Val alue ue Man anag agem emen ent TVM : V VE TQM QM - - PowerPoint PPT Presentation

April il 16 16, , 2018 2018, Jeddah, ah, Saudi di Arabia ia

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Tot

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al Val alue ue Man anag agem emen ent

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TVM : V VE – TQM QM integrati gration

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Pre rese sent nted ed by Abdulaz aziz iz S. A . Al-Youse sefi, i, CVS VS – Lif ife, , FSAVE VE

Org rgan anized ized by by

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The Forum

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What is VE The VE Job Plan When to do VE

VE – TQM Integration TVM vs. Others

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VE started at the Industrial Engineering under the Quality umbrella and was developed by an Industrial Engineer

The origin of Value Engineering (VE)

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VE is a study that is applied to projects in order to Customize Quality and Optimize Resources at the same time.

What is Value Engineering (VE)?

It covers Technical, Operational and Financial issues

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The Goal of VE Studies is to ….

What is Value Engineering (VE)?

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Technical

Financial

Operational

Value

Value Engineering (VE) Main Focus

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ةسدنهلا

لا قةيمي

Val alue ue Eng ngin inee eering ring

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VE Studies done since the start of VE in the GCC in 1978 by Saudi Aramco

 More than 17,000 VE Studies  More than 200,000 participants  Done at the rate of > 250 /year  Improved the Quality of our projects  Saved More than $ 55 BILLION  Saving ranged from 5-30% of the IC  Rate of return is 1 : 100 VE Accomplishments in the Gulf Area

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VE Studies done since the start of VE in the GCC in 1978

VE Accomplishments in the Gulf Area

> 17,000

VE Study

> $ 55 B Saving >200,000

Participants

>250 VES per year Save 5–30% ROR 1 : 100

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Value studies are mandatory in …

 All US federal projects > $ 2 M  All Japan projects > $ 2 M  All Saudi Government Project > $ 5 M  All RC of J&Y projects > $ 5 M  All Saudi Aramco projects > $ 10 M  also in UK, Germany, Francs, Australia, Korea, India, Malaysia, ..etc.

Why is that ?!!

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Saudi Ministry Of Finance Mandate

 Emphasis on Function, LCC and ROI  Perform VE during early design stages  Train employees on VE  Include VE Clauses in the Design contracts  Apply VE as follows …

• Typical repeated projects that is

> SR 5 M

• Projects that are

> SR 20 M ($ 5M)

• O&M Contracts that are

> SR 5 M First three years was optional then became mandatory

October 2001

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SAVE Award to Gulf Chapter

We got the Award for the Best Chapter among 24 chapters worldwide in 2006 & 2017

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Accordingly, GCC is ranked No. 3 after USA and Japan

Certification in VE

The only Four (4) Arabic VE Books were written by four Saudi Engineers

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The

VALUE Engineering Story

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1947 VA developed by Larry Miles at GE 1954

VE in US Navy Birth of SAVE

1959

VE-IC US DOD

1958

1st VEP US COE

1965 1968

VE in US GSA

1970

Birth of SJVE VE Cert. By SAVE

1973

VE in Saudi Arabia

Next slide

Value Engineering Story - Global

VE started Europe

1975

Asia Gulf Area Arab

FAST Diagram, Developed by

Charles Bytheway in the sixties

Dell’Isola Otaishan

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1978

1st VE Application In Saudi Arabia

Saudi Aramco

1st VE seminar In Saudi Arabia by GDMW in Riyadh

1981

Value Engineering Story - KSA

1992

Establishment Of Saudi Chapter

Became AGC, 1998 Then SAVE-GC, 2001

• Dr. Abdulaziz

Al-Otaishan Director GDMW

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1999

Recognized by Our national 7th Development Plan

National Saudi Level

2001

Regulated by Ministry of Finance

2000

Recognized by Our Supreme Economic Council

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Saudi Ministry Of Finance Circular

 Emphasis on Function, LCC and ROI  perform VE during early design stages  Train employees on VE  Include VE Clauses in the Design contracts  Apply VE as follows …

• Typical repeated projects that is > SR 5 M
• Projects that are > SR 20 M
• O&M Contracts that are > SR 5 M

 First 3 years is optional then it will be mandatory

October 2001

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ميمعت ةيلاملا ةرازو MO F Circular October 2001

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ميمعت ةيلاملا ةرازو MO F Circular October 2001

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Letter from The Saudi King Salman to form a committee to investigate Why Government ministries &

• rganizations

DO NOT do VE June 2014

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VALUE ةميِقلا

Analysis ليلحت

Engineering ةسدنه

Management ةرادإ

Control, Improvement, Enhancement …etc. Industry Processes

Engineering Projects

Management issues

VA ,VE or VM (The methodology is the same)

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Quality !? … different Names one Goal

Air plan seats

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لماكتت ةيميقلا ةسدنهلا ريثكلا عم ىرخلؤا ةدوجلا نيسحت تاينقت نم

VE, TQM, Kiezen, 6 sigma, BPR, QFD, MBO, CPI, SPC, JIT, QLF, BPR, ZQC, ZD VRP, LCC, AHP, TPM

Why every now and then we have a new buzz word ?

