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The Journal of SAVE International®

VOL. 36 |NO. 2 |FALL 2013


© 2013 SAVE International®

IN THIS ISSUE:
1 Editor’s Message: Achieving Value for Money in Project/
Product Development and Service Delivery
Mohammed A. Berawi, Ph.D.

3 VM—The Right Methodology for Innovation


Anita Lukose, CVS

13 Value Practices Completion Certificate: A Proposal to


Confirm the Successful Completion of Value Practices
Studies
Muhammad A. Al-Ghamdi, Ph.D.

21 Delivering Value on the Port of Miami Tunnel Project


Louis Brais, PE & J. Jeffrey Plant, MBA. P.Eng., PMP, CVS®

30 Function Inspired Organizational Change at Two National


Research Labs
Stephen J. Kirk, Ph.D., FAIA, FSAVE, CVS®-Life, LEED AP &
Kurt Gernerd

37 Appraisal of Value Engineering in Construction Industry in


Oman
Ibrahim Ali Albalushi, MSc., AVS; Fathoni Usman, Ph.D. & Ali S.
Alnuaimi, Ph.D.
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
PUBLISHED BY SAVE INTERNATIONAL®
1

Achieving Value for Money in Project/


Product Development and Service Delivery
M. A. Berawi, Ph.D.

Many public agencies or private companies discuss from the current progress of value engineer-
expend a great amount of effort to produce prod- ing (VE) application to the way of VE method has
ucts, projects, and services that optimize the value been used to achieve value for money in terms of
for money of an investment. Value for money can be efficiency and innovation.
defined as the optimal use of resources to achieve the The first paper, wrifen by Anita Lukose, dis-
intended outcomes; in this sense it means that wheth- cusses on how value management can be used as the
er or not organizations/stakeholders have obtained methodology for stimulating innovation. She argues
the maximum benefit from the goods produced and that VM helps to reap tangible and intangible ben-
services provided. In other words, it measures proj- efits in organizations and suggests some improve-
ect or product effectiveness by adopting innovative ments in the critical areas of concern in the innova-
approaches and techniques, financial efficiency by tion scenario, particularly in creating new ideas and
optimizing the capital resources, high quality and managing knowledge. By an in-depth understanding
innovative outcomes by providing additional func- of a product or a process through functional ap-
tions or alternative processes. These all are conducted proach, an optimized business process and value for
to maximize the product/project worth or benefits for money enhancement can be achieved. Furthermore,
the stakeholders. three different techniques as tools to generate ideas
are also discussed in this paper.
The second paper, wrifen by Muhammad A.
Creating Value for Money for Al-Ghamdi, highlights the use of a value practices
completion certificate (VPCC) to confirm the success-
Product/Project Development ful implementation of value engineering proposal
(VEP) in Saudi Aramco, Saudi Arabia. Diagnosis of
Value for money is designed to apply and utilize potential added-value areas in the VE study are em-
the existing knowledge and expertise to improve ployed to define the best strategy on achieving value
our ability to create more value added in projects/ for money for the organization business process.
products or services. Thus, a diagnosis on potential To verify the implementation of VEP, feedback was
added-value areas in product/project development solicited from Saudi Aramco’s Estimating Services
or service delivery within limited resources can be Division (ESD) and the Engineering Knowledge and
employed as a key success on defining the value for Resources Division (EK&RD) and the establishment
money. On top of that, improving the linkage be- of VPCC mechanism and procedure were conducted
tween costs and project/products/services offered, to ensure the implementation status of the VE pro-
innovative business processes and organizational posals.
performances, and a thorough understanding the The third paper, wrifen by Louis Brais and J.
needs of client/customer can also be used as a means Jeffrey Plant, outlines the process of a VE study on
to identify various areas where value for money can delivering value-for-money for the Port of Miami
be aimed. Tunnel Project (POMT). Fihy-six (56) of almost two
Responding to this issue, this edition of Value hundred (200) ideas were developed into VE recom-
World presents five selected papers from the journal mendations in which a number of VE ideas led to fur-
submissions and 2013 SAVE Value Summit to stimu- ther innovations in design or methods. Furthermore,
late debate and to explore the application of value the authors argue that the VE process has delivered
engineering in order to create value for money in substantial benefits to the project, including meeting
project/product development. These selected papers the project’s schedule and cost commitments.
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
2 PUBLISHED BY SAVE INTERNATIONAL®

The fourth paper, wrifen by Stephen J. Kirk and


Kurt A. Gernerd, outlines the use of function analysis
to discover opportunities for changes in the organi- Call for Papers
zation at two national research laboratories under
a federal government agency. This paper presents
the results of analysis of organizational governance,
& Workshop
work distribution, and business processes. As a result
of many implemented recommendations of the VE
study, the authors argue that significant organization-
Proposals
al improvements are achieved including consolidated
administrative functions, optimization of business
process and life cycle cost savings as well as strong
Due November 30, 2013
partnerships with stakeholders.
The last paper, wrifen by I. Albalushi, F. Usman The application process for the 2014 S A V E
and A. Alnuaimi, outlines the findings of a recent Value S u m m it follows the protocols estab-
study on implementation of value engineering in lished for the society’s 2013 annual confer-
construction projects in Oman. The result shows that ence. The S u m m it will be held J u n e 23-25,
most of the respondents agree that implementation 2014, at the Oak Brook Hills Marriott Resort in
of VE in construction projects will bring benefits to Oak Brook, Illinois, U S A .
the construction industry, particularly in minimizing
time and cost overruns, improving values and meet- Call forPapers
ing project requirements. On the other hand, there
are also factors that retard the application of VE in All authors are required to submit a for-
Oman, including lack of knowledge, guidelines and mal, written paper following the guidelines
unavailability of a dedicated VE team. Responding to published on the S A V E website (http://www.
this situation, the authors propose a procedure and value-eng.org/cfp_main.php). Conference
plan for improvement of VE study in the construc- organizers reserve the right to edit for gram-
tion industry in Oman. matical style, length, and clarity. In submit-
I hope this edition of Value World conveys some ting a paper, authors give their agreement to
new insights in the way we conduct our Value Meth- such editing. Papers and presentations must
odology studies. I can be contacted at maberawi@eng. be in English using U.S. spelling.
ui.ac.id and would be pleased to accept and respond Submit papers to directly VP-
to any comment and enquiry you may have on the Conferences Richard L. J o h n son at
direction and content of Value World. rjohnson@pmaconsultants.com.
With warmest regards from editorial desk,
Call forWorkshops
Training sessions will be held immediately
prior to the 2014 S A V E Value S u m m it and
geared to the needs of S A V E members and
other attendees interested in value-engineer-
ing related education. Workshop criteria are
judged objectively on marketability, enhance-
ment to the Value Methodology, presentation
skills of the instructor, prior experience in
delivering the specific workshop, and course
Dr. M.A. Berawi content/quality.
Faculty of Engineering Pre-conference workshop proposals will
University of Indonesia only be accepted via the online application
16424 Jakarta form accessible here: http://www.value-eng.
Indonesia org/cfp_pre_conference.php.
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
PUBLISHED BY SAVE INTERNATIONAL®
3

VM—The Right Methodology for Innovation


Anita Lukose, CVS

Abstract decision makers prompting them to ensure imple-


mentation. These ideas when executed systematically
Creating innovation is imperative for any orga- and launched strategically will help the organization
nization as it brings excitement to the stakeholders. to reap tangible and intangible benefits.
Choosing the right process is very critical for any The paper recommends that VM as the right
organization, since there will be an extensive use of methodology for innovation. It also suggests some
different types of resources for generating and imple- improvements in the critical areas of concern in the
menting the ideas and thus reaping good results out innovation scenario namely selling the idea, creating
of it. The effectiveness of the innovation process in new ideas and knowledge management during the
understanding the problem and creating profitable process.
ideas is a deciding factor for the selection of the right
methodology.
Proposing the idea generated through the meth- Introduction
odology to the decision makers and gefing them to
buy it ensures its implementation which is critical for Innovations benefit the organization with im-
the success of the idea. The ideas must be nurtured to proved profitability as they eliminate some prob-
reap the benefit of it. To sell the idea, it is imperative lem areas or address some customer requirements.
to have self belief in the idea. The belief will be the Equally important benefits of innovations are making
outcome of an idea that excites. Aspects to be consid- explicit the implicit knowledge, addition to informa-
ered while selling the ideas are also presented. Only tion repository, brand enhancement, strengthening
an orbit shihing idea can bring the confidence in the the organizational ecosystem and improving employ-
creator which will afract the afention of the hierar- ee satisfaction through involvement.
chy. Three different tools that can be used for creating Innovations are expected to create a “wow” factor
ideas are also discussed in the paper. for the customer. So, understanding the customer
Tapping the implicit knowledge of the employ- requirements is a crucial aspect in customer satis-
ees is a challenge to many organizations. Functional faction. Ohen customers are not clear about what
analysis in VM promotes effective knowledge shar- they really want. Customer requirement according
ing in the organization. FAST helps the team to to Henry Ford is, “If I had asked people what they
understand many areas with a functional perspective wanted, they would have said faster horses.” To
exposing many information and details which the manufacture a car when he asks for faster horse, it
team members were otherwise unaware of. During requires a thorough understanding of the function
function analysis sessions the team is able to make behind this desire. In one instance, a customer asks
explicit, the implicit knowledge of the members. a technician for a solar lighting system with three
Knowledge coupled with an explorative mindset lights and finds that he cannot afford it. The techni-
makes us special by giving us a cufing edge over cian visits the place and understands that the cus-
others. tomer requirement is to light three rooms rather than
Thus VM helps to have the right conception of a three lighting system. He provides a single light
the customer requirements and a clear knowledge of option from the ceiling which lights the three rooms
optimal areas of business enhancement. This knowl- at one-third the price. This shows that the customer
edge generates ideas which can be effectively pushed requirement is a given data which has to be analyzed
for implementation because of befer communication to understand the actual desire meant by him.
and understanding of the stakeholders. The clarity Innovation helps organizations to have a cufing
of information achieved during the study excites the edge over competitors as the process of generating
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
4 PUBLISHED BY SAVE INTERNATIONAL®

innovations help them to constantly analyze and Figure 1 (below) shows the FAST diagram which
keep watch on its different activities. describes the logic of an efficient process to create
innovation. A close examination shows that VE has
all the expected functions according to this logic. As a
Choosing a Right Methodology for methodology it encourages the use of different tools
Innovation during different phases of the study helping the team
to take the advantages of those tools also.
“Thinking is the hardest work there is, which is prob- An analysis of the FAST diagram calls for an at-
ably the reason so few engage in it.” tention to the basic and the other important function
~ Henry Ford in the critical path. The functions sell idea, create idea
Choosing the right process is very critical for any and develop thinking are explained in detail.
organization since there will be an extensive use of
different types of resources for reaping good result
out of it. The process should be able to create a prof- Sell New Ideas
ited management, satisfied customer and a motivated Aher discovering and identifying a great idea
employee.
which will delight the customers and the hierarchy,
A good innovation process should help the team
the project needs afention and action. The idea,
to think analytically, creatively and constructively
however valuable, will not be able to demand imple-
helping them to evaluate effectively and prompting
mentation by itself. This leads to a need for it to be
them to take actions for implementation and analyz-
ing the result. VM helps the team to functionally transformed to fit the business context and presented.
analyze the area understudy, generate creative solu- Valuable innovative ideas are lost every day because
tions and evaluate the ideas according to the design their significance is missed and they are not devel-
requirements. The identified solution from the evalu- oped to their full potential. FAST is a good tool which
ation can be implemented as the team will be confi- can be used for communicating the great ideas with
dent and motivated because of the new knowledge clarity. A few key understanding which will help
acquired and the great outcome of the study. right afention for your proposal are listed below:

Conform
How Basic Why
Motivate
Requirement
Employee

Conform Enhance Be
Quality Thinking Positive
Create
New Ideas Develop Share Make
Generate Sell Evaluate Analyze
Innovation Idea Idea Thinking Information Knowledge Team
Create
Alternatives
Ensure Set Provoke Understand Collect
Implem Criteria Thinking Requirements Info
entation Enthuse
When Customers
Expose Communicate
Ensure
Implicit Requirements
Value
knowledge
Addition
Scope of the project

Figure 1. FAST diagram for efficient innovation process.


VALUE WORLD |VOL 36 |NO 2 |FALL 2013
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• Innovation is executing the idea; not only cre- second career path. The gap between the two was
ating it. Creators take their time and effort to gen- very vivid since they talked two different aspects of
erate an exciting idea by collecting information business. This led to the third career path, the intra-
from various sources, analyzing and internalizing preneurs to bridge the gap between the first two. He
the facts and pufing their best creative thinking. defines intrapreneur as “any of the dreamer who
Finally when they hit the idea, they feel that the does - those who take hands on responsibility for
target is achieved. They do not feel that convinc- creating innovations of any kind within the organiza-
ing others of the idea’s value is imperative. They tion. Intrapreneur may be the creator or inventor but
believe that their idea will “sell itself” and selling always a dreamer who figures out how to turn an
is not their activity. Change agents act as a link idea into a profitability.” Great idea combined with
between creators of new techniques and the us- large resources of an organization leads to exciting
ers. products or services.
• Innovation is execution—making great ideas
happen. It is about implementation along with Attributes of anIntrapreneur:
planning and design. This cannot be consummat-
ed only with managers or with technical experts. • Ability to take risk

• Ideas call for selling. The idea should be recog- • Persistence to get the idea implemented
nized by a decision maker. Those who have the • Willingness to take up task beyond the job re-
power to evaluate and adopt it should appreciate sponsibility
the idea. Those who understanding user must • Identifying the right people for the multi-disci-
welcome the proposal. There should be people plinary team, for implementing the idea and for
who are convinced that the idea has enough merit gefing the approvals.
to demand adoption. Selling is what people use
for convincing. • Willingness to work underground; popularity
brings competition which may be capable to kill
• Selling warrants effort. Selling innovations the idea.
requires preparation, initiative, patience, and
resourcefulness. The proposal to be worked out • Recognise the people who helped.
factually overruling the excitement about the The VE manager should act similar to an intra-
idea. It may take more effort than originating the preneur to implement the ideas developed by dif-
idea. Packaging the idea to stand out in an age of ferent teams. He should be aware of the following
technical progress and information density, new points while communicating the idea and presenting
ideas rarely stand out. the implementation plan.
The above facts points to the need of people to act 1. Believe in the proposal: Self belief is the most
as link with the creators and users. convincing characteristic required for any kind
of selling. If the proposer himself does not have
How toSell faith in his proposal, he will not be able to con-
vince his customers. Before an idea is sold, you
Innovation and change ohen depend upon must be sold to the idea.
convincing potential users and decision makers of
the benefits of an innovation. To sell the idea to the 2. Create a support group: To implement the pro-
peer or to the hierarchy and get it implemented, VE posal all by your lonesome is an extremely chal-
team should understand and develop the capabili- lenging task. Proposal supported by a concerned
ties of an “intrapreneur”. Intraprenuring is a term team increases the credibility to a project, as it
coined by Grifford Pinchot for entrepreneurs within demonstrates a team effort considering different
the organization who creates and markets their own angles. Munshi, Porus (2009) suggest that meet-
idea for the mutual benefit of them and the company. ing the people concerned about the proposal
The corporate success was always defined as moving separately before the formal presentation and ex-
up the hierarchy. With the conception of technical plaining the project will create an individual buy
breakthroughs, another stream of successful people in. For example, if you are presenting a proposal
emerged without becoming managers creating a in the execution of electrical service of a construc-
tion project, discuss your idea generated by your
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
6 PUBLISHED BY SAVE INTERNATIONAL®

