IMPLEMENTATION PHASE

The objective of a value engineering study is the successful incorporation of recommendations into the product or operations. However, a successful project often starts back at the beginning. Each project must be thoroughly analyzed to determine its potential for benefit and the probability of implementation. This is as important as the knowledge and skill required to apply the system to attain successful results.

An excellent idea is worthless unless it can be properly implemented. If it is not implemented, no one will obtain any benefit. It must also be implemented in the manner intended. Unfortunately, there have been many cases on record where the idea could not be implemented because of the high cost to make the change. There are other cases where the recommendations were not properly understood and implementation resulted in increased cost. This often results in disillusionment or the feeling that value engineering does not work on our problems. Actually, in most cases the real problem was that the problem was not properly diagnosed. It was not that value engineering does not work; it was a matter of inefficient preliminary analysis and preparation.

It does not seem reasonable to expend the effort and funds required to make a value study without first having done the necessary work to ensure that the project is practical, that it can be implemented, and that the necessary funds and people will be available.

Selection of projects is a part of the entire value engineering implementation process. Many times, management will assume that any project will prove profitable. This is not always the case. The project must be practical in relationship to its effect on the organization ” see the discussion on SIVE.

To aid in the selection of projects, development of people, implementation of projects, and all the other aspects necessary to successfully achieve the stated objective, we have prepared some guidelines. They are guidelines, not rules, as every organization is different and successful value engineering efforts must be integrated into operations to become part of the day-to-day decision-making process of the company.

To begin with, we will look at the overall organization and implementation of value engineering operations. Then we will look at some of the details that make for success.

GOAL FOR ACHIEVEMENT

What do we want to get from value engineering? What will be the objective? This is the first question to answer. Value engineering can increase productivity, reduce product cost, improve quality, reduce administrative costs, or produce a number of other benefits that may be critical to operations. Whatever the goal, it should be defined in specific terms, such as increase productivity by a specific percent, reduce product cost by a specific number of dollars per unit, and so on. Whatever the initial goal may be, it can be revised and broadened as skill in application and implementation of the process develops and understanding and credibility increase.

Value engineering is a people-oriented program designed to help people to do a better job by aiding them to break down constraints to understanding. It provides some very specific methods and systems to achieve results. Since people perform a wide range of jobs in an organization, it is certainly logical to expect that if they can be provided with a system that can help them to do a better job, anything that they are expected to do can be improved. In the end it is people who do the thinking. If they can improve their performance, everyone will benefit.

This has been our experience. Many people who are highly skilled in their jobs have developed new insights that have created breakthroughs in technology as well as major organizational and operational improvements. The goal for achievement should be known to everyone. It can be product oriented or directed towards manufacturing or administrative operations. It need not be company wide. However, the scope can be broadened at any time. Once the goal has been determined, the means to achieve the objective can be developed.

DEVELOPING A PLAN

There are five steps to incorporating value engineering into operations. They are as follows :

1. Evaluate the system.

2. Define an objective.

3. Develop plan and organization to achieve objective.

4. Understand the principles.

5. Implement the plan.

Each step can be approached in a number of different ways. However, certain specific problems must be considered , and pitfalls must be avoided in each. Understanding the problems and pitfalls rather than outlining a specific method or procedure should provide the necessary guidelines for an effective operation. In many cases, a consultant can aid in the initial stages and support each step of the process by providing a broad range of experience for the client to build upon. However, it is important that the consultant have the type and quality of experience to ensure success.

EVALUATION OF THE SYSTEM

Evaluation of value engineering can be a very tricky process. Some companies have spent large sums of money for educational training/ seminars and are not using the systems in any way. Some companies did not understand the principles and, when they tried to apply them, found that they had neither the skill nor the discipline to achieve success. There are still others who feel a highly organized cost reduction program is value engineering.

As a result, there are some who feel that value engineering works but not on their product. There are others who feel that value engineering is nothing new; it is the same thing they have done for years under a different name . And, of course, there are some who ask the classic question, "Who has the time for all this?"

Evaluation of the benefits to be obtained from value engineering should therefore be based on at least some prior knowledge of the methods and disciplines so questions can be asked to determine what is being done. Are the principles of function analysis and evaluation being applied? Is the function analysis system technique (FAST) used? How is the creative stage handled? How are the projects selected and organized? How is the team approach used? What authority does a value engineering team have to implement projects? How are teams selected? How is the operation organized?

These are key questions that are required to evaluate whether the company actually has been using value engineering based on the principles established by Miles (1961) and supported by the Society of American Value Engineers (SAVE).

A major element of the evaluation process should be a one-day orientation for key management ” those who will be required to support operations with time, manpower, and funds. The orientation should be presented by one who has had successful experience conducting value engineering operations within the constraints and limitations of daily operations. Preferably, the person should be certified as a Value Specialist (CVS) by SAVE. To just understand the principles is often not enough. How to make them work in an operating environment is frequently at least of equal importance. As in everything, future success is based on a firm foundation.

UNDERSTANDING THE PRINCIPLES

Very early in the plan to introduce value engineering into operations, high-level and operating management must be introduced to the system. The intention is not to teach them value engineering but to demonstrate the benefits to be achieved and how they are produced. This establishes the need to apply the process and defines the necessary commitments for success. Those who should attend would be everyone who will be expected to support operations with time, manpower, and funds.

It is difficult for a large group of high-level people to attend a one-day seminar. However, it is essential for successful operations. Attendance also broadcasts the message of importance to all levels of the organization. In addition, the managers attending often derive substantial benefit from the session that can lead to immediate results.

The one-day orientation should be a case study, so participants can try the various methods and systems. The result will be understanding of the system and how it may be applied to various projects. It will identify the organizational and operational pitfalls and in many cases define projects for future workshops.

