VM is:

• Systematic
  
• Function oriented (defines purpose)
  
• A multidiscipline team analysis
  
• Customer priority driven

• Analyze prevailing solutions
  
• Explore alternatives
  
• Develop cost-effective innovations
  

Savings range from 5% to 100%

Value methodology techniques can be effectively applied to any project, process, procedure or service for improved competitive position and profitability.

Benefits of the Value Methodology

• Clearly define project scope and budget
  
• Use resources more effectively
  
• Increase revenue
  
• Reduce product development costs and lead time
  
• Reduce project construction costs
  
• Reduce operation and maintenance costs
  
• Simplify procedures and reduce paperwork
  
• Streamline processes and reduce waste
  
• Develop innovative solutions
  
• Increase collaboration among stakeholders
  
• Increase procurement efficiency
  
• Improve quality
  
• Implement lean initiative
  

Analysis of Functions

The VM job plan organizes the value study into six phases:

• Information: collect and understand the project needs
  
• Function Analysis: defines what it does to meet customer needs
  
• Creative: search for new ways to achieve functions
  
• Evaluative: rank ideas against specific criteria
  
• Development: expand ideas into alternatives
  
• Presentation: report findings of team to owner
  

Each phase is designed to prepare the VM team to be creative with ideas and to develop those ideas into viable alternatives for consideration. The team normally assigns a champion to each proposal. The implementation phase must follow the VM study to assure that the best alternatives are used and cost impacts are recorded.

While every business and industry must use VM to meet that industry’s unique requirements, the basic goal is to improve value, as defined by the simple expression:

The importance of this definition is that value can be improved in several ways:

• Reducing cost
  
• Increasing functionality (performance, worth)
  
• Reducing cost and increasing functionality
  

VM practitioners strive to always maintain or increase functionality; reducing functionality while reducing cost is not acceptable, unless functions are being performed that the customer does not want or is not willing to pay for. Profitability can be improved by all three ways of improving value, but the intended use of the value methodology is to improve the performance of the product, process, facility, system or service at lower cost, thus helping companies realize a higher profit.

“DuPont’s senior management is committed to VE, and so we’ve formally used VE on over 330 projects for improving our new and existing chemical processes. VE has saved 10%-12% of the investment for all these projects combined, and has elevated us to best-in-class for project cost as measured in industry benchmarking analyses.”

The value methodology originated in the U.S. industrial community in the 1940s as a way to identify alternatives to materials that were in short supply due to the rationing during World War II. Though the value methodology was introduced by one man working for one company, it has grown in the late 20th century so that it is now used worldwide and is currently applied to all kinds of intellectual and physical efforts in business and industry. VM has consistently yielded a large return on investment while maintaining necessary quality and performance requirements of the product, process or facility studied. Billions of dollars have been saved with VM.

VM is embraced by a wide spectrum of businesses and industries, from automobile manufacturers to chemical processors, from aircraft companies to electronics firms, from appliance manufacturers to pharmaceutical companies. Benefits realized by companies who use VM far exceed the cost of implementing VM programs. Savings in time and cost contribute to improving an organization’s competitive position in the marketplace and to increasing its profitability for stockholders.

VM has been traditionally applied as a problem-solving tool to reduce unnecessary costs while improving performance. VM also can be used to set goals and performance plans at the start of a new project. Rather than wait for problems to develop in poorly defined projects, VM is used to identify the owner’s true functional requirements so the project begins with a clarity of purpose. VM is used in conjunction with target costing strategies.

The value methodology has proven to be a team-oriented, creative, systematic, function-oriented approach that enhances decision making, improves products, processes and facilities, and increases customer satisfaction. It can also be used for strategic planning and developing an organizational structure.

Initiation of your VM program requires drafting and approving a VM policy that includes statements of objectives, leadership, staffing, training and-most importantly-management support. SAVE International can provide you with the resources to establish and maintain a VM program in your organization.

“Value Analysis/Value Engineering has been a part of my life for well over 20 years. After leaving General Motors and consulting in VE around the globe, I have seen first hand that this irreplaceable methodology when properly applied leads to substantial value improving opportunities. Many companies state that their situation is different and unique, but I have found that all organizations in manufacturing and service share the same problems and thus the same opportunities. I have seen exact analogies of problems and issues that were encountered at General Motors, wherever I work. VM can and does get to the bottom line.”

“TRW Automotive has found that Value Management has been a very useful tool to improve performance, technical innovation, and customer satisfaction as it has been expanded throughout the majority of the company’s products and processes.”

“Within the Engineering organization of Pratt & Whitney, our experience and success with Value Management (VM) has progressed and we are more and more comfortable with where, how and to what degree VM can be effectively applied to a particular situation. We’ve found that by applying the discipline and tools of VM to the process of how we validate VM deployment, we’re able to increase our returns. I like to think that VM is part of our overall toolkit for helping us work smarter and more efficiently while ensuring we’re meeting and exceeding our customer expectations.”

“We start with Value Engineering. It defines the problem and generates solution options. It’s the key to speed.”

Value Methodology Training

The educational requirements leading to certification by SAVE International consist of two training courses. The first is Module I (40 hours) - the basic workshop. It provides the primary value technology training and practice of the individual skills, using live projects. The second is Module II (24 hours) - the advanced seminar. It continues the technical education beyond the basic workshop and presents leadership and management material concerning the value methodology.

SAVE International can help you locate a wide range of courses provided by private companies specializing in the value methodology field. Please contact SAVE International headquarters for current dates and locations of VM training courses, as well as information about the certification program.

Learn About the Value Methodology

SAVE International is a professional society dedicated to the advancement of the value methodology through education. Its goal is to generate understanding of the principles, methods and concepts of the value methodology technology.

SAVE International offers:

• Consultants Directory
  
• Team Member Listing
  
• SAVE Website
  
• Value Publications
  
• MILES Value Foundation
  
• College and University Courses
  
• SAVE Approved Training Courses
  
• SAVE Annual Conferences
  
• SAVE Standard Methodology
  
• SAVE Body of Knowledge
  
• SAVE Bookstore
  
• Transactions from Previous Conferences
  
• Value World Technical Papers
  
• lnteractions - Monthly Informative Up-to-Date Information on the Value Organization Activities
  
• Research Papers
  
• Corporate Advisory Panels