VE team to the heads of electrical design and ex- benefit the decision maker. Know more about
ecution before the proposal to the management. him from the networks or groups in which he is a
During formal presentation, they already know part of.
the proposal in detail which otherwise may not
be communicated with clarity using an abridged 6. Present your understanding: Presenting the facts
version in the presentation. On the day of the and assumptions behind the proposal is ohen
formal presentation you will also be prepared to neglected as it is seems to be obvious. As the
address the concerns that they raised during the person responsible to study the problem, you are
meeting earlier. This also will help your higher more knowledgeable about the various details of
authorities for faster decision-making and to ap- it analyzing from different angle. These facts help
preciate your proactive nature. the decision maker to evaluate your proposal. It is
imperative to explain the facts related to the prob-
3. Take advantage of the resistance: Addressing the
lem to be solved, the technical aspects of your
concerns, challenges, or issues that are raised by
assumption with a well thought implementation
those who are skeptical of your plan will give the
plan mentioning both the potential advantages
perspective that you are knowledgeable and have
and disadvantages, and some conclusions drawn
thought about your proposal in totality. It show-
about possible results based on other people’s ex-
cases your meticulousness and will give you the
feel of reality that may be overshadowed by your periences, your research, assumptions, and data.
passion about your idea. The more clearly you state your proposal, the
more likely you are to get and keep the decision
4. Achieve the critical mass: A new idea has to be maker’s afention.
suggested many times to afract afention. Initial
failures at promoting a new idea are to be ex- If used effectively, the FAST diagram can be used
pected, so don’t get discouraged if you don’t get to enhance the understanding. You are equipped
the results you want the first time. Some ideas with almost all information and criteria related
take years to catch on. However, first exposures to the proposal since you have completed the VE
are crucial to future prospects. Do it right the first project. Present this knowledge according to the
time and keep doing it till it achieves the momen- target audience.
tum.
7. The presentation: An introduction-body-content
5. Communicate according to the listeners: It is im- structure will make the presentation effective.
portant to put the project in the way the listener is The introduction should explain the background
relating to the area of reference and not in terms of the problem with your objectives. The body
of how you see it. Innovation and change ohen should be organized with distinguishable ideas of
depends upon persuading potential users of the the report using effective transition from different
benefits of an innovation. points. Avoid extraneous material while present-
While presenting to top management, the impact ing the support data. In the conclusion, the rec-
on the brand reputation, awareness, lead gen- ommendation should be clearly stated with the
eration need to be highlighted. If it is a process value addition to the organization.
improvisation, the areas of improvement along 8. Negotiation: Be humble enough to accept that
with the benefits and the ability to address the your proposal is not perfect and that there is
problem area of the business will afract afention. scope for improvement. Be prepared to negotiate.
If the selling is to the peer, help them understand But this should not be for diluting your idea. Do
how it will change their priorities, roles, and how not accept compromises, but understand con-
the proposal equips them to do it. straints and rework. Some progress is befer than
To increase the credibility of the proposal, it is bringing it to a halt.
necessary to know and understand their interests 9. Share success: Sharing the success helps to win
and opinions. It is imperative to collect the infor- the trust of your colleagues for the present and
mation such as the past experience of the decision future projects. While owning your part in the
maker in the area of proposal, his style of think- project, share the credit for successes by giving
ing and decision making, any new developments credit for how others have helped you. Analyz-
happening in the area and how the proposal will ing the failures rationally rather than emotionally,
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
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the problems faced and its cause can be identified ing is encouraged in Lotus Blossom Technique, which
without accusing personally. Also share the les- was originally developed by Yasuo Matsumura of
sons from the project positive and negative to the Clover Management Research in Chiba City, Japan.
boss and the team and document them. Commu- This thinking strategy tool helps to organize
nicate ohen and openly and the peers will come thinking around specific themes by providing an
to know that you are interested in the results. in-depth view of various solutions. It begins with a
VM helps the team to prepare the presentation in central core idea surrounded by eight empty boxes or
detail explaining critical information, analysis, func- circles. Using brainstorming, eight additional ideas
tions and their relationship, criteria and their relative are wrifen in these boxes. Each of these eight ideas
importance along with an implementation plan. This becomes the core of another set of eight surrounding
systematic approach expedites the selling of the idea empty boxes, which are filled in by new ideas using
and its implementation. brainstorming. (See Figure 2, previous page.) The
process continues until a satisfactory solution or a
sufficient number of ideas have emerged. This ap-
Create Ideas proach is pursued in ever-widening circles until the
subject or opportunity is comprehensively explored.
To sell your idea, it is imperative to have self The cluster of themes and surrounding ideas and
belief in the idea. The belief will be the outcome of an applications, provide several different alternative
idea that excites you. Your past experience with the possibilities.
organization tells you if it will excite all the stake- The guidelines for Lotus Blossom are as follows:
holders of it. Only an orbit shihing idea can bring the
confidence in the creator which will afract the afen- 1. Write the central problem in the center. In Figure
tion of the hierarchy. 2 it is wrifen in the center cell which is named as
An understanding on the different styles of Core Idea.
innovative thinking and knowing the individual 2. Write the significant themes, components or
innovation style and communication style will help dimensions of your subject in the surround-
the team to be cohesive and mutually supporting ing boxes labeled A to H around the box of the
during discussions. This behavioural understanding central theme. Ask questions like: What are my
will help the leader to lead the team to address pos- specific objectives? What are the constants in my
sible conflicts and to take the maximum output of the
problem? What are the dimensions of my prob-
team.
lem?
Even though brainstorming is a much sought
to method for generating ideas, alternate methods 3. Use the ideas wrifen in the circles as the central
sometimes enthuse the team to be creative. VM has themes for the surrounding lotus blossom petals
the advantage that it can encompass many different or boxes.
tools to enhance the output in various stages of study. 4. Generate eight ideas for these second level central
There are many proven techniques that can be adopt- themes and write it in the cell around.
ed to generate valuable creative idea. Three of them
5. Continue the process until the lotus blossom dia-
are mentioned below:
gram is completed.

1. The Lotus BlossomTechnique An important aspect of this technique is that it


encourages examining the important themes of the
To solve the problem of evolution, Charles Dar- problem and the relationships and connections be-
win initially organized his thinking around sig- tween them. This helps you to identify a property or
nificant themes, principally eight of the problem. criteria ignored before.
This approach gave his thinking some order for the This also encourages connecting functions of
themes connected loosely so that he could easily alter different things to make a whole new product.
them singly or in groups. The point is that by orga- Generally, higher level properties are regarded as
nizing his thinking around loosely-connected themes, emergent—a machine is an emergent property of the
Darwin expanded his thinking by inventing alterna- interconnected parts. If it is disassembled and all the
tive possibilities and explanations that, otherwise, parts kept separate, the property of the machine and
may have been ignored. This kind of creative think- its function disappears. When the parts put together
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1: Change 2: Change 3: change 1 2 3 1 2 3


shape Design color
4:improved A: Attract 5: Change 4 B: Product 5 4 C: 5
Advertisement user packing Quality Enhance
Feature
6: Alternate 7: Target 8: Adopt 6 7 8 6 7 8
material unaddressed Contemporary
customer theme
1 2 3 A: Attract B: Product C: 1 2 3
user Quality Enhance
Feature
4 D: increase 5 D: Core Idea: E: 4 E: 5
outlets increase Increase Customer Customer
outlets sales lifestyle lifestyle

6 7 8 F: Reduce G: sales H: 6 7 8
Cost strategy Improve
service
1 2 3 1 2 3 1 2 3

4 F: Reduce 5 4 G: sales 5 4 H: 5
Cost strategy Improve
service
6 7 8 6 7 8 6 7 8

Figure 2. Lotus Blossom Technique.


according to function, a pafern becomes visible and copier together made fax machine. Likewise force the
this inspires you to make a machine out of it. It is like creativity within to create extreme possibilities to cre-
the reverse process of building of a FAST diagram. ate new customer experiences.
Similarly, a lotus blossom helps you to see paferns
and make connections. The connections you make 3. The Excursion Technique
between the themes and ideas and applications may
become breakthrough proposals. The Excursion Technique is used for forcing a
group to discard the traditional parameters to formu-
late new strategies. The team is directed to take an
2. Method of AbsurdCombinations
imaginary excursion to a physical location (a muse-
This is mainly used for original products or prod- um, a jungle, a city, another planet, etc.), totally irrel-
uct improvisations by considering the absurd way evant with respect to the real problem. Then the team
of working for a product. Trevor Bayliss, the Eng- members write down 8-10 images, in the first column
lish inventor, applied it to radio and conceived the of a table of tree columns. In the second column the
clockwork radio. Instead of using electricity the radio analogies or express relationships between what they
started working by winding it like a clock. saw on the excursion and the problem as defined.
The same process can be applied to combinations The solutions to their problems are wrifen in column
of diverse individuals or organizations combining 3 beside the items and analogies identified in the
different skills could create an original approach other columns. The next step is to share their experi-
to the market. When creativity and computer skills ences from the excursion stating what they saw, their
combined together, computer graphics becomes a analogies and their solutions. Finally, the team dis-
possibility. When a trolley and suitcase was com- cusses each other’s ideas. Eventually the leader helps
bined, wheeled suitcases was created. Phone and the group come to a common solution or a set of
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
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9

solutions to the problem. The excursion technique is Knowledge coupled with subversive mindset
based on many years of observations of what people makes us special by giving us the cufing edge over
do naturally, though not necessarily consciously, to others. Intellectual capital is becoming the fundamen-
generate new ideas. This helps the team to temporar- tal measure of future corporate performance. Orga-
ily put the problem aside and think. nizations possess large amounts of useful data and
the amount of accessible data increases steadily on a
daily basis. Static knowledge management is neither
Develop Thinking & Knowledge efficient nor scalable for ever increasing knowledge
Management base. It is vital for organization to have proper meth-
ods and processes for knowledge sharing and man-
“We are just an advanced breed of monkeys on a minor
aging.
planet of a very average star. But we can understand the
universe. That makes us something very special.” Learning in an organization occurs when in-
~ Stephen Hawkins dividuals come together under circumstances that
encourage them to share their ideas and to develop
VM promotes effective knowledge sharing in the new insights together that will lead to the creation
organization. Functional analysis, especially FAST, of new knowledge. Many companies try and tap
helps the team to understand concerned areas with implicit or tacit knowledge by transferring and
a functional perspective exposing many information
mixing of different teams. To make wider use of the
and details which the team members were otherwise
tacit knowledge of individuals, managers are urged
unaware of. Kaufman & Woodhead (2006) point out
to identify the knowledge possessed by various
that analysis of FAST models, if done effectively,
helps to generate ideas and thus enables innovations. individuals in an organization and then to arrange
During function analysis session the team is able to interactions between knowledgeable individuals that
make explicit, the implicit knowledge of the mem- will help the organization perform its current tasks,
bers. Tapping the implicit knowledge of the employ- transfer knowledge from one part of the organiza-
ees is a challenge for many organizations since that is tion to another, and/or create new knowledge that
the individual knowledge the employee is possessing may be useful to the organization. Aher initial train-
and when this employee leaves the organization that ing, a team of new employees are put together with
knowledge is lost. There may be employees who do highly experienced team for execution to acquire tacit
things very creatively without using a specific pro- knowledge possessed by the experts. VM promotes
cess. This is ohen because of the implicit knowledge such learning within the organisation to create new
that they possess. Implicit knowledge is that skill or
ideas. Well defined and documented process descrip-
awareness which is not directly expressed; that is, the
tions of routine and repetitive task are possible aher a
meaning is inferred from the context and, therefore,
VE study which is an asset for a successful knowl-
relies on existing knowledge. Two different ap-
proaches suggested for knowledge management are edge management.
tacit knowledge management and explicit knowledge To get the understanding of who knows about
management. The salient characteristic of the tacit what in an organization will help in the formation of
knowledge approach is the basic belief that knowl- effective VE teams. An example of such an effort is
edge is essentially personal in nature and is therefore the creation an online listing of experts with different
difficult to extract from the heads of individuals. kinds of knowledge within many business units of an
The dissemination of knowledge in an organization organization. In the intranet one can type in the key
can best be accomplished by the transfer of people words for a specific knowledge domain and it will
as “knowledge carriers” from one part of an orga- retrieve a listing of the people within the organiza-
nization to another. Working from the premise that tion, possibly worldwide, who have such knowledge.
important forms of knowledge can be made explicit,
Contact information can also provided for each per-
the explicit knowledge approach also believes that
son listed, so that anyone who wants to know more
formal organizational processes can be used to help
about that kind of knowledge can get in touch with
individuals articulate the knowledge they have to
create knowledge assets. listed individuals.
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
10 PUBLISHED BY SAVE INTERNATIONAL®

Conclusion Analysis and Mapping , Hoboken, New Jersey,


John Wiley & Sons Inc.
By an in-depth understanding of a product or a
process though the functional approach, VM helps Munshi, Porus (2009); Making Breakthrough Innovation
to have the right conception of the customer require- Happen, Noida, UP, HarperCollins Publishers.
ments and a clear knowledge of optimal areas of
business enhancement. This knowledge generates Pinchot, Grifford; Intrapreneuring: Why You Don’t
ideas which can be effectively pushed for imple- Have to Leave the Corporation to Become an Entrepre-
mentation because of the befer communication and neur, New York, Harper & Row Publishers Inc.,
understanding of the stakeholders. The teamwork 1985.
enhances the clarity of the processes and procedures
followed. It also helps to tap the implicit knowledge
within the team members. This sharing ensures a About the Author
befer individual involvement and generates creative
solutions. Thus, VM is proved to be the right meth- Anita Lukkose, CVS, is currently the head of the
odology for innovation. department of value engineering at M/s Sobha Developers
Care should be taken to make the presentation of Ltd., a premier real estate company based in Bangalore, In-
the ideas so as to communicate to the decision mak-
dia. She also holds the additional responsibility of heading
ers by orienting towards their areas of concern. The
ideas when executed systematically and launched the innovation commiflee that spearheads the Innovation
strategically will bring profitability along with em- activities in the company. A civil engineer by profession,
ployee satisfaction—the ideal situation for a success- Lukose is also certified as a Certified Value Specialist, the
ful organization. first woman so designated in India. She has presented sev-
eral papers in value engineering and innovation in differ-
ent national and international level conferences. She is the
References secretary of INVEST South Zone Council and a member
Kaufman, Jerry & Roy Woodhead (2006); Stimulating of INVEST (Indian Value Engineering Society) National
Innovation in Products and Services: With Function Council.

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VALUE WORLD |VOL 36 |NO 2 |FALL 2013
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11

There’s No Such Thing as a Bad Idea (Or is there?)