Quality ?

ءامسلؤا تددعت ... دحاو فدهلاو

70 – 80 ةدوجلاو ةرادلئا ءاملع نم...نيسدنهم 70-80% of the world experts in Quality and Management are Engineers

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Why we do VALUE Engineering

Total Value Management

Because There are many ways to waste Money, Time and Efforts

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Planning, Coordination & Miscommunication

We do not have such thing as “ Technical Problem” We actually have “ Management Problem”

Many of the VE Proposals are NOT Technical based, But based on management issues

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What is VALUE ?

What is VALUE ?

Is it money or price?

 What is the meaning of VALUE for money?  What are Corporates Vision, mission, goals,

• bjectives and VALUES?

 What does it mean when we say … this is

better VALUE than the other one

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What is VALUE ?

Most people think of Value as … price , money , cost

Is it money or price?

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Then … what is

VALUE

Value Engineering

It is Benefits & Usefulness عفانملاو دئاوفلا

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What is Engineering ?

Value Engineering

70 – 80 ةدوجلاو ةرادلئا ءاملع نم...نيسدنهم 70- 80% of the world experts in Quality and Management are Engineers يبرعلاب ةسدنهلا– زدنه ( يسراف لصا نم) ....ليحلا ملع In English – Gene … Genius… Creativity

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What is Value Engineering ?

How to get what you want and beneficial to you in a creative way

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In An Engineering projects, to do a good job, What is the most important thing to consider?

 Satisfy Customer, client  Stick to Schedule  Minimize Waste (money, time, effort ..etc)  Accomplish the Function (s)  Select the right team (personnel)  Collect the proper information  others

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The Value Equation

Function Cost Quality

Value

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The Value Equation

ةفيظولا ةفلكتلا ةدوجلا

ةميقلا

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ةميقلا

ةءافك ةفيظو ةفلكت ةلوقعم ةدوج ةبسانم

ديفتسملا تابلطتم

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Value

Fair Cost

Customized Quality

Customer Requirements

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What is

Functions … are Needs

Let’s first define ….

The reason for its existence Answering … What does it do?

Normally … it is fixed … it is either does it or does not do it

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What is Function Analysis in Value Engineering

Value Engineering

When we concentrate on the FUNCTION NOT on the ITEM, we could change our basic understandings. ةداملا ىلع سيلو ةفيظولا ىلع زكرن

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Function Analysis is the main source of ideas If we concentrate on the FUNCTION NOT on the ITEM, we could change our basic understandings. ةداملا سيلو ةفيظولا ىلع زكرن Function : Enhance Vision

Options : Contact lenses, Laser , Lasik … etc. Same Function, different items (Solutions)

What is the function of this item? The main question in VE is:

What does it do?

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Going from good to better

Conventional Method One line

VE Technique

Wider Path

A

A

B

B C D

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Going from good to better

Conventional Method One line

VE Technique

Basic Function

A

A

B

B C D

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Function Analysis ….

What are the functions of some of the Masjid components

• 1. Mihrab بارحملا
• 2. Dome ةبقلا
• 3. Minaret ةرانملا

Reflect (Amplify) Sound Strengthen Structure Announce Athan

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Function Analysis

Transport Liquid Enhance Vision

Options …  Contact lenses  Laser  Lasik Options …  Steel, PVC, Copper ..  Open system  Sloping , by Gravity …

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What is

Quality?

Quantity is what you count Quality is what you count on

Conformance to Requirements

Value-Added benefits

It is variable .. It is different from one person to another

Fit For Use

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Quality definitions

The degree to which a set of inherent characteristics fulfill requirements (PMBOK, Fourth Edition, 2008)

The first absolute of Quality Management is: QUALITY HAS TO BE DEFINED AS CONFORMANCE TO REQUIREMENTS, NOT AS GOODNESS. Philip Crosby Quality in a service or product is not what you put into it. It is what the customer gets out of it. Peter Drucker Quality - Those attributes of a product or service that the customer attaches value to. Depending on the customer's focus, "Quality" may include surface finish, timeliness, size, cost, reliability, or other factors. Joseph R Jablonski

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Quality concept has changed

Coffee shops do not sell … Just coffee Restaurants do not sell … Just food They actually sell  Services  Experience  Entertainment  Relationship

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Function Quality Relationship

Gate هباوب

River رهن

Boat براق

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Function Quality Relationship

Function

Quality

Customer

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Quality

Quantity is what you count Quality is what you count on Conformance to Requirements

Requirements could be needs or desires

Does Quality mean ….. Tough, Durable, Strong, last long…. Etc. …. not necessary …

Fit For Use or Fit for purpose

Cone Cup

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The Value Equation

Function Cost Quality

Value

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What is

Cost

Let’s first define ….

It is the

LCC

Life Cycle Cost

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What about ….

Time &

Let’s first define ….

