You are on page 1of 46

Value Engineering 

Methodology In Construction

Fadi Elayache, Dubai 2010 1


Alliances

2
Overview

‰ What is Value Engineering?


‰ How Do we Apply VE?
‰ When is it used?
‰ Value Engineering Six Steps Plan?
‰ VE Case Studies

3
Value Engineering the
Forgotten Technique
Originally called Value Analysis by its inventor, Larry
Miles, an engineer in GE's purchasing operation in
1947, VA/VE uses a value equation that says value is
equal to function divided by cost. If, for example, the
buyer wants to get more item value, he/she needs to
either increase the item's functionality at the same time
he/she is containing cost; or he/she needs to reduce cost
while holding or improving its functionality. Either
way, the result is more value for the customer
Ref: Purchasing Magazine - "Value Analysis makes a
comeback," Jim Morgan, November 20, 2003.").
4
What is Value Engineering?
Value Engineering (VE) is an intensive,
interdisciplinary problem solving activity that focuses
on improving the value of the functions that are
required to accomplish the goal, or objective of any
product, process, service, or organization.

VALUE METHODOLOGY
“The systematic application of recognized techniques
which identify the functions of the product or service,
establish the worth of those functions, and provide the
necessary functions to meet the required performance at
the lowest overall cost.”
Ref: John M. Bryant, VM Standard, Society of American Value
Engineers, Oct. 1998
5
Concept of Value

FUNCTION
VALUE =
COST

6
Concept of Value Desirable

Ideal Good Acceptable Passable

Function Function
Value =
Cost
Cost

7
Concept of Value
Undesirable

Undesirable but Passable


(cheapening the
product)

Function Function
Value =
Cost
Cost
8
8
When Value Engineering is
Used
€ Value Engineering is used to determine the best design
alternatives for Projects.
€ Value Engineering is used to reduce cost on existing Projects.
€ Value Engineering is used to improve quality, increase
reliability and availability, and customer satisfaction .
€ Value Engineering is also used to improve organizational
performance.
€ Value Engineering is used to improve schedule
€ Value Engineering is used to reduce risk
€ Value Engineering is a powerful tool used to identify
problems and develop recommended solutions.

9
Potential Saving from VE

Re-Test Feasibility
Drawings Released Design Changes

Cost Net Savings from VE

Total Cost of VE Implementation

VE Implementation
beyond this point
results in a net loss.

Construction
Concept Design Dwgs Release Construction

TIME 10
Value Study Diagram

11
Six Steps VE Plan
Information ** Clearly
Clearlyidentify
identifythe
theproblem(s)
problem(s)to
tobe
besolved,
solved,and
and
Information
Phase gather
gatherinformation
informationon onthe
thebackground,
background,functions
functionsand
and
Phase
requirements
requirementsof ofthe
theproject.
project.
Functional
Functional ** What
Whatmust
mustthe
theproject
projectdo?
do?What
Whatare
arethe
thefunctions
functions
Analysis
Analysis and
andhow
howare
arethey
theyrelated?
related?
** Brainstorm
Brainstormideas
ideason
onhow
howtotoimprove
improvethe
thehigh
highcost,
cost,
Creativity
Creativity broken,
broken,or
orinadequately
inadequatelyperformed
performedkey
keyfunctions.
functions.
Phase
Phase
** Screen
Screenideas
ideasfor
foracceptance,
acceptance,score
scoreremaining
remainingideas
ideas
Evaluation
Evaluation on
onaascale
scaleand
andgroup
groupideas
ideasinto
intocategories.
categories. Develop
Develop
Phase
Phase design
designscenarios,
scenarios,and
andselection
selectioncriteria.
criteria. Rate
Rateand
and
rank
rankideas.
ideas.
Development
Development ** Plan
Planhow
how to
tosell
sellideas
ideasto
tomanagement,
management,identify
identifykey
key
Phase
Phase recommendations,
recommendations,planplanmanagement
managementpresentation.
presentation.

Reporting ** Give
Giveoral
oralpresentation
presentationtotomanagement,
management,or
ordevelop
develop
Reporting
Phase written
writtenreport.
report.
Phase
Information Phase
Facts Finding
‰ What do you need to know about the problem
that you don’t know now?
™ What facts are known?
™ What are the requirements of the system?
™ Are these facts, opinions, assumptions, or
prejudices?

‰ Where or how can information be obtained?


13
Functional Phase

¾ Functions - Describe what something does


¾ Functions - Use active verb and measurable noun
¾ FAST (Function Analysis System Technique) - A logic
diagram to describe how a system works.
¾ Examples :
Secondary Functions
1 Plan Finishing Material
2 Magnify Living Room Area Key Function :
3 Reduce Wall Thickness Satisfy Tenant
4 Design Exposure
5 Minimize Defect
6 Design Finishing 14
Function Analysis

Secondary Functions
1 Design Unit Plan
2 Put Cavity Wall
3 Control Temperature
4 Minimize Exterior Surface Key Function :
5 Execute Natural Ventilation Maintain Facility
6 Maintain Cleanliness
7 Supply Air Conditioner
8 Keep View
9 Install Insulation
10 Control Humidity
15
Function Analysis

Secondary Functions
1 Supply Pipeline Space
Key Function :
2 Design Ventilation Space
Install Equipment
3 Provide Elec. Pipe Space
4 Add Sewage Space

Secondary Functions
1 Arrange Wall Key Function :
2 Collect Opinion Design Interior
3 Install Art
16
Creativity Definition

Creativity is the art of


bringing something
new into existence.

