UNIT-IV

VERSATILITY OF VALUE ENGINEERING

 VERSATILITY OF VALUE ENGINEERING
Value Engineering Operation in Maintenance and Repair Activities:
VE is a rigorous, systematic effort to improve the value and optimize the life cycle cost of a facility.
 Based on Value Engineering factor comparison study technique, required maintenance practice can be
selected.
The VE study is very helpful for new industry or small-scale industry for selecting the best maintenance
practice for economic point of view
It is new concept for selection of maintenance practice and enhance the moral of employee for taking a
strong decision.
The time consumption for taking a decision is less in this VE concept compared to other techniques.
 The following parameters have been selected for value Engineering study in maintenance and repair
activities:
 Cost (A)
 Safety (B)
 MTTR (C)
 Quality(D)
 Severity factor (E)
 VALUE POINT FOR COST VALUE POINT FOR SAFETY
Cost: According to cost, less cost of Safety: For safety; maximum point got
maintenance has more value than high cost more safe maintenance practice.
of maintenance.

Point Point out

Maintenance type Maintenance type
out of 10 of 10
Break down maintenance (BM) 9 Break down maintenance (BM) 4
Maintenance prevention (MP) 8 Maintenance prevention (MP) 7
Corrective maintenance (CM) 7 Corrective maintenance (CM) 7
Condition base maintenance Condition base maintenance
(CBM) 6 8
(CBM)
Time base maintenance (TBM) 5 Time base maintenance (TBM) 9
 VALUE POINT FOR MTTR VALUE POINT FOR QUALITY

MTTR (Mean time to repair): It is a ratio of Quality: It can be define as an owner’s or

repair time to frequency of failure & it should user’s needs, desires, and expectations.
be less for best maintenance practice so have a Here we give better point to good
less MTTR got maximum weight. maintenance practices.
Point Point
Maintenance type Maintenance type
out of 10 out of 10
Break down maintenance (BM) 4 Break down maintenance (BM) 4
Maintenance prevention (MP) 5 Maintenance prevention (MP) 6
Corrective maintenance (CM) 6 Corrective maintenance (CM) 6
Condition base maintenance Condition base maintenance
(CBM) 8 8
(CBM)
Time base maintenance (TBM) 9 Time base maintenance (TBM) 8
VALUE POINT FOR SEVERITY FACTOR
Severity factor: It represents the effect level of failure on the equipment on the basis of
downtime, scrap rate and safety. It should be less for best maintenance practice, so best
maintenance practice got maximum point.
Point
Maintenance type
out of 10
Break down maintenance (BM) 3
Maintenance prevention (MP) 5
Corrective maintenance (CM) 6
Condition base maintenance
(CBM) 8

Time base maintenance (TBM) 8

DEGREE OF IMPORTANCE FACTOR COMPARISON TABLE
 Major Difference (3)  Cost - Avg.
 Medium Difference (2)  Safety- High
 Minor Difference (1)  MTTR -Very high
 No Difference (0)  Quality -High
 Severity factor- Very high
Evaluation Matrix Table
Cost Safety MTTR Quality Severity Total Adjusted
(A) (B) (C) (D) (E) weight Weight
A B2 C1 A1 E1 1 2
B C1 B2 E2 2 3
C C1 C2 3 4
D E2 2 3
E 3 4
 TABLE FOR PAIRED COMPARISON
Maintenance Safety MTTR Quality Severity Total
Cost (A)
type (B) (C) (D) (E) score
A (2) B (3) C (4) D (3) E (4)
BM 9 (18) 4 (12) 4 (16) 4 (12) 3 (12) 80
MP 8 (16) 7 (21) 5 (20) 6 (18) 5 (20) 95
CM 7 (14) 7 (21) 6 (24) 6 (18) 6 (24) 101
CBM 6 (12) 8 (24) 8 (32) 8 (24) 8 (32) 124
TBM 5 (10) 9 (27) 9 (36) 8 (24) 8 (32) 129

 The proposed processes for maintenance practice are based on weighted points scored
as shown in evaluation matrix table.
 And finally, Time base Maintenance practice get highest point, and alternately it
should be selected as a best maintenance.
 VALUE ENGINEERING IN NON-HARDWARE PROJECTS

