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BODY OF KNOWLEDGE
June 2007
Value Standard and Body of Knowledge
Table of Contents
Page No.
J Acknowledgements ...............................................................................................................2
J Value Standard
Value Standard..................................................................................................................5
J Body of Knowledge
History .................................................................................................................................7
Overview ............................................................................................................................8
Applicability .....................................................................................................................10
Glossary.............................................................................................................................21
J References .......................................................................................................................................... 28
Value Standard
1) Define the steps and components that Users of the Value Standard should be
constitute a valid Value Study. aware that some governing bodies require
that value engineering facilitator hold
2) Document supporting information that specific licenses or other credentials not
defines a generic methodology, identified by the Value Standard. If so, the
common terminology, and standard user should identify such considerations
practice to guide practitioners and when soliciting and contracting for value
managers in effectively applying value methodology services.
methodology to improve the value of
their projects.
The Job Plan consists of the following and the associated value improvement
sequential phases. (See Figure 1, page 13): opportunity.
Body of Knowledge
Overview
The value methodology is a systematic The identification and naming of project
process used by a multidisciplinary team to functions enables clear thinking by limiting
improve the value of a project through the the description of a function to an active
analysis of its functions. Value is defined as verb that operates on a measurable noun
a fair return or equivalent in goods, services, to communicate what work an item or
or money for something exchanged. Value activity performs. This naming process helps
is commonly represented by the multidisciplinary teams build a shared
relationship: understanding of the functional
requirements of the project and, as a result,
Value ≈ Function/Resources it allows them to identify where
opportunities for value improvement exist in
where function is measured by the the project.
performance requirements of the customer
and resources are measured in materials, Function analysis can be enhanced
labor, price, time, etc. required to through the use of a graphical mapping
accomplish that function. A value tool known as the Function Analysis System
methodology focuses on improving value Technique (FAST), which allows team
by identifying alternate ways to reliably members to understand how the functions
accomplish a function that meets the of a project relate to each other.
performance expectations of the customer.
A fundamental tenet of a value
Function Analysis is the foundation of a methodology is that basic functions (the
value methodology and is necessary
the key activity that purpose of the
differentiates this body of Value is defined as a fair project) must be
knowledge from other preserved. This is
problem-solving or return or equivalent in goods, because the
improvement practices. services, or money for basic function
During the Function Analysis reveals the
Phase of the Job Plan,
something exchanged. usefulness of the
functions are identified that project and the
describe the work being reason for its
performed within the scope of the project existence. For example, the basic function
under study. These functions are described of a wristwatch could be “indicate time.”
using two word, active verb/measurable Other secondary functions support the
noun pairings, for example one function of basic function. These secondary functions
a hammer is to apply force. The team typically provide esteem, dependability, or
reviews the project’s functions to determine convenience value for the user. An
those that could be improved. These may example is a gold watchcase that performs
be project functions that seem to be an aesthetic function which pleases both
performed inefficiently or with more than customers and those whom they want to
expected cost. These functions become impress.
the focus of the value methodology team
in their endeavor to improve the project.
The value methodology is applied using a While a Value Study is guided by the
process known as the “Job Plan.” The function-based Job Plan, it can be further
purpose of the Job Plan is to guide the supported by many commonly used
Study team through the process of business improvement techniques (See
identifying and focusing on key project Activities section for examples).
functions in order to create new ideas that
will result in value improvements.
Applicability
Value methodologies can be applied A value methodology can be used to
during any stage of a project’s either develop new ways to
development cycle, although the greatest manufacture a product or change an
benefit and resource savings are typically existing process.
achieved early in development during the
conceptual stages. At this point, the basic y Business systems and processes may also
information of the project is established, but be the subject of Value Studies. Many
major design and development resources elements of a business or an
organization may be improved through
have not yet been committed. The reason
the application of a value
this is the best time to apply a value
methodology is because the manner in methodology. This may be from the
which the basic function of the project is development of business plans and
organizational studies to improving
performed has not been established, and
alternative ways may be identified and existing business processes.
considered. y Service organizations can benefit from
the use of value methodologies. In the
Examples of these applications are: past value methodologies have been
y Construction projects could benefit by used to improve processes and
identifying improvements for various procedures in the medical industry
project phases: concept development, (operating rooms, emergency rooms,
preliminary design, final design, etc.) and the legal system (police
procurement and construction. systems).
Study Duration
A value study generally encompasses three Projects with a concise scope or a low level
stages. (See Figure 1, page 13): of complexity may be performed in less
time. Sufficient time should be allotted to
1. Pre-Workshop (Preparation) adequately apply the value methodology
process and document the team’s findings.
2. Workshop (Execution of the six phase Shortening the time needed to execute the
Job Plan) Job Plan phases may result in a less-than-
optimal result.
3. Post-Workshop (Documentation and
Implementation) Projects of very large scope or complexity
may require 10-15 days or more to achieve
The duration for executing the Job Plan in a the study’s objectives. Consideration of
value study depends on several factors: the these factors is important to ensure that the
size and complexity of the project, the proper time is allocated and needs to be
stage of project development, the addressed as part of the upfront planning
estimated cost of the project, etc. for a value study.
