2. * What is it? * Where did it come from? * How does it work? * What are benefits?
3. A decision process that uses systematic, organized procedures to generate creative alternatives to secure essential functions at the greatest worth. DEFINITION
5. EXISTING PRODUCTS, PROCESSES or SERVICES Concept Design Development Manufacturing Distributing Selling Servicing Value Engineering Value Analysis FUTURE PRODUCTS, PROCESSES or SERVICES Value Planning
6. 1960s - Miles publishes first book - Initial FAST diagramming techniques developed - Society of American Value Engineers (SAVE) establ. - US Dept. of Defense requires for procurement 1940s - Larry Miles / GE developed Theory of Value Analysis and Use Functions 1950s - Adopted by Bureau of Shipyards & Docks as Value Engineering 1990s - Public Law 104-106 mandates Value Engineering at all executive agencies of federal government 1970s & 1980s - Value Engineering courses established at University of Wisconsin - “Technical” and “Customer” FAST standardized - Quality Function Deployment (QFD) begins in US - Value Methods expand to major US companies HISTORY
8. WORTH COST • Performance • Quality • Safety • Esteem • Timeliness • Convenience • Reliability • Production • Ownership • Training • Delay • Breakage • Poor Style • Maintenance • Excess Time • Wear • Service • Benefits POOR VALUE
9. KEY ELEMENTS • Team Involvement • Structured Process • Functional Analysis • Communication • Creativity
10. • Structured Process JOB PLAN 2 Information 3 Creativity 1 Selection 5 Development 4 Analysis 6 Presentation 7 Implementation 8 Verification TEAM WORKSHOP (3 to 10 days)
11. • JOB PLAN 2 Information 3 Creativity 1 Selection 5 Development 4 Analysis 6 Presentation 7 Implementation 8 Verification Project Scope Data Team Based on: • Apparent benefits • Cost / Resource reductions • Performance improvements • Projected ROI Based on: • Budget available • Time available • Opportunity for changes • Expertise available • Drawings & Schematics • Specifications • Cost Accounting • Performance • Customer Feedback Based on: • Expertise • Compatibility • Availability • Interest Indicators: • Costs Increasing • Schedules Missed • Losing Market Share • Traditional Solutions - won’t work! . . . too costly!
12. • Team Involvement - 5 to 7 Members - Selected by Management - Assisted by Certified VM Facilitator - Multiple Disciplines
13. • JOB PLAN 2 Information 3 Creativity 1 Selection 5 Development 4 Analysis 6 Presentation 7 Implementation 8 Verification (Project, Scope, Data, Team Members) FA FAST Focus Points FUNCTION ANALYSIS
14. FUNCTION ANALYSIS - Two Word Descriptions - What Does It Do ? - Active Verb + Measurable Noun for each component or element what is it ? example: a pencil “makes marks”
15. / COSTS Remove Marks Secure Eraser Display Info. Protect Wood Improve Appear. Make Marks Improve Appear. Transmit Force Support Lead Display Info. $1.19 Accommodate Grip / $0.30 / $0.10 / $0.03 / $0.05 / $ 0.05 / $0.04 / $0.24 / $0.20 / $0.14 / $0.04 FUNCTION ANALYSIS Valmax Associates Eraser Band Paint (Body) Paint (Letters) Body Lead Eraser Band Paint (Letters) Paint (Body) Lead Body PARTS COSTS $0.30 $0.13 $0.05 $0.09 $0.24 $0.38 $1.19 Eraser Band Lead Body PARTS FUNCTIONS Paint (Letters) Paint (Body)
16. • JOB PLAN 2 Information 3 Creativity 1 Selection 5 Development 4 Analysis 6 Presentation 7 Implementation 8 Verification (Project, Scope, Data, Team Members) FA FAST FAST Diagram
17. FAST Diagram - Logical Arrangement of Functions - Distribute Costs by Function - Prioritize Functions for Analysis higher order, basic, secondary, supporting costs of functions allocated focus points refine emphasis of study
