VALUE Volume 6 No. WORLD
Transcript of VALUE Volume 6 No. WORLD
VALUE WORLD
July/Sept 1 Volume 6 No.
The Journal of Value Engineering for the Society of American Value Engineers
TABLE OF CONTENTS
IN THIS ISSUE Page
Features Benjamin Franklin's Junto, Selections from
The Autobiography of Benjamin Franklin John A. Jonelis, CVS 4
The V E Decisions of 1982 Howard M. Pryor 8
1 labits and Attitudes . / J ^ f l r V > ^ ^ ^ ^ ^ L % ^ ^ ^ ^ ^ \ . Walter J. Kirst 21
Value Management of Logistics Support Edward B. Lowe 22
Psychological Aspects of Value Analysis Fred Spiegl 24
Special Reports
1982-1983 Financial Report J.A. Dziekonski, CVS and B.A. Zolezzi, CVS 17
What Did We See in '83? 1983 Conference Report C P . Smith, CVS 20
Regular Departments
Improvement Carlos Fallon, CVS 3
Window on Value ,1 ^ ^ L ^ H . ^ V - ^ H - l A ^ ^ k - m v ^ ^ ^ \ • • • 26
Calendar of Events 27
Other Articles
Learning and Using A . E . Mudge, CVS 3
Executive Survival Kit Herbert E . Markley 6
Voice of India S.S. Venkataramanan, CVS 11
"Market Basket" Signode 25
T . G . I . M Arthur E . Mudge, CVS 25
When You're Hot, You're Hot! James A. Dziekonski, CVS 25
PLUS
SPECIAL CLIP AND S A V E SECTION -Directory of SAVE Board of Directors and National Directors and Committee Chairmen 15
Publisher Society of American Value Engineers
220 N. Story Rd. , Suite 114 Irving, Texas 75061
Phone (214) 253-5171
1983-1984 S A V E National Board
President Executive Vice Vice President -Vice President -Vice President • Vice President • Immediate Past Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
President - Finance - Administration - Communications - Professional Development President International
- Northwest Region - Great Plains Region - Great Lakes Region - Northcentral Region - Northeast Region - Southwest Region - Southcentral Region - Southeast Region
William F . Lenzer John A. Jonelis B. A. Zolezzi Nathan Borsuk Edward W. Mitchell R. Glenn Woodward John W. Bryant William J. OP de Beeck Douglas M. Hood Teresa A. Barlow Eugene R. Smith John H . Maurer Hal Goldman Julian J. Pennello Robert C. Pumpelly Peter S. Megani
Co-Editors
Rita Bates - Managing Editor
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Special Note
Contributions to Value World are welcome; please send them to Value World Editors, 220 N. Story Rd. , Suite 114, Irving, Texas, 75061. Editorial changes and publication of an article or other contribution in any particular issue are at the discretion of the Editorial Staff. A l l material for Value World must be received on the 15th of the month preceding publication (i.e. November 15th for Jan./March issue).
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Value W o r l d July/September 1983
Carlos Fallon, CVS IMPROVEMENT
As we learned f r o m Charles W . Bytheway i n the 1965 proceedings, everything can be i m proved. Everything? The wheel? Yes, the wheel! Both the Japanese and the West Germans have been successfully using electromagnetic forces to replace wheels i n their high-speed trains.
Because our popula t ion pressure and present road system have not yet created the need for such high-speed trains is no reason to let our technology ignore such a fu ture need. The Nor th Amer ican continent s imply cannot aff o r d to be lef t behind . We have to keep our tools sharp.
I want to recommend the t w o books I consider necessary for the value specialist w h o wants to continue i m p r o v i n g . Y o u don ' t have to order these books r igh t away. Ask your l ibrary to get them. I f they can't order them for you , they can borrow them f r o m another l ibrary — but by a l l means, get your hands on the books and read them. Here they are: Peters, Thomas J. and Waterman, Robert H . Jr. I n Search of Excellence. New York: Harper & Row, 1982. Ohmae, Ken ich i . The M i n d of the Strategist. New York: M c G r a w - H i l l , 1982.
Dr. Ohmae's previous Japanese book The Corporate Strategist has sold more than 100,000 copies, w h i c h is very h i g h for a Japanese publ ica t ion . His doctorate is f r o m M . I . T . and he is now Managing Director of the Tokyo off ice of McKinsey & Company, one of the most respected management consult ing f i rms i n the w o r l d .
The author of the other book is also part of McKinsey & Company's New York team. The subtitle to the book is Lessons f r o m America 's Best Run Companies. Robert H . Waterman, Jr. s t i l l works i n and out of McKinsey 's New York off ice where he is a director.
Thomas J. Peters, w h o was a Pr incipal at McKinsey, has set up his o w n consul t ing f i r m i n Cal ifornia .
Believe me, these t w o books, w r i t t e n w i t h an ocean between them, very honestly show that there is more to value than least cost.
Most of my readers w i l l have some manufactur ing or buy ing experience. I ask you now, w h i c h of your suppliers cou ld you depend on for quali ty, re l iabi l i ty , t ime ly delivery, and a fa i r price? Y o u w i l l f i n d t h e m I n Search of Excellence. Noth ing l ike your o w n experience to te l l you w h i c h way to go.
I t may be that you have this question i n m i n d , " W h a t is a good company strategy fo r growth and prof i t?" .
I n The M i n d of the Strategist there are answers; many answers to many var ing problems. Dr. Ohmae clarifies a serious problem i n our system th ink ing ; organic processes are analog rather than d ig i ta l ; not black-or-white, yes-or-no.
I was to ld once by a design engineer that linear programming is robust because it is linear. By robust, of course, he meant not likely to generate errors. True. Everything is simpler i f i t is linear. But, as Dr. Ohmae points out, l i f e itself, is not ru led by zero-and-one, yes-or-no; but i t presents an i n f i n i t e variety of possiblities i n between.
This brings us to improvement. The subtit le of Chapter 9, page 279, of In Search of Excellence is called Hands on, Value Dr iven . This chapter makes i t clear that i n a l l the companies rated as excellent, a def ini te system of shared values is central. Instead of the cumbersome super ordinate goals (p. 280) he calls them "shared values" (p. 281).