Budget

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When purchasing an item

Function

Customer Needs

Quality

Customer Desires +

Cost

Customer LCC

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When purchasing an item

Quality

Customer Desires +

Cost

Customer LCC

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Function

Customer Needs

Quality Resources

Offered Expected Available Required

When Evaluating a project

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The Value Equation

Function

Cost Quality

Value

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The Value Index If You can not Measure it You can not Improve it

Value Value

Function Function Cost Cost Quality

If you can not measure it, you can not manage it

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How to measure VALUE ?

If you can not measure it you can not improve it you can not manage it

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The Value Equation

VAL ALUE UE

Function Cost Quality

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Value Measure

C V=

F

Q

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Funct Function ion

The Value Equation

VAL ALUE UE

Cost Quality

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Value Engineering integrates with and complements others

VE, TQM, Kiezen, 6 sigma, BSC, KPI, BPR, QFD, MBO, CPI, SPC, JIT, QLF, BPR, ZQC, ZD, VRP, LCC, AHP, TPM

Why every now and then we have a new buzz word ?

Quality ? Different names (labels) … one goal

70-80% of the world experts in Quality and Management are Engineers

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Can we ….

Quantify the Quality

The VALUE equation

The answer is not just … yes …. But actually … we should Can we measure Quality ? Can we measure beauty?

If you can not measure it, you can not manage (Improve) it

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How to solve a BIG or complicated problem?

The VALUE equation

By breaking the BIG problem into several smaller easier problems.

If you can not measure it, you can not manage (Improve) it

Use Quality Based Selections (QBS) Decision Matrix

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What is QBS?

Quality Based Selection

Quality Based Selection (QBS)

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2 points for Major Preference 1 points for Minor Preference 1 point each for Same preference

Q C V

ةدوجلا

Points

ةفلكتلا ةيلكلا رشؤم ةميقلا

= Q / C

A

B C D E رايعملا لقث رايعم لكل ةيوئملا ةبسنلا

Quality Base Selection (QBS) … Decision Matrix (DM)

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91 Non-Monetary Criteria

2 points for Major Preference 1 points for Minor Preference 1 point each for Same preference

Q C V

ةدوجلا

Points

ةفلكتلا ةيلكلا رشؤم ةميقلا

= Q / C

A

B C D E رايعملا لقث رايعم لكل ةيوئملا ةبسنلا

Quality Base Selection (QBS)

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Flooring for Training Room Like this course

Non-Monetary Criteria

2 points for Major Preference 1 points for Minor Preference 1 point each for Same preference

Q C V

Quality

Points

LCC Value Index

= Q / C

• A. Safety
• B. Hygiene
• C. Ease of O&M
• D. Aesthetics
• E. Sound Absorb

A

A/2 B A/C C/1 C A/D B/D C/D D E/1 E/1 C/E E/1 E

4 1 4 3 4

25 6 25 19 25 4 5 4 3 2 100 30 100 57 50

Ceramic Carpet Marble

5 3 3 5 5 125 18 75 95 125 3 4 4 5 3 75 24 100 95 75

337 337 438 438 369 369 70 70 80 80 100 100 4.81 81 5.48 48 3.69 69

Weight Weight Percentage

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Flooring for Training Room

Weighted Evaluation

• A. Safety ناملؤا

2

• B. Hygiene ةحصلا

1

• C. Ease of O&M ةنايصلاو ليغشتلا AC

1

• D. Aesthetics لامجلا

• E. Sound absorption توصلا صاصتما E1

Ceramic

338 70 4.82 8.8

Carpet

438 80 5.47 10.0

Marble

369 100 3.69 6.7

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How Important

• A. CPU Speed

2

• B. HD Capacity

1

• C. Weight & Size

1

• D. Cache Memory

• E. Screen Size

Q C V = Q / C

Dell, 13.3 "

500 8.0 62.50 7.4

Toshiba, 13.3 "

436 5.7 76.44 9.1

HP, 14.1 "

479 5.7 83.96 10.0

QBS, Choosing a Laptop , June 2008

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QBS, Quantifying the Quality – Purchasing a car

Non-Monetary Criteria

2 points for Major Preference 1 points for Minor Preference 1 point each for Same preference

Q C V

Weight

% of the total

= Q / C

• A. Safety
• B. Size
• C. Comfort
• D. Spare parts Availability
• E. Ease of Maintenance

A

A/1 B A/2 B/C C A/2 D/1 C/D

D

A/2 E/1 C/E D/1 E

7 1 3 3 2

44 6 19 19 12 5 4 4 5 5 220 24 76 95 60

Venture – GM Honda Previa – Japan

5 5 5 3 3 220 30 95 57 24 4 4 4 5 5 176 24 76 95 60

475 475 426 426 431 431 125 125 135 135 115 115 3.80 80 3.16 16 3.75 75

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رايتخا ةجوز ... جوز وأ( يلع وبأ عورشم )

ةيدام ريغلا ريياعملا

2 points for Major Preference 1 points for Minor Preference 1 point each for Same preference

