Value engineering (VE) is widely used in the transportation industry today. The VE process outlined in this book was developed by Muthiah Kasi and his colleagues at Alfred Benesch & Company over the past 30 years. The techniques are based on work that was created by Larry Miles, Thomas J. Snodgrass, Ted Fowler, Thomas Cook and other eminent value engineers. This book, focusing on one transportation case study, illustrates the method to create an appropriate way to address transportation needs. It is a guide on how to perform a VE. It includes:Identification of users, owners and stakeholders and their needs, desires and constraintsDevelopment of project functions based on the constraints, needs and desiresAnalysis of the functions and consideration of function costIdentification of value and mismatchesDevelopment of creative ideasCreation of alternativesMeasurement of alternatives against performance, acceptance and costDevelopment of leading alternatives Recommendation and presentation of a performed alternative with support documentation

Function Approach to Transportation Projects

A Value Engineering GuideBy Muthiah Kasi

iUniverse, Inc.

Copyright © 2009 Muthiah Kasi
All right reserved.
ISBN: 978-1-4401-5144-6

Contents

Preface..................................................vAcknowledgements.........................................ix1.0 Introduction.........................................12.0 Information Phase....................................93.0 Information Phase-Functions..........................194.0 Information Phase-Function Logic.....................275.0 Information Phase-Cost...............................456.0 Information Phase-Function Cost......................577.0 Speculation Phase....................................758.0 Evaluation Phase-Screening...........................879.0 Evaluation Phase-Ranking.............................10110.0 Development Phase...................................12311.0 Presentation Phase..................................13312.0 Organizing a VE Study...............................15113.0 Conclusion..........................................161Glossary.................................................171References...............................................177Index....................................................179

Chapter One

Introduction

Objective

The objective of this chapter is to introduce the VE methodology and VE job plan.

History Of Value Engineering Methodology

Larry Miles developed the concept of value methodology while working at General Electric during World War II. Due to shortage of materials, parts and personnel, products were in great demand. Mr. Miles, when purchasing, approached the problem of shortage by asking the question, "What does it do?" Once he had an answer, he explored the question, "What else will do the job?" Through this process he substituted an equivalent or better product that performed the same function as the one in shortage. This new "function based approach" became very successful and was accepted as a value analysis technique. Larry Miles defined value analysis as "... a system for use when better than normal results are needed."

In the 1960's, Charles Bytheway developed a structure for functions which later became a widely known concept, Function Analysis System Technique (FAST). Later, Thomas J. Snodgrass and Ted Fowler developed the concept of a customer-oriented FAST diagram. The term FAST in this book refers to a Function Logic Diagram.

What is Value?

Value is achieved when the project has a very high performance while reaching a broad acceptance at a reasonable cost. Value is subjective. It reflects people's feeling and their needs at the time. Sometimes people can't define or describe what they want. They confuse needs and desires leading to the perception of a constraint.

People value things differently. Consider this the next time you are in a large parking lot. You will see cars of different types, size, color and price. Each one of those cars was purchased because the owner decided it was the best value for them. As an outsider, we cannot make assumptions about the motivation behind those purchases because we don't know the owners. Don't be surprised if a wealthy person chose an economical car or if a luxury car owner can't quite afford the car payment. Similarly, value engineers should not assume how owners set emphasis on the variables that define value. The VE process described in this book places a high priority on understanding the stakeholders-including the owner, their needs, desires and constraints-in order to determine value.

For example, during a VE study of a train station entrance, the owner insisted on an entrance with the best spatial quality. The team developed the entrance with various shapes and dimensions. The owner kept rejecting each idea as too small, too big, too intimidating or too restrictive. As the team got frustrated, they asked him to define his version of spatial quality. He calmly replied, "I will tell you when I see it." The team proposed more ideas until the owner became excited and said, "That's it!" This example demonstrates how subjective the term value can be and how important it is to involve the owner in this part of the process. When the owners, or their representatives, participate in the study, it helps the team define the value of a project.

Determining Value

Exploring the definition of value is a key task during any VE study. When defining value, value engineers should weigh the circumstances under which value is determined. In addition, they should recognize that the constraints, needs and desires of the users, owners and stakeholders influence value.

Years ago, I arrived at a train station around 5:30 am. The temperature was -20 degrees with a lower wind chill index. I needed 40 cents for a bus ride. I checked my pocket and realized that I had only 39 cents. I checked my wallet for a dollar bill to drop in, but all I had was a $20 bill. I couldn't find a cab anywhere. I ended up walking a mile to the office in the cold weather. I would have used as much as $5 to get a bus ride. The question is "What is my estimated value of a penny?" It is definitely not $20. Under the circumstances, I set an upper limit value of $5. What I learned was that the circumstances often dictate the value, but there is always a limit.

Value by Comparison

Value engineering encourages people to ask the question "Why?" It makes people compare the benefits of various options and determine their worth. This approach can be practiced within the context of every decision in life. When my son, who was living in Illinois, wanted to go to an out-of-state university, I asked the question, "Why do you prefer to go to an out-of-state university?" His answer indicated that he wanted to go school with some of his friends. Out-of-state tuition would have cost $9,000/year ($36,000 for four years). For my son the out-or-state school would accomplish the function of Feel Comfortable. Instead of telling him it would cost us an additional $36,000 we equated that to a cost of a sports car. We promised him a car upon graduation if he chose the in-state university. He was given a choice of two functions: Feel Comfortable vs. Receive Gift. In the end, he chose the Attract User function over Assure Convenience function by opting for the in-state school. When he graduated from school, his accomplishment and his maturity made him decide he didn't want the sports car from us. He understood later that his decision to stay in-state resulted in a much higher value. My wife and I were not surprised with the outcome. Similarly in projects, value engineers should look for ideas with alternative functions to compare. Decision makers will be able to understand appropriate value comparisons and will be able to better appreciate its long term use.

Consider an interchange reconstruction project with two alternatives: one would keep all ramps open for a three year construction period, the second would require the ramp traffic to be rerouted with a two year construction period. Which alternative has more value, more inconvenient for a shorter period or less inconvenient for a longer period? These questions are very subjective. Under various circumstances both alternatives are acceptable. Defining value is a critical part of the VE process and instrumental to the ultimate satisfaction of the stakeholders. One way to define value is by comparing various alternatives.

What is Value Engineering?

Value engineering...