These shared values are in fo rma l ly but unquestionably supported by management. A l l manner of legends, myths, and parables f i l t e r d o w n to let a l l wage-earners know how management feels about the company's shared values.
Can Value Analysis be Improved?
Certainly. The most important cont r ibu t ion is i n he lp ing a company establish a system of shared values suitable to their o w n i n d i v i d u a l needs. No general manager is happy lay ing o f f workers because the economy is d o w n . He has to look in to the systems of shared values. Shared w i t h whom?
Managers and investors share i n the value of the company's p ro f i t . W i t h w h o m do the hour ly workers share their values? A l l they want is a decent, safe place i n w h i c h to work . Nowhere i n their u n i o n contract does i t say that they are peasantry and that managers are gentry. Using their economic power to l o rd i t over their subordinates undermines a basic task of modern management; the task of adminis ter ing a decent, safe, and happy w o r k environment. A l l wage-earners should f i n d more than meeting their economic needs i n the o.'e t h i r d of their lives they spend at work . I n mosi. successful companies managers mainta in a happy w o r k relationship w i t h their subordinates.
Many suggestions have surfaced but not one of them is satisfactory to everybody. The issue is the stabili ty of the l i ve l ihood of the work force. I t h i n k i t migh t be a matter of cost comparison — the cost of layoffs and^of replacing lost ski l ls , etc., but we are s t i l l looking for answers.
LEARNING AND USING
The learning and using of the cost improvement organized job plan must be approached the same as a child learning to walk. The child must first learn how his arms and legs work, then how to use them to crawl and then how to walk. Only after this step-by-step process can he progress to running and jumping. Without going through this development process, the child could be seriously injured.
Similarly, an individual or group must approach the use of the job plan in much the same manner. Each individual must first learn what it is and how it is used, then apply it in
every detail to a series of small problems or projects. Only after this step-by-step learning process should the individual progress to major problems or large applications of the job plan. Without going through this development process, the individual could end up with serious problems or confrontations.
One of the major problems encountered when working with new users of this job plan, is that they want to move too fast. They hear the fundamentals and the first broad brush description of the job plan and they think that they are instant specialists. The real problem is that the individuals try to learn too fast instead of learning to last. From seeing this happen too many times in
many organizations, my recommendation is to secure a full understanding of the fundamentals of the job plan, apply it to a small project and build gradually. Build one success upon the preceeding one; gradually build in magnitude.
A . E . Mudge, CVS
You Hold the Key to Unlocking Successful Value Engineering / Cost Improvements
S U B M I T Y O U R I D E A S T O D A Y !
Value W o r l d July/September 1983 3
Benjamin Franklin's Junto / Selections from
THE AUTOBIOGRAPHY of
BENJAMIN FRANKLIN
For twenty years, S A V E has been trying to discover ways to support V E -learning for chapter members and for members where there are no chapters.
If we look back 250 years to Ben Franklin's Junto, we can rediscover his way
to: (1J Support VE-learning in chapters, and (2) Organize V E groups where S A V E membership cannot support full
chapters.
(Marginal notes by John A. Jonelis, 5/17/83)
I should have mentioned before that, i n the
au tumn of the preceding year, I had fo rmed
most of my ingenious acquaintance in to a
club of mutua l improvement, w h i c h we called
the JUNTO; we met on Friday evenings. The
rules that I drew up required that every
member, i n his tu rn , should produce one or
more queries on any po in t of Morals , Poli t ics,
or Natural Philosophy, to be discussed by the
company; and once i n three months produce
and read an essay of his o w n w r i t i n g , on any
subject he pleased. Our debates were to be
under the direct ion of a president, and to be
conducted i n the sincere spir i t of i nqu i ry after
t ru th , w i thou t fondness for dispute, or desire
of v ic tory; and to prevent warmth , a l l expres
sions of positiveness i n opinions, or direct
contradict ion, were after some t ime made
contraband, and prohib i ted under small
pecuniary penalties.
About this t ime there was a cry among the
people for more paper money, only f i f t een
thousand pounds being extant i n the pro
vince, and that soon to be sunk. The weal thy
inhabitants opposed any addi t ion , being
against a l l paper currency, f r o m an apprehen
sion that i t w o u l d depreciate, as i t had done i n
New England, to the prejudice of a l l creditors.
We had discussed this po in t i n our Junto,
where I was on the side of an addi t ion , being
persuaded that the f i r s t small sum struck i n
1723 had done much good by increasing the
trade, employment, and number of i n
habitants i n the province, since I now saw al l
the o ld houses inhabited, and many new ones
bu i l d ing ; whereas I remembered w e l l that
w h e n I f i r s t walked about the streets of
Philadelphia, eating m y r o l l , I saw most of the
houses i n Walnu t Street, between Second and
Front streets, w i t h b i l l s on their doors. " T o be
l e t ; " and many l ikewise i n Chestnut Street
and other streets, w h i c h made me then t h ink
the inhabitants of the ci ty were deserting i t
one after another.
This was 1727 when Ben was 2 1 ; f i v e years before the b i r th of George Washington. ^ ^ s c h o o , w e
" l ea rned" that Ben Frankl in established the f i r s t publ ic libraries. It was actual ly
„ , , , . accomplished by h i These rules would . .„
. . , , Junto, work today j o r a small group discussing/learning
VE.
Six of the nine or iginal members of the Amer ican Philosophical Society were members of the Junto. The society s t i l l continues. I t was designed by F rank l in to give a common ground of association to those i n the various Amer ican colonies who were pursuing studies i n science and phi losophy.
The Junto could extract the gist of a matter, and devise means f o r better solutions.
Today, we cal l that "determining the / u n c t i o n " , and the "Job p l a n " .
