O'Connell Publicity & Publications
V.E. Weekly Marvin Kaplan
1327 F St., N.W., Washington, D.C. Mgr. of Industrial Engineering
Loral Electronics Corp.
Education
825 Bronx River Ave., Bronx, N.Y.
B.P. Schroeder
Mgr. Education Services
General Dynamics/Pomono, Calif.

40 S.A.V.E. JOURNAL
12-62-2
 V. f . Calender Events
Dec.
Feb.
Salt Lake Area Chapter meeting Boston University
40 Hour - Systems Management Seminar
Dec. 6 40 Hour - Value Engineering Product Design and Dev.
Seminar - Chairman-R. Gillespie
Paul Revere Chapter meeting
Feb. 7
Dec. 11 The Dallas Forth Worth Chapter meeting
Rochester Reliability Engineers
Rochester, New York Feb. 7
T.H. Redman of Rochester Products, Div. of G.M.,
w i l l speak on "Value Related Product Abilities". Paul Revere Chapter meeting
Dec. 11
Feb. 13
Los Angeles Chapter meeting
Metropolitan New York Chapter meeting
Jan.
Feb. 24 (week of)
Salt Lake Area Chapter meeting
Seminar to be held at Southern Methodist
Jan.
Paul Revere Chapter Mar.
36 Hour - Specialist and Instructors Inst.
Salt Lake Area Chapter meeting
36 Hour - V.E. "Blast, Create and Refine" Technique
Course Mar. 7
Jan. 3
Paul Revere Chapter meeting The Dallas F o r t Worth Chapter meeting

Mar. 7
Jan. 8
Paul Revere Chapter meeting
Metropolitan New York Chapter meeting
Mar. 12
Jan. 10
Metropolitan New York Chapter meeting
The Dallas Fort Worth Chapter meeting
April
Feb.
Salt Lake Area Chapter meeting Salt Lake Area Chapter meeting

Apr. 4

Paul Revere Chapter meeting

Apr. 24-25
S.A.V.E. National Convention
Americana Hotel
New York, N.Y.

S.A.V.E. « 1963
E N G I N E E R S IMPRESSION
of a V A L U E E N G I N E E R
CONTRIBUTED BY:
National Convention
H.Hortgl<ns a M.GImn

12-62-2
April 25 & 26, 1963
S.A.V.E. JOURNAL 41

New York
 Seminars, Workshops & Training Aids
Institute of Human Science
333 North Michigan Avenue
Chicago 1, Illinois
The Institute has developed a Human Engineering
Program which endeavors to teach the a r t of know-
ing how to predict, move and control people.
Northeastern University
Boston 15, Mass.
The present course f o r Value Engineering and
Analysis being given at the Northeastern Univer-
sity's Center f o r Continuing Education has become
a regular program, with two eighteen-week courses
offered each year. The f a l l semester begins i n late
September and the spring semester i n early
February.
UCLA'S Business Administration Extension
UCLA'S Business Administration Extension w i l l
offer a course, "Principles and Applications of
Value Analysis and Engineering, X 445 2AB" at
five locations i n California i n 1963.
The courses w i l l consist of 15 meetings, with a
credit of 2 units being given. The cost w i l l be
$35.00.
Further information about the courses may be had
f r o m Jean M . Cooper, Business Administration
Extension, UCLA, 813 South H i l l Street, Los Angeles
14, Calif.
Sperry Utah Engineering Laboratory
Salt Lake City 16, Utah
A Value-Engineering two-week training seminar has
been planned and is scheduled f o r A p r i l 1963.
JOURNAL BINDERS
Sturdy gold printed blue plastics ring binders
with a 3 year Journal storage cabability.
Cost - $3.00 Delivery - 2 weeks
42 S.A.V.E. JOURNAL
Southern Methodist University
A Value Analysis Seminar, is to be held at Southern
Methodist University the week of February 24,1963.
The f a c i l i t i e s of Dallas College of Southern Method-
ist University i n downtown Dallas, w i l l be utilized.
The Seminar w i l l be sponsored by Southern Method-
ist University i n cooperation with the Value Analysis
Standardization Committee, of the National Associa-
tion of Purchasing Agents.
Mr. C.W. Doyle, Value Control Administrator,
General Dynamics, Fort Worth, Texas, w i l l act as
Workshop Coordinator. ^
The Seminar w i l l be designed not only f o r purchasing
people, but alsof or engineers, accountants, financial
officers, and other executives who wish to know
more about the subject.
Registration blanks may be obtained directly by
writing:
Dr. John M . Claunch, Dean of Dallas College,
Southern Methodist University, Dallas, Texas
Industrial Education F i l m s , Inc.
"The Search For Savings" is a n e w f i l m released by
the Industrial Education F i l m s , Inc. It was written
under the technical supervision of E.D. Heller,
Value Control Coordinator, General Dynamics/
Pomona. It was reviewed by L . D . Miles, Manager,
Value Analysis Services, General Electric Co.,
author of "Techniques of Value Analysis and Engi-
neering", and originator of the concept of system-
atic value analysis.
The f i l m explains the step-by-step procedures in
searching f o r alternate materials, manufacturing
processes, or components that w i l l adequately per-
f o r m a function at less cost.
Mail Checks To:
MARVIN KAPLAN, Executive Editor
S.A.V.E. JOURNAL
LORAL ELECTRONICS CORP.
825 BRONX RIVER AVENUE
BRONX 72, NEW YORK
12-62-2
 Engineer's Corner
RECURRING/NON-RECURRING TRADE-OFF

Engineering design requires a series of decisions based upon a choice of a l t e r -

natives involved with performance, physical characteristics, effectiveness, and
cost. In studies involving expected costs, f o r example, the choice of alternatives
w i l l depend upon a given set of conditions.