18. FAST Diagram F unction A nalysis S ystem T echnique TECHNICAL FAST
19. Purpose How Why Higher Order Function CUSTOMER (TASK) FAST TASK TASK The reason that the product, process, system, service, etc. exists. Secondary Basic Secondary Basic Secondary Basic Primary Basic BASIC FUNCTIONS Essential for performance of the TASK Assure Convenience Facilitate • spatial layouts • maintenance • repairs Furnish • instructions • directions Assure Dependability • Make stronger • Make safer • Ensure reliability • Extend life • Protect environs Supporting Functions Satisfy O U S • Desired by users •Make easy to use •Offer comfort •Make pleasing •Improve basics -faster, smaller,etc. Attract O U S • Style • Color • Image • Shape • Texture • Endorsement SUPPORTING FUNCTIONS NOT essential for performing the TASK. ENABLE • marketing • selling • customer acceptance FAST Diagram Scope Line Secondary Basic Functions A schematic of logical functional relationships
20. Convey Information Supporting Functions 20% 17% 25% 8% 8% Assure Dependability 12% 4% 6% Satisfy O U S Make Marks Transmit Force Remove Marks Secure Eraser Display Information Accommodate Grip Support Lead Protect Wood Improve Appearance CUSTOMER (TASK) FAST FAST Diagram How Why Valmax Associates Eraser Band Paint (Body) Paint (Letters) Body Lead Assure Convenience Secondary Higher Order Function Basic Functions Attract O U S Eraser Band Lead Body PARTS FUNCTIONS/COSTS Paint (Letters) Paint (Body) Remove Marks / $0.30 Secure Eraser / $0.10 Display Info / $0.05 Protect Wood / $0.05 Improve Appear. / $0.04 Make Marks / $0.24 Improve Appear. / $0.03 Transmit Force / $0.20 Support Lead / $0.14 Display Info / $0.04 $1.19 Accommodate Grip
21. • JOB PLAN 2 Information 3 Creativity 1 Selection 5 Development 4 Analysis 6 Presentation 7 Implementation 8 Verification (Project, Scope, Data, Team Members) FA FAST Focus Points ) • Basic Function(s) • Value Mismatches • Complexity
22. Convey Information Supporting Functions 20% 17% 25% 8% 8% 12% 4% 6% FOCUS POINTS • Basic Functions • Highest Cost Supporting Functions (potential VALUE MISMATCHES) • Complexity FAST Diagram How Why Assure Convenience Display Information Accommodate Grip Remove Marks Secure Eraser Assure Dependability Support Lead Secondary Higher Order Function Basic Functions Transmit Force Make Marks Satisfy O U S Protect Wood Attract O U S Improve Appearance
23. • JOB PLAN 2 Information 3 Creativity 1 Selection (Project, Scope, Data, Team Members) 5 Development 4 Analysis 6 Presentation 7 Implementation 8 Verification (FA FAST Focus Points) ( Focus Points • Brainstorming • Gordon Technique • Field Force Analysis • Brain-writing • Uniform Methods Listing • Other methods Ideas Concepts )
25. • JOB PLAN 2 Information 3 Creativity 1 Selection (Project, Scope, Data, Team Members) 5 Development 4 Analysis 6 Presentation 7 Implementation 8 Verification (FA FAST Focus Points) Ideas ( Focus Points Concepts ) • Affinity Grouping • Blast-Create-Refine • Refine Concept Groups • Identify Benefits/Risks • Other methods
26. CONCEPT 1 CONCEPT 2 CONCEPT 3 CONCEPT n AFFINITY GROUPS Creative IDEA IDEA IDEA Focus Point A IDEA IDEA IDEA IDEA IDEA IDEA IDEA IDEA Focus Point B IDEA IDEA IDEA IDEA IDEA IDEA IDEA IDEA IDEA Focus Point n IDEA IDEA IDEA IDEA IDEA Focus Point C IDEA IDEA
27. • JOB PLAN 2 Information 3 Creativity 1 Selection (Project, Scope, Data, Team Members) 5 Development 4 Analysis 6 Presentation 7 Implementation 8 Verification (FA FAST Focus Points) Ideas (Focus Points Concepts) ( Evaluate Rank Select Concepts ) • Consensus • “ Sticky Vote” • Probability Grouping • Criteria Weighting Matrix • Multi Series Decision Matrix