It has the art of making,


inventing, or producing
something new and
different.

17
17
Creativity & Innovation

You must blast before you can


create. Blow apart the
misconceptions, skeptics, and
naysayers. Blow-up the
preconceived ideas and
common theories of how
things should be done.
Rather, focus on possibilities.
J. R. Wixson - 2004

18
Imagination

Imagination is more important than


knowledge, for knowledge is limited,
while imagination embraces the entire
world.
‚ Albert Einstein

19
Thought of the Day

When you always do what you have


always done - you always get what
you have always gotten.
‚ Socrates

20
IDEAS Vs Solutions

¾ A solution requires justification &


validation, and idea needs no justification.
¾ A solution is an end point, an idea is just
the beginning.
¾ A solution is solid and self supporting, an
idea is tender and must be built upon.

DON’T KILL IDEAS WITH


ROADBLOCKS!!

21
Information for Skeptics
¾INNOVATION
¾"... after a few more flashes in the pan, we shall hear very
little more of Edison or his electric lamp. Every claim he
makes has been tested and proved impracticable."
[New York Times, January 16, 1880]
¾AEROSPACE
¾"Heavier-than-air flying machines are impossible."
[Lord Kelvin, president, Royal Society, 1895]
¾"Airplanes are interesting toys but of no military value."
[Marechal Ferdinand Foch, Professor of Strategy, Ecole
Superieure de Guerre]
22
Information for Skeptics

COMPUTATIONAL SYSTEMS
¾"I think there is a world market for maybe five
computers.“, [Thomas Watson, chairman IBM, 1943]

¾"There is no reason anyone would want a computer in


their home." [Ken Olson, Chairman and founder Digital
Equipment Corp., 1977]

¾"640K ought to be enough for anybody." [Bill Gates, 1981]


23
Counter Skepticism

Tilt-up Construction is an
innovative construction
method that will replace
traditional construction of
low and mid rise buildings
in the Middle East within
few years
Fadi Elayache 2010

24
Counter Skepticism

Aluminum Honeycomb System is an Innovative


Solution for Stone Cladding of High Rise Buildings
Vincenzo Portciello, 2010

25
Counter Skepticism

Mateen-bar will replace steel reinforcement in structures


exposed to aggressive environmental conditions in the
Middle-East , Fadi Elayache 2010

26
Rules of Brainstorming

¾ Generate a large number of ideas - quantity,


not quality.
¾ Free-wheeling is encouraged - Listen and
improve on the ideas of others.
¾ Don’t criticize - No evaluation of ideas
¾ Encourage everyone to participate
¾ Record all ideas presented
¾ Time to let ideas “incubate” should be allowed.
¾ Select an appropriate meeting place
27
More Creativity

Creative Ideas &


Innovative Solutions Will
be covered in the VE
Case Studies

28
Evaluating Ideas

Š GO - NO GO
−Scratch ideas that hold no interest.
Š CHAMPION
−Who will speak for the ideas and support them?
Š GFI (Gut Feel Index)
−Discuss pro/con and vote. GFI is team average.
−Combine ideas; add new ideas.
−Record all assumptions when voting.
29
Performance Comparison
Performance Comparison Matrix

Criteria Option A Option B Option C Option D

Roof Structure
Constructability 1 2 3 3
Weather Resistance &
1 2 3 3
Durability
Thermal Resistance 1 1 3 3
1= Acceptable
Fire Resistance & Safety 2 2 3 3 2= Good
Flexibility in Applying Finishes 1 2 3 3 3= Excellent
Score 6 9 15 15
Roof Finishes
Maintenance 2 2 2 2
Aesthetics 2 2 2 3
Ease of Installation (skilled
2 2 2 1
labor requirement)
Score 6 6 6 6
Total Score 18 24 36 36
30
Cost Comparison
Option A Cost Estimate - Curved Steel Beam + Option D Cost Estimate - PT Concrete Slab + FRP
FRP Cladding Cladding
Unit Unit Total
Quantit Total Cost Quantit
Description Unit
y
Cost
(AED)
Description Unit Cost Cost
(AED) y
(AED) (AED)
Roof Structure: Curved Roof Structure:
Steel Beams + Purlins + Post Tension
ton 120 28,000 3,360,000
Intermediate Steel cum 389 3,100 1,205,900
Members Concrete Roof
Slab
Metal Deck sqm 1,520 350 532,000 Waterproofing +
Polyurethane
CIP Concrete (150mm) sqm 1,520 80 121,600
sqm 1,520 85 129,200
Foam Insulation
Waterproofing + Rigid
+ Protection
Insulation Boards + sqm 1,520 85 129,200 FRP Panels sqm 1,520 400 608,000
Protection
F.C. Suspension
FRP Panels sqm 1,520 400 608,000 sqm 1,194 100 119,400
System
F.C. Suspension System ton 30 28,000 851,200 F.C. Gypsum
sqm 1,194 100 119,400
Board
F.C. Gypsum Board sqm 1,194 100 119,400 Sub Total 2,181,900
Total (including
Sub Total 5,721,400
15% Contractor's
Total (including 15% 2,509,185
Prelims, Overhead
Contractor's Prelims, 6,579,610
Overhead & Profit)
& Profit)

