1-Value Engineering Methodology in Construction by Mr. Fadi Elayache

Value Engineering Methodology In Construction

Fadi Elayache, Dubai 2010 Fadi Elayache, Dubai 2010 1

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Alliances

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What is Value Engineering?How Do we Apply VE?When is it used?Value Engineering Six Steps Plan?VE Case Studies

Overview

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Originally called Value Analysis by its inventor, Larry Miles, an engineer in GE's purchasing operation in 1947, VA/VE uses a value equation that says value is equal to function divided by cost. If, for example, the buyer wants to get more item value, he/she needs to either increase the item's functionality at the same time he/she is containing cost; or he/she needs to reduce cost while holding or improving its functionality. Either way, the result is more value for the customer

Ref: Purchasing Magazine - "Value Analysis makes a comeback," Jim Morgan, November 20, 2003.").

Value Engineering the Forgotten Technique

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Value Engineering (VE) is an intensive, interdisciplinary problem solving activity that focuses on improving the value of the functions that are required to accomplish the goal, or objective of any product, process, service, or organization.

VALUE METHODOLOGY“The systematic application of recognized techniqueswhich identify the functions of the product or service, establish the worth of those functions, and provide the necessary functions to meet the required performance at the lowest overall cost.”

Ref: John M. Bryant, VM Standard, Society of American Value Engineers, Oct. 1998

What is Value Engineering?

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VALUE =

FUNCTION

COST

Concept of Value

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Ideal Good Acceptable Passable

Value = Function

Cost

FunctionCost

Concept of Value Desirable

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Value = Function

Cost

FunctionCost

Undesirable but Passable

(cheapening the product)

Concept of Value Undesirable

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When Value Engineering is Used

Value Engineering is used to determine the best design alternatives for Projects.Value Engineering is used to reduce cost on existing Projects.Value Engineering is used to improve quality, increase reliability and availability, and customer satisfaction .Value Engineering is also used to improve organizational performance.Value Engineering is used to improve scheduleValue Engineering is used to reduce riskValue Engineering is a powerful tool used to identify problems and develop recommended solutions.

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Net Savings from VE

Total Cost of VE Implementation

Concept DesignConstruction Dwgs Release Construction

Drawings Released Design Changes

Re-Test Feasibility

VE Implementation beyond this point results in a net loss.

Potential Saving from VE

Cost

TIME

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Value Study Diagram

Information Phase

Information Phase

Creativity Phase

Creativity Phase

Evaluation Phase

Evaluation Phase

Development Phase

Development Phase

Reporting Phase

Reporting Phase

* Clearly identify the problem(s) to be solved, and gather information on the background, functions and requirements of the project.

* Clearly identify the problem(s) to be solved, and gather information on the background, functions and requirements of the project.

* Brainstorm ideas on how to improve the high cost, broken, or inadequately performed key functions.

* Brainstorm ideas on how to improve the high cost, broken, or inadequately performed key functions.

* Screen ideas for acceptance, score remaining ideas on a scale and group ideas into categories. Develop design scenarios, and selection criteria. Rate and rank ideas.

* Screen ideas for acceptance, score remaining ideas on a scale and group ideas into categories. Develop design scenarios, and selection criteria. Rate and rank ideas.

* Plan how to sell ideas to management, identify key recommendations, plan management presentation.

* Plan how to sell ideas to management, identify key recommendations, plan management presentation.

* Give oral presentation to management, or develop written report.

* Give oral presentation to management, or develop written report.

Functional AnalysisFunctional Analysis

* What must the project do? What are the functions and how are they related?

* What must the project do? What are the functions and how are they related?

Six Steps VE Plan

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Information Phase Facts Finding

What do you need to know about the problem that you don’t know now?

What facts are known?

What are the requirements of the system?

Are these facts, opinions, assumptions, or prejudices?

Where or how can information be obtained?

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Functional Phase

Functions - Describe what something doesFunctions - Use active verb and measurable nounFAST (Function Analysis System Technique) - A logic diagram to describe how a system works.Examples :

Secondary Functions1 Plan Finishing Material2 Magnify Living Room Area3 Reduce Wall Thickness4 Design Exposure5 Minimize Defect6 Design Finishing

Key Function :Satisfy Tenant

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Function Analysis

Secondary Functions1 Design Unit Plan2 Put Cavity Wall3 Control Temperature4 Minimize Exterior Surface5 Execute Natural Ventilation6 Maintain Cleanliness7 Supply Air Conditioner8 Keep View9 Install Insulation10 Control Humidity

Key Function :Maintain Facility

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Secondary Functions1 Supply Pipeline Space2 Design Ventilation Space3 Provide Elec. Pipe Space4 Add Sewage Space

Secondary Functions 1 Arrange Wall2 Collect Opinion3 Install Art

Function Analysis

Key Function :Install Equipment

Key Function :Design Interior

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Creativity Definition

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Creativity is the art of bringing something new into existence.