By Dottie DeHart, DeHart & Company Public time and energy of the group?
Relations “We were really fascinated, and a
little puzzled, by people’s reactions,”
NewYork, N Y (Sept. 2013) — sa y s Rigie. “ S o we decided to post
“There’s no such thing as a bad idea!” this question on LinkedIn: ‘We’ve all
Whether you’re in advertising, sales, heard the expression There are no
HR, or just slaving away in the back bad ideas. Do you agree? If not, why?
cubicle, at some point you’ve probably If so, what does the expression mean
been involved in a brainstorming ses- to you?’ We wanted to see just h ow
sion where someone has uttered those varied the responses would be.”
brave words. In fact, the mantra is Here is a small samplin g of the
often upheld as the number-one “rule” responses the SmartStormin g part-
of brainstorming, long embraced and ners received:
championed by experts. “Of course there are bad ideas.
But is it really true? After all, when When your product does not meet
you think about it, you usually hear customer [expectations], it’s a bad
The Thinker is a bronze sculp-
those words when they’re being used idea.”
to justify a less-than-stellar suggestion ture by AugusteRodin. “In the army they used to say the
that’s just been made by a colleague. In only stupid question is the one not
reality, aren’t there at least a few bad ideas lurking in asked. There are plenty of stupid ideas but everyone
the shadows? should have the opportunity to express [them].”
In their SmartStormin g corporate training ses- “We are taught to encourage everyone to sa y
sions, Mitchell Rigie and Keith Harmeyer—coauthors only positive things to others’ suggestions and
of SmartStorming:The Game-Changing Process for keep everything nice and rosy. Unless you want to
Generating Bigger, Better Ideas—always introduce sit around a campfire, sin g ‘Kumbaya,’ and make
the “n o bad idea” notion. More often than not, a s’mores, this is ludicrous!”
heated debate ensues. “There are man y bad ideas out there, like harm-
“Most of u s have at least a vague understand- ing oneself or others, taking advantage of others,
ing of the expression’s meaning—but man y of u s and making foolish financial and business decisions.”
just don’t buy it,” say s Harmeyer. “Wh en the debate “ J u m p i n g out of an airplane without a parachute:
comes up, there’s always one participant, and of- a B A D i d e a … B u y i n g MySp ace for billions: a B A D
ten man y more, wh o challenge this notion that bad idea.”
ideas don’t exist. We typically hear comments like, “I’ve sat in brainstorming sessions where ‘there
Of course there are bad ideas! If we all decided to are no bad ideas.’ Um, there are. Okay, some trigger
jump out of the window right n o w and defy gravity, innovative thinking. But most just waste time. Unfor-
wouldn’t that be a bad idea?” tunately, ma n y people just like to hear themselves
“ S o m e people really get passionate about it, like talk.”
they find it personally offensive,” say s Rigie. “Th en The debate, as you can see, is fairly one-sided.
again, we often find that other people are equally Generally, there is widespread contempt for the “n o
passionate about the opposite point of view.” bad ideas” notion. Yet Rigie and Harmeyer have a
A window on the “ S t o r m ” of controversy different take on it.
According to Rigie and Harmeyer, the “n o bad Surprise! A lot of good can come from bad ideas.
idea” mantra is not a new one. Alex Osborn, consid- S o … a r e there bad ideas, or not?
ered by many to be the father of brainstorming, be- “It all depends on h ow you look at it,” Harmeyer
lieved that in order to be successful, participants must explains. “There are obviously ideas that appear
“suspend judgment.” Like most savvy brainstorm unfeasible, impractical, irrational, harmful, and po-
leaders, he understood the perils of allowing people tentially devastating. N o one of sound mind would
to start criticizing ideas in the midst of a session. And propose implementing such an idea, assu min g they
today almost every well-regarded group idea genera- truly believed it to be bad.The real question isn’t
tion methodology maintains the tradition. whether such ideas are bad, but instead, should
S o wh y do so man y people feel strongly that those ideas be cast aside as soon as they’re voiced?”
there are bad ideas—ideas so bad they should be “Most brainstorming gurus agree that when
stopped dead in their tracks so as not to waste the Ideas continued on page 12
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
12 PUBLISHED BY SAVE INTERNATIONAL®

Ideas continued from page 11


searching for new, innovative solutions, it’s impor- als working in tall city buildings. Or conceive an
tant to give even ideas that resonate as undeni- improved process for evacuation from high floors
ably ‘bad’ a chance to be considered, debated, and during a fire. A new “team h an g gliding” extreme
developed,” says Rigie. “As Osborn put it, we should sports event. A breakthrough advertising concept
suspend judgment. He didn’t sa y to eliminate judg- where a group of people are able to fly after consum-
ment, only to suspend it. This would imply that we ing a new beverage.You name it! Any of these, and
will eventually evaluate and judge whether some an infinite number of other possibilities, could be
ideas are unacceptable, impractical, or simply off born from the “b ad idea” that everyone in the room
target. But we must suspend that judgment until an should jump out of a window.
idea has had a chance to percolate.” “That is, unless the idea is shot down prema-
Read on for a few tips on wh y you should let bad turely before the potentially great idea within it has
ideas fly and h ow to man age them: a chance to blossom,” says Rigie. “And that is the
Criticism kills innovation. According to Rigie and point: to suspend judgment until an idea has had a
Harmeyer, first, and perhaps most obvious, is the fair chance to sh ow all it’s got.”
fact that rampant criticism in a brainstorm is offen- When the time is right, you can kill it with con-
sive to many. When people’s ideas are quickly and sideration. When is it appropriate and even produc-
consistently shot down, they become intimidated tive to reject an idea? “One of the most important
and are reluctant to share—not an ideal situation in a concepts to understand about successful group idea
group idea generation session. generation is that there is a time to generate ideas
“It takes courage to put forth an idea that is and a time to judge and select ideas,” says Rigie.
imaginative or radical sounding,” say s Harmeyer. “Th ese are two very different and distinct processes
“Negativity and judgment create an unsafe atmo-
that require different thinking skills. During idea
sphere for sharing such ideas.”
generation, thinking must remain spontaneous and
In the beginning, you want quantity, not quality.
free of any negativity or judgment.This is the optimal
A s a rule of thumb, the idea generation phase of a
condition for generating the greatest breadth and
brainstorm should be spontaneous and free flowing,
depth of fresh ideas possible.”
where ideas are plentiful, offered spontaneously and
Rigie go es on to explain that later, once the
without hesitation.
idea generation process has been completed, it is
“Th e moment an idea is shot down, the free-
then time to switch to the process of evaluating and
wheeling momentu m will grind to a halt,” explains
Rigie. “It can take a group significant time to get back selecting ideas, and subject the best ones to critique.
into flow, if they are able to at all. S o even if an idea It is during this phase in the session (or in a subse-
has no value, the ‘cost’ of killing it is too great, when quent session) that ideas should be judged worthy
considering the negative impact on the session’s or unworthy, practical or implausible, etc. B y keeping
productivity.” these two processes separate, you optimize your ef-
Often, bad ideas lead to BIG ideas. You never fectiveness at both.
know when a so-called “b ad idea” will contain the “Most of u s enter a brainstorm with the goal of
seeds of greatness within it. generating fresh, innovative, game-changing ideas,”
“We’ve seen it countless times in our work,” says says Harmeyer. “However, if judgment and criticism
Harmeyer. “A ‘bad,’ even absurd, idea is offered up, are part of the ideation process, it is highly unlikely
and within minutes it has transformed into a brilliant that the goal will be achievable.”
example of innovative thinking. In fact, like man y “ S u s p e n d judgment,” adds Rigie. “E ven if you
brainstorming experts, we make use of some very know, without a doubt, that an idea is bad—really
effective idea generation techniques that actually bad, even horrible—let it live, just for a while.You
invite participants to come up with the worst, most just might find a game-changing g e m hidden inside!
ridiculous, even distasteful ideas imaginable—and N o w doesn’t that sound like a good idea?”
then to turn around or transform those ideas into
great ones.” About the Book
Consider the somewhat extreme “what if we all SmartStorming:The Game-Changing Process for
jumped out of the win d ow” example, suggest the Generating Bigger, Better Ideas (Dog Ear Publish-
authors. Anyone would agree this is a bad idea in ing, 2013, ISBN : 978-1-4575166-3-4, $29.95, www.
and of itself. But Rigie and Harmeyer point out that smartstorming.com) will be available from all major
from such an idea, one might develop an innovative online booksellers and at http://www.SmartStorming.
emergency personal parachute product for individu- com/book.
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
PUBLISHED BY SAVE INTERNATIONAL®
13

Value Practices Completion Certificate:


A Proposal to Confirm the Successful
Completion of Value Practices Studies
Muhammad A. Al-Ghamdi, Ph.D.

Abstract The Completion Status of Value


The need to confirm the implementation of value Practices Studies
practices proposals was highlighted by Saudi Aram-
co management. Current procedures contain para- The successful completion of value practices
studies is important to project management. Saudi
graphs that mandate the implementation and report-
Aramco’s engineering procedures mandate the
ing of Value Practices proposals; however, the review
implementation of value practices proposals and the
of some project documents did not show strong
reporting of value practices documents. Subsequent-
adherence to these procedures. The purpose of this
ly, the Project Execution Optimization Division is not
paper is to introduce the Value Practices Completion
gefing frequent feedback from the users of value
Certificate that is proposed to confirm the successful
practices. Therefore, there is a need to establish value
implementation of Value Practices proposals.
practices completion certificate to bridge this gap.

Key Words Value Practices


Saudi Aramco, Value Practices, Completion Cer- Value practices implemented in Saudi Aramco
tificate, Implementation, Studies. consists of some of the best practices recommended
by the Construction Industry Institute (CII), which
are:
Introduction • Constructability
Saudi Aramco executive management high- • Lessons learned implementation
lighted the need to confirm the realization of value • Lessons learned collection
improvements resulting from value engineering (VE) • Project definition rating index
studies. This raised the need to answer the following • Planning for start-up
• Project planning and team alignment
important question: Are accepted value engineering
• Scope control and change management
proposals being implemented?
• Schedule optimization
To verify the implementation of value engi-
neering proposals, feedback was solicited from the In addition, Saudi Aramco’s value practices port-
Estimating Services Division and the Engineering folio includes the SAVE International’s formal meth-
Knowledge and Resources Division. There was no odology that is the Value Methodology.
information available that could clearly reflect the
implementation status of the proposals of VE or other The Importance of Successful Completion of
value practices. This document proposes the estab- Value Practices Studies
lishment of the value practices completion certificate
to address management’s concern. The value practic- The successful completion of value practices stud-
es completion certificate will be managed and issued ies can be measured by the implementation of value
using the value practices management system . practices proposals. (The outcome of value practices
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
14 PUBLISHED BY SAVE INTERNATIONAL®

studies can be in the form of proposals, recommenda- typical scope changes are the savings realized
tions or actions). In addition, it can be indicated by from VE and other value practices.”
the reporting of all value practices. The data collected ● “All scope changes shall be recorded in a spe-
aher the successful completion of value practices cial section in the ER estimate package. This
studies are needed to: section shall contain a list of all scope changes
• Ensure the realization of the value added by the with justification, cost impact, schedule
implemented value practices. impact, initiator organization, date initiated/
approved and any supported cost estimate
• Calculate project management key performance documents.”
indices. When the implementation status of value prac-
tices proposals was inquired, not all project proposals
• Enhance the moral and motivates value practices
of previous projects were available with the Engi-
teams.
neering Knowledge and Resources Division. In addi-
• Encourage the introduction of new value prac- tion, the available ones did not provide details on the
tices. implementation status of the value practices propos-
als. Likewise; the Estimating Services Division did
• Benchmark Saudi Aramco projects with best in not have information on the savings realized from VE
class companies. and other value practices.

• Highlight areas for further improvement in value


practices processes. The Implementation of Value Practices
Proposals andRecommendations
• Facilitate the accumulation of knowledge gained
during value practices studies. Based on Saudi Aramco Engineering Procedures,
there is no concrete evidence of the implementation
status of value practices proposals. Although some
Saudi Aramco Engineering Procedures sections in related Saudi Aramco’s engineering pro-
Addressing the Completion of Value Practices cedures, such as Saudi Aramco’s engineering proce-
Studies dures-14, 25 and 367, mandate the reporting of value
practices proposals implementation status, Project
There are several Saudi Aramco’s engineer- Execution Optimization Division receives no detailed
ing procedures mandating the implementation of and frequent feedback from customers on the imple-
value practices proposals and the reporting of value mentation of value practices proposals.
practices documents. Some examples of these Saudi
Aramco’s engineering procedures are as follows. The Reporting of Value Practices Documents
• Saudi Aramco’s engineering procedures-14(Sec- Project Execution Optimization Division does not
tion 4.1.3): have all documents of previous value practices stud-
● “The status and resolution of all accepted and ies. It has only the documents of the value practices
pending value engineering proposalss shall studies facilitated by its value practices specialists, in
be documented in the Value Engineering Sec- addition to some other value practices studies facili-
tion of the Project Proposal.” tated by out of company value practices consultants.
Project Execution Optimization Division solicita-
● “A copy of the final VE report shall be distrib-
tion for documents from value practices users is not
uted to the project management no later than
always answered.
four weeks from the completion of the VE
session.”
• Saudi Aramco’s engineering procedures-25(Sec-
The Need for Value Practices Completion
tion 3.3.1.3): Certificate
● “A scope change is defined as any cost or There are several symptoms highlighting the
scheduled deviation from the approved need for a more effective solution to confirm the
design basis scoping paper. An example of implementation of value practices proposals and
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
PUBLISHED BY SAVE INTERNATIONAL®
15

the reporting of value practices documents. Some of • The lack of detailed and frequent feedback from
these symptoms are: value practices users on the implementation sta-
tus of value practices proposals and the reporting
• The lack of adherence to sections in Saudi Aram- of value practices documents.
co’s engineering procedures that address value
practices requirements. • The limited utilization of value practices propos-
als in addressing other value practices activities.
• The lack of mechanisms in Saudi Aramco’s engi-
neering procedures to ensure the implementation To overcome the above mentioned issues, this
of value practices proposals and the reporting document proposes the establishment of a value
value practices documents. practices completion certificate.
DD/P/C
DBSP*

Value Practices Completion Activities


PP*

■ □ □ Constructability
□ Implementation Status of Constructability Action Items

□ Constructability Recommendations Implementation Plan

■ □ □ Lesson s Learned Collection


□ TBD
■ □ □ Lessons Learned Implementation
□ Implementation Status of Identified Lesson s Learned
■ □ ■ Project Definition Rating Index
□ Confirmations of Definition Improvement to L o w Defined Elements (PDRI Score > 250)
■ □ □ Planning for Start-Up
□ Confirmations on Addressin g All P F S U Commen ts

□ Final Draft of Start-Up Execution Plan

■ □ □ Project Planning andTeam Alignment


□ Confirmations on Addressin g all PPTA Commen ts
□ □ □ Risk Management
□ Implementation of Risk Response Actions

□ Risk Management Report

■ □ □ Scop e Control and Ch an ge Management


□ Implementation of Scop e Control and Ch an ge Management Internal

□ Procedure Sign ed Scop e Freeze Letter

■ □ ■ Schedule Optimization
□ TBD
□ □ ■ Value Engineering
□ Finalization of Accepted for Further Stu d y Value Engineering Proposals

□ Implementation Status of Acceptes Value Engineering Proposals

□ Final Value Engineering Report

*Design Basis S c oping Paper (DBSP), Project Proposal (PP), Detailed Design/Procurement/Construction (DD/P/C)
Figure 1. Value Practices Completion Checklist
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
16 PUBLISHED BY SAVE INTERNATIONAL®

● 4.1.3 VE Proposal Implementation & Report-


Framework for the Establishment
ing Requirements
of a Value Practices Completion
Add:
Certificate
A value practices completion certificate will be is-
The key elements of the proposed value practices
sued when the value engineering proposals imple-
completion certificate process are the value practices
completion checklist, the value practices comple- mentation and reporting requirements are met.
tion certificate, the required changes to related Saudi
● EXHIBIT II – ER ESTIMATE PACKAGE
Aramco’s engineering procedures and the automa-
tion of the value practices management system. CHECKLIST

Add:
Value PracticesCompletion Checklist
Value Practices Completion Certificate
By the end of any value practices studies there
are certain actions, implementation status, and docu- • Saudi Aramco’s Engineering Procedures-25
ments that have to be reported to the Value Practices
Unit (VPU) and Project Research and Knowledge ● EXHIBIT II – BUDGET ESTIMATE PACKAGE
Management Unit (PR&KMU). The value practices CHECKLIST
completion checklist summarizes the key items for
all value practices. The Value Practices Completion Add:
Checklist is illustrated in Figure 1 (see page 15).
Value Practices Completion Certificate

Value PracticesCompletion Certificate ● EXHIBIT III – ER ESTIMATE PACKAGE


CHECKLIST
The value practices completion certificate will be
issued by Project Execution Optimization Division Add:
when all items in the value practices Completion
Checklist are met. The value practices completion Value Practices Completion Certificate
certificate is illustrated in Figure 2 (next page).
• Saudi Aramco’s engineering procedures-329

Milestones of Value Practices Completion 1.3 Final Reports

Certificate Add:
As illustrated in Figure 3 (next page), the value Value Practices Completion Certificate
practices completion certificate shall be issued as
applicable, at the end of the key project stages. The ● 7. Close-Out Appraisal Meeting
value practices completion certificate issued by the Replace:
end of a stage should confirm the implementation of
all value practices planned for that particular stage. Use of value improving practices