Application of Value Engineering in the Field of Accounting

 It is an effective device to get price discounts due to the fact that its primary goal is
to identity the needless fees in a service or product. Reduction in price will give
greater income for a firm.
 Value Engineering objectives give maximum use price and Value price to
customers.
 It facilitates maintenance control due to the fact that value engineering inspects
strategies which will decrease the price and grow the worth of the items. It
guarantees the fullest viable use of assets.
 It promotes innovation and creativity. It induces the innovative function of the
workforce as it includes an innovative technique for locating needless fees.
 It creates right environment for multiplied performance.
 It is beneficial in any power to import substitution as it explores new strategies saving
valuable overseas exchange.
 Its objective is figuring out unwanted fees at any stage of product life cycle.
 Customers' wishes are high satisfactorily served with the assistance of value analysis as
its objective is to manufacture maximum appropriate products.
 VE in Maintenance and Logistics Activities
The absolute value of a product is impacted by it’s working, maintenance and other operations
costs. Lessening these expenses in acquisition cost brings about a lower life cycle cost and
ultimately improves the value of product.
Bigger potential reserve funds facilitates for the VE study and allows execution costs during the
functional stage.
VE studies in the functional stage have been exceptionally effective.
Applications and advantages of involving Value engineering procedures in Maintenance and
Logistics Activities are as per the following:
VE ventures can get profit from known impacts of field by using existing equipment only.
This is possible through VE study as it identifies and distinguishes areas of shortcomings that
would be troublesome or difficult to foresee during planning. It also facilitates for advancement
in alternative arrangements and proposes suitable enhancements.
A VE program can answer unanticipated issues that create after the plan is in execution
for example, early disappointment occurrences in the results, extreme recurrence of substitutions
in the plan, unnecessary expansions in the expense to fix the bottle necks, substitutions or changes
in mission (work).
 The VE approach can create, access and execute new and extended problem fixing
techniques to broaden the application and use of existing equipment, decreasing the
rejecting and removal rates, diminishing expensive and tedious handling, work on
assessment and testing strategies.
 VE can propose changes to specialized information like fixing manuals, quality review
measures and different principles, particulars and resilience (capacity to recover quickly)
for the inspection and examination, update, testing and acknowledgment of things going
through final level.
 It can distinguish the total tech information and disposes unnecessary without decreasing
fundamental execution principles of the end thing.
 Offer some benefit by designing counselling services to the leader and different
supervisors in the concerned departments which facilitates the greatest utilization of VE
procedures all through the association.
 VE uses current innovation in materials and strategies to further develop the unwavering
quality and practicality of by diminishing costs.
 INITIATING A VALUE ENGINEERING PROGRAMME

Organization willing to implement Value Engineering (abbreviated as VE )program needs