A typical duration for the Workshop Stage is
five-days, which does not include the Pre-
Workshop and Post-Workshop efforts.
Pre
Study
Activities
Stage 1 - Pre Workshop/Study
Stage 2 - Workshop/Study (Value Job Plan)
No
Function
Information Creative Evaluation Results
Analysis
Phase Phase Phase OK?
Phase
Yes
Presentation Development
Phase Phase
Figure 1.
Value Study Process Flow Diagram
Workshop Activities
Pre-Workshop Activities
Purpose: y Distribute information to team members
Plan and organize the Value Study for review
y Develop informational models and
Fundamental Question: diagrams about the project
What has to be done to prepare for a y Determine the study dates, times,
Value Study? location and other logical needs
y Clearly define, with senior
Common Activities: management, the requirements for a
successful Value Study results
y Obtain senior management
concurrence and support of the job
Typical Outcome:
plan, roles, and responsibilities.
The desired outcome is a clear
y Develop the scope and objectives for
understanding of what senior management
the Value Study
needs to have addressed, what the
y Obtain project data and information
strategic priorities are, and how
y Obtain key documents such as scope of
improvement will increase organizational
work definition, drawings, specifications,
value. It is during this phase that a view is
reports, and project estimate
formed as to whether subsequent phases
y Identify and prioritize strategic issues of
are likely to yield sufficient value to justify
concern
the cost of the study within the terms set. It
y Determine the scope and objectives of
may be appropriate to increase or
the study
decrease study parameters at this time.
y Develop the study schedule
Team members are knowledgeable of and
y Undertake competitive benchmarking
committed to achieve the project’s
analyses
objectives.
y Identify Value Team members
y Obtain commitment from the selected
team members to achieve the project
objectives
y Review the project costs
y Gather appropriate customer/user
information about the project
y If appropriate, invite suppliers,
customers, or stakeholders to
participate in the Value Study
Post-Workshop Activities
Implementation Activities y Ensure that new practices become
embedded by establishing and
Purpose: managing an implementation plan
Ensure accepted value alternatives are Typical Outcome:
implemented and that the benefits
The project stakeholders determine what
projected by the Value Study have been
will be changed in the project as a result of
realized.
the Value Study. These are changes to the
Fundamental Question: original concept or base case of a study,
resulting from the value alternatives, that
What are the program changes, and how
the project development will incorporate in
will the project team manage them?
future design or product development
activities.
Following delivery of the value study
preliminary report, management and the
project team should consider and agree
upon the value alternatives to be
implemented and then how and by when
the implementation will occur. In some Value Study Follow-Up Activities
instances, additional study and information
may be required. Implementation of Purpose:
alternatives is the responsibility of Follow up on implementation of the Value
management with assistance from the Study results and improve the application
project and value teams. of a value methodology for future studies.
y Reflect on the value study and consider the value study, comparing the way things
how the experience has developed turned out, and ascertaining how that
new capabilities knowledge affects the way they believed
their own theories in the first place. This is a
Typical Outcome: key step in learning what will help the
Individuals become better value creators organization become better at managing
by reflecting on theories they held before innovation.
Another role of the Value Manager is to ♦ Evaluate ideas using their experience
ensure that the proper amount of Pre- and expertise
Workshop activities take place prior to any ♦ Develop alternatives
Value Workshop. These Pre-Workshop
♦ Present results
activities may not need the attention of the
whole team. However, a successful Value
Study is unlikely without proper planning
Team Members’ Responsibilities
and information sharing so all interested
parties have a clear understanding of the
1. Keep accurate notes as assigned by
purpose and details of the project. This,
team leader
again, is the responsibility of the Value
2. Consult with team leader on any
Manager in charge of the project. If these
problem that may handicap progress
details are properly communicated with
3. Show respect through timely
the clients and customers involved, the
attendance
potential for a successful Value Study is
4. Share workload equally whenever
greatly increased.
possible
Executive Review Board: Senior managers 5. Be willing to admit if they don’t know;
set the initial strategic goals for the Value but strive to get the answer. Don’t be
Study and, at a later date, decide which afraid to make mistakes
outputs will be invested so they can be 6. Stay focused - avoid tangents - follow
implemented. These managers do not the basic problem-solving steps and
always participate in the day-to-day get help from Value Team Leader on
working of the Value Study but are part of what techniques may be most suitable
the overall value program. for the particular problem
7. Don’t waste time discussing whether or
Sometimes managers are designated as not a step should be used; do it and
Sponsors or Champions to support a value evaluate it all after the entire workshop
study and/or the value program within an 8. Understand the approach being
organization. taught and its purpose, including the
reason for each step and the
Technical Champions: Those members of technique being applied
the Value Study team who are selected 7. Do the job together as a team. Don’t
because of their technical expertise. force individual solutions - sell them!