Required Changes to Related Saudi Aramco With:

Engineering Procedure Use and completion of value practices


To ensure the effective implementation of value • Saudi Aramco’s engineering procedures-367
practices completion certificate, there are several
recommended changes that need to be considered ● 7.2 Implementation of PMOD is responsible
for related Saudi Aramco’s engineering procedures. to:
Below is a preliminary list of these recommended
changes: Add:
• Saudi Aramco’s Engineering Procedures-14 Issue Value Practices Completion Certificate
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
PUBLISHED BY SAVE INTERNATIONAL®
17

Project Management Office Department


Project Execution Optimization Division
Value Practices Completion Certificate

Project Details
BI #
BITitle
Detailed Design/
Project Stage(s) DBSP Project Proposal Procurement/Construction
□ □ □
Value Practices
Const. LL PDRI PFSU PPTA RM SCCM SO VE
Planned □ □ □ □ □ □ □ □ □
Executed □ □ □ □ □ □ □ □ □
Implemented □ □ □ □ □ □ □ □ □
Reported □ □ □ □ □ □ □ □ □
Waived □ □ □ □ □ □ □ □ □
Notes

VPCCApproval

Concurred By:
V P U Supervisor* Date
Signature

Concurred By: Date


P R & K M U Supervisor
Signature
Date
Approved By:
*VPU and P R & K M U supervisors report to P E D O General Supervisor.
P E O D General Supervisor
Figure 2. Value Practices Completion Certificate Signature

Funding

Design MC OS
Basis Preliminary Design Detail Design/Procurement

Start
Construction Up
VPCC VPCC

VPCC
Figure 3. Milestones of Value Practices Completion Certificate.
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
18 PUBLISHED BY SAVE INTERNATIONAL®

VPs Stages VPMS Activities Non-VPMS Activities

Schedule of
Applicable Value
Pre−VPs Session
Planning Practices
Activities

VPs Session
Execution Activities

VPs
Implementation Implementation
Status

Post−VPs
Session
Activities
VPsFinal
Reports
Reporting

Key Project
Completion Management
VPCC
Documents

Figure 4. Value Practices Completion Certificate Flowchart - I


Automation of value practices completion of value practices. Once completed, the value prac-
certificate tices completion certificate will be issued to fulfill
the requirements of other key project management
Currently, the value project management system documents.
is utilized for the planning and scheduling of value Figure 5 (next page) provides more details on the
practices studies. This proposal suggests the use of proposed automation of the value practices comple-
the Value project management system for the imple- tion certificate. It shows that the feedback on the
mentation, reporting and completion of the value
implementation and reporting of value practices
practices studies. Figure 4 (above) shows the intro-
has to be satisfactory to the Value project manage-
duction of the value practices Completion Checklist
and Certificate in the five stages of the value practices ment system coordinator (and value practices subject
process. It also shows the relationship between Value mafer experts). When all items in the value prac-
project management system and non-Value project tices Completion Checklist are met, then the value
management system activities. The figure indicates practices completion certificate will be ready for the
that the Value Practices Completion Checklist will be concurrence of VPU and PR&KMU supervisors and
utilized to monitor the implementation and reporting the approval of the Project Execution Optimization
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
PUBLISHED BY SAVE INTERNATIONAL®
19

VPs
Implementation
Status
Update VPs Completion Yes Feedback Post−VPs Session
Checklist Satisfactory Activities

VPs Final
Reports

No

VPs Completion Notify Customer of


Checklist Non−Confirmations

No Budget Estimate
Completion
Package Checklist
Confirmed
(DBSP Stage)

Yes

Concur on VPs ER Estimate


Approve VPCC VPCC
Completion Checklist Package Checklist
(PEOD)
(VPU&PRKMU) (PP Stage)

Project Close−Out
Report
(DD/P/C Stages)

Figure 5. Value Practices Completion Certificate Flowchart - II.


Division General Supervisor. The certificate will be gineering procedures already have paragraphs that
required for the completion of: mandate full implementation of these proposals, but
• Budget Estimates during the design basis scoping there are symptoms indicating the need for further
paper stage. measures. This paper recommends the utilization of
• Expenditure Review Estimates during the PP value practices completion certificate to confirm the
stage. implementation of the value practices proposalss.
• Project Close-Out Report during the DD/P/C The application of this proposal will require some
stages. changes in the Saudi Aramco EngineeringProcedures
and will be executed via the value practices manage-
ment system.
Summary
Saudi Aramco is investing a lot of time and
money to improve the value of its capital program. References
However, the return on this investment may not be
leveraged without confirming the implementation of Saudi Aramco Engineering Procedure 14, Project Pro-
value practices proposals. The Saudi Aramco’sen- posal
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
20 PUBLISHED BY SAVE INTERNATIONAL®

Saudi Aramco Engineering Procedure 25, Estimation drah of this article. Their time and thoughts are
Preparation Guidelines greatly appreciated.

Saudi Aramco Engineering Procedure 329, Project Close-


Out Report About the Author
Saudi Aramco Engineering Procedure 367, Value Im- Dr. Muhammad A. Al-Ghamdi holds a Ph.D. in
provement Practices Requirements construction management and engineering from the
University of Reading. He joined Saudi Aramco’s
value engineering program in 2000. Dr. Al-Ghamdi
Acknowledgment facilitated numerous VE studies and instructed sev-
eral VE courses, in addition to conducting research
The author would like to thank Saudi Aramco to maximize the benefits of Saudi Aramco’s value
value practices professionals who critiqued the first practices portfolio.
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
PUBLISHED BY SAVE INTERNATIONAL®
21

Delivering Value on the Port of Miami


Tunnel Project
Louis Brais, PE & J. Jeffrey Plant, MBA, P.Eng., PMP, CVS

This paper was originally presented at the 2013 SAVE course of design development. Although there is no
Value Summit in Arlington, Virginia. value engineering change proposal (VECP) clause in
the design-build agreement, BOUYGUES did agree
to share savings with their client and the owner on
Abstract one significant change.
The following paper outlines the VE process that
The Port of Miami Tunnel (POMT) Project is an was followed on the POMT project and highlights
excellent example of the value-for-money that can be some of the significant VE recommendations that are
achieved through public-private-partnerships. Esti- being implemented.
mated to cost over $1.2 Billion to construct prior to
the solicitation of bids in 2008, the successful conces-
sionaire awarded a $652 million design-buildcontract Introduction
to Bouygues Civil Works Florida, Inc. (BOUYGUES)
in October of 2009. The project is proceeding on Bouygues Civil Works Florida, Inc. (BOUYGUES)
schedule and on-budget for a May 2014 opening. was awarded a $652 million design-build contract for
Design-build bids are typically based upon an the Port of Miami Tunnel (POMT) project by MAT
incomplete preliminary design and a contractor’s Concessionaire, LLC (MAT) in October of 2009. MAT
assessment of risk based upon years of experience. is a special purpose company controlled by Meridi-
While many successful design-build contractors am Infrastructure. Originally estimated at over $1.2
perform value engineering during the bid stage to Billion to construct prior to the solicitation of bids
find innovative ways of satisfying the performance in 2008, the POMT project represents an excellent
specifications at a lower cost and with a shorter con- example of the value for money that can be achieved
struction duration, the real challenge occurs during through public-private-partnerships.
the detailed design stage when the construction team The owner of the project is the Florida Depart-
must find ways to deliver the project on schedule and ment of Transportation (FDOT). In addition to FDOT
on budget. and the State of Florida, Miami-Dade County, the
BOUYGUES undertook a formal value engineer- City of Miami and the Federal HighwaysAdministra-
ing (VE) study shortly aher receiving authorization tion (FHWA) through the TIFIA program are sharing
to proceed. Facilitated by Jacobs Engineering, the in the funding of the project. Over $300 million in
lead design consultant, the workshop brought twen- private funding is also being provided by a consor-
ty-nine (29) members of the construction and design tium of ten (10) banks including BBVA, BNP Paribas,
teams together in a problem-solving atmosphere to Calyon, Dexia, ING, RBS, Santander, Societe General,
share creative ideas and kick-start the project. Fihy- Uni-Credit and WestLB. The Miami-Dade Seaport
six (56) of almost two hundred (200) ideas developed Department is the primary beneficiary of the project
through brainstorming sessions were developed into and is actively involved.
VE recommendations. The POMT project will connect SR A1A/MacAr-
BOUYGUES is implementing a significant per- thur Causeway to Dodge Island, providing direct
centage of the VE recommendations. In addition, access between the seaport and Highways I-395 and
a number of VE ideas led to further innovations in I-95. The POMT will create an alternative entry to
design or methods following the initial workshop. the Port of Miami and keep the Port of Miami, the
Most VE ideas were consistent with the performance community’s second largest economic generator,
specifications and were implemented during the competitive with other ports on the eastern seaboard
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
22 PUBLISHED BY SAVE INTERNATIONAL®

Figure 1. POMT Location.


anticipating an increase in freight traffic following TEUs (twenty-foot equivalent units) were processed
the doubling of the Panama Canal capacity in 2014. through the Seaport. The Port ranked first in the state
In addition, the POMT will improve traffic flow in in TEU volume for Fiscal Year 2011 (Miami-Dade
downtown Miami by reducing the number of cargo Seaport Department, 2011).
trucks and cruise ship related vehicles on congested To add to the construction challenge, SR AIA/
downtown streets. (See Figure 1, above.) It will also MacArthur Causeway is the main connection be-
support ongoing and future development in and tween the cities of Miami and Miami Beach carrying
around downtown Miami. over 120,000 vehicles per day through the heart of the
work site. Over one million eyes are on the project
every day from high-rise office buildings and condo-
The Value Engineering Challenge miniums in downtown Miami and vicinity.
BOUYGUES was able to win the project through
BOUYGUES commifed to deliver a fixed-price, aggressive bidding based upon its extensive tunnel-
date-certain tunnel project at the height of the finan- ling experience from around the world. Its tunnelling
cial uncertainties that gripped the U.S. market, in accomplishments include the English Channel Tun-
some of the most technically challenging geotechni- nel, the Caluire Tunnel (France), the Sydney under-
cal conditions that have ever faced tunnelling con- ground urban railway, the Cairo underground urban
tractors, and at half the cost of what the experienced railway, the Rostock Tunnel (Germany), the Groene
owner’s engineers estimated the work should cost. Hart tunnel (Netherlands) and the Tyne Tunnel
The tunnel project involves the construction of (Newcastle, England).
two 42-feet diameter, 4,400-feet long tunnels from the A number of modifications to the FDOT con-
I-395 extension on Watson Island to the Port of Miami ceptual design were proposed by Bouygues and
on Dodge Island. When completed, the tunnels will accepted by FDOT during the bid process. The most
service the cruise ship terminals and the cargo op- significant change proposed was the combining of
erations of the Port of Miami. The Port is the largest tunnel portals on Watson Island into a single portal.
cruise ship home port in the world and is among the This change significantly improved traffic flow by
top 11 container ports in the United States. For fiscal eliminating a dangerous weave condition between
year 2011, the Port handled approximately 4.1 million I-95 and the MacArthur Causeway, simplified con-
passengers. During this same period, approximately struction and was expected to improve safety during
7.4 million tons of cargo and close to 0.9 million construction. Other changes involved extending the
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
PUBLISHED BY SAVE INTERNATIONAL®
23

Figure 2. Bid Stage Value Enhancements.


bored tunnel sections to reduce traffic disruptions on the fields of geotechnical engineering (support of
Dodge Island related to cut & cover work and simpli- excavation, tunneling, deep foundations, retaining
fication of final traffic movements on Dodge Island. walls, earthworks and pavement design), high-
(See Figure 2, above.) way design, bridge design, hydrology (drainage,
Despite its extensive experience, the POMT proj- storm surges) and the permifling process. The
ect presented special challenges to the BOUYGUES Design-Builder will provide subject mafler experts
team. Innovative methods and technologies would in estimating, constructability, scheduling and
still need to be found during the design stage to de- methods engineering. The technical subject mafler
liver on its firm commitments. experts should be independent of the preliminary
design team.
A five (5) day workshop was conducted from
The VE Workshop November 2 to 6, 2009 in Miami. Twelve (12) tech-
nical specialists and a facilitator were provided by
Recognizing the potential for value engineering
Jacobs and sixteen (16) construction specialists were
to kick-start the project and stimulate innovation,
provided by BOUYGUES. Jacobs hosted a welcom-
BOUYGUES included the following requirement
ing reception for the VE Team in a venue overlooking
in the contract with its primary design consultant,
Biscayne Bay on the evening of the first day of the
Jacobs Engineering Group Inc. [Jacobs]:
workshop following a site tour that completed the in-
Facilitation of a 5-day value-engineering workshop formation stage of the workshop. There was consid-
within the first month following Date of Com- erable excitement in the air, and some trepidation, as
mencement. The Value Engineering Facilitator is the VE Team digested the full extent of the challenge
to be a Certified Value Specialist (CVS), a member that faced them.
in good standing of SAVE International (www. A cost model was presented that showed the cost
value-eng.org) and experienced in the facilitation of the bored tunnels accounted for almost 50% of
of value engineering studies for complex trans- the budget. The second highest costs were related to
portation projects. The valueengineering study is construction and support of the excavation required
to be completed in accordance with the job plan as to launch and retrieve the tunnel boring machine.
set out in the SAVE International Value Standard The bid-stage 55 month schedule was reviewed.
and Body of Knowledge (June 2007). The Designer It was concluded that there was zero float in the
is to provide technical subject mafler experts in schedule. It was noted that the schedule seemed to
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
24 PUBLISHED BY SAVE INTERNATIONAL®

incorporate accelerated methods that would require One idea that the VE team felt would provide
innovations not identified in the bid submission. Po- significant scheduling, site access, safety and man-
tential penalties and damages for failing to complete agement of traffic advantages was to combine the two
on time were identified in the millions of dollars per separate portals on Dodge Island into a single portal.
month. It was concluded that failure to deliver on- This idea required substantial changes to the bid-
time was not an option. stage traffic paferns on Dodge Island. Although the
The functions of the overall project were identi- project team believed that the changes represented
fied as: Separate Traffic, Remove Downtown-traffic, befer functionality by improving traffic flows to both
Increase Safety, Increase Capacity, Improve Port,
the cruise ship and cargo areas of the Port, FDOT
Stimulate Economy, Reduce Delays, Deliver Quality,
indicated that this change would require sharing of
Enable Redundant Access, Improve Levels of Ser-
the expected contractor savings.
vice, Improve Environment, Reduce Public Invest-
ment, Improve Security, Reduce O & M Costs, Create The POMT design-build and concession agree-
Sustainability and Maintain Systems all within the ments do not contain value engineering change
context of making money and delivering on-time. proposal (VECP) clauses. VECP clauses are standard
The individual components of the project were in conventional design-bid-build contracts issued
disaggregated into the following work packages and in accordance with the Federal Acquisition Regula-
the functions of each work package identified: Ma- tions (FAR). FAR Part 48 defines value engineering
cArthur Causeway Bridge Widening, Watson Island as “the formal technique by which contractors may
Surface Works, Dodge Island Surface Works, Tunnel (1)voluntarily suggest methods for performing more
& Tunnel Boring, Cross Passages, Buildings, Dodge economically and share in any resulting savings or
Island “Y” Bridge, Portal Uwalls and Support of Ex- (2)be required to establish a program to identify and
cavation [SOE]. submit to the Government methods for performing
The VE team divided into two for brainstorming more economically. Value engineering afempts to
purposes. One hundred and ninety-eight (198) ideas eliminate, without impairing essential functions or
were generated then consolidated into a list of one characteristics, anything that increases acquisition,
hundred and sixty-two (162) for further evaluation.
operation, or support costs.”
Of these, fihy-six (56) were developed into VE rec-
When VE change proposals are made voluntarily
ommendations and twenty-six (26) listed as design
by a contractor it uses its own resources to develop
suggestions. The VE recommendations and design
suggestions were developed and wrifen-up by seven and submit them. All development costs and sched-
(7) sub-teams of specialists in corresponding disci- ule risks are absorbed by the contractor. On a project
plines. with zero float in the schedule and substantial penal-
ties for failure to complete on-time there is no time
available for protracted discussion between the con-
What Was Implemented? tractor, the client and the owner on the benefits and
cost savings associated with change proposals.
The real test of value engineering lies not in the Fortunately MAT and FDOT recognized the
number of ideas generated or the number of ideas potential benefits to all parties of a single portal on
developed into recommendations, but in the number
Dodge Island. Independent estimates of savings
and quality of ideas actually implemented for the
were prepared by BOUYGUES and FDOT. Negotia-
beferment of a project. The project team was well-
tions on cost savings concluded in a mafer of weeks.
acquainted with the challenges of making changes
during the detailed design and construction stages of BOUYGUES were given the green light to proceed
a design-build project. with the single portal on Dodge Island. BOUYGUES
The ideas that were carried forward tended to be was able to implement a number of related improve-
those that could be implemented within the normal ments to the Dodge Island construction staging, traf-
process of design development. They were ideas that fic management during construction and in the final
could be presented to the client and owner as being traffic paferns.
within the scope of the technical specifications for the The following is a summary of the major VE rec-
project. ommendations that were implemented:
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
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25

Figure 3. Single Portal on Dodge Island.