Q C V

ةدوجلا

Points

ةفلكتلا ةيلكلا رشؤم ةميقلا

= Q / C

• A. لامجلا
• B. بسنلاو بسحلا
• C. ةيسنجلا
• D. ةورثلا
• E. رمعلا

A

A/1 B A/2 C/1 C A/B B/1 D/1

D

A/E E/2 E/2 E/1 E

5 2 1 1 6

30 14 7 7 42 4 5 4 3 2 120 70 28 28 82

ةريمس(ةقلطم) داعس(ركب) ارون(ةلمرأ)

5 3 3 5 4 150 42 21 35 168 4 4 5 5 3 120 42 35 35 126

320320 416416 363363 6565 100100 7070 4.9 4.2 5.2

رايعملا لقث رايعم لكل ةيوئملا ةبسنلا

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Choosing a wife

Non-monetary Criteria

2 points for Major Preference 1 points for Minor Preference 1 point each for Same preference

Q C V

Quality

Points

Cost SR Value Index

= Q / C

• A. beauty
• B. Type -race
• C. Nationality
• D. Wealth
• E. Age

A

A/1 B A/2 C/1 C A/B B/1 D/1

D

A/E E/2 E/2 E/1 E

5 2 1 1 6

30 14 7 7 42 4 5 4 3 2 120 70 28 28 82

Sameerah Suad Nora

5 3 3 5 4 150 42 21 35 168 4 4 5 5 3 120 42 35 35 126

320 320 416 416 363 363 65 65 100 100 70 70 4.9 4.2 5.2

W Percentage

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رايتخا ةيناث ةجوز ... رايسم... رافسم ... فايصم ...ةسانو ...خلا

ةيدام ريغلا ريياعملا

2 points for Major Preference 1 points for Minor Preference 1 point each for Same preference

Q C V

ةدوجلا

Points

ةفلكتلا ةيلكلا رشؤم ةميقلا

= Q / C

• A. لامجلا
• B. بسنلاو بسحلا
• C. ةيسنجلا
• D. ةورثلا
• E. رمعلا

A

A/1 B A/2 C/1 C A/B B/1 D/1

D

A/E E/2 E/2 E/1 E

5 2 1 1 6

30 14 7 7 42 4 5 4 3 2 120 70 28 28 82

ةريمس(ةقلطم) داعس(ركب) ارون(ةلمرأ)

5 3 3 5 4 150 42 21 35 168 4 4 5 5 3 120 42 35 35 126

320320 416416 363363 6565 100100 7070 4.9 4.2 5.2

رايعملا لقث رايعم لكل ةيوئملا ةبسنلا

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رايتخا ةجوز ... رايسم ... رافسم ... دنرف جاوز( يلع وبأ عورشم )

ةيمسرلا ةقيثولا

Official Document How to choose a wife

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QBS, Structural System

Non-Monetary Criteria

2 points for Major Preference 1 points for Minor Preference 1 point each for Same preference

Q C V

Weight

% of the total

= Q / C

• A. Insulation
• B. Schedule
• C. Durability
• D. Flexibility
• E. Maintenance

A

A/1 B A/2 B/2 C A/2 B/2 D/1

D

A/2 B/1 C/E D/E E

7 6 1 2 2

41 29 6 12 12 4 4 5 2 5 164 116 30 24 60

Pre-cast Double Wall Steel Frame

5 1 4 4 4 205 29 24 48 48 5 3 3 2 4 205 87 18 24 48

394 394 354 354 382 382 49 49 45 45 81 81 8.04 04 7.87 87 4.72 72

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Now do your Quality Based Selection (QBS ) for three options

Your QBS

For examples. Choosing ….

• University.
• A training venue
• Job.
• Vacation place.
• thers …

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VE Definition (s)

Value Engineering

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Value Engineering applications

VE

Product s Process Services Hard VE

Goods Projects

Soft VE

Project management, Cost Estimation, Specs, Standards …etc

Products

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ةميقلا رصانع

ةيلاملا Financial ةينفلا Technical ةيليغشتلا Operational

Value Engineering

VE Covers Three main Issues

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Value Engineering (PMBOK – 4th Edition, 2008)

An approach used to optimize project life cycle costs, save time, increase profit, improve quality, expand market, solve problems and use resources more effectively.

ةقيرط مدختست لوصولل فيلاكتب ةرود ةايح عورشملا ىلإ دحلا لثمألا ريفوتو تقولا ةدايزو حابرألا نيسحتو ةدوجلا عيسوتو ةصح قوسلا و لح لكاشملا مادختسإو دراوملا ةيلعافب ربكأا.

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An organized team effort aimed at analyzing Functions and Quality of projects (goods, services and processes) in

• rder to generate practical cost-

effective alternatives that meet customer requirements.

Value Engineering

Value Engineering ( Al-Yousefi)

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دهج يعامج مظنم ليلحتل ف ئاظولا ةدوجلاو ضرغل جورخلا لئادبب ةيلمع وذ ةفلكت ةبسانم يبلتو تابلطتم تابغرو ديفتسملا

Value Engineering

يه ةيميقلا ةسدنهلا:

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Value Engineering

Improve Value ةميقلا نيسحت

Value Engineering

تاقفنلا ديشرت Optimize Cost ةدوجلا ليصفت Customize Quality

Not always Improving Quality Not always Reducing Cost

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Function is the most important, then Quality, then Cost

Function

Quality

Cost

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VE

Examines

LCC

Life Cycle Cost Total Cost

Life Cycle Costing

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THE ICEBERG

HOW MUCH DO YOU SEE OF AN ICEBERG?