Remember, there can be more than
one solution to a problem
Value Team Members 8. Be a good listener; don’t cut people off
and don’t second guess what other
Value Team members are expected to people are going to say and what they
participate in a Value Study in the following are thinking
ways:
♦ Participate in all meetings
♦ Gather information as requested
♦ Analyze information
♦ Identify functions
♦ Contribute ideas
Value Principles
Strategic Problem/Opportunity Framing
J Historical development of the Value
Methodologies J Reviewing the business case
J Performance-to-cost relationships
hitchhiking VM Study Recommendation
Documentation
J Cost-to-worth relationships
J Document the key information related
J Cost-to-function allocation to a Value Study recommendations
♦ Original Concept
J Function worth identification and ♦ Proposed Change
understanding
♦ Discussion of benefits of the change
♦ Cost impact analysis
J Cost-value relationships
♦ Sketches
J Cost-value mismatches ♦ Implementation considerations
♦ Follow-up actions
J Pareto analysis of major cost drivers
J Investment appraisal
J Initial and subsequent impacts on other J Selecting and leading Value Studies
key attributes
J Coordinating Value Study logistics
J Sketches and other communication aids
J Facilitator skills
J Reporting responsibilities
J Value training
VM Glossary
In 1985, the Lawrence D. Miles Foundation individually and in teams to define, refine
created the College of Fellows of the and finalize a glossary of value related
Society of American Value Engineers terms. In 2006, the Glossary was reviewed
(SAVE), now SAVE International, with the by the Certification Board and those
specific intent of developing a Glossary of definitions most essential to the current
Terms related to value. Over a two year application of value methodologies were
period, approximately 10 Fellows worked identified and refined where necessary.
ASSOCIATE AVS is a recognition designed for individuals who are new to the value
VALUE SPECIALIST methodology. An AVS is encouraged to progress to VMP or CVS
(AVS) certification.
CERTIFIED VALUE CVS is the highest level of certification attainable through SAVE
SPECIALIST (CVS) International. Designation is reserved for Value Specialists and Value
Program Managers who have demonstrated expert level experience and
knowledge in the practice of the value methodology.
Technical FAST Model: A variation to the Classical FAST that adds “all
the time” functions, “one time” functions and “same time ” or
“caused by” functions.
FUNCTION, The specific purpose(s) for which a product, facility, or service exists and
BASIC: conveys a sense of ‘need’. In ‘continuous innovation’ projects the basic
function must always exist, although methods or designs to achieve it may
vary. In ‘discontinuous innovation’ projects, which seek to create new
industries, the existence and persistence of the basic function is itself the
focus of challenge.
FUNCTION, The specific goals (needs) for which the basic function(s) exists.
HIGHER ORDER:
FUNCTION, The function that is selected to initiate the project and is outside the study
LOWER ORDER scope.
(ASSUMED or
CAUSATIVE):
FUNCTION, A function that supports the basic function and results from the specific
SECONDARY: design approach to achieve the basic function.
FUNCTION The lowest overall cost to perform a function without regard to criteria or
WORTH: codes.
JOB PLAN: A sequential approach for conducting a value study, consisting of steps or
phases used to manage the focus of a team’s thinking so that they
innovate collectively rather than as uncoordinated individuals.
PERFORMANCE: The capacity of a product to fulfill its intended function. Factors such as
reliability, maintainability, quality and appearance are some examples.
SAVE For the purpose of a Value Study, the Job Plan shall be facilitated by a
INTERNATIONAL Certified Value Specialist (CVS), or a Value Methodology Practitioner
CERTIFIED (VMP) working under the supervision of a CVS. SAVE International
PROFESSIONAL: Certification requirements are identified by the SAVE International
Certification Board, which maintains a list of currently certified individuals.
SCOPE: The portion of the overall project that is selected for the value study. The
analysis accepts everything within the defined scope in order to focus
attention on the functions within those limits.
VALUE INDEX: A ratio that expresses function cost ÷ function worth. This ratio is used to
determine the opportunity for value improvement, which is usually
identified in the Function Analysis Phase.
VALUE VMP recognizes individuals with basic value training and some experience
METHODOLOGY in the application of the methodology. Value methodology practitioners
PRACTITIONER participate in or lead Value Studies.
(VMP):
VALUE One who applies the value methodology principles to study and search for
PROFESSIONAL: value improvement. Synonymous with value analyst, value engineer, value
practitioner, or value specialist.
References
Publications Catalog, SAVE International: Building Systems,” American Society
Describes textbooks and for Testing and Materials, Publication
educational materials on Value E-1699.
Methodologies and related
programs. This catalog includes Value Certification Manuals (on SAVE
videotapes and information on International
Value World, SAVE International’s website/home/certification)
peer-reviewed, technical journal.
y Certification/Recertification
Annual Conference Proceedings, SAVE Manual
International: Includes all y Certified Workshop Manual
presentations given at each annual y Certification Examination Study
conference. Also available is a value Guide
bibliography, a compilation of all y SAVE International Internet Web
presentations since 1980, and articles Site: http://www.value-eng.org
from Value World. Each presentation
shows title, author, abstract, and Lawrence D. Miles Value Foundation
source. Papers may be individually Internet website:
ordered from SAVE International. http://www.valuefoundation.org