Cost Saving of 4 million AED 31


Development Phase

Planning
¾ What is recommended?
¾ Who has to approve it?
¾ What is the implementation plan?
¾ Are mockups or prototypes required to
verify final decisions?
¾ What are the cost, schedule, and
deliverables?
¾ ROI?
32
Action Plan

¾ “What needs to be done?”


¾ “Who should be assigned the action?”
¾ Assign a team member.
¾ Assign a completion date for the action.
¾ “When should the task be completed?”
¾ Plan regular team status meetings.
¾ Anticipate 4-6 weeks to complete the actions.

33
Plan for Roadblock

34
Reporting

¾ Give oral presentation.


¾ Support it with written executive brief.
¾ Be clear, concise, and positive.
¾ Anticipate roadblocks
¾ Use good human relations.

35
Follow –up Activity

h Recognize the participants.


h Publicize the results.
h Audit the performance of the
implemented actions.
h Close out the project.

36
Case Studies
Replacing Piles with Footings

Worked Performed:
Replacing 43 piles
with isolated footings

outcome

1- Cost Savings = 1,119,000 AED


2- Time Saving = 2 months
3- Easier, tidier and safer
construction

37
Case Study- Resizing &
relocating Water Tank

Worked Performed:
1- Reducing size from 14,384 to 7000 m3
2-Remove 100 piles
3- Minimize depth to avoid excessive
excavation in sandstone layer
4- Relocate WT Under footprint of Bldg
outcome

1- Cost Savings = 7,930,000 AED


2- Time Saving = 3 months
3- Easier, tidier and safer construction
4- Regain Land space
38
Case Study- Lagoon Depth, walls
& liners
Worked Performed:
1- Reducing depth by 1.25 m about 50000 m3
2- Replace CIP Reinforced Concrete walls with Pre-cast panels
3- Incorporate underwater theming within pre-cast panels
4- Use Double liners instead of concrete floor with 2 stages installation
5- Introduce leakage detection system in lagoon bottom and behind
wall
outcome

1- Cost Savings = 8,338,600 AED


2- Time Saving = 2 months
3- Easier constrction
39
Case Study- Lagoon Depth

Five pits were used instead of one To reduce


Lagoon Depth by 1.25 m and achieve more
effective collection of sediments

40
Case Study- Lagoon Walls

Recommendations for the 1675


m long lagoon perimeter:
1- To Use Gravity Precast panels
Instead of CIP reinforced
concrete walls
2- To use 6 Deg tilted walls
instead of vertical walls to
reduce footing sizes
3- Incorporate theming in
Underwater precast Panels to
reduce cost
41
Case Study- Floor Liners

Recommendations for the 40000 m2


Floor 2 liners instead of one liner and
concrete floor:
1- To Use double liners, one 1.5 mm
and the 2nd 0.5mm thick separated
with granular layer
2- To provide leakage detection
system as shown
42
Case Study- 40 m Dome
Structure
Recommendations for the 30 and
40 m LH Domes
1- To use PT Concrete curved Roof
instead of Steel
2- Eliminate Fire Proofing
3- Reduce Thermal Insulation
4- Reduce Suspension System of
False Ceiling. outcome
1- Cost Saving of 4,385,065 +
2,466,600 for the 40 and 30 m
Domes respectively
2- No Time impact
3-Similar construction Risk
43
Case Study – Displaced Cooling

Recommendations for Air Displacement


System
1- To use Conventional Ventilation
Instead
2- To reduce interference Among trades
3- To manage risk of potential
scheduling conflict

outcome

1- Cost Saving of 891,625


44
Our VE Services

We Partner With Consultants & Developers to provide:


‰Value Engineering Services for all project Phases,
Conceptual, Design, & construction
‰In House Training of Project Team for Value Engineering
Analysis

We partner with Contractors for:


‰ Preparation of value Engineered alternatives
proposals at the tender stage
‰ Proposing Value Engineered alternatives during
construction.

45
References

1. “Value Standard and Body of Knowledge “; Save International, June


2007
2. J.R. Wixon, “ Value Engineering The Forgotten Lean Technique”,
University of Idaho, Industrial Technology Program.
3. J.Jerry Kaufman & Jimmie L. Carter “ Evaluating Brainstorming Ideas”
1994
4. Chi-Sung in et al, “Hierarchical Concept Modules for improving Function
Analysis of Construction VE Process,”
5. Fadi Elayache, “ work Experience with Parson Brinkerhoff ME, Sr. PM
Theme Park”, 2008

Thanks 46

You might also like