Our debates possessed me so f u l l y of the su-
ject that I wrote and pr in ted an anonymous
pamphlet on i t , ent i t led The Nature and
Necessity of a Paper Currency. I t was w e l l
received by the common people i n general;
but the r i c h men dis l iked i t , for i t increased
and strengthened the clamor for more money,
and they happening to have no wri ters
amoung them that were able to answer i t ,
their opposi t ion slackened, and the po in t was
carried by a major i ty i n House. M y fr iends
there, w h o conceived I had been of some ser
vice, thought f i t to reward me by employ ing
me i n p r i n t i n g the money; a very profi table
job and a great help to me. This was another
advantage gained by m y being able to wr i t e .
The u t i l i t y of this currency became by t ime
and experience so evident as never afterwards
to be m u c h disputed; so that i t grew soon to
f i f t y f i v e thousand pounds, and i n 1739 to
eighty thousand pounds, since w h i c h i t arose
dur ing war to upwards of three hundred and
f i f t y thousand pounds, trade, b u i l d i n g , and
inhabitants a l l the w h i l e increasing, though I
now th ink there are l imi t s beyond w h i c h the
quanti ty may be h u r t f u l .
* * *
A n d now I set on foot my f i rs t project of a
publ ic nature, that for a subscription l ibrary. I
drew up the proposals, got them put into f o r m
by our great scrivener, Brockden, and by the
help of m y fr iends i n the Junto, procured f i f t y
subscribers of fo r ty shi l l ings each to begin
w i t h , and ten shi l l ings a year for f i f t y years,
the te rm our company was to continue. We
afterwards obtained a charter, the company
being increased to one hundred; this was the
mother of a l l the Nor th Amer ican subscription
libraries, now so numerous.
* * *
A t the t ime I established myself i n Penn
sylvania, there was not a good bookseller's
shop i n any of the colonies to the southward
of Boston. I n New York and Philadelphia the
printers were indeed stationers; they sold on
l y paper, etc., almanacs, ballads, and a f ew
common school books. Those w h o loved
reading were obliged to send fo r their books
f r o m England; the members of the Junto had
each a few. We had lef t the alehouse, where
we f i rs t met, and h i red a room to h o l d our
club i n . I proposed that we should a l l of us
b r ing our books to that room, where they
w o u l d not only be ready to consult i n our con
ferences, but to borrow such as he wished to
read at home. This was accordingly done, and
for some t ime contented us.
Our c lub, the Junto, was f o u n d so useful ,
and a f f o r d e d such sa t is fact ion to the
members, that several were desirous of in t ro
ducing their f r iends, w h i c h cou ld not w e l l be
done wi thou t exceeding what we had .settled
as a convenient number, v i z . , twelve. We had
4 Value W o r l d July/September 1983
f r o m the beginning made i t a rule to keep our
ins t i tu t ion a secret, w h i c h was pretty w e l l
observed; the in ten t ion was to avoid applica
tions of improper persons fo r admittance,
some of w h o m , perhaps, we migh t f i n d i t d i f
f i c u l t to refuse. I was one of those w h o were
against any add i t ion to our number, but i n
stead of i t , made i n w r i t i n g a proposal that
every member separately should endeavor to
f o r m a subordinate c lub, w i t h the same rules
respecting queries, etc., and w i t h o u t i n f o r m
ing them of the connection w i t h the Junto.
The advantages proposed were, the improve
ment of so many more young citizens by the
use of our inst i tut ions; our better acquain
tance w i t h the general sentiments of the i n
habitants on any occasion, as the Junto
member migh t propose what queries we
should desire, and was to report to the Junto
what passed i n his separate club; the promo
t i o n of our part icular interests i n business by
more extensive recommendation, and the i n
crease of inf luence i n pub l ic affairs, and our
power of doing good by spreading through
the several clubs the sentiments of the Junto.
The project was approved, and every
member undertook to f o r m his c lub, but they
d i d not a l l succeed. Five or six on ly were
completed, w h i c h were called by different
names, as the Vine , the U n i o n , the Band, etc.
They were useful to themselves, and afforded
us a good deal of amusement, in format ion ,
and inst ruct ion, besides answering, i n some
considerable degree, our views of in f luenc ing
the publ ic op in ion on part icular occasions, of
w h i c h I shall give some instances i n course of
t ime as they happened.
When more and more persons became interested i n j o in ing the Junto, the or ig inal club was not permitted to expand because the values of the discussion group wou ld be lost. Instead they fo rmed add i t iona l Juntos. Perhaps pur SAVE chapters should be l i m i t e d to 12 members. Or perhaps, we should organize Juntos as we l l as chapters.
F rank l in described the members of his or iginal Junto: they were not unl ike the members of OUT present-day SAVE.
O n the whole , I proposed as a more effec
tual watch, the h i r i n g of proper men to serve,
constantly i n that business; and as a more
equitable way of support ing the charge, the
levying a tax that should be proport ioned to
the property. This idea, being approved by
the Junto, was communicated to the other
clubs, but as arising i n each of them; and
though the p lan was not immediately carried
into execution, yet, by preparing the minds of
people for the change, i t paved the way for the
l aw obtained a f ew years after, w h e n the
members of our clubs were g r o w n into more
inf luence.
Abou t this t ime I wrote a paper (first to be
read i n Junto, but i t was af terward published}
on the dif ferent accidents and carelessnesses
by w h i c h houses were set on f i r e , w i t h cau
tions against them, and means proposed of
avoiding them. This was much spoken of as a
useful piece, and gave rise to a project, w h i c h
soon f o l l o w e d i t , of fo rming a company for the
more ready ext inguishing of fires, and mutua l
assistance i n removing and securing of goods
w h e n i n danger. Associates i n this scheme
were presently f o u n d , amount ing to th i r ty .
Our articles of agreement obliged every
member to keep always i n good order, and f i t
for use, a certain number of leather buckets,
w i t h strong bags and baskets (for packing and
transporting of goods), w h i c h were to be
brought to every f i re ; and we agreed to meet
once a mon th and spend a social evening
together, i n discoursing and communicat ing
such ideas as occurred to us u p o n the subject
of fires, as migh t be useful i n our conduct on
such occasions.