to impart necessary training to the employees regarding implementation VE program.
A training of appropriate level for almost each employee is necessary to make them
acquainted about their responsibilities for the success of the VE program.
Though VE concept can be understood easily but very few personnel are aware of VE
concept and its benefit to the organization.
Consequently, it is desirable that an organization planning to implement VE job plan must
undertake a planned program of VE training, in order to achieve sufficiently skilled
manpower to successfully implement a VE job plan.
Main objective of VE program is to convey to the personnel, the successful method of
implementing VE program in the organization and to improve Value Management skills of the
personnel.
The VE training program focuses on classical VE techniques with emphasis on successful
techniques for a specific application.
Importance of creativity, innovation and team work is emphasized throughout the training
program.
VE training program helps to develop the technical and analytical skills of the employees.
Thus, a good VE training program serves the interest of both management and the employees.
The VE training program is not same for each employer of the organization, hence different
level of VE training is imparted to each employee, depending upon the expected degree of
involvement of the employee in the implementation of VE job plan
 IMPLEMENTATION OF VE TRAINING PROGRAM
A systematic implementation of VE training program requires three attributes given below:
1)Training coordinator
2) Training plan
3) Training capability.
Training coordinator: A senior officer in the organization is formally appointed as a VE training
coordinator who is responsible for coordinating VE training throughout the entire organization.
A central coordination system helps and any conflict, duplication, ambiguity and dilution in the
VE efforts.
The major role of VE training coordinator is as follows:
To initiate appointment of one personnel from each department like design, manufacturing,
quality control, purchase, marketing who will be inducted as a VE team member.
To group personnel of each department based on category to be imparted to them.
 (2) Training plan:
A training plan is prepared for each group of training personnel which is decided by the
training coordinator.
A training plan usually includes:
i. A schedule for training for each category which indicates the number of days and hours per
day of training.
ii. The schedule also indicates the topics to be covered during the training program and the
venue for training program
iii.A procedure to assess the effectiveness of the training
iv. A method for developing in-house training capabilities (If they do not exist and if felt
necessary by the organization)
(3) Training capability:
The training imparted to the personnel can be provided in following ways:
 By in-house officers
 By in-house officers along with visiting faculty
 By professional bodies consultants
(i) Training by in-house officers:
In large organizations usually there exist a HR (Human Resource) Training
department which are involved in training of employees in the skills needed by the
organization.
The officers of HR department along with the heads of other department having
knowledge about VE may impart the training to various groups.
(ii)Training by in-house officers along with visiting faculty:
In certain cases organization may feel it important to invite experts from
professional bodies or academic institutes or individual consultant to deliver
lectures, to add to the training being imparted by the in-house officers.
This helps to bring new ideas from outside the organization.
(iii) Training by professional bodies/consultants:
 The organization may engage professional bodies or consultant or academic
institute to implement complete training program for each cadre of personnel
in the organization.
 Where no VE training capability exists, an in-house training capability may be
achieved by obtaining initial VE training outside the organization.
 Some of the professional agencies imparting professional VE training are
Indian Value Engineering Society (INVEST), SSA training solutions, SAVE
International etc.
 Upon completion of this outside training a VE training plan can be formulated
which satisfy the specific needs of the organization.
 The next step is to schedule the first in-house workshop utilizing the services
of one or more of the sources listed above.
 For subsequent training of other personnel large organization gradually
develop a complete in-house VE training capability.
 CATEGORIES OF TRAINING
There are mainly following six categories of VE training:
i. Limited training (Level 1)
ii. Intensive training (Level II)
iii.On the job training
iv. Training by rotational job assignment
v. Contractual training
vi. Informal training
The first two types of VE training are implemented by professional organizations, while
remaining four types of training programs organized and coordinated by in-house training/ HR
department of the organization itself.
It is not necessary for any organization to implement all is categories of VE training program for
all the employees, rather depending upon the size and scope VE Job plan/ project the employees
are grouped into two or three group sand each group is imparted different category of training.
(1) Limited training (Level 1):
Limited training is necessary for all the employees of the organization willing to implement VE
job plan
This training provides a basic foundation of the concepts of VE.
It is presented as mixture of lectures and application portion in the form of a workshop where
live cases are discussed.
The duration of the limited training program is around 30-40 hours.
The training program is tailored, based on the specific requirements of the organization, but
usually following topics are covered during the lecture.:
Objective of VE program
Expected outcome of VE
Concept of VE program
Terminology related to VE
Principal VE methods
Criteria for applying VE
Organization and operation of VE (VE job plan)
Contractual aspects of VE (Introduction)
Case studies
Receive Level 1 certificate from certification authority like SAVE
(2) Intensive training (Level II):
Intensive training is meant for those employees/personnel who are expected to play the key
role in the implementation of VE job plan.
Usually five-seven member team is appointed as VE team.
One each from design, manufacturing, finance, marketing, purchase etc.
This team shoulders the responsibility of the success of VE program and hence are eligible
for undergoing intensive training.
The duration of intensive training program is around 30-40 hours.
