Introduction

What Is Value?

A dictionary definition of Value is a fair return or equivalent in goods, services, or money for something exchanged. More specifically, Value is an expression of the relationship between function and resources. Value is represented by the relationship:

Value ≈ Function/Resources

Function is measured by the reliable performance of customer requirements. Resources are measured by cost, materials, labor, price, time, energy, etc. required to accomplish those functions.

The Value Methodology (VM) focuses on improving value by identifying the most resource-efficient way to reliably accomplish a function that meets the performance expectations of the customer.

What are Value Methodology, Value Analysis, and Value Engineering?

The Value Methodology (VM) is a systematic process used by a multidisciplinary team to improve the value of a project, product, or process through the analysis of its functions. The VM process comprises techniques that enable the project team to provide the highest value projects, products, and processes for the customer. Chapter 1 contains the history of VM and evolution of its name.

The term Value Analysis (VA) is typically used when applying the VM process to improve existing applications, such as manufactured products. The term Value Engineering (VE) is used when applying VM to new projects, products, processes, and services. Value Management is the application of VA and VE with other quality and improvement techniques to achieve strategic value improvement.

Key concepts include understanding the functions which the customer wants and needs and using Function Analysis to provide those functions and quality at the lowest total life cycle cost. A multidisciplinary team approach is used. Experts from the various disciplines participate on the team. The team is led or facilitated by a qualified Value Methodology professional.

SAVE International® (www.value-eng.org) is the professional society for the Value Methodology and its practitioners. It maintains the Value Methodology Standard and Body of Knowledge, which may be accessed through the organization.

The process for applying VM consists of the following stage-gate process of three stages:

• Pre-Workshop Stage
  • Plan the venue & logistics for the VM Workshop Stage
  • Gather information
  • Determine & validate scope, team members needed, objectives, and deliverables
  • Draft and finalize the VM Workshop Stage agenda
• VM Workshop Stage
  • VM Workshop 6 phase job plan
• Post-Workshop Stage
  • Report results
  • Implementation
  • Monitor and Audit results

The VM Workshop activities (known as the VM Job Plan) consists of the following six phases which are conducted sequentially:

1. Information Phase

2. Function Analysis Phase

3. Creative Phase

4. Evaluation Phase

5. Development Phase

6. Presentation Phase

VM is a process to:

• Improve the performance of a project, product, or process
• Identify and reduce unnecessary resources, such as cost, in a project, product, or process
• Offer alternatives while assuring that quality, reliability, life cycle costs, safety, and other critical factors meet or exceed the customer’s expectations

VM is not:

• Cost cutting
• Quality reduction
• A process that can be applied without top management support and without the support of all functional disciplines

All activity in VM focuses on providing the highest value to customers. Quality and functions are improved while expending less resource (cost, time, schedule, etc.), ultimately improving overall value to the customer.

What makes VM unique?

To provide the highest value to the customer, VM is unique compared to other practices such as Total Quality Management, Lean Manufacturing, and Six Sigma because it analyzes functions and applies a formal, step-by-step process. The 3 step/stage-gate process, 6 phase VM Workshop Job Plan, multidisciplinary team approach, and Function Analysis are the foundational characteristics that make VM like no other management practice. This framework far surpasses any one methodology, tool, or technique having been applied VM in every industry and most government entities. Historical VM success may be quantified in the billions if not trillions, as measured, in US dollars.

How to use this book

This book offers you the history, methodology, and applications of the Value Methodology so you will be able to successfully apply the practice within your business. This information is useful to all stakeholders of any project, product, process or service – whether you are the owner, the designer, the manufacturer, service provider, or the customer.

Analyzing functions, cost, and your criteria for success will enable you to objectively define the solution that will spell success! The VM approach along with its tools, applications, and examples you find in this Memory Jogger® will enable you to expand your understanding of VM and inspire you to new and innovative uses of the practice in your own business!