ValueEngineering MethodologyInConstruction

Fadi Elayache, Dubai 2010

Alliances

Overview

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

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.").
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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
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Concept of Value

FUNCTION VALUE = COST

Concept of Value Desirable

Ideal Good Acceptable Passable

Value =

Function Cost

Function Cost
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Concept of Value Undesirable

Undesirable but Passable (cheapening the product) Function Cost Function Cost
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Value =

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.
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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 Dwgs Release

Concept

Design

Construction
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TIME

Value Study Diagram

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Six Steps VE Plan

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

Information Phase Facts Finding

What do you need to know about the problem that you dont 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?

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Functional Phase

Functions - Describe what something does Functions - Use active verb and measurable noun FAST (Function Analysis System Technique) - A logic diagram to describe how a system works. Examples : Secondary Functions Plan Finishing Material Magnify Living Room Area Reduce Wall Thickness Design Exposure Minimize Defect Design Finishing

1 2 3 4 5 6

Key Function : Satisfy Tenant

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Function Analysis
Secondary Functions Design Unit Plan Put Cavity Wall Control Temperature Minimize Exterior Surface Execute Natural Ventilation Maintain Cleanliness Supply Air Conditioner Keep View Install Insulation Control Humidity

1 2 3 4 5 6 7 8 9 10

Key Function : Maintain Facility

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Function Analysis
Secondary Functions Supply Pipeline Space Design Ventilation Space Provide Elec. Pipe Space Add Sewage Space

1 2 3 4

Key Function : Install Equipment

Secondary Functions 1 Arrange Wall 2 Collect Opinion 3 Install Art

Key Function : Design Interior

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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.

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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

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Imagination
Imagination is more important than knowledge, for knowledge is limited, while imagination embraces the entire world.
Albert Einstein

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Thought of the Day

When you always do what you have always done - you always get what you have always gotten.
Socrates

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IDEAS Vs Solutions

A solution requires justification & validation, and idea needs no justification. A solution is an end point, an idea is just the beginning. A solution is solid and self supporting, an idea is tender and must be built upon.
DONT KILL IDEAS WITH ROADBLOCKS!!
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Information for Skeptics

INNOVATION "... 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] AEROSPACE "Heavier-than-air flying machines are impossible." [Lord Kelvin, president, Royal Society, 1895] "Airplanes are interesting toys but of no military value." [Marechal Ferdinand Foch, Professor of Strategy, Ecole Superieure de Guerre]
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Information for Skeptics

COMPUTATIONAL SYSTEMS "I think there is a world market for maybe five computers., [Thomas Watson, chairman IBM, 1943] "There is no reason anyone would want a computer in their home." [Ken Olson, Chairman and founder Digital
Equipment Corp., 1977]

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

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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

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Counter Skepticism
Aluminum Honeycomb System is an Innovative Solution for Stone Cladding of High Rise Buildings
Vincenzo Portciello, 2010

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Counter Skepticism
Mateen-bar will replace steel reinforcement in structures exposed to aggressive environmental conditions in the Middle-East , Fadi Elayache 2010

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Rules of Brainstorming

Generate a large number of ideas - quantity, not quality. Free-wheeling is encouraged - Listen and improve on the ideas of others. Dont criticize - No evaluation of ideas Encourage everyone to participate Record all ideas presented Time to let ideas incubate should be allowed. Select an appropriate meeting place
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More Creativity

Creative Ideas & Innovative Solutions Will be covered in the VE Case Studies

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Evaluating Ideas

GO - NO GO Scratch ideas that hold no interest. CHAMPION Who will speak for the ideas and support them? GFI (Gut Feel Index) Discuss pro/con and vote. GFI is team average. Combine ideas; add new ideas. Record all assumptions when voting.
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Performance Comparison
Performance Comparison Matrix Criteria Roof Structure Constructability Weather Resistance & Durability Thermal Resistance Fire Resistance & Safety Flexibility in Applying Finishes Score Roof Finishes Maintenance Aesthetics Ease of Installation (skilled labor requirement) Score Total Score Option A Option B Option C Option D

1 1 1 2 1 6 2 2 2 6 18

2 2 1 2 2 9 2 2 2 6 24

3 3 3 3 3 15 2 2 2 6 36

3 3 3 3 3 15 2 3 1 6 36
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1= Acceptable 2= Good 3= Excellent

Cost Comparison
Option A Cost Estimate - Curved Steel Beam + FRP Cladding
Description
Roof Structure: Curved Steel Beams + Purlins + Intermediate Steel Members Metal Deck CIP Concrete (150mm) Waterproofing + Rigid Insulation Boards + Protection FRP Panels F.C. Suspension System F.C. Gypsum Board Sub Total Total (including 15% Contractor's Prelims, Overhead & Profit) Unit Quantit y Unit Cost (AED) 28,000 Total Cost (AED)

ton

120

3,360,000

sqm sqm sqm sqm ton sqm

1,520 1,520 1,520 1,520 30 1,194

350 80 85 400 28,000 100

532,000 121,600 129,200 608,000 851,200 119,400 5,721,400 6,579,610

Option D Cost Estimate - PT Concrete Slab + FRP Cladding Unit Total Quantit Description Unit Cost Cost y (AED) (AED) Roof Structure: Post Tension cum 389 3,100 1,205,900 Concrete Roof Slab Waterproofing + Polyurethane sqm 1,520 85 129,200 Foam Insulation + Protection FRP Panels F.C. Suspension System F.C. Gypsum Board Sub Total Total (including 15% Contractor's Prelims, Overhead & Profit) sqm sqm sqm 1,520 1,194 1,194 400 100 100 608,000 119,400 119,400 2,181,900 2,509,185

Cost Saving of 4 million AED

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Development Phase

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

What needs to be done? Who should be assigned the action?

Assign a team member. Assign a completion date for the action.

When should the task be completed?

Plan regular team status meetings. Anticipate 4-6 weeks to complete the actions.

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Plan for Roadblock

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Reporting
Give

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

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Follow up Activity

h h h

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

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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

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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
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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
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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

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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
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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
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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
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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
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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.
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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
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