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Mohammed Ali Berawi, M.Eng.Sc, PhD

Faculty of Engineering

University of Indonesia

Indonesia

email. maberawi@eng.ui.ac.id

Editor-in-Chief Value World

Journal of the Society of American Value Engineers (SAVE) International

http://value-eng.org/education_publications_value_world.php

International Journal of Technology

Faculty of Engineering - University of Indonesia

www.ijtech.eng.ui.ac.id

Editorial Board Member:

International Journal of Construction Project Management (Nova Publishers, Canada)

International Journal of Project Planning and Finance (CIDI, Ghana)

Journal of Construction Engineering and Management (ASCE, USA)

Journal of Engineering, Design and Technology (Emerald, UK)

International Journal of Quality and Reliability Management (Emerald, UK)

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Introduction

All products/projects involve the allocation of scarce resources and when complete, need to satisfy a range of users’ requirements.

The philosophy and techniques of Value Engineering/Value Management (VE/VM) provide a structured approach to the examination and development of a product/project which will increase the likelihood of achieving these requirements at optimum value for money.

Background

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Value Management is a holistic approach that plays a key role in the construction industries quest for continuous improvement and innovation. This initiative is applied both to the strategic planning of the business, improvement in performance in addition to delivering Best Value.

The benefits Value management programmes have assisted in achieving value improvement for major clients such as BP, Retail, British Airways, BAA, Pfizer, Stanhope, and water and rail companies. Substantial improvements have been achieved in the return on investment of capital projects, up to 50% improvement in capital productivity

How is best value achieved? The key to delivering Best Value projects for clients in the construction industry is to run a tight ship, with senior management supervision and clear direction. In particular to ensure that project teams have:

► An understanding of the key business needs and success criteria of clients, users and stakeholders;

► A clear performance brief in terms of value objectives;

► The skills needed, and further training if required;

► An effective team with good communications; and

► The will to eliminate unnecessary costs, and to seek innovative solutions

Source: http://www.ivm.org.uk

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VM studies in construction save millions

Construction projects face many challenges: budget constraints, safety issues, environmental impact. By applying the value methodology to construction projects, highway and transportation departments saved U.S. taxpayers $1 billion in 2000 by:

► Reducing project construction costs

► Decreasing operation and maintenance costs

► Simplifying procedures

► Improving project schedules

► Reducing waste

► Increasing efficiency

► Using resources more effectively

► Developing innovative solutions

► Meeting federal and state laws requiring VM

"Value engineering demonstrates President Clinton’s commitment to common sense government. Federal programs like this allow [the U.S. Department of Transportation] to work with state and local governments to build roads that are safe, to stretch the buying power of federal dollars and, in some cases, to complete roadway projects ahead of schedule. ... Value engineering is beginning to pay off literally, and states that have developed active programs are finding the results well worth the investment."

— Rodney E. Slater

U.S. Secretary of Transportation

Source: http://www.value-eng.org

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Value Engineering/Value Management (VE/VM) is an innovation

methodology that applying functional theories.

Functional concepts is an important for creativity and innovation (Vermaas &

Houkes, 2003).

Identifying functions enables alternative ways in the act of product creation

and innovation (Woodhead & Berawi, 2006).

Therefore the study and articulation of function is central to innovation.

FAST (Function Analysis System Technique) is a method to represent

complex theories of functioning in Value Engineering/Value Management.

Background

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Phenomenon:

NASA Story

Sun Flowers – Teleological Function

Bridge – Etiological Function

Rolex

Background

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Value Management Definition - AS/NZS 4183-1994

A structured and analytical process which

seeks to achieve value for money by

providing all the necessary functions at

the lowest total cost consistent with

required levels of quality and

performance

Definition from: Australian/New Zealand Standard

for Value Management AS/NZS 4183:1994

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Valu Engineering: o Multi-disciplinary Team Approach; o System innovation oriented; o Life Cycle oriented; o Function oriented.

What is Value

The value of an item must not be

based on its price but rather on the

utility which it yields

Bernoulli D. (1738)

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Value and Cost Sources: Central Unit on Procurement, HM

Treasury, UK

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Job Plan

The job plan is conducted in eight sequential phases (which may overlap in practice) as follows:

1. Orientation Phase

2. Information Phase

3. Function Analysis Phase

4. Creative Phase

5. Evaluation Phase

6. Development Phase

7. Presentation Phase

8. Implementation Phase

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Improve human life

quality

Stimulate(regional)

culture

Improve culture level

Increase tourism

Stimulate Economy

Attract public Provide amusement

Increase land valueDevelop vacant

public land

Host cultural

events

(see FT-1)

Display art

(see FT2)

Create Museum

Provide

Landmark(should

change to

Function= Identify

Facility Use, see

FT-3)

Protect Facility

Provide related

services

Provide

additional

services

Feed visitors

(see

information in

Test approach

#2)

Relax Visitors

Make sculpture

Make symbols

Display creek beauty

(added: Higher Order

Function+ "Beautify

Facility Surroundings"

see FT-6

Enclose space Build structure

Cross Creek(bldg)

Energize

Equipment

Mechanize

Equipment

Service Occupants

(See Functions to the

right)

Furnishing Occupant’s

Space

(need to provide more

breakdown)

Allocate Occupants

Space

Partition

Occupant’s Space

Support Structure

Weight

(Substructure)

Prepare Site

(see Functional

Breakdown, below)

Provide people

access

Determine soil

conditions

Locate

underground

facilities

Connect services

(to trunk lines)

Control

surface water

Landscape outside

HOW?WHY?