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ONLY 10 OF ANY ICEBERG IS VISIBLE. THE REMAINING 90% IS BELOW SEA LEVEL.

THE ICEBERG

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Where are the hidden Costs

Running , Follow on or Ownership cost Are all the associated cost of running the facility. It covers energy, maintenance, repair replacement, staffing.. etc. Initial

Single

Cost

The 3 kinds of costs of LCC

Running Cost

We use the Present Worth Analysis

What we normally see Hidden costs

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Where are the “ Hidden Costs “ ?

Fees Capital cost

Occupancy Cost Furnishing Operating Cost Maintenance Cost

The Client

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؟ ةيئرم ريغلا فيلاكتلا نيأ

موسر ءاشنلبا

حيلصتلاو كلبهلئا تادعملاو ثيثأتلا ليغشتلا ةنايصلا

ديفتسملا

نيزختلا لادبتسلبا نامضلا ةراسخلا

ةيلكلا ةفلكتلا

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ـل ةيلكلا ةفلكتلا Life Cycle Costing

300 Bed Hospital - Life span is 25 years

Design Cost Operation Cost Initial Cost Alteration Cost Maint. Cost

Case 1 : Initial Cost = SR 365 Millions 8 % Even if we save SR 100 M, all we are doing is reducing the 8% to 6%

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Level of Influence on Cost

Who influence the total cost !

Life Cycle Costing

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Level of Influence on Cost

Life Cycle Costing

5 70 50 20 15 5 30 5

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Actual cost Cost Influence

Overhead Labor Material Design

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Life Cycle Cost ةيلكلا ةفلكتلا 10.1 3.4 Revenues Annual Expense

For an Economical Life Span of 25 years And Discount rate of 6%

Our annual Net is 6.3 Initial cost is 220 M Break even is in Year 90

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16 2 Revenues Annual Expenses If our revenue is 16 M Annual expenses is 2 M

The break even will be in year 40

Life Cycle Cost ةيلكلا ةفلكتلا

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Recommendation Economic Life Span

Time (Years)

Discounted Annual Cost

Life Cycle Costing Technical Life Real Life

• wnership

Economical Life

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Value Management

The Stages

• f VM Study

Value Management

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1- 3 days Coordination Data Preparation Team Selection Modeling Pre-Study 3 – 5 days

VE Workshop VE Study Report Implementation Plan Follow-Up Post-Study 1 – 4 week

The Stages of the VM Study

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Value Management

The Stages of the VM Study

Value Management ةلودجلا ، لمعلا قيرف ديدحت ،طيطختلا ، دادعلئا Preparation, Team Selection, Agenda

1- 3 days Coordination Data Preparation Team Selection Modeling Pre-Study

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لضفأ طيطختلا

لهسا عيقرتلا اي......

If you succeed to plan, you are planning for success

If you fail to plan, you are planning for failure

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Quality Model (Star Diagram)

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Pareto Law … the 80/20 Principle

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Current Situation

Availability of Parting Technical (AC, Lighting ..etc)

Using the latest High tech A/V

Catering & Coffee breaks

Flexibility

Suitable Training Halls

Ease of O&M Aesthetic & image

Wanted Situation

Quality Model ( Training Center)

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User Comfort Safety & Security Engineering Performance Operation Effectiveness Environmental Impact Flexibility Image

( Site & Facility)

Schedule

Balance Maximum Minimum

Quality Profile

10 5 5 10

Quality Model ( Housing Project)



138

Quality Model (Star Diagram) مدختسملا ةحار ةملبسلاو ناملؤا ةينفلا ةءافكلا ليغشتلا ةنايصلاو ةئيبلا ةنورملا يلامجلا لكشلا لودجلا ينمزلا

Balance Maximum Minimum

Quality Profile

10 5 5 10

ةدوجلا تايولوأ ديدحت مهملاف مهلؤا



139

Current Situation

Housing unit Layout Design Concept

Building Material Modification to Housing unit by tenants Speed of Construction Ease of O&M Building codes & Regulation Social Issues

Wanted Situation

Quality Model ( Housing Project)



140

Pareto’s Law the 80/20 Principals

80% of the world wealth is controlled by 20% of the people

80% of the cost comes from 20% of the components

20%

80%

Component Cost



141

Pareto’s Law the 80/20 rule

% of Items % of Total Cost

80

20% of the items Makes up 80% of the cost

80% of the cost comes from 20% of the components



142

Pareto’s Law the 80/20 rule

% of Items % of Total Cost

80

80% of the cost comes from 20% of the components



143

0.35 0.35 0.4 0.64 1.33 2.78 3.13 5.06 6.22 6.32 7.78 2 4 6 8 10 Saudi Riyals

Finishes Structural Mechanical Electrical

Doors & Windows

Auditorium

Elevators

Site development & Landscaping Insulation Equipments Metal Work

Office building

Pareto’s Law the 80/20 rule



144

Why Value Engineering

Again ………….