It has the art of making, inventing, or producing something new and different.

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You must blast before you can create. Blow apart the misconceptions, skeptics, and naysayers. Blow-up the preconceived ideas and common theories of how things should be done. Rather, focus on possibilities.

J. R. Wixson - 2004

Creativity & Innovation

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Imagination

Imagination is more important than knowledge, for knowledge is limited, while imagination embraces the entire

world.Albert Einstein

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Thought of the Day

When you always do what you have always done - you always get what

you have always gotten.Socrates

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IDEAS Vs Solutions

A solution requires justification & validation, and idea needs no justification.A solution is an end point, an idea is just the beginning.A solution is solid and self supporting, an idea is tender and must be built upon.

DON’T KILL IDEAS WITHROADBLOCKS!!

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INNOVATION"... after a few more flashes in the pan, we shall hear very

little more of Edison or his electric lamp. Every claim he makes has been tested and proved impracticable." [New York Times, January 16, 1880]

AEROSPACE"Heavier-than-air flying machines are impossible."

[Lord Kelvin, president, Royal Society, 1895] "Airplanes are interesting toys but of no military value."

[Marechal Ferdinand Foch, Professor of Strategy, Ecole Superieure de Guerre]

Information for Skeptics

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Information for Skeptics

COMPUTATIONAL SYSTEMS"I think there is a world market for maybe five

computers.“, [Thomas Watson, chairman IBM, 1943]

"There is no reason anyone would want a computer in their home." [Ken Olson, Chairman and founder Digital Equipment Corp., 1977]

"640K ought to be enough for anybody." [Bill Gates, 1981]

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Counter Skepticism

Tilt-up Construction is an innovative construction method that will replace traditional construction of low and mid rise buildings in the Middle East within few years

Fadi Elayache 2010

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Aluminum Honeycomb System is an Innovative Solution for Stone Cladding of High Rise Buildings

Vincenzo Portciello, 2010

Counter Skepticism

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Mateen-bar will replace steel reinforcement in structures exposed to aggressive environmental conditions in the

Middle-East , Fadi Elayache 2010

Counter Skepticism

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Rules of Brainstorming

Generate a large number of ideas - quantity, not quality.Free-wheeling is encouraged - Listen and improve on the ideas of others.Don’t criticize - No evaluation of ideasEncourage everyone to participateRecord all ideas presentedTime to let ideas “incubate” should be allowed.Select an appropriate meeting place

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More Creativity

Creative Ideas & Innovative Solutions Will

be covered in the VE Case Studies

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Evaluating Ideas

GO - NO GO−Scratch ideas that hold no interest.

CHAMPION−Who will speak for the ideas and support them?

GFI (Gut Feel Index)−Discuss pro/con and vote. GFI is team average.−Combine ideas; add new ideas.−Record all assumptions when voting.

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Performance Comparison

Performance Comparison Matrix

Criteria Option A Option B Option C Option D

Roof StructureConstructability 1 2 3 3Weather Resistance & Durability 1 2 3 3

Thermal Resistance 1 1 3 3

Fire Resistance & Safety 2 2 3 3

Flexibility in Applying Finishes 1 2 3 3Score 6 9 15 15

Roof FinishesMaintenance 2 2 2 2

Aesthetics 2 2 2 3Ease of Installation (skilled labor requirement) 2 2 2 1

Score 6 6 6 6

Total Score 18 24 36 36

1= Acceptable2= Good3= Excellent

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Cost Comparison

Option A Cost Estimate - Curved Steel Beam + FRP Cladding

Description Unit Quantity

Unit Cost

(AED)

Total Cost (AED)

Roof Structure: Curved Steel Beams + Purlins + Intermediate Steel Members

ton 120 28,000 3,360,000

Metal Deck sqm 1,520 350 532,000

CIP Concrete (150mm) sqm 1,520 80 121,600

Waterproofing + Rigid Insulation Boards + Protection

sqm 1,520 85 129,200

FRP Panels sqm 1,520 400 608,000

F.C. Suspension System ton 30 28,000 851,200

F.C. Gypsum Board sqm 1,194 100 119,400

Sub Total 5,721,400Total (including 15% Contractor's Prelims, Overhead & Profit)

6,579,610

Option D Cost Estimate - PT Concrete Slab + FRP Cladding

Description Unit Quantity

Unit Cost (AED)

Total Cost (AED)

Roof Structure: Post Tension Concrete Roof Slab

cum 389 3,100 1,205,900

Waterproofing + Polyurethane Foam Insulation + Protection

sqm 1,520 85 129,200

FRP Panels sqm 1,520 400 608,000

F.C. Suspension System sqm 1,194 100 119,400

F.C. Gypsum Board sqm 1,194 100 119,400

Sub Total 2,181,900Total (including 15% Contractor's Prelims, Overhead & Profit)

2,509,185

Cost Saving of 4 million AED

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Development Phase

PlanningWhat is recommended?Who has to approve it?What is the implementation plan?Are mockups or prototypes required to verify final decisions?What are the cost, schedule, and deliverables?ROI?