I began now to t u r n m y thoughts a l i t t le to
publ ic affairs, beginning, however, w i t h
small matters. The c i ty wa tch was one of the
f i rs t things that I conceived to want regula
t i o n . I t was managed by the constables of the
respective wards i n t u rn ; the constable warn
ed a number of housekeepers to attend h i m fo r
the n ight . Those w h o chose never to attend
pa id h i m six shi l l ings a year to be excused,
w h i c h was supposed to be for h i r i n g
substitutes, but was, i n reality, m u c h more
than was necessary for that purpose, and
made the constableship a place of prof i t ; and
the constable, for a l i t t le d r ink , o f ten got such
ragamuffins about h i m as a watch, that
respectable housekeepers d i d not choose to
m i x w i t h . W a l k i n g the rounds, too, was of ten
neglected, and most of the nights spent i n t i p
p l i n g . I thereupon wrote a paper to be read i n
Junto, representing these irregularities, but
insis t ing more par t icular ly on the inequal i ty
of this s ix-sh i l l ing tax of the constables,
respecting the circumstances of those w h o
pa id i t , since a poor w i d o w housekeeper, a l l
whose property to be guarded by the watch
d i d not perhaps exceed the value of f i f t y
pounds, pa id as much as the wealthiest mer
chant, w h o had thousands of pounds ' w o r t h
of goods i n his stores.
The Junto was also instrumental i n reforming the police dept., and i n f o r m i n g the first volunteer f i r e dept.
W E B S T E R ' S NEW C O L L E G I A T E DICTIONARY, 1973
jun-ta / 'hun-te , 'jent-e, 'hen-te/ n [Sp.
f r . f em. of jun to jo ined, f r . L junctus,
pp. of jungere to j o i n — more at YOKE]
1 : a counc i l or committee fo r po l i t i ca l
or governemntal purposes; esp : a
group of persons cont ro l l ing a govern
ment esp. after a revolut ionary seizure
of power 2 : JUNTO
jun-to / ' jent-( ,)o/ n . p ] juntos [prob.
alter, of j u n t a ] : a group of persons j o i n
ed for a common purpose
R E F L E C T I O N S
Carlos F a l l o n , ou r V E p h i l o s o p h e r
emeritus, has considered the foregoing and
his response, i n part, is:
I t h i n k Frank l in had a w o n d e r f u l idea. I
don ' t believe i n l i m i t i n g chapter
membership, but I t h i n k each chapter
should have a value task group . . .
O n page one of your enclosure is the
suggestion that road blocks be subject
to a small pecuniary penalty. Attached
is the " s m a l l pecuniary penal ty" for
the road block I am about to raise.
The Spanish w o r d junta s imply means
a gathering. I n Frankl in 's day, i t did not have its present-day connotation of " a gathering of extreme-rightist military men. Today, government by junta is government by mi l i t a ry men who think that the army way is more orderly than d e m o c r a c y . F o l l o w i n g my characteristic resistance to chango. I l ike the term "value task group" Instead of junto. Maybe somoono with o more f lexib le mind can como up wllh a better name for our discussion groups. These could be assigned at ono chaptor meeting for the mooting lo follow. They could be glvon u subjoct In ndvonce.
Value World July/Soptombor 1983 5
ACTIONS
The SAVE Regional VP's discussed the ap
p l ica t ion of the Franklin-type juntos for i m
prov ing the VE knowledge of members. They
accepted Carlos Fallon's suggestion and
changed the name to 'Value Study Group" .
The result is that the Nat ional Business Off ice
w i l l make study courses available for :
(1) Chapters, to increase the VE knowledge
of their newer members.
Example- A group of members study a
lesson and then assemble pr ior
to regular chapter meetings fo r
discussion. The discussion is
led by an experienced member
w h o uses the study guide's
answer sheets to grade papers
and administer tests.
(2) Small groups of persons (members or
non) who are not served by chapters.
Example- Some cities have suff ic ient VE-
interested persons to f o r m a
Value Study Group but not suf
f ic ien t to f o r m a chapter. Those
groups cou ld meet on a regular
basis to study, share and
discuss. They w o u l d have an
experienced member, or take
turns, administer ing the study
course. SAVE Nat ional could
he lp suppor t t he i r e f for ts
th rough the Regional VP and
Chapter rebates.
S T U D Y C O U R S E A V A I L A B L E F R O M NBO
Value Foundation's 10 lesson study course:
Basic Value Analys is plus text, Value
Analysis; Fal lon, soft bound .
Available at $20.00 each i n packets of six or
more; includes one set of answers for
homework and t w o tests to be administered
by an experienced member. Call , or wr i t e to,
the Nat ional Business Off ice .
The course is also available at $75.00 each
as an i n d i v i d u a l correspondence course. This
includes the guide, the texts, m a i l i n g
envelopes, and available telephone consulta
t ion . Cal l , or wr i t e to , the Value Foundation,
986 Nat ional Press Bldg . , Washington, D . C ,
20045, Te l . (202) 347-7007.
F U T U R E Y o u w i l l hear more about a l l of this f r o m
your Regional Vice President. A n d , i f you or
your chapter are interested i n increasing your
VE acumen, hopefu l ly he w i l l hear more f r o m
you.
JOHN A . JONELIS
Executive Survival Kit Value has to be merchandised Q l t seems as though everyone is
on a qua l i ty kick today. Yet, when we
t ry to sell qual i ty , i t seems that buyers are
real ly interested i n price. Are we i n this coun
t ry really serious about improv ing quali ty?
S.L.C.
A Yes, I t h ink we are. But we have to clar
i f y our t h i n k i n g . As I have said before,
I am not convinced that the level of quali ty is
as l o w as some believe i t is. More of ten, the
impression of l o w quali ty is the result of i nd i f
ferent service after the sale.
A major cause of the qual i ty confusion is
the attitude i n this country that you can ex
pect something for noth ing . A few decades
ago, people bought on value. For instance,
w h e n a so-called popular-sized car was pur
chased, the price was reasonably modest. The
buyer d i d not expect to get the same quali ty as
his neighbor w h o bought a luxury car at twice
the price. Both received the value they were
seeking. The buyer of the lower-priced car fe l t
that he received every b i t as much value for
each of his dollars.
