Vol: 2 No: 1 June 1969 VALUE ENGINEERING In this issue Editorial - Lt. Col. Bert Decker - Value Visibility Setting up a Value Programme by R. Dick-Larkam The Challenge of V.E. - Value Training bv Frank Bowyer Developing and Organising an Effective Value Engineering Programme Part 3: A Case History on the Largest Scale by B. G. Matossian Theoretical Evaluation of Function by Arthur Garratt Purchase Cost Estimating and Analysis by K. F. Boddy Negotiation and Specification Checklists An Introduction to Value Management by D. 1. Speirs An Analysis of the Method of Value Analysis by C. F. Graham Change is a Challenge by K. R. Whyles The Value Engineer's Bookshelf Selected Abstracts of Recent Literature on Value Analysis/Engineering Pergamon Press The Operational Research Quarterly is an Some papers from recent issues international journal which examines the broad scope Operational research as Genesis. E. C. Williams of operational research as the application of scientific Operational research and innovation in management analysis to management problems. This important methods. J. Banbury publication covers all aspects of management Decision trees and the Second law. F. S. Drechsler Repeat-buying of textile garments. A. S. C. Ehrenberg including administration, organisation, economics, Investment decisions under uncertainty and variability— work flow, measurement, and productivity, which Some practical experiences of using forecasts and are directly related to man's technological probabilities. W. T. Thorneycroft, J. W. Greener environment. and H. A. Patrick Operations research has an established position in Advertising response functions and media planning. M. H. J. Webb industrial fields, such as building, health, engineering, construction, fuel, power, management information and An econometric approach to short-run analysis of the local government problems policy. It is also being U.K. economy, 1955-66. R. J. Ball and T. Burns developed in other areas, including banking, commerce, Inventory control with a randomly available discount manpower and implementation. purchase price. A. P. Hurter and F. C. Kaminsky A boundary method for planar travelling salesman Papers deal with forward planning, the development problems. T. A. J. Nicholson of management control systems and the way in which Some notes on dynamic programming and replacement. management organises itself to achieve its objectives. N. A. J. Hastings Emphasis is placed on a practical approach, oriented to the solution of the real life problem. Please write for an Index and information leaflet giving full details and subscription rates. Published for the Operational Research Society by Pergamon Press Headington Hill Hall Oxford 0X3 OBW England Maxwell House Fairview Park Elmsford New York 10523 USA 12/68 Value In this issue | Engineering Editorial: Value Visibility Setting up a Value Programme Value Analysis which has now been operating in this company in a revised form is described. ! Vol: 2 No: 1 June 1969 R. Dick-Larkham The new form embodies training, public rela­ Manger of Value Engineering, tions and a results programme. Overall direct cost savings of 35% are reported. The British Oxygen Company Ltd. The Challenge of V.E. - Value 'By no stretch of the imagination', says this author, 'can the story of Value Analysis training Training be counted a success'. Value Analysis training Frank R. Bowyer presents to Managements a bewildering picture of chaotic contradiction and irresponsibility. Consultant, Supplying guidelines for the selection of train­ Value Engineering Ltd. ing programmes, the writer asks whether agree­ ment can be reached as to the most effective method of training. This, he considers, is one of 1 the great challenges of V.E. Developing and Organising an This writer, who was formerly engaged in Value Engineering in the United States, reports the Effective Value Engineering experience of the Department of Defense in the Programme - Part 3: A Case application of Value Engineering. According to the author. 'Full benefits of Value Engineering History on the Largest Scale cannot be achieved without a well-planned B. G. Matossian programme of introduction, education and B. G. Matossian and Associates development.' In the Army, Navy, Air Force and D.S.A. $500 million of savings were accom­ plished in the fiscal year 1966. Theoretical Evaluation of The author writes further on the development of a theoretical evaluation of function. He shows Function how, by the use of mathematics and costing, Arthur Garratt the cost of performing basic and secondary i functions may be determined. After applying Technical Director, his theory to the cost of transmitting torque, the Value Engineering Ltd. author also cites an electrical example. The author points to