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Action Plan

“What needs to be done?”“Who should be assigned the action?”Assign a team member.Assign a completion date for the action.“When should the task be completed?”Plan regular team status meetings.Anticipate 4-6 weeks to complete the actions.

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Plan for Roadblock

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Reporting

Give oral presentation.Support it with written executive brief.Be clear, concise, and positive.Anticipate roadblocksUse good human relations.

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Follow –up Activity

Recognize the participants.Publicize the results.Audit the performance of the implemented actions.Close out the project.

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Case StudiesReplacing Piles with Footings

1- Cost Savings = 1,119,000 AED

2- Time Saving = 2 months

3- Easier, tidier and safer construction

Worked Performed:

Replacing 43 piles

with isolated footings

outcome

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Case Study- Resizing & relocating Water Tank

1- Cost Savings = 7,930,000 AED

2- Time Saving = 3 months

3- Easier, tidier and safer construction

4- Regain Land space

Worked Performed:

1- Reducing size from 14,384 to 7000 m3

2-Remove 100 piles

3- Minimize depth to avoid excessive

excavation in sandstone layer

4- Relocate WT Under footprint of Bldg

outcome

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Case Study- Lagoon Depth, walls & liners

1- Cost Savings = 8,338,600 AED

2- Time Saving = 2 months

3- Easier constrction

Worked Performed:

1- Reducing depth by 1.25 m about 50000 m3

2- Replace CIP Reinforced Concrete walls with Pre-cast panels

3- Incorporate underwater theming within pre-cast panels

4- Use Double liners instead of concrete floor with 2 stages installation

5- Introduce leakage detection system in lagoon bottom and behind wall

outcome

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Case Study- Lagoon Depth

Five pits were used instead of one To reduce Lagoon Depth by 1.25 m and achieve more effective collection of sediments

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Case Study- Lagoon Walls

Recommendations for the 1675 m long lagoon perimeter:

1- To Use Gravity Precast panels Instead of CIP reinforced concrete walls

2- To use 6 Deg tilted walls instead of vertical walls to reduce footing sizes

3- Incorporate theming in Underwater precast Panels to reduce cost

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Case Study- Floor Liners

Recommendations for the 40000 m2

Floor 2 liners instead of one liner and concrete floor:

1- To Use double liners, one 1.5 mm and the 2nd 0.5mm thick separated with granular layer

2- To provide leakage detection system as shown

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Case Study- 40 m Dome Structure

Recommendations for the 30 and 40 m LH Domes

1- To use PT Concrete curved Roof instead of Steel

2- Eliminate Fire Proofing

3- Reduce Thermal Insulation

4- Reduce Suspension System of False Ceiling. outcome

1- Cost Saving of 4,385,065 + 2,466,600 for the 40 and 30 m Domes respectively

2- No Time impact

3-Similar construction Risk

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Case Study – Displaced Cooling

Recommendations for Air Displacement System

1- To use Conventional Ventilation Instead

2- To reduce interference Among trades

3- To manage risk of potential scheduling conflict

outcome

1- Cost Saving of 891,625

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Our VE Services

We Partner With Consultants & Developers to provide: Value Engineering Services for all project Phases,

Conceptual, Design, & constructionIn House Training of Project Team for Value Engineering

Analysis

We partner with Contractors for:Preparation of value Engineered alternatives

proposals at the tender stageProposing Value Engineered alternatives during

construction.

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References

1. “Value Standard and Body of Knowledge “; Save International, June 2007

2. J.R. Wixon, “ Value Engineering The Forgotten Lean Technique”, University of Idaho, Industrial Technology Program.

3. J.Jerry Kaufman & Jimmie L. Carter “ Evaluating Brainstorming Ideas”1994

4. Chi-Sung in et al, “Hierarchical Concept Modules for improving Function Analysis of Construction VE Process,”

5. Fadi Elayache, “ work Experience with Parson Brinkerhoff ME, Sr. PM Theme Park”, 2008

Thanks