Completion of the management orientation will create a need for a decision to determine how operations will proceed from this point. If a consultant has been brought in to aid in progressing to this point, the consultant will now be able to assist in getting down to brass tacks. If one has not been brought in, now would be the time. The consultant's experience can ensure success from the start and increasingly successful performance as skill develops. At this point there are two ways to go. However, in the long run, the same objective will be achieved. One approach is a large multi-team workshop or series of workshops directed towards indoctrinating a large group of people (30 “40) in the system at one time. These people would learn the process while applying the methods and systems to projects of current interest to the company. These workshops usually develop substantial monetary benefit for the company. The second approach is one or two teams working on a specific project. Both methods can be successful. However, the first is better suited to very large organizations with large amounts of manpower. The second can be used in both large and small organizations and produces substantial benefit that can be used for further development. In many cases, a combination of the two plus a series of orientations can be used effectively. The specific plan depends entirely upon the organization and should be tailored to fit.

ORGANIZATION

The first step is to determine the objective, as was discussed earlier. The second should be to develop a plan to achieve the objective and set up the necessary organization. The third step is implementation of the plan; the fourth follow-up and audit operations.

The essential elements are:

1. Define the objective

2. Develop the plan

3. Implement the plan

4. Conduct follow-up and audit operations

Upon completion of the evaluation and the making of a decision to implement value engineering operations, the first step should be to appoint a coordinator. A brief outline of factors to be considered in selecting a value engineering coordinator or manager is:

Primary purpose of position

• Establish the value engineering business discipline as part of the fiber and decision-making process of the company to increase the opportunity to maximize the profitability of all products marketed by the company.

• Plan, staff, and direct a value engineering program to provide maximum product value by the application of recognized techniques to identify and eliminate unnecessary cost in products and operations.

• Develop and implement a program to educate key employees , management, and suppliers in the value engineering approach to problem solving with particular emphasis on function and value.

• Publicize and demonstrate the use of value engineering techniques to company management and suppliers to develop support and participation in the use of value engineering and in the implementation of recommendations.

Knowledge and skills requirements

• Degree in engineering, business, or economics with a thorough understanding of technical aspects of product design and development, business operations and economic factors involved

• Value engineering training

• Three or more years in value engineering program operations and a thorough understanding of the techniques and methodology as applied to both product development and manufacturing operations

• Minimum of ten years combined experience in product management, project engineering, manufacturing management, or product development with a thorough understanding of procurement practices, systems analysis, cost, estimates, or any of a number of other broad rather than specialized product areas

• Creativity and flexibility in planning and thinking, with demonstrated leadership abilities necessary to organize and guide persons of widely divergent backgrounds into an effective team

• Ability to communicate effectively in both oral and visual techniques

The coordinator will develop and organize a plan for management approval. Inherent in the plan should be education and application programs for all who will be involved in operations. The coordinator should be required to select a consultant, develop an educational plan, aid in organizing and conducting workshops, and identify people who may be developed into value specialists. The extent of these programs will depend upon the size and scope of the company.

From what we have noted here, it is obvious that the problem is complex from the standpoint of options. However, successful operations do not have to be extensive . Starting small and developing successfully is preferred to a lot of noise and a big crash because of poor planning.

ATTITUDE

One of the most important factors in value engineering is attitude ” attitude on the part of both management and people on task teams. A positive, cooperative, supportive attitude is required. In many cases, value engineering actually requires a new management style. It cuts across organizational lines, looks at taboo aspects of a problem, and recommends drastic changes compared to the past. To accept these disruptions to the old way of doing business requires faith and understanding ” a positive attitude.

In many cases, whenever a new idea is presented to an American management team the initial reaction is negative. The first remarks are, "It is interesting but let me tell you what is wrong with it." The best approach to this reaction is to listen carefully . The managers may have some ideas you overlooked. After all negative reaction has run out, be prepared to ask some specific positive questions of the group that will develop positive responses. For example, "I understand your difficulty in producing this part in the plant. What do you think we would have to do to make this practical? Do you see any changes we might make to satisfy our methods?" This will usually work to a positive result.

Never argue. In many cases it is beneficial to solicit negative ideas, but be prepared to develop positive questions. Our attitude is that we must begin to ask "What's good about this idea?" "How will it help us to do a better job?"

Changing people's attitudes is difficult and may never happen, but understanding the reasons behind the negative reaction should make it possible to persuade most people that they can benefit from success. Remember, there is a risk of failure in new ideas. New ideas require change, and they may not work. People want proof that something will work before they will support it. However, maybe you can show that the benefits are greater than the risk.

The best way to change people's attitude is to show that top management is interested in value engineering and expects participation and results in achieving the stated goals.

VALUE COUNCIL

The value council is a small group of high-level executives who oversee operations. In a small company, it might be chaired by the president; in a large company, by a division manager. The council should be staffed with people who have the authority to make decisions relative to acceptance and/or rejection of proposals, authorizing funds, and manpower. They set the attitude, develop the environment, break the bottlenecks, and by their interest and visibility create credibility to participation and provide authority to operations.

It is important that members of the council make every effort to attend council meetings except in cases of dire emergency. A member who is unable to attend should authorize a key assistant to act on his or her behalf . If the council attendance degenerates, the message sent is that we are losing interest.

The council should be made up of five to six people. Their duties are as follows:

• Set objectives

• Guide operations

• Monitor progress

• Eliminate roadblocks

• Recommend/approve projects

AUDIT RESULTS

There are two reasons to audit results. The first is to determine the actual benefit received. Is it in accordance with expectations? If not, why not? The second is to determine how to improve operations. A periodic status report on a project tends to move it along. This is especially true of cost reductions.