145

Who are the most influencers ?

Who are the Decision Makers ? Technical, workers Mangers SM

Top

Circle of SM influence

Decision Takers



146

Where do senior managers invest their time …

Actual

What they Say ... Common Sense is not always Common Practice

According to a survey (In Saudi Arabia & USA 1996)

1- Marketing 2- Human Resources 3- Projects 4- Finance 5- Quality

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147

No Yes Some What

According to a survey (In Saudi Arabia, 1991)

• Q. Are you satisfied with what you’ve got ?

When asked … after the completion of the facility:- Answer ….

Value Engineering

61 % 26 % 13 %

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148

According to KSU Research , 1999

• Q. Are you satisfied with what you’ve got ?

When asked … after the completion of the facility:- Answer ….

Value Engineering

No Yes Some What

75 % 21 %

4

Conclusion :

People know about what they do not need Much more than what they need

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149

Reasons for unnecessary Costs (Poor Value)

Poor Value Cause

Environment

Methods Time

Organization

People Material

Effect



151

فيلاكتلا ةدايزل بابسأ رشع مهأ ...ةدوجلا ةءادرو



ةيلحملا تافصاوملا بايغ



تامولعملا ةلق(فيلاكتلا ، تابلطتملا ، فادهلؤا)



يف ةغلابملا ميمصتلا سسأريياعملاو



يف ةغلابملا ناملؤا لماعم ( ( Safety Factors



نم ةدافتسلبا مدع ةثيدحلا تاينقتلا.



قيسنتلاو تاقلبعلا فعضرارقلا ذاختاب ةينعملا تاهجلا نيب



ديدحتو ريدقت مدع ةيادبلا يف ةفلكتلا



ىلع دامتعلباتايضرفلا قئاقحلا نود



ةيلولؤا ةفلكتلا ىلع زيكرتلا ةيلكلا ةفلكتلا سيلو.



تقولا قيض ميمصتلاو تاسرادلل حاتملا

دجوي له ولخي عورشم هذه ضعب نم ؟ بابسلؤا

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152

Top 10 reasons for excess cost and poor quality

1.

No national specs, standards, code, regulations … etc.

2.

Lack of information (goals, objectives, requirements)

3.

Exaggerated design bases

4.

Unrealistic Safety Factors.

5.

Not using latest technology

6.

Lack of coordination between all parties

7.

Lack of Initial Cost accuracy before design

8.

Not Doing LCC during early stages of design

9.

work based on assumption (Honest but wrong beliefs)

• 10. Not enough time for Studies and developing the design Concept

How many projects do you know that have some of these?

Source : VE Day Symposium, SCE, Riyadh, 2008

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153

Honest, but wrong beliefs Better Quality

Less cables Less Voltage drop Less Construction

Less Cost

$ 1.1 M Saving



154

Unrealistic design or Safety factors LPR

6.0 – 0.5 Km is OK

26 factors to consider

GP

6 Km

GP

2.5 Km

H H

Before After

Saving

$ 4.5 Millions

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155

Codes, Regulation, standardizations, specification

Saudi annual loss of not having standards according to KFUPM research:

• Doors & Windows

> one Billion SR

• Electrical Plugs

> 600 Million SR

That is 1.6 B out of 5-7% of the total initial cost of the project



156

The VM Stages

Value Engineering



157

1 - 3 days Coordination Data Preparation Team Selection Modeling (QM, PC) Pre-Study 3 – 5 days

VE Workshop VE Study Report Implementation Plan Follow-Up Post-Study 1 – 4 week

The Stages of the VM Study



158

VE Job Plan

Like any other Problem Solving Methodology Do



159

Value Management

Of The

VE Workshop



160

SAVE International VM Job Plan (six phases)

Source : Value Methodology Standards, SAVE International

Post Workshop

Implementation & Follow-up

Pre Workshop (Activities) 1- Information Phase 2- Function Analysis Phase 5- Development Phase

No Yes 6- Presentation Phase

No Yes 4- Evaluation Phase 3- Creative Phase



161

The 7 Phases of The VE Workshop

Information Implementation Follow up Yes

VE Job Plan

Function Analysis Presentation Development

No

Summarize results



162

The 7 Phases of The VE Workshop

Information Implementation Follow up Yes

Function Analysis Presentation Development

No

What Why How All What How When Who



163

The 7 Phases of The VE Workshop

Implementation & Follow up

Evaluation

VEPs

Drop VEPs

Further Study

No AFS No Yes Yes

VEPs Presentation Function Analysis Information Preparation



164

TVM Road Mapةميقلا ةرادا قيرط ةطخ

Information Phase Function Analysis Idea Generation Evaluation Phase

VEP Development

Presentation Phase Implementation & Follow up Implementation & Follow up Implementation & Follow up