Enclose (More)

Space

Drain Building

(Plumbing)

Convey People and

Goods (Elevators &

Lifts)

Heat, Cool and

Ventilate Visitors

(HVAC)

Safeguard Visitors

from Fire

FAST DIAGRAM

DAEGU MUSEUM

TEST FOR FUNCTION, PROCESS, OBJECTIVE AND

OUTCOME

FAST DIAGRAM

DAEGU MUSEUM

TEST FOR FUNCTION, PROCESS, OBJECTIVE AND

OUTCOME

LEGENDLEGEND

WHEN (CAUSED BY)?

Control sheet

runoff

Control(valley)

water

Scope Line

Determine

desirable

services

FUNCTION

PROCESS

REMOVE

PURPOSE

OUTCOME

FUNCTION BROKEN

DOWN – per Bubble

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Prevent Theft,

Prevent

Vandalism",

"Secure Entrance",

"Provide Internal

Vigilance"

SERVICE UNMET

NEEDS

(See FT-6)

Finance Facility

Design Facility

Construct Facility

Lease Facility

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ACCOMMODATE

NEEDS

OCCUPY

SPACE IMPLEMENT

MOVE LEASE

SPACE

RE-ARRANGE

SPACE

ALLOCATE

SPACE EXECUTE

PLAN

CREATE

PLAN DEFINE SPACE

REQUIREMENTS

ASSESS COMMUNICATION

NEEDS

DETERMINE

TRAFFIC

PATTERNS

DEFINE

SECURITY

REQMNTS.

DEFINE

SAFETY

REQMNTS

DETERMINE

ACTIVITIES

ANALYZE

RESOURCE

NEEDS

FORECAST

POPULATION

GROWTH

IDENTIFY

GROWTH

DEPARTMENTS

CONFIRM

HEADCOUNT

CONSTRUCT

SPACE

RESOLVE

CONFLICTS IDENTIFY

PROBLEMS REHEARSE

MOVE

INVOLVE

PARTICIPANTS

HOW WHY

WH

EN

FUNDING

APPROVAL

GATE

FACILITIES

SPACE PLANNING

OCCUPYING DEPT’S

RESOURCE PLANNING

MARKETING

SECURITY

SAFETY/FIRE

PROCUREMENT

PERSONNEL

COMMUNICATIONS

INFO. SYSTEMS

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2 3 4 5

6

7

8

9

10 11 12

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15

16 17

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19

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INVENTORY

FURNITURE

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1

6

17 1

8

19 20 21 22 23 24

FACILITY PLANNING

LAYOUT

OFFICE

SPACE

PROCURE

CAPITAL

EQUIPMENT

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2/10

2/01 2/30 3/15

4 Months

BOLD type = Core Team

= Moved to action

= Responsiblility

Sample from J.J Kaufman Associates, Inc.

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Example- Mobile Phone Function

Breakdown

COMPONENTS HOW WHY

Supply energy

Display information

Transmit sound

Enable control

Battery

Speaker

Contrast symbol

Button

Operate speaker

Antenna

Convert energy

Transmit movement

Screen

Enable Network-access Receive signal

Microphone Transmit sound Send data

SIM-card Control access Connect provider

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Function Analysis System Techniques

Communicate

information

Send

information

Operate

mobile

Receive

information

Supply

energy

Set

component

HOW WHY

Connect

provider

Enable

control

Enable

Network

Right Scope Line Left Scope Line

Exchange

information

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Function Analysis System Techniques

Exchange

information Communicate

information

Transmit

sound

Convert

energy

Send

information

Receive

data

Operate

mobile

Send

data

Dispatch

sound

Display

Information

Receive

information

Supply

energy

Set

component

HOW WHY

Connect

provider

Active

mobile

Transmit

movement

Press

thumbs

Contrast

symbol

Enable

control

Control

access

Enable

Network

Operate

speaker

Operate

microphone

Receive

signal

Right Scope Line Left Scope Line

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Identifying Function with Deterministic Analysis

A static dimensioning approach is to share the measure out evenly over the functions involved

Part Cost

Item A

Item B

Item C

Item D

£100

£ 200

£ 300

£ 50

50 50

50 50 50 50

100 100 100

10 10 10 10 10

Total Cost

£ 650 60 10 60 110 210 150 50

Source: McCuish & Kaufman (2002), Value Management & Value Improving Practices, SAVE International Conference Proceeding.

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Source: McCuish & Kaufman (2002), Value Management & Value Improving Practices, SAVE International Conference Proceeding.

Source: McCuish & Kaufman (2002), Value Management & Value Improving Practices, SAVE International Conference Proceeding.