I n recent years, however, buyers began to
expect Cadillac qual i ty at Chevrolet prices. I f
they d idn ' t get i t , these buyers became
disgruntled and organized protests. There
was a solution: buyers cou ld stop buy ing u n t i l
a given supplier accommodated their stan
dard of value. To some extent, this happened
after W o r l d War I I . Americans became more
w o r l d l y i n their outlook, and i t became chic to
buy fore ign goods, i nc lud ing automobiles. I n
those early days, buyers were buy ing on
p r i c e _ n o t qua l i t y . The impor t ed cars
couldn ' t compare w i t h those of Detroit for
qual i ty , but they woro low-priced and
economical to oporute.
The foreign manufacturers recognized that
price might get them into our market, but i t
couldn ' t keep thorn thore. They began to i m
prove their products, and many d i d indeed
become better vuluos. Whether real or imagin
ed, many people—both as consumers and as
industr ial buyers—believed that imported
products were of higher qual i ty , and usually
these products wore lower in price. The fact
that lower prices were often made possible
because the foreign supplier was subsidized
by its government was not relevant or even
k n o w n to many buyers.
W h i l e this was going on, Amer i can
management was becoming overly enamored
w i t h the bot tom l ine . Too few CEO's paid at
tent ion to quali ty and service. Companies
began to develop purchasing techniques
w h i c h , among other things, rewarded pur
chasing agents w h o could t r i m their purchase
prices. I t w o u l d have been more beneficial to
have given rewards for reducing costs
through improved design, better quali ty, and
dependable del ivery. These buyers forced
suppliers to cut corners.
Herbert E. Markley
Rarely d i d a purchasing agent return i n
ferior goods and dismiss the supplier u n t i l
evidence was presented that guaranteed
quali ty at a given level . W h y d idn ' t the buyers
do this? W e l l , the user company had
schedules to meet. A n d no purchasing agent
was going to accept the responsibil i ty for his
o w n manufactur ing facil i t ies going d o w n
because of a lack of purchased parts caused by
his refusal to accept shipments.
People are always going to buy on price
unless we learn how to merchandise qual i ty.
I t can be done. One foreign car bui lder does i t
a l l the t ime. We w i l l have to do i t by stressing
value. Y o u and other CEO's can make this
happen. When you sell, make sure that your
customer understands how you as a supplier
are p rov id ing the best value. Your assistance
i n design, your dependabil i ty on delivery,
and your service after the sale are as much a
part of what the customer pays for as the pro
duct itself.
O n the buy ing side of the equation, I hope
you w i l l insist that quali ty is an important i n
gredient i n what you considor va lue
Reprinted w i t h portnission of Industry
Week. Tho Into llorbnrt K. Markloy, is former
presidont of Tho T l iukon Co.
6 Value W o r l d July/September 1983
MANAGER, VALUE ENGINEERING
Already a world leader in digital switching, Northern Telecom has evolved into a new era where communications technology is increasing the world's capacity to accumulate, absorb and integrate information. In this competitive business environment, Northern Telecom has an increasing commitment to productivity improvement.
To further this commitment, we now require a Manager, Value Engineering to assist in planning, promoting, organizing and controlling the application of productivity generating techniques to tap the synergistic potential of Northern Telecom Canada Limited.
Based at our Toronto Headquarters, you will contribute significantly to the attainment of major financial targets and potential improvements measured in tens of millions of dollars annually.
Ideally you will have a minimum of 10 years design/manufacturing experience in an industrial environment coupled with an engineering degree. Certification in Value Engineering is a prerequisite as you will be involved in the leading of workshops or sponsoring of the same. The successful candidate must possess leadership qualities, be both highly motivated and motivating, and able to communicate effectively at all levels within the organization.
In addition to a competitive salary and comprehensive benefits including relocation assistance where necessary, we offer in-house training and development, and performance based progression.
Please send your resume, in confidence, to: Cynthia J . Yano, Staffing Manager, Northern Telecom Canada Limited, 304 The East Mall, Islington, Ontario, Canada M9B 6E4 (416) 232-2000
WE HIRE TALEN
mj^jmk northcrr • • • telecom
Value World July/September 19B3
THE VE DECISIONS OF 1982 by Howard M. Pryor
Professor of Contracting Management, School of Systems and Logistics, Air Force Institute of Technology, Wright-Patterson A F B O H
Our f i rs t case of the year, the Cardan Com
pany (1) came about as an appeal of the con
tracting off icer decision that the contractor
was not ent i t led to a value engineering share
where the contractor proposal corrects an er
ror i n the Government w o r k specification. I f
the nature of the change seems almost super
f i c i a l , the issues are certainly much more con
sequential.
The facts were simple: the contract directed
the contractor to accomplish site renewal
w o r k to include the sowing of seed over about
six acres. The work specification called for
f ive species of seed to be appl ied at the rate of
20 pounds of seed per 1,000 square feet of
area. This is the equivalent of 871 pounds of
seed per acre. The Cardan b i d inc luded
$30,624 for this seed. ($5.86 per pound X 871
pounds X 6 acres.)
About f ive weeks after contract award, the
president of Cardan discussed the possible
reduct ion i n seed amount per acre w i t h the
Assistant Area Engineer and stated a w i l l
ingness to submit the idea as a VECP i f the
Corps of Engineers was interested. The
f o l l o w i n g day the Assistant Area Engineer
t o l d M r . Cardan to go ahead and submit his
proposal.
I n about th i r ty days, a Cardan letter propos
ed to reduce the seed ratio to 218 pounds per
acre. The letter pointed out that this ratio had
been used for other government site renewal
w o r k i n the same locale.
I n a memo of the same date as the Cardan
letter, the A i r Force asked the Corps of
Engineers to review the seed specification as
to type and quanti ty and " t o revise i f
necessary." Dur ing the hearing, i t was admit
ted that the A i r Force knew of Cardan's iden
t i f i ca t ion of the seeding error and of Cardan's
intent to submit a VECP at the t ime the A i r
Force directed their request to the Corps.
I n about 2Vz weeks, a letter f r o m the Con
tracting Officer 's Representative (COR) i n
formed Cardan that a reduct ion i n the seed
was being processed because of the A i r Force
request ment ion above. This letter was f o l l o w
ed, i n t w o days by a contract mod i f i ca t ion
proposal revising the seed m i x and setting the
ratio at 150 pounds per acre.
