Value Managament Introduction
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Transcript of Value Managament Introduction
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VALUE MANAGEMENTUEB 4543
LECTURE 1
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Lecture Overview
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What is VALUE? What does VALUE
mean to you?
What is VM?
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CLOCK
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The VM History
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The VM History
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Key Terms
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Definitions of VM
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Definitions of VM
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Principles of VM
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VM as a Structured Process
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VM as a Structured ProcessThought Processes
Analytical Creative
1 - Analyse information2 - Brainstorm Functions
3 - Organise Functions 4 - Generate Ideas forAlternatives
5 - Evaluate Alternatives
6 - Develop Proposals7 - Appraise Options
8 - Recommend Solutions
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Cross Disciplinary Team
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Cross Disciplinary Team
Distinct Perspectives
Comprehensive ApproachShared Vision
Consensus
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Cross Disciplinary Team
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What Does the Facilitator Do?
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Function Based/Analysis theFunction
Normal Cost Reduction Process1. What is it?
.
Value Management
3. What does it do? Or What is the function
that it seeks to achieve?
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Function Based
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Function Based
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MOUSETRAP
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What is a Function?
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Elements of Value
Cost Time
Function/Quality
Value
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What is Value?
When we say the estimated value of aproject is RM100 Million is it the same ascost?
When we say the project value rose fromRM40 Million to RM50 Million, does itmean cost?
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Cost is not the same as value
Values are perceived differently dependingon the user, for instance, a landlord maylook at the value differently from a tenant
What is Value?
There are hard and soft values Hard values involve something at best and
lowest cost
Soft values includes attractiveness tocustomers, etc.
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Relationship between Value,Function and Cost
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Categories of Value
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Categories of Value
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Another relationship by Dell Isola
CostCostCostCost
QualityQualityQualityQualityFunctionFunctionFunctionFunction +=Value
Function = The specific work that a design/itemmust perform
Quality = The owners or users needs, desiresand expectations
Cost = The life cycle cost of the product
Value = The most cost effective way to reliablyaccomplish a function that will meet the usersneeds, desires and expectations
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To Increase Value
Value = Function (F) + Quality (Q)Cost (C)
(F) + (Q) (F) + (Q)
(F) + (Q)
(C)
(F) + (Q)
(C)MAINTAIN REDUCE INCREASE
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Value
Common sense says that value relates what youget to what you pay
In VM common sense applies and so value
Expectation : What must the service do to meetuser/stakeholder expectation?
Performance : How well are those needs met?
Resource : What must be committed to secure theservice
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How to Improve Value?
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COST is . . .
How do we define COST?
the sum of all expenditures necessaryto acquire, produce or utilize aproduct, service, process or facility.
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Habits & AttitudesHonest Wrong Beliefs
What are some causes ofUNNECESSARY COSTS?
Shortage of TimePoor Communication Lack of Ideas
Reluctance to Seek AdviceFear of Trying Something New
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Life Cycle Cost (LCC)
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LCC
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In a nutshell
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VM
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The 3 stages in VM Study
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The VM Job Plan
The Value Methodology Job Plan
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INFORMATIONPHASE FUNCTION
ANALYSIS PHASECREATIVEPHASE
EVALUATION
PHASE Complete datapackage
Modify scope Identify functions
Classify functions
Develop functionmodels
Cost functions Establish valueindex
Select functions forstudy
Create quantity ofideas by function
DEVELOPMENTPHASE
PRESENTATIONPHASE
How must each ideawork?
What is thefeasibility of
- Conduct benefit
analysis Complete technicaldata
Createimplementation Plan
Prepare finalproposals
Present oral report
Prepare writtenreport
gy
- What is the
problem oropportunity?
Why do youconsider it a problemor opportunity?
Why is a solutionnecessary?
What is the cost? What is the task
What else canperform thefunction?
Where else canthe function beperformed?
How else can thefunction be
Rank and ratealternative ideas
Select ideas for
development
Who should besold?
implementation?
What will be the
cost?
When will webreakeven?
What is the bestoverall alternative?
- Complete/implementchanges
- Monitorstatus
- Collect user/ customer attitudes
Complete data files
Determine evaluation factors
Scope the study
Build data models
Determine team composition
PRE-STUDYPOST-STUDY
Property of OSC VE Office
What is to be included in the study?
Who is best able to study the problem?
What are the current and futurerequirements of the subject under study?
What type of impediments will the team
come against?
Develop a plan togather project data
Investigate theproject
Verify data
function?
What are the basicfunctions?
What are thesupporting functions?
performed?
How candisadvantages beovercome?
Why is the new waybetter?
Will it meet all therequirements withoutcompromise of form,fit, or function?
What are the annual
savings?
ideas be presented?
What was theproblem?
What is the newway, savings, andbenefits?
How will it satisfyour customers?
What is needed toimplement theproposals?
Who isresponsible forimplementing thechange?
Did the new way work?
How much did itcost/save?
Did the change meet
customers expectations?
Verifyaccomplishments
Present results
Advertise outcomes