What is Value Analysis?

Value Engineering a.k.a. Architorture”

Value Analysis is….

 “an organized team study of functions to

creatively generate alternatives which will
satisfy the users needs at the lowest initial
and/or life-cycle cost”
Value Analysis is NOT…..

 A COST CUTTING PROGRAM!!!!

– Cost cutting programs cut costs
regardless of how they affect the product.
– Any product can be cut in costs!
 JUST A HURDLE TO JUMP
THROUGH
Value Analysis IS about…..

 Sound, Defensible, Value-based Decision

Making
 Providing essential functions for an appropriate
cost
 Benefit to Cost Relationships and working both
sides of the equation.
 Managing the Decision Points
 Making better decisions!!!
Why do Value Analysis…..?
To improve benefit or reduce cost….
Value Analysis Job Plan

 Information Phase (Investigation)

 Functional Analysis Phase (Analysis)
 Creativity Phase (Speculation)
 Evaluation Phase
 Development Phase
 Recommendation Phase (Presentation)
 Implementation Phase
INFORMATION
PHASE
Information Phase

 Understand the function and purpose of the

project by gathering relevant information.
 Review base data
– Stakeholders
– Building Program
– Current Alternatives
FUNCTIONAL
ANALYSIS
PHASE
Functional Analysis

 Park Purpose and Significance -- ? Exist for

Monument Open Space/Monument Fire
Center?
 Program
 What does a facility need to do?
 How do you do it?
 Why do you do it?
Functional Analysis
Fast Diagram
Functional
Analysis
System
Technique
FAST Diagramming
Functional Analysis
S he nandoah NP - Water Pipe Mate rial
FUNCTION ANALYSIS SYSTEM TECHNIQUE (FAST) DIAGRAM
HOW? WHY?
>>==> DESIGN OBJECTIVES ALL THE TIME <==<<

Reduce Improve Meet

Cost Efficiency Codes

Pre ve nt Re d uce Prevent

Loss of Re source Ground Wa te r De p le tion Waste

Contain Prevent Reduce Reduce

Water Leakage Corrosion Interactivitiy
| Wrap
Provide Transport | Prevent D.I. Pipe
Visitor Enjoyme nt Water | Contact
|
Protect Avoid Strengthen Increase Install
Water Breakage Pipe Break Strength D.I. Pipe

Protect Bed Screen

Pipe Pipe Material

Improve Reduce Increase Install Utilize

Park Operations Disruption Production Rate More Pipe Equipment

Add
Crews
|
Lighten
Pipe
|
Simplify
Installation

High Order Function Bas ic Funct io ns Seco nd ary Funct io n C o ns t ruct io n Feat ures
Co ns t ruct io n Oriented FA ST Diag ram
Cost Model
PLAN COMPONENT COSTS - NEW RIVER GORGE NR DCP

NET CONSTRUCTION COST

$- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000

CSA - Cliffside Amphitheater $2,621,576

POA - Maintenance Shop $1,812,000

POA - Associated Site Work $1,195,043

POA - Associated Utilities $1,195,043

GS/U - Associated Utilities $1,153,720

POA - Office Complex $857,500

CSA - Associated Site Work $655,394

CSA - Associated Utilities $655,394

CORE - New Visitor Center $639,000

CORE - Environmental Education Center $450,000

PLAN COMPONENTS

CORE - Associated Site Work $332,350

CORE - Associated Utilities $332,350

TS - New Asphalt Road and Parking $224,000

CORE - Restrooms $203,000

KEY
TS - Clearing and Grubbing $190,000

TS - Road Restoration $171,000 GS/HM - General Site/Building Hazmat

POA - Ranger Fire Cache $158,172 POA - Park Operations Area
$150,000
TS - Turkey Spur
GS/U - Align/Adjust New Asphalt Road
CORE - Core Areas
PA - Picnic Shelters (4 ea @ 2&3) $144,000
CSA - Cliffside Amphitheater
POA - Refurbish Site of Demo Struct $100,000 PA - Picnic Areas
TSMaintainance Pole Barn $90,000 GS/U - General Site Work & Utilities

POA - Covered Parking: Vehicle Storage $40,500

PA - Associated Site Work $36,000

PA - Associated Utilities $36,000

POA - Demolish Unused Core Area Structures $30,000

GS/HM - Hazmat Removal $15,000

What areas should we focus on?
CREATIVITY
PHASE
Creativity Phase
 "Brain-storm" alternative methods of achieving the
required functions of a project.
 Ideas are not evaluated, since criticism of an idea could
discourage participation, decrease the flow of
alternatives, and inhibit the creative endeavor.
 Promote and encourage sustainable concepts and
other policy objectives