Single Portal on Dodge Island
The original design was based upon twin portals
on Dodge Island separated by the existing grade
separation between cargo and cruise-bound traffic.
The final design is based upon a single portal and
improved traffic circulation on Dodge Island. (See
Figure 3, above.)
Benefits: Savings in SOE and portal construction,
replacement of “Y” bridge with simpler structure
offset by increased roadway costs. Fewer temporary
traffic stages during construction. Mobilization of
larger work zone. Net savings shared with owner. Figure 4. SOE and Excavation on Watson Island.
Benefits: The excavation on Watson Island was
SOEConstruction completed on-time and was ready for delivery of the
tunnel boring machine [TBM]. (See Figure 4, above.)
The original SOE design was based upon the use The excavation for the single portal on Dodge Island
of reinforced secant piles around the portal excava- was completed ahead of time and off the critical path.
tions combined with two types of tension piles (2-feet
diameter concrete caissons with embedded steel
H-pile and 7-inch diameter reinforced micropiles) Site Access
terminating in one of three excavation “boxes”. In ad- Access to the Watson Island site was initially ex-
dition, horizontal pipe struts would span the excava- pected to be from eastbound and westbound MacAr-
tion near the top of the secant pile walls. Excavation thur Causeway. (See Figure 5, top next next page.)
would be performed “in-the-wet” to a depth of ap- The VE team recommended accessing the work
proximately 60 feet and a concrete base poured using zone between the eastbound and westbound lanes of
tremie methods to engage the tension piles prior to MacArthur Causeway by constructing a ramp from
dewatering. Parrot Jungle Trail where it passed beneath MacAr-
The final SOE designs were based upon cufer soil thur Bridge. In addition, extension of the access road
mixing (CSM) techniques. Pipe struts were eliminat- into the SOE box was recommended.
ed through the use of inclined soil anchor tie-backs. Benefits: This simple recommendation has re-
The maximum depth of excavation was reduced to moved the need for site access from the MacArthur
40 feet by extending the bored tunnel length and Causeway greatly improving safety during construc-
providing above-grade surcharge. All rock within the tion. Site logistics have been significantly improved
zone of excavation was pre-drilled and broken-up by enabling vehicular access into the tunnel. Smaller
to facilitate excavation. Concrete was poured on an cranes are needed to lih tunnel liner segments onto
incline using tremie methods. the specialized trucks that feed the TBM. In addition,
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
26 PUBLISHED BY SAVE INTERNATIONAL®

the access has allowed the area beneath the MacAr- Tunneling Support
thur Causeway Bridge to be used for the tunnel grout Operations under the
bridge requiring site
access via ramp: Grout
plant and the tunnel wastewater treatment plant. Plant, Water Treatment

Watson Island ControlBuilding


The proposed Watson Island Control Building
was located directly above a portion of the proposed
cut and cover tunnel section. (See Figure 6, middle Access ramp at
right.) Accordingly this building could not be con- Parrot Jungle Trail

structed until aher the cut and cover section of the


tunnel was completed and engineered backfill in-
stalled. Parrot Jungle Trail
The building would be on the critical path and
would force mechanical and electrical installations on
to the critical path.
The building was relocated off the cut and cover Figure 5. Watson Island Site Access.
section of the tunnel. Benefits: Maintenance of Sched-
ule. The Watson Island Control Building is no longer
on the critical path.

U-Turning theTBM
The original plan was to stage TBM operations
from Watson Island, bore the eastbound tunnel,
disassemble and remove the TBM on Dodge Island,
truck it back to Watson Island, reassemble it and
complete the westbound bore. (See Figure 7, bofom
right.)
Once the Owner agreed to a single portal on
Dodge Island, a decision was made to turn the TBM
in the portal and to bore the westbound tunnel from
Dodge Island. This permifed the batch plant, water
treatment plant and mucking operations to be re-
located to Dodge Island so that work could be ad- Figure 6. Watson Island Control Building.
vanced on the Watson U-walls and completion of the
MacArthur Bridge widening.
Benefits: Maintenance of schedule.

Grouting of Layer“7”
The stratigraphy of the soils through which the
tunnels must pass are extremely complex. Eight (8)
principal geological layers were identified. Layer
“7”, identified as loose to medium sand, presented
the greatest challenge. (See Figure 8, top next page.)
Earth Pressure Balance TBMs depend upon the
creation of pressure at the tunnel face to counteract
the pressure exerted by the earth and groundwater
and prevent any loss in stability. Layer 7 proved to
include large fragments of extremely porous coral
which when drilled would appear as lose to medium Figure 7. U-turn the TBM.
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
PUBLISHED BY SAVE INTERNATIONAL®
27

Figure 8. Geological Stratigraphy.

Figure 9. TBM Advance Grouting Concept.


sand but in an undisturbed state were actually coral
fragments with large voids.
BOUYGUES in association with the TBM sup-
plier, Herrenknecht had devised a means of grouting
Layer “7” in advance of the TBM should it become
necessary. (See Figure 9 above.) As the amount of
grouting that would be required in advance of tun-
neling became known, it became clear that grouting
from the TBM would substantially slow the rate of
TBM progress. BOUYGUES undertook an extensive
program of grouting Layer 7 using conventional
Figure 10. Grouting Layer “7” in Government Cut.
surface and barge-mounted grouting methods. Ad-
ditional environmental permits and precautions were Optimization of Cross-Passages
required to work in the Government Cut channel. The initial design included four (4) cross passages
Work hours were severely restricted so as not to con- between tunnels and two (2) stairwells for emergency
flict with cruise ship traffic in the busy channel. (See egress. All cross-passages were to be constructed by
Figure 10, right.) soil freezing. The stairwells would require complex
Benefits: Maintenance of schedule. Minimization shoring and de-watering to construct.
of grouting costs. (Additional costs were shared with The two stairwells have been eliminated in favor
owner.) of a fihh (5th) cross passage. Three of the cross pas-
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
28 PUBLISHED BY SAVE INTERNATIONAL®

sages will be pre-grouted


from the surface and will
not require soil freezing.
(See Figure 11, right.)
Benefits: Maintenance of
schedule. Simplified con-
struction methods.

MacArthur Causeway
Bridge Widening
The original design for
the MacArthur Causeway
Bridge included widening
both sides of the bridge in
the westbound direction at
the merge of Miami-bound
tunnel and Causeway traf-
fic. (See Figure 12, bofom
right.) Figure 11. Cross Passages.
Geometric adjustments
were made to the design to eliminate the need to
widen the bridge on the north side at the merge.
Benefits: Simplified construction. Simplified traf-
fic staging. Improved safety.

Conclusions
The formal VE process initiated by BOUYGUES
on the POMT project and facilitated by Jacobs deliv-
ered substantial benefits to the project including:
1. The construction and design teams became ac-
quainted right at the start of the project and built
relationships that were essential to implementing
many of the good ideas that came out of the VE
workshop; Figure 12. MacArthur Causeway Bridge Widening.
2. The workshop exposed differences in techni- those that would require a change in the Techni-
cal approaches and risk mitigation between a cal Specifications;
European contractor and an Americandesign 5. Virtually the entire construction team and many
consultant that helped both sides to modify their
on the design team were looking at the project
approaches for the beferment of the project;
with “fresh” eyes. The VE workshop brought the
3. The introduction of function helped the design entire team up to speed very quickly and exposed
and construction teams to remember the client areas of the bid-stage proposal that required ad-
and owner perspectives when waxing enthusias- ditional afention;
tic about certain opportunities;
6. The team approach to the development of VE
4. An understanding of function helped the team
recommendations served to jump-start the de-
to differentiate between value opportunities that
could be considered design development from sign process by fostering interaction between the
designers and the builders;
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
PUBLISHED BY SAVE INTERNATIONAL®
29

7. Specific VE recommendations that were identi- Works Florida. He accepted, on behalf of BCWF, the 2013
fied during the workshop were sufficiently un- award Outstanding Value Methodology in Construction
derstood and acted upon by the project team; and presented by SAVE International at the 2013 Value Sum-
8. Taken together the VE recommendations that mit in Arlington, Virginia.
were implemented will ensure that BOUYGUES J. Jeffrey Plant, MBA, P.Eng, AVS, PMP, is an ac-
will meet its schedule and cost commitments. complished project manager with over 30 years of trans-
portation, environmental and building project experience
for a variety of clients including government ministries;
References departments and agencies; international financial in-
stitutions; design-build contractors; private developers;
Miami-Dade Seaport Department, A Department of consulting engineers; concessionaires; building owners;
Miami-Dade County, Florida; Comprehensive facility managers; railways; transit authorities; municipal-
Annual Financial Report for the fiscal year ended ities; first nations and industries. Mr. Plant has worked on
September 30, 2011. major projects in over 30 countries. He is a recognized ex-
pert in design-build and public-private partnership models
of project delivery. Mr. Plant is a member of SAVE Inter-
About the Authors national and has served as its Vice President of Finance &
Louis Brais is a project executive with Bouygues Civil Administration since 2009.

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Function Inspired Organizational Change at


Two National Research Labs
Stephen J. Kirk, Ph.D., FAIA, FSAVE, CVS®, LEED™ AP
& Kurt A. Gernerd

Abstract posters and signs, inventory and monitoring, and


Forest Service uniforms.
A large federal government agency had two
research centers at different locations and wanted
to explore their operations for value improvement. Value Analysis Objectives
Each center had separate directors, staffs, budgets,
publications group, web sites, and program work The value analysis (VA) team, as a minimum,
load. This case study presentation includes the shall analyze and afempt to answer the following
results of an analysis of organizational structure, questions:
staffing, work distribution, communication, web sites 1. Should the NT&D program maintain split pro-
(style, templates, management, etc.), project submit- grams at both centers for the same sponsor pro-
tal acceptance, overhead structure and costs, busi- grams?
ness processes and overall national governance. The
study also included review of center management, 2. Should the NT&D program maintain a separate
supervision, direction, location, operational direc- photography group, editing group, publishing
tives, administrative and publishing integration, and group and web site for each center?
other related functions. Key to success was the use of 3. Should the NT&D program have a director at
Function Analysis to inspire the team to discover op- each center?
portunities for changes in the organization.
4. Should there be two separate centers?
5. Does the current NT&D program serve Forest
History of the Research Centers Service needs?
The United States Forest Service operates two a. How does the NT&D Program relate to the
technology and development (T&D) centers aimed Forest Service Enterprise Team organization
at applying technology and developing equipment and program?
to improve business practices and at keeping em- b. Should the NT&D Program move into an op-
ployees safe while working in a forest environment.
erational role rather than a development role.
The T&D centers are located in Missoula, Montana
and San Dimas, California. Their primary purpose is c. How does the NT&D Program ensure quality
support of Forest Service internal activities; therefore, delivery of its program and responsiveness to
they provide products and services exclusively to its customers?
Forest Service employees and cooperating agencies. 6. What are some alternative functional and op-
Currently, T&D projects relate to fire and aviation erational models that would improve the busi-
management, engineering (facilities, transportation,
ness processes of the national T&D program (i.e.
environmental), information technology (Office of the
consolidation, streamlining, eliminate repetitive
Chief Information Officer projects), forest manage-
or redundant staff or programs, etc.)?
ment, reforestation, nurseries, recreation, safety and
health, forest health protection, watershed and air 7. Estimate cost saving to by each recommendation,
management, explosives, global positioning systems, as appropriate.
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
PUBLISHED BY SAVE INTERNATIONAL®
31

Value Study Approach presentation to senior management was given on the


final day via a video conference to Washington, DC.
A VA team was assembled from senior managers
at several locations. A CVS® was selected to lead the
value study. Function Analysis to Inspire Change
The information phase consisted of the team
Critical to the success of this workshop was the
spending four days at each research lab location to
extensive use of function analysis to inspire change
meet the management, discuss their functions, and within the two organizations. Participants determined
collect information about their operations and costs. the functions being performed at each location. The
A 5-day VA workshop was then convened which following Figure 1 (below) is an example of function
followed the 6 step job plan. The value analysis team analysis for the “Fire & Aviation” Program. Benefits of
identified 211 ideas for value enhancement. Of these, performing the functions are alsorecorded.
11 ideas were selected for development into recom- The above sample format was used to document
mendations for improving the performance and/or the functions of each Center program as well as the
lowering the initial and life cycle cost of the project. A cost and benefits of each program and function.
Higher Order Functions: Ensure Safety
Manage Natural Resources
Program Function Kind Cost Benefits
Verb Noun (B, S) Per Year (Forest Service, Other Organizations)

Enhance Visitor Experience


Improve Health & Welfare

Centralize Tech. & Dev.

Meet Unique FS Needs

Credibility & Support


Meet Safety Policies

Improve Knowledge

Save FS Resources
Save Environment

Efficiency to Field
Standardization

Gain Feedback
Ensure Quality

Effective Use
Protect Lives

Fire & Aviation Develop Equipment Basic 35% $455,000 + ++ + + + + + + + + +


Develop Training Mat'ls Basic 15% $195,000 + + + + + + + + + + +
Transfer Technology Basic 15% $195,000 + + + + + + + + + + + + +
Support Field Offices Basic 15% $195,000 + + + + + + + + + + + + + +
Evaluate Products Basic 10% $130,000 + + + + + + + + + + + + + + +
Develop Solutions Basic 5% $65,000 + + + + + + + + + + + + + + +
Give/ Attend Presentations Basic 5% $65,000 + + + + + + + + + + + +
Subtotal $1,300,000
Wildfire Chemicals Evaluate Products Basic 35% $245,000 + + + + + + + + +
Transfer Technology Basic 20% $140,000 + + + + + + + + + +
Develop/ Maintain Specifications Basic 15% $105,000 + + + + + + + + + + +
Develop Test Procedures Basic 10% $70,000 + + + + + + + + + +
Train Field Trainers Basic 10% $70,000 + + + + + + + + + + + + + +
Prepare Qualified Products List Basic 5% $35,000 + + + + + + + + + + + +
Give/ Attend Presentations Basic 5% $35,000 + + + + + + + + +
Subtotal $700,000
Engineering Transfer Technology Basic 60% $300,000 + + + + + + + + + +
Develop/ Update Technology Basic 10% $50,000 + + + + + + + + + + + + +
Support Field Offices Basic 10% $50,000 + + + + + + + + + + + +
Develop Solutions (VA's) Basic 10% $50,000 + + + + + + + + + + + + + +
Develop Equipment Basic 5% $25,000 + + + + + + + + + + + + + + +
Give/ Attend Presentations Basic 5% $25,000 + + + + + + + +
Subtotal $500,000
Etc.