Af t e r t w o more weeks the contractor was
once again in formed of the seeding change
and was asked for a cost proposal related to
the deductive change order. A companion let
ter stated that the Cardan VECP was being re
jected because of the change i n the require
ment prompted by the A i r Force.
The contractor immediate ly restated his
posi t ion as to the va l id i ty of his VECP. Abou t
fou r weeks later, the contractor was to ld , oral
ly , that his VECP w o u l d f a i l because the VE
clause i n his contract stated that a VECP could
not be based solely on a change i n deliverable
end i t em quantities. W i t h i n a week, Cardan
pointed out, by letter, that the end i t em under
the contract was not "deliverable seeds" but
rather undeliverable grass. The contractor
subsequently f i l e d his c la im.
The contractor posi t ion: a government error
called to the government's at tention saved
the Government money. As long as a contrac
tor proposal results i n an acceptable qual i ty
and is not s imply a reduct ion i n end i tem
quantities, i t should be a v a l i d VECP.
The Government posi t ion: a contractor
should not share i n the results i f his submit tal
only achieves, th rough a better estimating
procedure, a correction to a Government
overdes ign. The Government c i t ed the
Hol loway (2) decision i n support of their posi
t i on .
I t should be noted that the ASBCA refused
to accept Hol loway as a precedent, po in t ing
out that the Engineering Board had indulged
i n adverse comment about a VE share that had
been agreed to and was not part of the
dispute. Next the ASBCA disagreed w i t h the
effect of the Engineering Board decision's i m
pl ica t ion that a VE settlement cou ld be used to
punish one contractor for a design mistake
made by a second contractor. Aga in , the
ASBCA f o u n d no meri t to the Government
w i s h to use Hol loway as a precedent.
The ASBCA decided i n favor of Cardan, for
$15,350. I t was acknowledged that there
might be ambigui ty i n the contract as to what
was the end i tem of performance i n the con
tract as related to seeds. The ASBCA fe l t that
more than delivery of seeds, per se, was called
for and i f the language was actually am
biguous, the matter w o u l d be resolved against
the government, as drafter, i n favor of the con
tractor.
The decision says, i n part, " w h i l e i t may be
true that i t was contemplated . . . that the
greatest savings w o u l d result f r o m proposal
relat ing to complicated engineering pro
blems, we k n o w of noth ing . . . w h i c h states
that proposals must relate to such problems.
The Cardan decision may w e l l become one
of the more w i d e l y ci ted cases since i t square
l y answers one of the questions consistently
raised du r ing the brief history of contractual
value engineering: should a contractor share
i n the results of ca l l ing an error i n the
specifications to the at tention of the Govern
ment? The Board thoroughly squelches any
no t ion that this is somehow " u n f a i r " to the
Government. I f the who le idea of contractual
VE is to save the Government money, then the
cause of the analysis or the procedure that
leads to the VECP are not integral to the ac
ceptance or rejection of the contractor pro
posal.
The second case of the year, the J. A .
McDermott Corporation (3) centers around the
fundamental concepts of the nature of a
VECP. The contractor's idea seemed to have
resulted i n a change to contract technical re
quirements but a savings to the Government
was not supported by the evidence.
McDermot t received a contract for 900 vehi
cle warn ing l ights . The u n i t inc luded a skirt;
the skirt f i n i s h was to be i n accordance w i t h a
M i l i t a r y Standard (MIL-L-45325D). A t least
t w o di f ferent approaches were set f o r t h
depending on whether stainless or a plastic
material was used for the skirt . The technical
r e q u i r e m e n t s o f the c o n t r a c t became
somewhat confused by the appearance of
Amendment #1 to MIL-L-45325D w h i c h was
never made part of the contract bu t w h i c h was
treated as though i t had been, by the contrac
tor and by the Government.
About 3 months after award, McDermott
submitted a VECP that addressed the material
used i n the skirt and the means of p rov id ing
color to the. skirt . The VECP used Amendment
#1 to the MIL-STD as a po in t of departure.
I n a remarkable degree of promptness, the
Contracting Off icer responded i n three weeks
rejecting the VECP on the basis that A m e n d
ment #1 permit ted both material change and
the color change. I n the v iew of the Board, the
matter migh t have rested there as a k i n d of
"Mex ican stand-off" had not the Government
i n about t w o months of the VECP rejection
issued a Cut Sheet that amended the M I L -
STD. The Cut Sheet, w h i c h also was ap
parently referred to as Amendment #2, seem
ed to incorporate the color change idea of the
VECP i n the v i ew of the contractor. I n the
v i ew of the Contracting Off icer , the Cut Sheet
"mere ly c l a r i f i e d " the w o r d i n g of Amend
ment # 1 .
I n a f i n a l decision, twenty three months
after the f i rs t rejection, the Contracting Off icer
again rejected the contractor's VE c la im for
the reasons given above. McDermot t f i l e d an
appeal to this action.
The Board thought the Contracting Off icer
was erroneous i n stating that the color change
was permissable under Amendment # 1 . As
the Board saw the mattor, the color change
was acceptable only aftur the Cut Sheet
enlargement; it was in fuel a contract change.
The author, using lnnguogo not u t i l i zed by the
8 Value W o r l d July/September 1983
Board, m igh t say that there was constructive acceptance of the contractor's idea.