Keywords: Brainstorming, Deferred Judgment, Options, Alternatives

Roadblocks to new ideas….
 It needs higher approval
 Its too ambitious for us
 We did it this way the last time
 We have no problems now…why change
 If you want a quick answer it is…NO!!
 It does not agree with the guide specs
 It’s against our policy
 That’s not the way it’s done around here
Roadblocks to new ideas….(cont)
 It won’t work
 It’s too much trouble to phase in
 We tried that 10 years ago, and it didn’t…
 Let maintenance take care of that
 Let operations handle it
EVALUATION
PHASE
Evaluation Factors

N a t i o n a l L e a d e r s h ip C o u n c il
O b je c t iv e s

S e r v ic e w id e P r io r ity
E v a lu a t io n F a c t o rs
C h o o s in g B y A d v a n ta g e s

V a l u e A n a l y s is
E v a lu a t io n F a c t o rs
C h o o s in g B y A d v a n ta g e s
Objectives

 Protect cultural and natural resources

 Provide for visitor enjoyment
 Improve efficiency of forest operations
 Provide cost-effective, environmentally
responsible, and otherwise beneficial
development for the national forest system
Evaluation Factors
 Prevent loss of resources
 Maintain or improve condition of Resources
 Provide visitor services and educational and
recreational opportunities including accessibility
 Protect public health, safety, and welfare
 Improve operational efficiency and sustainability
 Protect employee health, safety, and welfare
 Provide other advantages to the national forest
system
 CHOOSING BY
ADVANTAGES
A DECISION MAKING PROCESS
CBA Purpose.......

To simplify, clarify and unify

decisionmaking
To quantify non-monetary
benefits or advantages
Effective Decisionmaking

 Doing the Right Things Right - the First

Time, Every Time, and On Time - in a
manner that is acceptable to various
stakeholders who may have conflicting
values and preferences
Definitions
CBA Matrix...
FACTOR ALTERNATIVES
SITE NO. 8 SITE NO. 19 SITE NO. 23

FACTOR 1 – Water
Attributes
 60 Feet Away  260 Feet Away  150 Feet Away
Advantages
200Feet Closer 40 110 Feet Closer 30
FACTOR 2 – Tent Spot
Attributes
 Moderately Level  Almost Level  Quite Sloping
Advantages
Moderately more Level 30 Much more Level 70
FACTOR 3 - Table
Attributes
 Without  Without  With

Advantages
With versus Without 65
FACTOR 4 - Privacy
Attributes
 Close sites  screened  screened
 Near Road  distant sites  Close sites
Advantages
Much More Privacy Moderately more 45
due to screening and 100 Privacy due to
remoteness screening

TOTAL IMPORTANCES OF
ADVANTAGES
70 170 140

TOTAL COST $3.00 $4,50 $20.00

DEVELOPMENT
PHASE
Development Phase

 Best alternatives are developed into

proposals for final evaluation and
presentation.
 Initial Cost Estimates
 Life Cycle Cost Estimates
Money Decisions
Require Special Methods
 The Principle of Interdependency: A dollar spent
for one purchase is not available for another
 Wellington’s Rule: “No increase of expenditure over
the unavoidable minimum is expedient or justifiable,
however great the probable profits and value of the
enterprise as a whole, unless the INCREASE can with
reasonable certainty be counted on to be, in itself, a
profitable investment.”
Money Decisions
Require Special Methods
 An increment is increase in cost, coupled
with an increase, a decrease, or no change
in total importance of advantages, or
benefits.
 Importance to Cost Graph
CAMPSITE SELECTION

200

180

170
160

140 140
IMPORTANCE

120

100
Alternative S2

80
70

Alternative S3
60
Alternative S1

40

20

0 0
$0 $5 $10 $15 $20 $25

INITIAL COST(Net)
Life Cycle Cost is….

“Life cycle costing is the development of all

significant cost of ownership of an item,
system, or facility, over a specified length
of time”
 Life Cycle Cost
Development Phase
 Initial Cost  Annual Cost
– Cost associated with – Operations
initial development of a – Maintenance
facility, including project – Staffing
costs as well as
– Energy
construction costs.
 Recurring/Cyclic Costs
– Costs that recur on a
periodic basis throughout
the life of a project.
RECOMMENDATION
and
PRESENTATION
PHASE
Recommendation and
Presentation Phase
 Review Decisions
 Make Recommendations
 Conduct Presentation
 Summarize
 Wrap-up
IMPLEMENTATION
PHASE
Implementation Phase

Occurs outside the workshop and provides for

implementation of accepted VA proposals.
 Follow Through
 Documentation
 Monitoring