the need to. establish Purchase Cost Estimating and i purchase price objectives which involves con­ Analysis sideration of material cost and manufacturing K. F. Boddy method, scrap allowance, tooling, development, packaging and delivery costs. The fact that Senior Buyer, several major industries in England have well- J.C.B. Chaseside Ltd. established purchase price control systems indicates that the potentiality of these systems is now being appreciated. This article deals with the application of Value An Introduction to Value In future issues Analysis techniques to the operations of a The Resource Stewards - A Survey Management company. The Value Management project D. I. Speirs described by the author is divided into the Value of Value Analysts and Engineers Analysis job plan stages and the action required by Antipodean (Parts 1-6) Harold Whitehead & Partners Ltd. on each stage of the job plan is described. The article concludes with a description of the type The Challenge of Change - Value of benefits which the company may expect. Engineering Development by Frank R. Bowyer, Consultant, 'It is good', as the author points out, 'for the An Analysis of the Method of Value Engineering Ltd. converted to be faced with heresy'. This is what Value Analysis the author sets out to do and does exceedingly Reducing Direct Labour Costs C. F. Graham well. He holds that the nearest thing to a tech­ Through Short-Interval Scheduling nique in Value Analysis is brainstorming which by Martin K. Smith, author of he considers to be a very bad technique. Later on, he says, 'this jumble of non-mathematical, 'Short-Interval Scheduling' pseudo-economic, meaningless non-quantifica­ The Basics of Value Engineering tion leads me to the conclusion that you could do better to leave the word "value" in the by A. J. Dell'Isola, Director, hands of the theoretical economist.' V.E. Division, Louis C. Kingscott & Associates Inc. 'Resistance to change', as the author says, 'is Change is a Challenge Value Engineering - The Human essentially an act of self-preservation.' He asks K. R. Whyles whether value engineers while recognising this Aspect resistance to change are themselves altogether Group Methods Engineer, by Donald E. Williams, free from it. Emotions, Egoism, Fear and Education Manager, Automotive Products Company Ltd. Suspicion are advanced as barriers to the Barber-Colman Company acceptance to change. The author considers that the answers to the problem lie with our­ Essential Ingredients for a Successful selves, not within the covers of books. V.E. Program by F. S. Sherwin, Value Engineering Negotiation Checklist Checklists Coordinator, Strengths and Weaknesses of Negotiators A Survey of Vendor's Capability Plessey Company Limited Factors influencing value trade-offs Creative Management of Profitable Checklist of items for a specification Change by Bert Decker, Director Project 3000, The Value Engineer's Bookshelf State University of New York at Buffalo. Abstracts [98] to [103] Value Engineering, June 1969 L Regional Editors Canada Western United States Mr C. Bebbington, Mrs Patricia B. Livingston, Value Program Coordinator, Management Systems Analyst, United Aircraft of Canada Ltd., North American Rockwell Inc., P.O. Box 10, Longueuil, Quebec. Space Division, Downey, California. North Eastern United States United Kingdom Lt.-Col. Bert J. Decker, USAFR (Ret.), Mr R. Perkins, Director, Project 3000, Technical and Works Director, Millard Fillmore College, Barfords of Belton Ltd., State University of New York at Buffalo, Belton, Grantham, Lines. Hayes A, Buffalo, N.Y. 14214 Europe Mr P. F. Thew, Southern United States Manager - Industrial Engineering, Mr F. Delves, I.T.T. Europe Inc., Lockheed-Georgia Company, 11 Boulevard de I'Empereur, Marietta, Georgia. Brussels 1, Belgium. The Regional Editor for North Eastern United States Lt.-Col. Bert Decker, USAF (Ret.), A.B., M.Ed. Aims and Scope Before he retired, 31st March 1968, from the United States Air Force, Lt.-Colonel Bert Decker The aim of Value Engineering is to en­ was a Communications-Electronics officer assigned to HQ Electronics System Division as its courage the wider use of Value Analysis/ Staff Value Engineer. He started WWII as a private and radar mechanic, became an Army Signal Engineering techniques throughout Corps Officer, and served in the Pacific. On the assault of Iwo Jima, he was the Shore Party industry. Commander of the Air Service Group responsible for getting the fighter strip there operative and earned a Bronze Star and Purple Heart on that assault. Value Engineering provides a link Returned to active duty in 1951, Colonel Decker first activated as its NATO secretary, the between those who are practising and European Radio Frequency Agency in London, and then became