The value process offers the opportunity to remove waste by ensuring that function is maximised and life-cycle cost is minimised. This opportunity is best achieved through the involvement of project stakeholders and is imposed through structured workshops. The need on all projects is to apply the process as early as possible in the project life-cycle. In fact, the process should be used to help with defining the requirements of a project owner. It has been well established that the greatest impact of the application of the value process is in the conception phase. The cost of undertaking the process, even if an extra cost to the project, will be more than compensated through the realisation of overall project cost reductions.
The typical six-step sequence that forms the value process template can be used in any type of project, process, product or service being considered. This only varies from the traditional problem-solving process by the inclusion of function step. Identifying and analysing function is what differentiates the value process from the problem-solving process. The essential philosophy of the value process is illustrated by the following definition:
- A disciplined procedure towards the achievement of necessary function for minimum life-cycle cost by the elimination of unnecessary cost without detriment to quality, reliability, performance, delivery or safety.
Based on experience thus far, the application of the value process to a project may be expected to generally save between 5 and 25% of total project cost. Value can be provided by determining the functional requirements of the matter under investigation or any of its constituent parts, brainstorming alternative technical ways of satisfying the function requirement and examining the cost and value of each alternative to enable the best value selection.
Design of most projects is complex, requiring investment in experienced and talented people. Regardless of how capable or how able a designer is, there will always be unnecessary cost hidden in the design. The reasons why there is unnecessary cost in project include:
- Inadequate available time to fully define
- Restricted fee for defining (designing) the project
- Lack of information/communication
- Lack of ideas/expertise and appropriate experience
- Lack of relationship between design and implementation methods
- Misconceptions
- Temporary decisions that become permanent
- Stakeholder's habits and attitudes
- Political factors
Whereas it is preferable to start the value process at the conception phase, not every owner will do this. It is known that some owners, where they apply it at all, do not begin the value process untill the project design is well under way. However, to do it at any time is markedly better than not doing it at all. From this knowledge of impact potential the following conclusions are reached:
- The value process should be introduced as early as possible; ideally no later than when the owner's requirements are being developed
- By using the output from early applications of the process, subsequent value exercises can further analyse the chosen project option when many options and alternatives within the design can be studied in much greater detail
- If engaged in the process a tendering supplier/vendor may be expected to bring other value improvement ideas and techniques for consideration by the owner/design team
- The project may run into practical, cost or time difficulties during implementation, and the owner/designer/vendor team have the opportunity to approach problems and develop likely solutions using the value process
Value process, value engineering, value reviewing and value management:
The generic term value process will relate to all aspects that constitute the achievement of value. Value planning (VP) will be the term used in applying the value process during the conception phase of a project. Value engineering (VE) will be the term used in applying the value process during the definition phase and early implementation phase of a project. Value reviewing (VR) will be the term used when referring to reviews that may be required for checking the effectiveness of the value process.
The value team: For the value process to be successful all stakeholders should be represented in any exercise, some to a greater extent than others. Open forumes for the stakeholders are the principal focus where all minds and disciplines can contribute. These forumes permit an amalgam of ideas to be formed and incorporated into solutions. The principal vehicle for the value process is the team workshop which will be the forum for following the sequence of information gathering, function analysis, speculation, evaluation, proposal and implementation/follow-up. Value teams must include all relevant design, specialist and management disciplines at an experienced free-thinking level and be company-approved decision makers. Specialists workshop sub-groups can be used to improve focus and to keep down the individual workshop nembers. It will be the innovative solution, whether complex or simple, which will provide the enhanced value. It is therefore important that the members representing their company/discipline should be the individuals on the value team. Within the value process the roles of the four main parties to a project can, in general, be seen as:
- Owner
- User
- Designer
- Vendor
Ref: Managing projects for success, a trilogy by Albert Hamilton, chapter 24
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