Limited training (Level 1) is considered as prerequisite for attending Intensive training.
The training program is designed to provide advanced knowledge about VE concepts and
its implementation.
The program broadens and reinforces understanding of each participant regarding VE job
plan.
The following topics are discussed and explained with suitable illustration and case studies
Objectives of VE program
Method of implementation of VE program
Function analysis (Primary and secondary)
 Preparation of FAST diagram
Evaluation of cost
Evaluation of worth
Estimation of Life Cycle Cost
Methods of creativity
Phases of VE job plan (Orientation, information, function, creation. evaluation, investigation,
recommendation and implementation)
The intensive training program is usually organized by professional bodies or consultants or
academic institute who have wide experience in implementation of VE program. VE training
program is organized in the form of workshop/seminar
(3) On the job training:
 This is a less formal learning where the individual employee is guided by the value
analyst during the office hours only.
 On-the-job training is arranged and coordinated by big organizations which have well
established setup to impart training and well qualified trainers for the purpose of
training.
 This is the most practical way of practicing and learning VE methods to work.
 They apply the methodology under the guidance of qualified value specialists
(trainer) and are given the opportunity to learn how to apply basic skills to specific
and productive work assignments.
 In this way, the trainee can be productive while in a training status.
 The employees identified for the training are required to meet the trainer periodically
and produce a periodic report of what they have been doing.
(4) Training by rotational job assignment:
Such assignments are frequently used in conjunction with on-the-job training.
This is a kind of individual training where there is no formal teaching-learning in class
rooms.
The "trainee" value specialist is deputed to various departments of the organization for
limited period of time.
These departments may include manufacturing estimating, methods engineering,
design engineering, etc.
Exposure to other organization departments broadens the individual's perspective and
leads improved understanding of the complex nature of product value.
As a corollary to this, many companies schedule each of their management trainees for
an assignment to the VE staff.
These assignments tend to increase the level of understanding between the VE staff
and middle management.
(5) Contractual training:
Certain aspects of VE in the defence environment of certain countries require specialized
knowledge of contract management and administration
Training programs to educate personnel in these areas are also necessary.
In some of the countries Government encourages industry to challenge unrealistic Government
requirements and specifications to increase profit by submitting Value Engineering Change
Proposal (VECP) under VE contract clauses.
These clauses are unlike other contract incentives that reward efficient performance according to
the stated terms of the contract.
VE contract clauses reward the contractor who proposes acceptable changes to the contract that
will result in equal or better but lower-cost defence products.
These changes are mutually advantageous to the Government and the contractor because both
share the resultant savings.
These are known as DoD (Department of Defence) VE contract clauses and these clauses
encourage entrepreneurship by rewarding contractors equitably for their initiative in developing
VECPS.
The need for training those personnel responsible for the administration of these incentives was
recognized.
A number of courses both within and outside the Government are now offered to explain the
concept and operation of the VE clauses of DoD (Department of Defence)
 6) Informal training:
Some organizations choose to train personnel for VE through less formal methods than those
previously discussed, or to supplement formal training programs with informal training devices.
Some of these informal training approaches are:
(i) Handbooks and manuals are a means of bringing about a climate of cost awareness
throughout the organization.
The manual can be used to demonstrate how to perform VE while the handbooks provide cost
data relating to trade-off possibilities, process information, etc.
(ii) Bulletins and newsletters, distributed periodically, containing a section devoted to VE
methodology.
They act as continuing reminders to employees about the need for better value.
(iii) Technical meetings at which VE films or speakers from other facilities are presented.
(iv) Displays of successful VE case histories may be placed on bulletin boards and other
locations throughout the organization.
Some organizations have extensive displays in lobbies, visitor and personnel reception rooms,
etc.
CAREER DEVELOPMENT FOR VALUE ENGINEERING SPECIALTIES
An engineer can develop a career as VE specialist and can pursue contractual work
large, medium and small scale organization.
In some countries, Department of Defence has an annual honorary awards program
for VE.
 The awards program is intended to acknowledge those individuals, program
managers, organizations, contractors and VE specialists, whose VE efforts were
exemplary and resulted in substantial savings benefits during a particular fiscal year.
A typical Value specialist has a degree in a related discipline or the equivalent years
of experience.
For those, who are to be trained as fulltime VE specialist, it is reasonable to require
related academic training, in order to enter the field and be able to develop at a
reasonable pace.
To be successful, a value engineer must exhibit professional competence and be able to
present ideas with tact and diplomacy.
An effective VE program depends on the skills and persuasiveness of the value engineer to
establish close working relationships with all personnel concerned with value.
Thus, communications skills should be considered when selecting those who are to be trained
as full time VE specialist.
A training program for a Value specialist would normally consist of completion of a formal
40 hour VE training seminar, participation in at least ten VE studies and general experience
in VE of at least four years.
A Certified Value Specialist (CVS) would typically possess at least these qualifications.
CVS certification is administered by the Society of American Value Engineers (SAVE) and is
an accepted standard of competence in the field.
Experience in the design, construction and operation of buildings of similar nature, scope and
complexity as those contemplate is desirable.