28. EASY MODERATE HARD LARGE BENEFITS MEDIUM BENEFITS SMALL BENEFITS IMPLEMENTATION DIFFICULTY GENERATE PROPOSALS FUTURE CONSIDERATION 1 2 3 n n n REJECT Analysis EXAMPLE: Probability Groupings
29. • JOB PLAN 2 Information 3 Creativity 1 Selection (Project, Scope, Data, Team Members) 5 Development 4 Analysis 6 Presentation 7 Implementation 8 Verification (FA FAST Focus Points) Ideas Concepts) (Focus Points (Evaluate Rank Select Concepts) ( Improve Proposal Value, Document ) SELECTED CONCEPTS: feasibility, viability, advantages, disadvantages, dangers, risks, costs (life cycle) WRITTEN REPORT
30. • JOB PLAN 2 Information 3 Creativity 1 Selection (Project, Scope, Data, Team Members) 5 Development 4 Analysis 6 Presentation (FA FAST Focus Points) Ideas Concepts) (Focus Points (Evaluate Rank Select Concepts) (Improve Proposal Value, Document) (Recommendations to Sponsors) WRITTEN REPORT & ORAL PRESENTATION • Information for Decision-Makers • Guidance for Implementation • Records for Audit & Verification 7 Implementation 8 Verification 7 Implementation 8 Verification
31. • JOB PLAN 2 Information 3 Creativity 1 Selection (Project, Scope, Data, Team Members) 5 Development 4 Analysis 6 Presentation 7 Implementation 8 Verification (FA FAST Focus Points) Ideas Concepts) (Focus Points (Evaluate Rank Select Concepts) (Improve Proposal Value, Document) (Recommendations to Sponsors) (Schedule, Budget, Staff, etc.) (Audit Actual Results and Compare) 8 Verification
32. • JOB PLAN 2 Information 3 Creativity 1 Selection (Project, Scope, Data, Team Members) 5 Development 4 Analysis 6 Presentation 7 Implementation 8 Verification (FA FAST Focus Points) Ideas Concepts) (Focus Points (Evaluate Rank Select Concepts) (Improve Proposal Value, Document) (Recommendations to Sponsors) (Schedule, Budget, Staff, etc.) (Audit Actual Results and Compare)
33. IMPROVE CUSTOMER SATISFACTION - Major appliance company product ratings increased from “unsatisfactory” to “ recommended”; new product rated one of “top three”. ROI - 40:1 typical (economic benefits / VM study costs) REDUCE PRODUCT COSTS - Electrical component manu- facturer introduced new lighted switch achieving larger market share with 30% lower product costs. INCREASE ORGANIZATIONAL EFFICIENCY - Sales training department reduced total program cost by 47%. INCREASE PROCESS EFFICIENCY - Machining / assembly costs reduced by 40% for automotive forgings. BENEFITS
34. Monetary Value Product Life Cycle PRE | MFG. Value Eng. Value Anal. Value Mgmt. VP PLANNING CONCEPT DEVEL. DESIGN/ DEVEL. PI LOT PROD ONGOING MFG. Potential Savings Cost to Change
35. EXAMPLE: Team Workshop Cost 5 Day Project 9 TIME (days) COST (w/OH) $10,800 5 $5,000 5 $2,000 5 $2,000 5 $2,300 5 $2,500 5 $2,500 3 $1,500 $12,800 $1,000 $29,600 $32,000 $15,800 Travel Exp. Total $800 $18,900 TEAM MEMBERS Facil -FT Subtotal Asst Facil -FT Member A-FT Member A-FT Member A-FT Member A-FT Member A-FT Other - PT Subtotal 3 Day Project 6 TIME (days) COST (w/OH) $7,200 3 $3,000 3 $1,200 3 $1,200 3 $1,400 3 $1,500 3 $1,500 1 $500 $7,300 $10,200 $21,000 TOT (rounded w/8% cont)
36. VE Society International Professional society for VM practitioners www.vesociety.com SAVE International Professional society for VM practitioners www.value-eng.org Miles Value Foundation VM reference center at College of Engineering, Univ. of Wisconsin www.valuefoundation.org VeToday Value Methods information web site: www.vetoday.com REFERENCES