Figure 1. Fire & Aviation Program


VALUE WORLD |VOL 36 |NO 2 |FALL 2013
32 PUBLISHED BY SAVE INTERNATIONAL®

Program Costs & Research Space FAST Diagram


Program cost components were identified for Combining all of the individual program func-
each Center. The space occupied by both Centers was tions and cost for both Centers produced the follow-
also obtained. ing FAST diagram (Figure 4) and led to the iden-
tification of two major functions that seemed best
candidates for value improvement.
Life Cycle Costs These were the transfer technology and develop
To understand the life cycle costs of each center, a products functions highlighted on the diagram on
life cycle cost model was prepared based on a 25 year the next page.
life span using a 4.9% discount rate (OMB Circular
A-94, 2008): Figure 2 (below) is the model one of the
centers. These models helped the VA team focus on the An Example of One Function
larger cost items for brainstorming ideas for savings.
Selected for Study
Staffing
65% One function management requested the value
study to explore was how to “consolidate resources”
to “transfer technology” and “develop products”
while maintaining effectiveness. This led to the ide-
ation of the following six alternatives:
Alt 1 Two centers under two programs (original
Facilities condition)
20%
Alt 1A Two separate centers under one program
Consultants
Printing 1%
2%
Alt 2 One center, Center 1, is turned over to Cen-
Materials ter 2
1% Travel
Utilities
3% 5% Alt 2A One center, Center 1 property given to
Maintenance
3% Agency “x”
Figure 2. Life Cycle Cost Model, One Center Alt 3 One center, Center 2 is turned over to Cen-
ter 1
An analysis of the funding received by each Alt 4 One center in new location, Centers 1 & 2
center was made—called “Sponsor Support”. This
property transferred to Agency “x”, and
helped the team and management visualize the
sources and amount of funding being provided and Center 2 property transferred to Agency“z”
the cost per employee at each center of operation. See Alt 4A One center in new location, Centers 1 & 2
Figure 3 (bofom). property transferred to Agency “y”, or sold.
Sponsor Support
Current Center 1 Center 2
1 Fire & Aviation Management $3,500,000 $1,750,000 $1,750,000
2 Engineering $2,200,000 $400,000 $1,800,000
3 Recreation $1,000,000 $500,000 $500,000
4 Forest Mgt. & Nurseries $800,000 $0 $800,000
5 Occupational Safety & Health $400,000 $400,000 $0
6 Watershed, Soil & Air $250,000 $65,000 $185,000
7 Chief Information Office $250,000 $250,000 $0
8 Forest Health & Protection $170,000 $170,000 $0
Total $8,570,000 $3,535,000 $5,035,000
Employees 42 44
Cost / Employee $84,167 $114,432

Figure 3. Sponsor Support.


PUBLISHED BY SAVE INTERNATIONAL®
2013
VALUE WORLD | VOL 36 | NO 2 | FALL
How? LEGEND: W h y? W hen?
"Function"
or " P urpos e"
(V erb -N ou n )
Support
Field Offic es
V al ue I mp r o v e me n t O pport uni t y
$544,900

Tr ansfer
T echnology

$2,555,7 00

M IS S IO N : Tr ain
Field Tr ainer s

E nsur e $330,900
S afety
D e ve l o p / E val. Conduct Identi fy Gather S el ect I dentify
EQ/ Products Research C o n c e rn s In fo rm ati on P r oj ects Needs
M anage
N atur al $3,214,0 50 | | | |
Resources - E v al uat e P roduc t s
D e ve l o p - D ev el op Training Mat'ls Conduct Calculate Convene
Solutions - D ev el op T e s t P roc edure s S urv ey Research S t eeri ng
H i gher Order - D evel op Specificati ons C ost vs. Benefit Committee
Func ti ons : $844,900 - Etc. | | |

Optimize Communicate A c c ept / R ej ec t Identif y


Cost Feedback P ropos al Problems
"Project P ropos al "
$2,584,5 50 |

Develop Utilize Leverage Coordinate


Policies Knowledge Lab(s ) NT&D
Resources
$138,000

B as i c Func ti ons :
P r oj ect S c o p e

3
3
Figure 4. FAST Diagram
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
34 PUBLISHED BY SAVE INTERNATIONAL®

CBA Importance to Life Cycle Cost Graph


Center Location(s)
400
385

350

290
300

Alt. 1
Alt. 1A
s)
it 250
ef
n 230
e 230
B
(
IMPORTANCE

200

Alt. 2A
Alt. 3
150
Reconsideration
126 126 Alternative

100

Alt. 4A
Alt. 4
Alt. 2

50

0
$100,000,000 $110,000,000 $120,000,000 $130,000,000 $140,000,000 $150,000,000 $160,000,000

LIFE CYCLE COST

Figure 5. Choosing By Advantages.


Choosing by Advantages (CBA) were formally presented to management that pro-
duced 47 performance benefits in 11 proposals:
An intense CBA analysis of the benefits of each al-
ternative versus the life cycle cost of each alternative Performance Benefits Proposals
produced the following graphic displaying the above
Improved field support 6
six alternatives (Figure 5, above).
Operational effectiveness/efficiency 10
Standardization 4
Study Outcome Flexibility 6
Improved synergy 5
Alternate 1A was selected for implementation
Improved image 8
at a reduced life cycle cost of $15 million because
Other 8
it preserved and enhanced all of the advantages of
47
the existing solution which scored 385 points in the
analysis.
The agency now has one center manager, one as- Other benefits included: improved leadership,
sistant manager, one staffing manager at each Center, personnel savings, increased revenue, improved tech-
one web site, one photo group, one budget group, nology transfer, improved morale by being involved
one publications group, one program leader per $1 in nationally significant projects, builds capability to
million workload. One program operating in two meet future staffing needs, improved productivity of
locations is the new theme. technical staff, befer addresses one-time/ short term
The above is just one example from a 120 page specialist needs, stability of the application research
study report for the organization that resulted in 211 program, expands utilization of agreements and au-
ideas for value enhancement. Of these 11 proposals thorities, initial cost savings and life cycle cost savings.
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
PUBLISHED BY SAVE INTERNATIONAL®
35

Summary & Conclusion societies for contacts and to locate similar work being
accomplished elsewhere, all for the benefit of the FS.
This value analysis allowed management to This is the model other technical support offices have
thoroughly explore options and assess the results in utilized successfully.
real time decision making workshop sefing. Many of Figure 6 (below) illustrates the NT&D Process
the recommendations have now been implemented and where these VA proposals are directed for im-
resulting in significant organizational improvements. provement.
Most of the administrative functions have been con-
solidated and professional staffing has been opti-
mized at each center. References
The greatest value added to the FS and partners,
is to optimize the role of center managers. To truly le- Kirk, Stephen, “Leadership in Design Team In-
verage work and dollars and add value to the agency, novation Using Value-Based Decision-Making Tech-
efforts have been made to focus work more closely niques,” Harvard University, Harvard Design School,
with WO sponsors, outreach to other Federal agen- Executive Education Seminars, Cambridge, MA,
cies, develop partnerships, work with professional January 24-25, 2002.
WO Organization Kirk, Stephen and Alphonse J. Dell’Isola, Life Cycle
Under State & Private Costing for Facilities, R.S. Means Company, Boston,
Forestry 2003 (Japanese 1st Edition 1985).
(VA-10)
Kirk, Stephen and Stephen Garref, “Innovative
Application of the Value Methodology (VM) for
W O T & D Coordinator Large, Complex Facilities,” SAVE International
Role
(VA-41)
Conference, Houston, May 2007.

Kirk, Stephen and Kent Spreckelmeyer, Enhancing


T&D Center Sponsors Value In Design Decisions, Mereal Publishers, 1994.
Field
Change Manage- Identify (also, Van Nostrand Reinhold Edition 1988 and
U s e Solutions/ Korean Edition 1997).
ment Model (VA-6) A g e n c y Needs
Evaluate
& Sponsors
Restructure for
Feedback for Other Funding Suhr, Jim. Choosing By Advantages Decisionmaking Sys-
“FastTrack”
Refinement Models tem, Westport, CT, Quorum Books, 1999.
(VA-15)
(VA-13) (VA-28)
Retain 2
C a m p u s e s (VA-11)
E xp a n d T & D
About the Authors
Mission (VA-26)
Stephen J. Kirk has over 35 years of experience in
applying value based design decision-making techniques
In-house Staff to government and private sector projects. Dr. Kirk is a
Develop L o n g registered architect, a Fellow of the AIA, a CVS®-Life,
Range Staffing and is a LEED™ Accredited Professional. Kirk is a Senior
Plan (VA-31)
Fulbright Scholar in architecture and received his doctor-
Technical Support ate degree at the University of Michigan. He is the au-
(IT, Webmaster)
(VA-29)
thor/co-author of nine books related to value analysis & life
cycle costing. Kirk received the prestigious Gold Award
from the Engineering Society in 2010 which recognizes the
Out-souce Michigan “Engineer of the Year.” He served as President
Support
of SAVE International from 1998 to 1999, and as the Vice
Flexible Staffing President of Education in 2013. He is currently serving
Model
(VA-34) as Director and Vice President of Education for the Miles
Value Foundation. Dr. Kirk is a Fellow of SAVE Interna-
Figure 6. NT&D Process & VA Proposals tional and is the Dean of the College of Fellows.
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
36 PUBLISHED BY SAVE INTERNATIONAL®

Kurt A. Gernerd, is the assistant director of engineer- degree from the University of Wisconsin and a Master’s of
ing for the U.S. Forest Service in Washington, D.C. Mr. Science Degree in Engineering from Utah State Univer-
Gernerd’s formal training and education is in Civil and sity, with post graduate study at Massachusefls Institute
Environmental Engineering and Project Management. He of Technology (MIT) in advanced hydrologic conveyance
is responsible for the Forest Service - Capital Asset Man- systems. He has published over 30 technical documents
agement and Sustainable design, Operation and Main- and developed and produced several training/ instructional
tenance of Facilities, Fleet and Equipment Management, videos and DVD’s. Kurt served on the SAVE Board of
and Value Engineering. He has a Bachelor’s of Science Directors as the Government Representative for 5 years.

Your Customers Are Smarter Than You—and 3 Other Awkward Truths


about New Product Development
Cu yah oga Falls, O H (Sept. 2013)—Picture this: tomers is good. But the vast majority of u s need to
You’re at your favorite restaurant with three friends. change h ow we approach the conversation.
The server welcomes you with a brief chat but never The owner of a proprietary B2B product devel-
takes your orders.Then, about 15 minutes later, he opment process called N e w Product Blueprinting,
arrives with an assortment of entrées for each of A d a m s says B2B suppliers have a huge advantage
you.Yours is okay. It’s not exactly what you wanted, when it comes to VOC—if they use it correctly. His
but since you’re starving it will do.Your vegan friend, new, free e-book shares new VOC rules for B2B so
Sally, has a real problem:The steak and cheesy broc- that your company can ride the innovation wave and
coli the server brought her mean s she’s goin g to be stay ahead of the competition.
pretty hungry for the rest of the night. Carl is on a “Compared to end-consumers, your B2B cus-
low-carb diet, so his pasta dish certainly won’t help tomers are more knowledgeable, interested, objec-
his weight-loss goals. But on the bright side, your tive, and fewer in number,” he points out. “Th ey are
other friend, Steve, is raving about his cheeseburger. perfect to directly engage! But an advantage is an
The server, as it turns out, advantage only if you know how
had a 25 percent success rate to take advantage of it. An d to
at gu essin g what each of you do that, you first have to face
would like best for dinner. Good the facts about h ow you’re cur-
thing this restaurant is hypo- rently doing things.”
thetical—Steve might come back Here, A d a m s shares four
again but the other three of you awkward truths about h ow your
almost certainly won’t. organization is currently devel-
Yes, it’s a ridiculous way to oping new products:
do business—yet Dan A d a m s 1. Your customers are
sa y s this is exactly what it’s like smarter than you. Have you ever
in new product development. heard anyone say, “Customers
Companies gu ess what their customers want (based can’t tell you what they want: That’s why Steve J o b s
on very limited information) rather than asking them. never asked them”? It sounds good (if a touch arro-
An d that’s why the average company has only—you gant), but that saying isn’t universally true. A n iPod
guessed it—a 25 percent success rate with new prod- is a consumer—not B2B—product. Apple engineers
ucts. designed a product they could easily see themselves
“In business, of course, we think we’re asking using.You don’t have that luxury.
customers what they want,” notes Ad ams, author of “Imagine you’re developing a pigment for pa-
the new, free 32-page e-book Reinventing V O C for per—a B2B product,” A d a m s suggests. “Wh o knows
B2B: 12 N e w Rules from N e w Product Blueprinting more about its requirements: you or your customer,
(www.newproductblueprinting.com/ebook). “We call the paper producer? B2B suppliers are smart about
the process ‘Voice of the Customer’—but from m y h ow to develop a product, but B2B customers are
experience in working with B2B companies, almost usually smarter about what the product should do.
everyone is doing it wrong.” “It’s different in the B2C world,” he adds. “Will
He says most B2B companies participate in “me- a consumer like the new iPod shape, for instance?
too VOC,” using surveys and questionnaires to pick It’s hard to say without a prototype. But for you, the
their customers’ brains because that’s what everyone
else is doing. Don’t get him wrong: E n gagin g cus- Voice of the Customer continued on page 47
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
PUBLISHED BY SAVE INTERNATIONAL®
37

Appraisal of Value Engineering in


Construction Industry in Oman
Ibrahim Ali Albalushi, MSc., AVS; Fathoni Usman, Ph.D.
& Ali S. Alnuaimi, Ph.D.