Before the contractor cou ld begin to celebrate his v ic tory , however, the Board proceeded to deny f u l l status as a VECP to the contractor submit tal . As the Board decision points out, a long standing prerequisite of a VECP is that i t reduces overall costs to the M i l i t a r y Department. The parties were given an oppor tuni ty to reopen the record to show the effect on costs of the color change. W h i l e McDermott submitted some u n i t cost informat i o n involved i n material changes, the contractor seemed unable to provide clear evidence as to cost reduct ion attributable to the colorat ion change. Therefore the contractor proposal lost its e l ig ib i l i t y for award under the VE clause i n the contract and the appeal was denied. -
For some years now, there have been dialogues between the contractor and the Government where the contractor comes up w i t h an idea that reduces cost and the contractor feels that automatically qua l i f ied the idea as a VECP. Not so, says the Government; there are other attributes that a proposal must have to be considered a VECP. I t must be ini t ia ted, and/or developed and/or documented a n d / o r / prepared and/or submitted by the Contractor. It must require a change to the instant contract to be implementable i n the instant compact. I t must not adversely affect any esseritial funct i o n and so on. Reducing costs, ^b le ly , does not qua l i fy a proposal; there arer many ways for a contractor to reduce cost? that w i l l not qua l i fy for submittal as a VEC
The McDermott decision now points to the other side of the coin; a contractor proposal may have one or more of the other attributes that have evolved over the years^but i f i t does not offer a reasonably h i g h potential for reducing overall costs to the agency^ then i t cannot qua l i fy as a VECP.
The t h i r d case fo r 1982, the Raytheon (4) was a move for reconsideration by the ASBCA of their decision dated 17 Nov. 8 1 . For a discussion of that decision see an earlier article (5). The contractor again maintains that the terms, "cos t r e d u c t i o n proposal" and "value engineering change proposal" used i n the same contract clause are ambiguous. The ASBCA was asked to rule this ambiguity, against the drafter, namely the Government and the Board was asked to resume an attitude of liberal interpretation evidenced i n an Ai rmot ive decision (6).
reasonable interpretation. The decisions of this court teach that a contract amenable to only one reasonable construction i n l igh t of a l l of its provisions, should be enforced accord ing to its tenor as a whole , w i t h o u t regard to possible ambigui ty i n on ly one p r o v i s i o n . "
I n restating their earlier decision on Raytheon, the Board again f o u n d no basis for resolving an ambigui ty against the drafter and the Board f o u n d no need to provide any addit ional interpretation, l iberal or otherwise.
The fou r th case for the year, K . I . M . (8), came into being as a result of the contractor asking for senatorial intervent ion i n its behalf. The Senator, i n tu rn , asked the General Ac counting Off ice to check in to the complaint . One of the basic responsibilities of the Comptroller General (CG) is to conduct investigations on behalf of the legislative branch of the Federal Government,.
K . I . M . had developed a modi f i ca t ion k i t that w o u l d extend the service l i f e of a vacuum pump used i n certain Navy ground support equipment . J^J^Mr i ransmi t t eoMhei r idea to PRD ElerJffonics, a f i r m holding^Gontracts
The Board refused to be placed i n a posi t ion that w o u l d cal l for free unstructured modes of interpretat ion. By indi rec t ion the Board reminds a l l of us that i n their interpretation basic rules of contracting are not set to one side i n dealing w i t h value engineering.
The ASBCA quoted f r o m an earlier Court decision, M a r t i n Lane (7), that a test for ambigu i ty goes to an objective examination of the contract language to establish, "whether the contract is susceptible to more than one
[""-contra w r t i f the Navy for such equipment. At^the
/ t i m e the idea was conveyed to PRD, K . I . M ^ d i d not have any contract w i t h PRD nor w i t h the Navy.
The Comptrol ler General (CG) direct ly stated a rule that has been variously verbalized over the years, " the Value Engineering Program is a purely contractual matter . . . The Value Engineering Program (was) to encourage contractors to submit cost saving changes to contracts. Contractors are awarded a share of the savings that result . . . A v a l i d VECP can only be submitted, and thus, an award can only be made, under an existing wr i t t en contract containing a value engineering clause."
The CG immediately established that since K . I . M . had no existing contractual relat ion at the t ime the idea was submitted to PRD, no entit lement to a VE award cou ld exist.
Further developments, however^-fevealed that the idea was subrrnt te j i - tOme Navy by PRD as an ECI'.~As"a result PRD ordered a substantial number of modi f i ca t ion kits f r o m K . I . M . Further orders for the modi f i ca t ion kits seemed l ike ly .
The unexpected tu rn of events, apparently left a small company a happy one. There should be a clear warn ing i n this case, nevertheless, that a good idea that is passed on wi thou t contract coverage is at h i g h risk. We have only to ask what happens to contractors that do have such contractual coverage and f i n d they must f igh t for their rights to conclude that a naive reliance upon the good i n tentions of others may be short l i ved .
The f i f t h case centered around some w o o d acquired by Midwes t Contractors (9), w h i c h passed into the possession of the Government, and whether the contractor had ever been paid for i t , i n f u l l . I t reportedly came into be
ing because of an unfortunate delay i n the decision to proceed w i t h the VECP submitted by the contractor.
The contractor called for Midwes t to instal l 70 carports, made of wood , onto f a m i l y housing uni ts at Fort S i l l OK. Contract award was on 27 March 1980. Eighteen days after award, the Contractor submitted his VECP proposing to instal l metal carports instead of wood . A l t h o u g h not part of the record, Midwes t had apparently successfully submitted the same idea under an earlier contract.
I n t h i r ty nine days, Midwes t was advised, orally that the VECP w o u l d be disapproved. Midwes t therefore released a purchase order for wood . Twenty f ive days after the oral rejection, the Resident Engineer asked i f savings were s t i l l feasible; the Midwes t answer was a part ial af f i rmat ive . The contractor was instructed to proceed w i t h the VECP albeit somewhat belatedly. Even though Midwes t qu ick ly alerted their suppliers, a substantial amount of the w o o d arrived on site. As Midwes t had no place for long term storage, the lumber was delivered to the Government for indoor storage at Fort S i l l .
The appeal to the ASBCA was grounded on the c la im by Midwes t that the lumber
Xdelivered to the site and turned over to the Government was never f u l l y paid for . I t may be \ i o t ed that the cost of the wood , shipped but riot used, was $40,518. The amount c la imed by Ihe contractor was $22,284.90.