165

Information Phase Function Analysis Idea Generation Evaluation Phase VEP

Development

Presentation Phase Implementation & Follow up

Other VE Studies !!! Some times we do not see it TVM Road Mapةميقلا ةرادا قيرط ةطخ



166

Function Analysis Idea Generation Evaluation Phase VEP

Development

Presentation Phase Implementation & Follow up Information Phase

TVM Road Mapةميقلا ةرادا قيرط ةطخ



167

Information Function Analysis Creative & Idea Generation Evaluation VEP Development Presentation

Implementation Phase



168

INDIVIDUAL EFFORTS SOLUTION VE TEAM EFFORT VE APPROACH

PM Designer Owner User Engineers

Value Management



169

The VE Team (Holistic Team) Multi-discipline Team

User

Designer

Specialists

Led by

Certified Value Specialist (CVS)

and composed of

قيرفلا مجح Team size

7 2

• +

_



170

Value Management Where to put the “ X “

لمع قيرف ةيميقلا تاساردلا VE TEAM

Others Designer Specialists Cost Estimator O&M User Engineers

CVS

دمتعم ةميق يئاصخأ ديفتسملا وأ كلاملا هلثمي نم وأ ممصملا يراشتسلبا نوسدنهم فلتخمب تاصصختلا نوكراشم نورخآ فيلاكت ردقم نويئاصخأ نورخآ ليغشت ولوئسم ةنايصو

Experience vs. Confidence

0 Years 5 10 15 20 100% 70% 30% Ideas Solutions Alternatives

Creativity in VE

عادبلئا لحارم– د .ناديوسلا قراط

ريضحتلا يرحتلا لوحتلا ناضتحلبا ريونتلا مييقتلا ذيفنتلا

عادبلئا ةيلمع :د .ناديوسلا قراط

ريوطتلاو ثحبلا

ةعباتملاو قيبطتلا معن

رارق

لب عمج تامولعملا ليلحت فئاظولا ضرع تايصوتلا

يرحتلا ريضحتلا لوحتلا ناضتحلبا ريونتلا ذيفنتلا مييقتلا

يه ةيميقلا ةسدنهلا ... ةيعادبإ ةيلمع

ردصملا :د .ناديوسلا قراط

Creativity in VE

Creativity Process – Dr. Tariq Al-Swuaidan

Preparation Investigation Transformation Incubation Illumination Evaluation Implementation

عادبلئا ةيلمع :د .ناديوسلا قراط

Investigation Preparation Transformation Incubation Illumination Implementation Evaluation

يه ةيميقلا ةسدنهلا ... ةيعادبإ ةيلمع

ردصملا :د .ناديوسلا قراط



176

When to do VE

The ideal time to apply VE

The ideal (best) time to do VE

Design Construction O &M



177

Project Life Cycle

Strategic Decisions Concept Definition

Project Management

O & M

Facility Enhancement POE

Funding Approval



178

Total Value Management

The 1- 10 - 100 Rule

The 1-10-100 rule states if a problem is not fixed when it occurs, it will

• nly become more costly to fix later …. in terms of both time and money.

1 Catching and fixing

problems in your work area

10 Catching and fixing problems

after they left your work area

100 Repairing the damage from

problems caught by external

Time

Cost

1 Catching and fixing

Before Design

10 Catching and fixing problems

After Design

100 Repairing the damage

During Construction



179

يف ةلكشملا لحت مل اذإاهنيح بلطتيسو ربكتس اهنإفةدايز اهحلبصإ يفةفلكتلاو دهجلاو تقولا 1

يأ اهنيح يف اهلحو ةلكشملا فاشتكا ميمصتلا ءانثإ

10 ميمصتلا دعب اهلحو ةلكشملا فاشتكا 100 ءاشنلئا ءانثأ ةلكشملا لح تقولا

ةفلكتلا دهجلا دراوملا

ةدعاق(1-10-100 )

ةلماشلا ةميقلا ةرادإ



180

Project Life Cycle

Strategic Decisions Concept Definition

Project Management

O & M

Facility Enhancement POE

Funding Approval



181

Total Value Management

Total Value

Management

Integrating VE within the Design Process

ميمصتلا ةيلمع نمض ةيميقلا ةسدنهلا جمد





182

When to apply VE ?

Project Life Cycle

100 10 1 Goals, Objectives, Requirements Design Criteria, Scope of work Detailed VE Alternatives to the design, Define Systems, Follow up VEPs of VE 1 Conformity to Code, standards, specs Make sure that VEP of VE 2 are implemented

Efficiency Effectiveness Soft Hard



183

Project Life Cycle

100 10 1

طيطختلا روصتلا يئادتبلبا

ميمصتلا يئاهنلا قيثوتلا ذيفنتلا ةعباتملا

TVM Model

تابلطتم ، فادهأ ، ةيؤر لمعلا لاجم ، ميمصتلا سسأ لبيصفت رثكأ ةيميق ةسارد ةمدختسملا ةمظنلؤا ديدحت

تادوكلاو سيياقملاو تافصاوملا عابتأ نم دكأتلا اهيلع قافتلبا مت يتلا ةيميقلا تاحرتقملا قيبطت نم دكأتلا