Abstract The VE term was used by United States military since


1954 [Elias 1998]. The success achieved by VE appli-
This paper presents results from field survey on cation in USA encouraged other countries to adopt it
implementation of value engineering in construction in their various systems [Amani et al 2012]. The use
projects in Oman. The main objective was to measure of this engineering technique for a variety of projects
the level of awareness and application of VE in con- has proven its effectiveness in reducing project costs
struction industry in Oman for further expansion and without reducing the scope of the work. The results
development. Data obtained from 64 respondents of over 500 studies in USA showed that VE had an
representing the public and private construction effect of a 5-35 percent reduction in initial costs and
sectors was analysed. The findings indicated that VE widely differing results for improving project pro-
is recognized in construction industry in Oman and cess, values and quality. VE can be applied at any
there is a sign that some organizations are applying stage and to any part of the project. However, the
VE in their projects, but there is confusion in under- earlier it is applied in a project life cycle, the greater
standing its process and application with the cost the savings that will be made [Dell’Isola 1997].
saving tasks. Forty-two percent (42%) of the respon-
The technique has been applied at different sec-
dents rated VE as limited to some special projects
tors of the economy where achieving best value is
and 40 percent stated that the application of VE is
desired. The applications of VE have been forced
low. Eighty-nine percent (89%) of the respondents
by laws in some countries [Arazi et al 2010]. Unfor-
assumed that implementation of VE in construction
projects will benefit the construction industry and tunately, application of value engineering does not
minimize time and cost overruns, improve values, seem to be well embraced in Middle East [Al-Barami
and meet requirements. The main factors retard- 2010]. In Oman, VE program introduced officially in
ing the application of VE in construction projects 2004 by the Value Engineering Centre, VEC, which
are found to be lack of knowledge, guidelines and is a private local consultant working in oil and gas
non-availability of dedicated VE team. A procedure is operation projects through the ministry of oil and
proposed towards the promotion and appraisal of VE gas. VEC has contributed to the improvement of the
in the construction industry in Oman. design and construction of different oil and gas proj-
ects. Projects’ time and cost overruns due to change
orders as well as deviations from planned quality are
Keywords the most popular problems encountered in construc-
tion projects in Oman [Alnuaimi et al 2010].
Value Engineering, Construction Management, Patrick et al (2000) investigated the VE knowl-
Oman, Construction Industry. edge, perception and application in the construction
industry in Hong Kong for further implementa-
tion and appraisal of VE. As revealed by the survey,
misunderstanding and false perceptions of VE still
Introduction persist in the minds of clients and construction pro-
Value engineering (VE) evolved from the concept fessionals; many construction professionals have not
of value analysis in 1940s during the effort to cater even heard the term VE, and the application of VE is
for the material shortage caused by World War II. still low in Hong Kong construction industry. It was
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
38 PUBLISHED BY SAVE INTERNATIONAL®

recommended that the government should lead the and could generate savings up to OMR 157 million
appraisal of VE application. (US $ 400 million) in addition of improving project
Robert et al (2004) investigated the level of prac- values.
tices of value management (VM) within major cost The expenditure on construction projects in
consultants in UK in order to appraise VM applica- Oman is made by both the public and private sectors.
tion within the cost consultant sectors. The results The public sector accounts for the major part of the
indicated that, the focus on VM studies tends to be total capital expenditure on construction and mostly
at spaces and elements levels rather than the earlier goes to infrastructure and development projects,
concept level. Moreover, the VM is used as a cost cut- while the private sector expenditure is largely allo-
ting exercise particularly on projects which are expe- cated to residential housing, commercial buildings,
riencing problems. The study recommended further industrial construction, and lately in tourism and
development of VM and integration of VM with risk natural gas related projects.
management to increases the benefits. It is clear that the measurement of the current
Steven and Philip (2006) studied the application level of VE application in Oman’s construction indus-
of VE within the Philadelphia regional construction try is very important for the further appraisal of VE.
industry to review and compare the application of The involvement of the public and private sectors in
true concept of VE. The findings indicated that the any investigation is critical as they are the key play-
true concept of VE is not understood by the construc- ers in construction industry.
tion industry members and they are mixing between The objective of this paper was to measure the
the VE and cost saving tasks. level of awareness and application of value engi-
Arazi et al (2010) studied the practice of VE neering in construction industry in Oman. This was
among the Malaysian construction consultant for required to structure future directions for appraisal
further enhancement of its application system. The of VE in construction industry. The work was con-
results indicated that the level of awareness of value ducted by a field survey on public and private sec-
engineering within the Malaysian construction con- tors’ projects. Reasons hindering theimplementation
sultant is high. The level of value engineering imple- of VE were investigated and studied. A development
mentation was found to be relatively average. The plan to expand the implementation of VE in con-
study recommended that the government should en- struction industry is proposed.
courage and lead the promotion of value engineering
in the Malaysian construction consultants by creating
more seminars and training workshops. Data collection and methodology
Amani et al (2012) investigated the perception
towards implementation of VE among the private For collection of data, a field survey was con-
sector in Malaysia to identify the acceptance level ducted using a questionnaire form, prepared by
of VE implementation within the private sector and the authors, focused on respondents’knowledge,
define the main obstacles of implementing VE within awareness, experience with VE and the obstructions
Malaysia private sector. The findings concluded that to implement VE in public and private construction
the perception of private sector’s consultants towards projects. Accordingly, the questions were modified
VE is sceptical and negative during its initial. The to eliminate wordings with possible confusion, dual
understanding from the private sector’s consultants definitions or ambiguities prior to the real study
towards VE is minimal due to the misconception presented here.
towards VE. The study suggested more encourage The survey was designed to obtain three sets of
towards the application of VE. information which contain measuring parameters of
Al Barami (2010) stated that the implementation awareness and implementation of VE in construction
of VE in construction projects in Oman is still mini- projects. The first part was designed to identify the
mal compared to other countries that have standard respondents’ job descriptions within the construction
of VE. The number of projects that have applied VE industry and the sizes and types of projects which
technique is limited and handful. Oman’s construc- they handled in Oman. This part also investigates
tion industry is expected to hit OMR 1.57 billion the sectors’ interest in VE through measuring therate
(USD 4 billion) by the end of 2013. Accordingly, the of their responses. The second part was designed to
possible impact of VE implementation in the con- measure the respondents’ general knowledge and
struction industry could be 10 percent in cost savings awareness on VE by asking various questions con-
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
PUBLISHED BY SAVE INTERNATIONAL®
39

cerning their experiences with the VE process and lack of knowledge about VE. Table 1 (below) shows
sizes of the projects in which VE was implemented. the percentage of the respondents as per their job
This part intended to reflect the respondents’ un- classification. Project engineers, design profession-
derstanding on the formal VE application in the als, construction managers and quantity surveyors
projects. The third part was designed to investigate dominated the number of respondents. The owners
the respondents’ opinions on various obstructions to and contractors were less involved with 6 and 3 per-
implementing VE process and it explores the respon- cent respectively. This shows that the owners who are
dents’ views about the level of VE application in the
investing a lot amount of money and contractors who
construction projects. This part contains suggested
are taking the responsibility and risks of construction
obstructions to implement VE in construction proj-
ects found in previous studies as well it allows the re- are having less knowledge about VE than others. It
spondents to add their own obstructions as per their is important to educate these two groups about VE
experience. The survey questionnaire was distributed implementation in construction projects.
to one hundred (100) professionals, who are mem-
bers of the projects’ teams, in a distribution database Table 1. Respondent’s Job Classification
that was created to provide an equal distribution
among the various members of public and private Classification Respondent Percentage
sectors. All selected participants were educated with Owner 4 6.25%
minimum degree of a Bachleor of Science. To ensure Design professionals 16 25.00%
large spread of distribution, only one member from Construction managers 7 10.90%
each project team was selected to participate. The Contractors 2 3.13%
participants were chosen from a diverse background Project Engineers 28 43.75%
with their industrial experience ranging from one
Quantity surveyors 7 10.90%
year to over 20 years. The distribution ensured that
Total 64 100.00%
the responses to the questionnaire would consider
the various perspectives of the different project team
members, thus providing general overall results. The Respondents’ experiences and types of
questionnaires were addressed to the directors of the projects
projects and maintenance directorate in public sec-
tors and to the project departments in private sectors. Figure 1 (below) shows percentage of the par-
The questionnaire was submifed and received from ticipant’s experiences in years. It is clear that the
the respondents by hands through focal points. The respondents have good background and experience
obtained data was analysed using Microsoh Excel in construction industry as 25 percent of the respon-
sohware to produce descriptive statistics of the level dents have more than 20 years’ experience and 36
of awareness, implementation, and obstacles of value
percent of them have experience more than 15 years.
engineering. The results were used to propose a VE
However, this result alone does not show the amount
implementation plan and appraisal method in the
of knowledge about the VE.
construction industry in Oman.

Results and Discussion


Types of Respondents
Out of the 100 professionals who were ap-
proached to answer the questions, 64 respondents
managed to complete the forms, 36 (56.25%) were
from the public sector and 28 (43.75%) were from
private sector. This indicates that the VE gained more
interest among the staff of public sector than of the
private sector. It should be noted that many engi-
neers did not afempt to enter into the survey due to Figure 1. Years of the Participants’ Experiences.
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
40 PUBLISHED BY SAVE INTERNATIONAL®

Table 2. Respondents’ awareness of VE

Aware of VE Respondents Percentage


Yes 57 89.06%
No 7 10.94%
Total 64 100.00%

Figure 2. Respondents and Project Types.


The respondents have participated in various
construction projects. Figure 2 (above) shows the per-
centage and type of projects handled by the respon-
dents. It is clear from the results that, the residential
projects have the largest portion of construction
industry which goes in line with data obtained from
the Ministry of Economy which indicated that resi-
dential projects has the largest share of construction
CAPEX in Oman [Ministry of Economy report, 2011].
From the type of projects and respondents as well as
their experiences, it can be stated that, the collected Figure 3. Source of Respondents’ VE Knowledge.
data was suitable for analysis to represent the real
Table 3. Statement on the Respondents’ General
situation of construction industry in Oman.
Knowledge of VE
Respondents’ General Knowledgeabout the

Respondent

Percentage
Concept ofVE Statement on the
Respondents’ General
To draw a befer understanding about the respon- Knowledge of VE
dents’ general knowledge and background on VE ap-
plication, they were asked to comment on how knowl-
Never heard of VE 7 10.94%
edgeable they are about VE. Table 2 (top right) shows
the percentage of the respondents’ general awareness Heard about, but I don’t 11 17.19%
about VE. The results illustrate that, 57 (89.06%) of the really know much about it
respondents showed awareness of value engineering. Understand the basic 31 48.44%
The remainder of seven (10.94%) respondents were concepts of VE
not familiar with VE concept and techniques. Figure 3
Know a great deal about VE 12 18.75%
(middle right) shows that, 15 (26.32%) of the respon-
dents who were aware of VE learned about it from Considered an expert on VE 3 4.69%
their work environments. Fourteen (14) (24.56%) re- Total 64 100.00%
spondents claimed that they learned basic facts about
VE from their colleagues and friends. A further 24.56 The findings give an indication of the presence
percent learned about VE through afending seminars, of VE in construction industry in Oman and the
and 10 (17.54%) respondents learned through afend- awareness of some respondents about the VE gen-
ing specialised short courses. Only four (7.02 %) of eral knowledge. Furthermore, the results indicate
respondents learned about VE through literature. Fur- that some of the construction industry organiza-
thermore, the results in Table 3 (bofom right) show tions apply VE in their projects as 15 (26.32 %) of the
that 31 (48.44%) of the respondents understand the respondents who were aware about VE learned it
basic concept of VE and another 12 (18.75%) respon- through their application in their projects. Generally,
dents know a great deal about the application of VE. the findings were not surprising, as there were some
Moreover, three (4.69%) of the respondents consider institutes in Oman who are giving VE general cours-
themselves experts in VE application. es to their participants where most of them work for
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
PUBLISHED BY SAVE INTERNATIONAL®
41

the public sector. Mere reading about VE through


literature or publications or hearing it from friends,
colleagues or in work environment is not sufficient to
claim knowledge in VE techniques. Nevertheless, the
results show that information about VE has reached
the construction industry and it is suggested that the
concepts, rules and methodology of VE should be
explained extensively.

Implementation of formal VE in respondents’ Figure 4. Stages of Project’s Life Cycle Where


organization Organizations Perform VE.
Accordingly, it cannot be predicted up to this point
The survey results showed that 42 (65.63%) out
that the participants have implemented a proper VE.
of the 64 respondents who participated in the survey
Further investigation of the results on VE imple-
claimed that they applied VE techniques in their proj-
mentation in participants’ projects, showed that out
ects. Table 4 (below) shows the number of the proj-
of the 42 respondents who verified that VE was per-
ects where VE was applied during the last five years
formed in their projects, 11 (26.19%) stated that VE
in the participant’s organization. The results showed
was performed during the final design stage, while
that 15 (26.32 %) of the respondents learned about VE
nine (21.43%) declared that VE was performed dur-
through their organization projects. 25 respondents
ing the preliminary design stage. Furthermore, nine
out of the 42 declared that their organization applied
(21.43) percent of the participant stated that VE was
VE techniques in a range of one to five projects in
the last five years. Furthermore, eight out of the 42 performed during the conceptual phase of the proj-
respondents stated that their organization applied ect and nine (21.43%) showed that they performed
VE techniques in more than 15 projects in the same VE in their projects during the construction stage.
period. Moreover, 7 out of the 42 participants stated Moreover, four (9.52%) showed that they performed
that they applied VE in a range of six to ten projects VE in their projects during the bidding phase. Figure
in the last five years and two participants claimed 4 (below) shows the stages of the project life cycle
that they applied VE techniques in the same period where the participants’ organisations performed VE
for a range of 11 to 15 projects. The results prove that in their projects. According to VE standard job plan
the knowledge of VE has reached the construction and procedure, the results are not consistent with the
community and there is a high interest in the orga- formal VE procedure and job plans as 24 (57.14%) of
nizations to apply VE in their projects. However, the the respondents claimed that VE was performed in
results suggested that all those familiar with VE have their projects during the final design, bidding and
learned about it in their projects. Hence, it is possible construction stages (Figure 4 above). As a general
that they do not have adequate knowledge or experi- VE rules, the VE formal study should be started in
ence on the techniques, rules or methodology of VE. the early stages of the project before commitment of
funds and approval of systems, services and design
Table 4. Number of Projects Where VE Was Applied [Dell’Isola 1997]. The benefits of VE comes down as
in the Last Five Years the project move further from the concept phase and
becomes very less in the construction stage, where
Respondents

more focus will be in the cost rather than the func-


Quantity of Projects Where VE Was Applied tions of the project. Else more, the results show that,
in the Last Five Years in Respondents’ out of the 64 respondents 22 respondents claimed
Organization that they participated in VE study on some projects.
Eighteen (18) of them (81.82 %) claimed that they
1-5 25 participated in a formal VE study where a dedicated
6-10 7 project study team was formed and four (18.18 %)
11-15 2 persons participated in non-formal study without
Above 15 8
dedicated team. Moreover, the project engineers and
owners led the performed formal VE study team as
Total 42
shown in Table 5 (next page, top). It is worth men-
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
42 PUBLISHED BY SAVE INTERNATIONAL®

tioning that, VE study should be guided by expe- Table 5: Who Leads the Formal VE Process in the
rienced VE leader as VE methodology contains a Project Study?
systematic job plan and preparation of project func-
tions [Al-Barami 2010]. The VE methodology requires

Responden
dedicated VE experts for organizing and guiding
Who leads the formal VE

Percent
the study as per the rules and VE job plan where the
process in the project study
preparation of the required project functions, and
function analysis system techniques need to be high-

t
ly considered. It can be learned from the results that, Owner 5 22.73%
the respondents may have participated in reviews Architect 1 4.55%
of the projects’ scopes for cost savings as this task is Construction manager 3 13.64%
very common in Oman during bidding and construc- Project Engineer 9 40.91%
tion stages where it is mostly led by the owner or his
Contractor 2 9.09%
representative. Therefore, it can be stated that there is
General Manager 1 4.55%
a lack of understanding of the general VE application
procedures and rules in construction industry and Course instructor 1 4.55%
the participants might have been confused between Total number of answers 22 100.00%
the cost saving tasks and VE techniques.
Figure 5 (middle right) shows that, the respon-
dents believe that project’s engineers, owners and
construction managers should participate in the VE
dedicated team during the project value study. They
also believe that owners and construction managers
have the most impact in elimination of the project
unnecessary cost as shown in Figure 6 (bofom right).
These findings support the statement that respon-
dents are confusing cost saving with the VE. This
opinion is established because usually the owners
and construction managers are the leaders of the
project team in Oman who decide on the construc-
tion cost and requirement revision tasks, it is not a
designer who is establishing the vision of the project
and evaluating the value of the works. This is again Figure 5. Participants in a Formal VE Analysis.
lined up with the fact that in construction industry,
the owner leads the consultant design team to his
requirements during the early stages of the design,
then the consultant continue the detailing works.