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Value engineering has been widely

used with project management body of

knowledge as a technique in which the

value of a system’s outputs is optimised

by crafting a mix of performance

(function) and costs.

In most cases this practice identifies

and removes unnecessary expenditures

and proposes alternatives solutions,

thereby increasing the value for the

manufacturer /constructor and/or their

customers.

Value Engineering and Project Management

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Innovation has seen as:

Idea generation in the creativity stage

(Oetinger, 2004; Birdi, 2005)

formalization processes (Bodewes, 2002)

the successful application of

concept in terms of output or product

(Cumming, 1998)

Innovation Management

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Conceptual World

Purpose

Outcomes Processes

Functions

Real World

Intentionality

Causality

The relationship between Functions, Processes, Outcomes and Purpose

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Introduction

Functional thinking enables Innovation

Conceptual World

Purpose

Outcomes

Functions

Real World

New Purpose Extended Function

Alternative

Processes

Processes B

Processes A

Causality

Intentionality

Recognition of processes in

relation to functions leads to

ideas. Further, this can be

extended to suggest new

functions and new purposes.

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Try building your own Function Model

Components

Chair Leg

4 x chair legs

Seat

Back Rest

Design Style

Function

Method 1. Observe a real world ‘thing’

2. identify its function

3. Build in the How direction

4. Test in the Why direction

5. Refine your explanation

6. Ask how will customer value steer your choices

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Introduction

Extended Functions Vs Innovation

Woodhead & Berawi, 2006

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Introduction

Functions forming Processes & Outcomes

As identifying functions enables us to propose alternative ways to perform those

functions in the act of idea generation, an ‘extended function’ will set a new context

(purpose and goal) of a system. It also leads to an improvement of products.

The ability to consider alternative ways or processes that could perform the same work

with added benefit stimulates enquiry and further exploration of the origin of ideas.

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INNOVATION

SMART TUNNEL “Stromwater Management and Road Tunnel

RELEASE TRAFFIC JAM

DISTRIBUTE WATER

PRODUCE ENERGY

Green Building to produce renewable energy

REDUCE ENERGY

CONSUMPTION

Bahrain World Trade Center;

wind turbines

Green Skyscraper in Dubai,

wind turbines and solar panels

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The design of Sunda Strait Bridge (JSS) can

be improved through creating additional

functions that generate added value to the

project.

The additional functions that can be created to

increase the value of the construction of JSS,

among others, are creating tourism industry

by adding hanging train/cable car to the

surrounded islands so the passengers can

enjoy the sea view attractions around from a

height of 70 meters, inserting fiber optic cable

to improve the information and communication

channel, and developing heavy industry

cluster including import and export central hub

(ASIA Links and MP3I) . This situation will

stimulate economic improvement for the

project.

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Table 1 Main intellectual contribution of VE/VA/VM: Value-based approach to design vs. Standard or

classical approach to design

Classical or technocratic design The designer is a lone individual, expert

or craftsman.

Focus is on thing-models according to

methods, disciplines or states of the art.

What is the thing?

Seeks to find best possible thing-model

within the constraints of the problem.

Focuses on constrained optimality.

Value-based design The designer is a team engaged in

collective design rather than single expert design.

Focus is on systems-models. What is the system-in-its-environment? How do they work?

Elevates or abstracts systems model to function-based model. Seeks to find the thing-model that best performs the functions wanted.

Focuses on functional value and economic value.

Source: Professr Dan A Seni, Function Analysis as a General, SAVE Conference 2004 Montreal Canada

How it fits to Innovation Management

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The key concept in science and technology is “the modeling

relation”, the relation between things and their representation in

ideas.

Innovation management

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modeling relation in classical design

Ideas

Things

Object

as-is

Implicit

model

from tacit

knowledge

Object

model

Object

as-

ought-

to-be

Time

Level of

abstraction

Problem-solve or invent

Problem-solve or innovate

(test-prototype-implement)

Innovation management

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modeling relation in “creative” VA/VE/VM

Ideas

Things

Object

as-is

Implicit

model

from tacit

knowledge

Object

model

Object

as-

ought-

to-be

Time

Level of

abstraction

Problem-solve or

invent

Problem-solve or innovate

(test-prototype-implement)

Function

model

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Modeling relation for VA/VE/VM: Design for Value

Ideas

Things

Object

as-is

Explicit

system-

environment

model

Object

model

Object

as-

ought-

to-be

Time

Level of

abstraction

Problem-solve or invent

Problem-solve or innovate

(test-prototype-implement)

Function

model2

Function

model1

Problem-solve or evaluate

Explicit

resource or

cost model

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Conclusion

Functions can be modelled as intentions and as

‘unthinking’ cause-effect relationships in an explanatory

model of how a system works.

There is a benefit found by distinguishing an artefact’s

function regarding either intentionality or its etiological

form (i.e. causal mechanism), as clearer understanding

leads to better ideas and innovation.

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Conclusion

By classifying concepts into:

what outcome and purpose we want to achieve,

how the sequence of processes can be executed, and

why we need to perform a function,

we are led to a shared understanding and better ability

to produce new ideas to stimulate innovation and add

product value.

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