184

When to apply VE ? Design Construct O &M Project Life Cycle

VE 1 VE 2 VE C VE M DR

Acceptance level

VE Change Proposal (VECP)

VEP 30% 80%



185

185

% of implementation

How to assure the right implementation of the VE Proposals (VEP)

100 10 1

Rules of thump of VEP Implementation Time of VE Study

Design Stage Implementation rate



186

Management

Doing a good VE Study is not enough

If the VE Proposals are not Implemented We have done nothing



187

Value Management

The 7 Phases of The VE Workshop

Information Implementation Follow up Yes

VE Job Plan

Function Analysis Presentation Development

No



188

Value Management (FITT Program )

How to assure the success of the VE Program

Management We need the right

F

Information

I

Timing

T

Team

T



189

جمانرب ” ومف ق”

يه ةمهم رصانع عبرأ ىلإ جاتحن:

دئاق قيرفلا

ق

تامولعم م قيرف ف تقو

و

متامولع وتق فقير ققيرف دئا

قفوم جمانرب– ةميقلا ةرادإ



190

Value Engineering vs. Others

VE vs. Others



191

BPR TQM VE

20% 40% 70%

Success rates - comparative analysis,

KFUPM Research

 Team effort  It is Task oriented  It takes short time  It gets Quick results  Many new ideas  Acceptable Solutions

Why VE is successful

VE is ….An eye opener



192

Future Top 10 Emerging trends

2000 and beyond … by AIA, 1999

10 20 30 40 50 60 Facility Managemnt Sustainable Builidings Project Web site Virtual Reality Value Engineering Smart Growth Design/Build Construction MANAGEMET Firm web site Electronic Documenation



193

Value Engineering vs. Others

Technical Review ةينفلا ةعجارملا



194

Value Engineering vs. Others

Cost Reduction فيلاكتلا ضفخ



195

Value Engineering vs. Others

Feasibility Studies ةيداصتقلبا ىودجلا



196

What is BPR

Business Process Reengineering

Value Engineering



197

What is ISO

Value Engineering

ISO is not International Standard Organization It come from the Greek word that means “ Equal “



198

Six Sigma

Value Engineering

Certifying products



199

Total Quality Management

Total Quality

Management

TQM



200

Total Value Management

Owner Designer Constructor

Customer Supplier

Requirements

Supplier Supplier Customer Customer

Plans Specs Codes etc. Facility

$$$$$

Customer-Supplier Loop



201

Total Quality Management (TQM) … is

A management approach to long-term success through customer satisfaction. In a TQM effort, all members of an organization participate in improving processes, products, services, and the culture in which they work. A management system for a customer-focused

• rganization that involves all employees in

continual improvement. It uses strategy, data, and effective communications to integrate the quality discipline into the culture and activities of the

• rganization.

Source: ASQ



202

The 8 principles of TQM

• 1. Customer-focused
• 2. Total employee involvement
• 3. Process-centered
• 4. Integrated system
• 5. Strategic and systematic approach
• 6. Continual improvement
• 7. Fact-based decision making
• 8. Communications

Source: ASQ



203

Total Quality Management

 Total Overall integrated and continuous effort from the CEO to the labors (all departments involved)  Quality Meeting the customer needs, desires and expectations  Management The process of performing activities through the efficient use of resources Total Quality Management



204

Total Quality Management (TQM) … is A cooperation form of doing business that relies on the capability of both labor and management, using teamwork, to continuously improve quality, economy and productivity to the complete satisfaction

• f

the customer.



205

Total Quality Management

Continuous Quality Improvement

Maintain momentum, give recognition Organize to reach the goals, train, solve problem Build awareness

• f needs, set

goals Report progress, keep score, communicate result



206

Total Value Management

Cost of Quality Management

 Crosby: “ What costs money are the un-quality things … all the actions that involve not doing jobs right at the first time”  Deming : “Inspection does not improve quality, nor guarantee quality. Inspection is to late”  Juran: “20-40% of the companies efforts are spent in redoing things that went wrong because of poor quality”



207

Total Value Management

Who is responsible of Quality Problem ?

 Crosby : Senior management is.  Deming: Senior manager is responsible for 94% of quality problem.  Juran: Senior manager is responsible for 80% of quality problem



208

Total Value Management

Value Engineering (VE) & Total Quality Management (TQM)

Many of unacceptable quality due to … the approach taking during design and … in management TQM … Concentrate on improving & managing… the quality of the design and the quality of doing business VE … is used to identify and initiate improvements that establish … at TQM attitude and awareness



209

Total Value Management

VE and TQM Integration

Integrating VE with TQM would results in the involvement of managers and engineers in a totally integrated effort toward improving performance at every step. Application of VE with the TQM approach will more closely achieve the desired concept of the owner and the end user.



210

Total Value Management

Total Value

Management

TVM



211

Total Value Management

Total Value Management (TVM)

Can be defined as …

An organizational Quality improvement methodology that focuses on needs & processes using VE Techniques to customize quality, optimize cost, integrate work, increase functional efficiency and shorten process cycle time.



212

The End