Respondents’ opinions on obstructionsto


implementing VE
Table 6 (next page) shows the factors that hinder
the implementation of value engineering in the con-
struction industry in Oman as per the respondents’
opinions. It is worth mentioning that, 57 (89.1%)
respondents completed this part of the survey while
the other 7 (10.9%) respondents were not having clear
answers for the questions. Accordingly, their answers
were not considered. 226 answers collected in this
part as the respondents can choose more than one Figure 6: Members Who Have Largest Impact on
answer. Elimination of Unnecessary Costs
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
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43

Table 6. Obstructions to the VE Process and Aapplication in Construction Projects in Oman

Reasons *Respondent Percent


Owners do not want to invest mon ey in the V E process 19 8.41%
Owners do not want to invest time in the V E process 16 7.08%
Lack of knowledge about V E procedures, applications and techniques. 43 19.03%
Lack of local guidelines about V E 24 10.62%
Engineers/architects do not have a financial incentive to produce the most 15 6.64%
efficient design
Engineers/architects want to complete the design as soon as possible since they 25 11.06%
are paid a lump s u m and do not want to invest time in exploring new ideas.
Non-availability of dedicated V E team with owners 30 13.27%
Non-availability of dedicated V E team in contractor’s or designer’s organization 17 7.52%
Local codes limit the use of creativity in design and the use of new technology 8 3.54%
and products
Construction managers and project engineers are not made part of the project 18 7.96%
team until the designs are completed or near completion
Owner’s engineer or contractor does not have financial incentive to produce the 11 4.87%
most officiate design
Total number of answers 226 100.00%

*The respondents can choose more than one answer for this question.
The results show that 19.03 percent of the ob- obstructions and another 40.35 percent agreed that
stacles to the VE implementation in the construction the application of VE is low. Figure 7 (below) shows
industry are associated to the lack of knowledge the level of application of VE in the construction
about VE procedures, applications and techniques industry. In order to widely extend the application of
while 13.27 percent are related to non-availability VE in the construction industry, most of the respon-
of a dedicated VE team with the owners and 7.52 dents stated that the authorised agencies whether
percent are related to non-availability of a dedicated they are from the public or private sector should
VE team with contractors or designers. Furthermore, be made aware of the importance of VE by special
10.62 percent of the obstacles are due to lack of local workshops or seminars, and should be encouraged to
guideline about VE and 11.06 percent is due to non- practice in systematic application of VE in their proj-
availability of proper time for completing the design ects. This will require the high level of project man-
of the project since the design firms are paid a lump agement to support the systematic application of VE
sum and do not desire to invest time in exploring programmes. The respondents also mentioned that
new ideas. Moreover, the owners inconvenience to
invest money in VE process represents 8.41 percent of
the obstacles.

Respondents Opinion on Future Prospective of


VE inOman
The survey indicated that 89 percent of the re-
spondents who completed the last part of the survey
stated that implementation of value engineering in
construction projects will benefit the construction
industry and minimize the time and cost overruns,
improve values, satisfy the requirements. 42.11 per-
cent of the respondents agreed that the application of Figure 7. Level of Application of VE in Construction
VE is limited to some special projects due to various Industry.
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
44 PUBLISHED BY SAVE INTERNATIONAL®

government rules and regulations should encourage concept and design stage, tender and evaluation
the application of VE in the construction industry stage and construction and maintenance stage [Am-
specially the implementation of VE in public proj- busaidi 2005]. The plan aims to build integrated and
ects before tendering. There is an acceptance among examined system based on assessments of each phase
the respondents that VE is a valuable technique that and includes all construction members’ levels who
would aid to elevate the status of the construction are handling project’s life cycle stages. The following
industry. They believe that VE can support in solving are the proposed stages:
the variations and cost overrun issues occurring in First Stage: as the client and consultant are lead-
the construction industry in Oman if the obstacles of ing the initiations of the project from the concepts
implementing VE are eliminated. and feasibility phase up to the tendering and evalu-
ation phases, the high management level of client
and consultant should be appointed to be conscious
Proposal for Promotion of VE in about VE concepts, strategies, positive incomes
and results in improving the project values, quality,
Oman and satisfying project requirements. Moreover, the
high management level will have an overview on
The following recommendations are suggested to
VE outcomes in enhancing the project life cycle and
widely extend the application of VE in the construc-
encourage them toward the application of VE in their
tion projects. projects. Workshops and seminars can be executed
through professional and experienced VE instructors.
Initiation ofVE The participant aher this stage can get the associated
value specialist certificates and will be able in estab-
The professional organizations such as Oman
lishing the basic rules and systems of applying VE
Society of Engineering, Sultan Qaboos University,
concepts on their projects.
Muscat Municipality, and Tender Board should take Second Stage: this stage is for the middle man-
the initiative to promote the use of VE in construc- agement level, designers, and technical engineers for
tion industry through organizing more seminars both the client and consultant as a continuation of
and training programs for introducing VE concepts, improving the knowledge about VE techniques. The
methodology and effect in construction industry. In workshops and seminars for this stage should con-
addition, the government should motivate the VE re- centrate on VE applications, rules and job plans by
searches in construction field. The works coordinated which the participants can obtain a deep understand-
to create building the capabilities and resources by ing about the technique and differentiate it from
means of long term planning of spreading VE knowl- only cost saving tasks. Aher this stage the participant
edge to a wide figure of construction organizations should be able to practice the initial VE techniques of
across Oman. sefing the goals, objectives and general performance
criteria’s of the projects in assistance of VE experts.
Enhance the knowledge of the project team Third Stage: the function sefings techniques,
members inVE idea creations and evaluations are essential tools of
VE. Middle management, design staff and techni- cal
It is fundamental for the concern staff in various engineers from both the client and consultant are
construction organizations particularly in the side of involved in this stage. The objective of this stage is to
client, consultant and contractor to be educated and let the participants learn and practice the creation of
trained on VE application to improve their knowl- function analysis system technique (FAST) models,
edge and skills in VE. Table 7 (next page) shows a idea creation process and procedures, and the evalu-
proposed five stage plan for improving the different ation techniques in order to further continues the VE
management levels and technical staff’ awareness study job plan. This stage is an important stage as the
and practice in VE applications. The program is not function analysis is an essential task in VE job plan.
limited to a time frame but with results gained, as it So, the participant should be educated and trained
will give more encouragement for the high manage- in practicing the creation of function analysis system
ment to accelerate the training for further applica- techniques.
tions. Commonly, the project life cycle in Oman con- Fourth Stage: For further continuation, this
stitutes four stages namely: feasibility study stage, stage is designed for the team who is involved in the
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
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45

Table 7. Proposed Plan for Improvement Organization Members VE Knowledge

Stages Stage 1 Stage 2 Stage 3 Stage 4 Stage 5


Parties Involved Client Client Client Client Client
Consultant Consultant Consultant Consultant Consultant
Middle and Middle
technical management,
Management
management design staffs, Project
High level wh o
level and technical management
management involved in
Key persons engineers team at
and technical bid evaluation
Technical involved in construction
level and value
engineers and concept and stage
measurements
staffs detail design
stages
Introducing Showing Usin g V E
V E concept, function Using V E tools in techniques
Introducing
rules, process, analysis, bid evaluations for revising ,
V E concept,
Objective of the application idea creation and measuring comparing and
strategies, rules,
training and get A V S , improving and comparing improving the
process, and
certificate from values methods values at bidding value during
application
SAVE and to get C V S stages the construction
certificate stage
V E /VM specific Advance V E
workshops Advance V E workshops for
Advance V E
and seminars workshops in construction
workshops in
VE/VM workshop on the rules, F A S T creations stages,
Training method value evaluation
and seminars applications and and Evaluation evaluation of
and value
process ofV E Matrix the values and
improvement
J o b plan and the application performance
expected results criterias
Applying the Applying V E
concept of V E at concept,
Applyin g the
at feasibility, design, detail Application of Application of
concept of V E
Application concept and design, with V E at final detail V E during the
at concept and
Design stage of idea creation design stage construction
Design stage
the projects and evaluation
matrix

bid evaluation aher project tendering. The courses The result of the five stages should be recorded
should include the VE tools used in evaluation of for further improvement. The assistance of VE ex-
project tenders. The course should concentrate on perts in practicing VE in live projects is very critical
assessing the project values by which the participant and adds values to the participants.
will be able to submit project value analysis to the
stakeholders for choosing the proper contractor for Guidance of the Application of VE in
the construction stage. Construction Industry
Fihh Stage: it is an advanced level stage for client
The government authorities should play a lead
and consultant where VE created in the construction
role in promoting VE as they are the most powerful
stages. The participant from the client and consultant
tool in forcing the application of VE in construction
will share their VE knowledge and experience with industry. The VE system should be built within the
the contractor. In this stage the three parties should provisions of government contracts. It is recommend-
get a high knowledge in revising project objectives, ed at this stage that, the Oman Engineering Society
values and measures performance criteria during the (OES) adopt the leading of the implementation of VE
construction stage. in construction projects through the creation of VE
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
46 PUBLISHED BY SAVE INTERNATIONAL®

department within its organization. The department References


should work with Tender Board, as it is handling the
project contract, rules and regulations, to review the Al-Barami, A. (2010). Application of value engineering
construction system and make rules and procedures in Oman. MSc Thesis. School of Engineering and
of enhancing the project management system with Design, Brunel University.
VE for application of VE in government projects.
Alnuaimi A. S., Taha R. A., Al-Mohsin M. and Al-
However, the application of VE should be initially
Harthi A. (2010). Causes, Effects, Benefits and
restricted to certain important public projects and it
Remedies of Change Orders on Construction of
may even be justified to form a VE society to oversee
Public Projects in Oman. Journal of Construction
the VE implementation for various projects and build
Engineering and Management, ASC, 136, n 4, pp615
up case precedence to facilitate learning and future
– 622.
improvements. A database for reviewing success and
failure rates of VE applications should made avail- Amani N, Jaapar A, Azmi N, Bari A and Zawawi
able. By studying these evidences and precedence, M. (2012). Value Management, Private Sector’s
clients would feel more comfortable in adopting VE Perception. Procedia - Social and Behavioral Sciences,
in their projects. Key lessons will be learned from 50, pp 383–391.
failures so that practices are improved over time to
Ambusaidy, S. A. (2005). Project Risk Management
suit unique circumstances.
in The Omani Construction Industry. MSc Thesis.
School of Civil Engineering, University of Man-
Conclusion chester.

This paper presented a field survey study con- Arazi, I., Olanrewaju, A. A., Mohd, F.K., Mohd, S.
ducted among the public and private construction (2010). The Implementation of Value Engineering
sectors to investigate the level of awareness and ap- among the Malaysian Construction Consultant.
MiCRA: Management in Construction Research
plication of VE in construction industry in Oman for
Association 9th Annual Conferences’ and Meet-
further improvement and appraisal. Sixty-four (64)
ing.
respondents, out of 100 professionals approached,
managed to complete the survey. It was found that Dell’Isola A. J. (1997).Value Engineering, Practical Ap-
VE is recognized in construction industry as 89 per- plications for Design, Construction, Maintenance &
cent of the respondents were aware of the concepts Operations. Kingston, R. S. Means.
of VE, but there is confusion in understanding its
rules, methodology and application with cost saving Elias S. (1998). Value Engineering, a Powerful Productiv-
tasks. The survey proves that some organizations in ity Tool. Elsevier Science Ltd.
construction industry are applying VE in their proj- Ministry of Economy, Sultanate of Oman. (2011). Sta-
ects but they are not following the proper VE rules tistical Year Book, Issue No. 39.
and job plans. The findings showed that, the level of
implementing VE in construction projects is low and Patrick, S. F., Qiping, S. (2000). Is the Hong Kong
limited only to some project as stated by 40 and 42 Construction Industry Ready for Value Manage-
percent of the respondents respectively. The result ment? International Journal of Project Management,
was encouraging toward future of VE application 18, pp 317-326.
in construction industry and expected to eliminate
Robert, C. T., Gerrard, D. W., David, A. K. (2004).
the current concerns. There is a number of obstruc-
Value Management Practices of Leading UK Cost
tions need to be tackled with more efforts to edu-
Consultants. Journal of Construction Management
cate industrial practitioners and owners on various and Economics, 23, pp 483-493.
aspect of VE. Government has to play a leading role
in promoting such initiatives. A proposed plan was Steven, M., Philip, D., (2006). Application of Value
presented to promote and appraise VE among the Engineering within the Construction Industry.
construction industry. ASC 42nd AnnualConference.
VALUE WORLD |VOL 36 |NO 2 |FALL 2013
PUBLISHED BY SAVE INTERNATIONAL®
47

About the Authors took his Ph.D. and M.Eng. in civil engineering (structure
and materials), Universiti Teknologi Malaysia, Malaysia,
Ibrahim Ali Albalushi, MSc, AVS, took his BSc in and B.Eng. in civil engineering, Universitas Sriwijaya,
civil engineering in 2001, at Sultan Qaboos University in Palembang, Indonesia. His research expertise focuses on
Oman. He obtained his Master’s degree in civil engineer- structure and materials; artificial intelligent; construction
ing (structural specialist) in same university in 2010. information technology system design and development;
Currently, he is a Ph.D. researcher in Universiti Tenaga industrial building system and sustainable construction.
Nasional in Malaysia. His research topic is “Development
of Value Engineering Advisory System in Public Con- Ali S. Alnuaimi, Ph.D., is an associate professor in
struction Projects of Oman.” He has worked in public con- the civil and architectural engineering department at the
struction sector for 10 years and participated in construc- Sultan Qaboos University, Oman. Dr. Ali took his Ph.D.
tion of an aluminium smelter in Oman (USD3 billion) as from Glasgow University, UK and he took his M.Sc. and
a senior project engineer for two years. B.Sc. from University of Southern California, USA. His
Dr. Fathoni Usman, is the senior lecturer and head research expertise focuses on structural design and analy-
of Unit Academic of the civil engineering department, sis, estimating construction cost and administration of
College of Engineering, Universiti Tenaga Nasional. He contracts.

Voice of the Customer continued from page 36


B2B company, the question might be, Will the paper issues to surface.’
producer want brighter paper or faster mill speed? “ M y point is, in the best B2B interviews and
This can be discussed and predicted.” tours, the customer leads,” he adds. “Th e customer’s
2. Your VOC is boring customers. Be honest: Do feedback takes the supplier to ‘the good stuff’ and
you like to answer surveys at home? H o w about at provides insights that were previously unimagined.
work? Lots of free time there? Of course not. An d Clever suppliers use advanced methods that con-
your customers are no different. The last thing they tinually put them in a position to be surprised.These
want is to see you comin g with a questionnaire or surprises—not fill-in-the-blank interview guides—
interview guide. What they do want is to help you provide the spark for true innovation.”
innovate: They’ll be heroes if your new product or 4. Your NPD process is backwards. Your new
service lets their companies make or save money. product development process probably begins with
“Wh en you know h ow to truly engage your “Generate Idea” on the left, perhaps even decorated
customers as opposed to simply throwing question- by a lightbulb icon. But does it specify whose idea it
naires in their general direction, exciting things will is: you rs…or your customers’? Most suppliers start
happen,” A d a m s assures. “First, your VOC interviews with their own solutions to assumed customer needs.
will last longer. S o m e great B2B interviews have ac- An d when do they test real customer needs? At the
tually lasted more than a day! A s a result of the time e n d … b y seeing if customers buy their new product.
spent together, your customers will volunteer more “Here’s a thought: What if we flipped that, start-
and richer insights, as they settle into their new role ing with customer needs and ending with supplier
as your teacher. solutions?” A d a m s asks. “For starters, your R & D
“E ven better, because of their participation in wouldn’t squander its time developing answers to
the product development process, your customers questions your customers weren’t asking. Customers
will be ‘primed’ to buy your product as soon as you would see you were interested in th em…n ot in ‘vali-
launch it…because they helped design it,” he adds. dating’ your preconceived notions. An d you would
3. You don’t know what you don’t know. A d a m s uncover and pursue customer needs your competi-
recalls a client wh o couldn’t wait to g o through their tors had completely missed.”
list of questions with customers.This client planned “Facing up to these awkward realities m a y not be
to confirm facts, validate hypotheses, and fill in gaps. your idea of fun, but it’s the start of a radical change
A d a m s recalls, “While the client’s enthusiasm in your new product development process,” A d a m s
was laudable, I had to tell them, ‘You know what you concludes. “Believe me, it’s worth a bit of embarrass-
know (facts). You know what you think (hypotheses). ment. When you bring the customer into the conver-
An d you know what you don’t know (gaps). But you sation from the beginning, you’ll make your o wn job
don’t know what you don’t know. Only the customer easier while strengthening customer buy-in. An d no
knows the issues that truly matter to them—and you one will have to look at those boring questionnaires
need to engage in a way that allows these important again!”
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