With the right "financial facts* the point where the two alternatives are equally
economical can be found. This i s known as the break-even point.

Following is an illustration of such an engineering decision:

An original selection of an off-the-shelf item costs $7.00 per unit i n quantities
1
of less than 1,000 units.
On the other hand, there are two special designs that can be manufactured to
p e r f o r m the same function.
Here are the three choices:

1. Original-cost . . . $7.00 per unit

2. Alternative Number 1 - r e c u r r i n g cost . . . $5.00 per unit;
non-recurring cost . . . $500.00
3. Alternative Number 2 - r e c u r r i n g cost . . . $1.00 per unit;
non-recurring cost . . . $700.00
(Recurring cost includes unit material and manufacturing cost; non-recurring
cost includes tooling and engineering.)

The curves below are plots on log-log paper of cost per unit against quantity of
units, with non-recurring cost amortized over the quantity indicated. Curves f o r
the alternatives clearly show the points of equivalency with the original selection.
In this case, any requirement of more than 116 units w i l l be met more economi-
cally by use of alternative number 2.

Cost of each unit f o r a specified number of units may be expressed as follows:

C = recurring cost+ non-recurring cost

number of units

The number of units at the break-even point f o r any alternative is found when C
of one alternative i s made equal to C of the other alternative.

The break-even point f o r each combina-

of alternatives can also be directly
computed by use of the relationship:
ANR
Break-even point
AR
where ANR-non-recurring cost d i f f e r -
AR = recurring cost difference. For this ALTERNATIVE -1

example, the break-even points are: ORlCiMAL 5ELECTI0H1

Alternative number 1 vs. original

ALTERNATIVE -2
selection — 250 units
Alternative number 2 vs. original 100 116 250 1000

selection - 116 units QUANTITY

Alternative number 1 vs. alternative

number 2 - 5 0 units COURTESY OF
A.C. FLACKBERT HUGHES AIRCRAFT COMPANY
S . A . V . E . JOURNAL 43
 Journal Advertising
L I S T OF ADVERTISERS
SIZE DIMENSIONS RATE

1/3 Page 7-1/2" x 3-5/16" or 2-1/2" x 10" $ 75 Alpha Wire Corp Page 24
1/2 » 3-3/4" x 10" or 7-1/2" x 5" $110
2/3 " 5" x 10" or 7-1/2" x 6-5/8" $140 Gries Reproducer 16
Full " 7-1/2" x 10" $200
Cover ;
$275 Industrial Value Services, Inc. 36
Colors (Each color) $ 60
Kent Associates 16

Submission Deadline Dates — Feb. 5, May 5, Aug, 5 & Nov. 5 Loral Electronics Corp.
Circulation — 2000 (including members & subscriptions)

Ryerson, Joseph T., Inc. 12

Mechanical > Copy or Line Illustrations —Black on White

Requirements I Half-tones—Glossy Photos or Negatives Value Programs f o r Industry, Inc. 39

ERNEST YURMAN, Advertising Editor

Request for Articles

Subjects: V.E. techniques relative to materials, organization, cost, procurement, reliability and quality
control.

Format: Typewritten with approximately 1000-2000 words. Photographs and illustrations must
be photographically reproducible. (Glossy photos preferred). Author's photograph
shall be head view and under 2" x 2".

Authorization: Written approval must be supplied f o r the use of a l l material.

NEXT ISSUE DEADLINE: February 5, 1963

44 S.A.V.E. JOURNAL 12-62-2

 1963 ANNUAL CONVENTION
Society of American Value Engineers
APRIL 25 & 26, 1963 (THURS. & FRI.)
AMERICANA HOTEL, NEW YORK CITY

Technical Presentations
The 1963 Convention shall include the most current and complete Value Engineering
(

information with areas of:

Military Products Manufacturing

Commercial Products Purchasing
Military Contracts Education
Design Systems & Procedures
Quality Control Reliability
Location
Convention headquarters, located in the heart of New York's entertainment and cultural
center, shall provide an interesting and relaxing atmosphere for members, wives and guests.
The Americana of New York, 50 stories tall, is one of the newest and most modern hotels in
the world. Special blocks of rooms and suites have been set aside for out-of-town attendees.

Speakers
The country's foremost authorities on Value Engineering, and key representatives from
Industry and the Government, shall comprise the impressive growing list of speakers and
guests.

For the Women

Special events will be scheduled for wives and friends, depending upon the interest shown
in the next few months. Tentative plans include television shows, luncheons, theater and
fashion shows. The weekdays and weekend should provide an attractive vacation for all.

Call for Papers

The importance of the meeting is second only to the need for original papers on all phases
of Value Engineering. All members of S.A.V.E,, Industry and the Government are urged to
start preparation of these necessary and valuable contributions to our field.

Details for papers shall be mailed to all members in the near future. For the present, 500
word abstracts, relative to one of the above listed "Technical Presentations" should be for-
warded to MARVIN KAPLAN, c/o LORAL ELECTRONICS CORP., BRONX 72, NEW YORK.

Additional Convention Details Will Be Mailed To All Members

 THE PURPOSES OF THE SOCIETY SHALL B E :

To create, stimulate and promote interest in the advancement and diffusion of

knowledge of value engineering and value analysis, and its application to the research,
design, development, test, evaluation, engineering, production, purchasing and distri-
bution phases in government, private industry and commerce.

OFFICIAL PUBLICATION OF THE

SOCIETY AMERICAN VALUE ENGINEERS

c/o LORAL ELECTRONICS CORP., 825 BRONX RIVER A V E . , BRONX 72, N.Y.