History of Value Methodology

Value Analysis (VA) was conceived in the 1940’s by Lawrence D. Miles, a product engineer, while employed in the consumer products division at General Electric. During World War II Mr. Miles was transferred to the Purchasing Department where he focused on the functions of manufactured components and created the process of Function Analysis. Mr. Miles was tasked with finding alternate materials, not reserved as strategic to the war effort, to meet functional specifications. In 1947 his formal process evolved into the practice called Value Analysis. In 1949 W. Edwards Deming took Lawrence (Larry) D. Miles to Japan where Miles introduced Value Analysis to the Japanese. Japanese industry successfully integrated Deming Quality principles and practices with Value Analysis as a strategic mechanism to produce high quality and excellent value products.

During the 1950's, VA became readily apparent and the technique was adopted by many United States corporations and US Federal agencies. When VA was introduced to the Bureau of Ships of the U.S Navy in 1954-1957, the Bureau renamed it Value Engineering (VE) because they had more engineers than analysts and thought the personnel department would upgrade them for higher salaries. In 1964, the US Army Corps of Engineers adopted VE as applied to civil works projects such as dams, levies, etc. In 1971, the General Services Administration (GSA) wanted to apply VA/VE to all of its agencies; Federal Supply, Public Buildings Service, National Archives and Records Service, etc. The thinking being, “Everyone needs to Manage Value” so it became a management program and hence called Value Management. In 2006 SAVE International® consolidated all three names of this improvement method, originally developed by Larry Miles, under the encompassing term Value Methodology (VM). Thus, the Value Methodology Standard (VM Standard) was first published.

The current VM Standard, June 2015, is on the SAVE International® web site.

The Society of American Value Engineers (SAVE) was incorporated in 1959. The name of this society was changed to SAVE International® in 1996 to reflect the worldwide growth of the Value Methodology. SAVE sponsors an annual conference where technical papers are presented on the latest VM techniques. Approximately 40 countries have very successful VM societies serving their VM practitioners. Some of these international societies are known as SAVE International® affiliates because they adopted the SAVE International® certification program.

Many individuals and corporations have contributed greatly to the VM practice by developing related techniques. These include:

• Function Analysis System Technique (FAST) Diagram, which was created by Charles Bytheway during the early 1960’s. The FAST graphical diagramming and mapping tool allows team members to understand how the functions of a product, project, and/or process logically relate to each other
• Target Costing, which originated at Toyota in 1959
• Quality Function Deployment (QFD), which was introduced by Yoji Akao in 1966
• Zero and First Look VE in new product development
• VA/VE Tear-down – General Motors and others developed competitive tear-down analysis during the 1960’s and Isuzu further refined the technique during the 1970’s
• TRIZ – Genrich Altshuller from Russia incorporated principles of Function Analysis into the TRIZ Systematic Innovation process
• Design for Manufacture and Assembly (DFMA) – Geoffrey Boothroyd and Peter Dewhurst developed DFMA, which has become a useful VM tool

The Lawrence D. Miles Value Foundation (www.valuefoundation.org) is a non-profit 501(c)(3) foundation that strives to develop, apply, and promote the use of the Value Methodology worldwide. Its mission objectives are:

• Advance the state-of-the-art and application of value methodology through planning, research and education.
• Plan, develop and implement strategies for the introduction of value methodology into new areas of business, commerce and government.
• Promote the scientific education of college or university students in the fields of value engineering, cost control, and life cycle costing.
• Establish a constituency of individuals concerned with improving the value of goods and services for consumers through research, development and demonstration of value improvements.
• Promote the general public awareness of the application of the value methodology through MVF supported activities such as: publications, library centers, technology exchange, conferences, and studies.

The Foundation’s work brings the study of the Value Methodology to college and university undergraduate and graduate programs in engineering, architecture, and business; and by the partnership with GOAL/QPC to create this Memory Jogger^® and the Function Analysis guide published in partnership with SAVE International^®.