To oi i r u l t imate loss, the administrative judge d i d not disclose the logic used i n reaching ja decision i n favor of Midwes t . The Government moved for reconsideration (10) but the Board rather tersely upheld the earlier decision/
The /administrative judge d i d suggest a sound rule for the parties to f o l l o w ; namely appl icat ion of the terms of the VEI clause. Since we do not have access to a l l of the
/ t e s t i m o n y or the fi les involved, we can only speculate as to w h y the sound rule was not fo l l owed . A key sentence of the contract clause (11) used said, "Instant contract savings . . . are the estimated reduction i n the Contractor's cost of performance resulting f r o m acceptance of the VECP."
A brief summary of the numbers provided
may be of assistance:
(1) FFP
(2) Total VECP
(3) Sub Total (4) Contr Share
(5) Sub Total (6) Wood Shipped (7) Total
Gov' t Cont ' r
$781,170 $781,170.
93,078 93,078. 688,092 688,092.
28,908 51,192.90
717,000 739,284.90
40,518 40,518.00 $757,518 $779,802.90
A n explanation of some of the above amounts is i n order. $93,078 was tho total amount of savings for wood , had the V E C P acceptance been t imely . Because of the dolay in reaching a decision, $40,518 In wood was purchased and delivered. Hy transfor this contractor-acquired property bucamo govorn-
Value World July/Soptombor 1983 9
ment owned property. The net effect of the
VECP amounted to $52,560 or $93,078
-$40,518. As shown i n the le f t co lumn above,
the contractor's instant share; l ine 4; was 55%
of $52,560 or $28,908. M a k i n g prov is ion for
f u l l reimbusement of the^ Midwes t cost for
lumber transferred arrives at the bo t tom l ine
total of $757,518.
The t w o amounts i n l ine 7, above, vary by
an amount of $22,284.90 or the amount of the
Midwes t c la im. There is the same amount of
variance i n l ine 4. Since the other lines are
ident ical i t w o u l d seem that the f o u r t h l ine is
the source of basic disagreement.
I n the r ight hand co lumn, l ine 4 lists
$51,192.90; an amount that is the result of
m u l t i p l y i n g $93,078 by 55%. Stated another
way the contractor c laimed his percentage
share of what the savings w o u l d have been
w i t h a t imely decision by the Government.
A cursory review of the clause sentence
quoted earlier confi rms that VE sharing is bas
ed upon estimated reductions i n contractor
costs result ing f r o m VECP acceptance, not as
they migh t have been had certain delays not
taken place.
I t is hoped that Fort S i l l f o u n d some good
and wor thwh i l e use for $40,518 w o r t h of
lumber. From the Government po in t of v iew,
however, some rather expensive education
was acquired. Not on ly d i d the Government
delay result i n a missed oppor tuni ty for a sav
ings of $18,233.10 or $40,518 x 45%, but the
Board decision resulted i n an addi t ional cost
of $22,284.90 or a total of $40,518, for con
tracts axiom, "The Government must t u rn
square corners w h e n i t deals w i t h a contractor
on VE shar ing."
The next case for the year, Erickson A i r
Crane (12), was i n some ways a parallel to
McDermott , discussed earlier, i n the crucial
issue of whether the contractor's submittal
was a VECP or not.
The Department of Energy (DOE) assumed
responsibil i ty for a contract awarded to
Erickson on 12 Jan 76. I n a short w h i l e
Erickson awarded a subcontract to a jo in t ven
ture, Professional Hole D r i l l i n g Inc. , and
Caissons Inc. (PHD/C). The subcontract
covered foundations fo r towers for 136 miles
of power transmission lines i n Colorado.
The contractor l is ted f ive types of founda
t i o n foo t ing (A, K, D, F, R) to be used depen
d i n g u p o n the soil/site condi t ions en
countered. The types A or K invo lved the use
of an auger. The types D, F or R d i d not. A
modi f ica t ion of the Type A k n o w n as " A M "
had been used i n hard soi l . As part of the
record i t was shown that the Contracting Of
ficer 's Representative had recommended that
the Type A M be inc luded i n the contract
specification but i t was not done.
About ten days after pr ime contract award
(22 Jan 76), the COR, dur ing a preconstruction
conference, recommended to the subcontrac
tor PHD/C that the Type A M founda t ion be
considered.
I n about a m o n t h (23 Feb 76) the pr ime con
tractor, Erickson, proposed by letter to use the
Type A M founda t ion where appropriate, i n
the manner described by the COR.
I n about six weeks (9 A p r 76) the COR
repl ied to Erickson agreeing to the use of the
Type A M founda t ion bu t on ly i n st ipulated
circumstances. I t was noted that PHD/C had
already installed six of the Type A M founda
tions on the basis of oral Government permis
sion.
Six months later (18 Oct 76) Erickson
asserted a VE c la im on behalf of PHD/C based
on 943 Type A M installations. The record
showed a total of 1459 Type A M footings were
installed du r ing the l i f e of the contract.
Five months ensued before on answering
COR letter (22 Mar 77), c i t ing the A p r i l 76 let
ter of the COR, stated that the foo t ing method
had been agreed u p o n at the t ime by the par
ties. The VE c la im was rejected as un t ime ly .
Erickson responded to the Mar 77 letter
t ransmit t ing the subcontractor pos i t ion that
the COR letter was considered to be
nonresponsive.
Af t e r eleven months, (15 Feb 78), a meeting
was he ld of a l l of the parties to discuss the
c la im. Since l i t t le is shown i n the record as to
this meeting i t must have been inconclusive.
O n 8 May 78 the subcontractor PHD/C f i l e d
a more detailed c la im for a VE share amoun
t ing to $1,440,367.73; the c l a im being denied
by the Contracting Off icer . This appeal was
only one of th i r ty f ive appeals related to this
pr ime contract.
The Erickson decision is a perfect example
of how a decision br ief w i l l sometimes pose
more questions that i t answers. For instance
we don ' t know (a) wha t i f anything the sub
contract said about VE; (b) whether the pr ime
contractor was conversant w i t h VE; (c) were
the savings to the Government on the order of
$2.8 mi l l i on?
W i t h our fust ra t ingly incomplete informa
t i o n we can only pass on the decision of DOE
Board of Contract Appeals. The c l a i m was
denied. In the v iew of the Board, the contrac
tor should have iden t i f ied his proposal, at the
t ime of submit tal , as a VECP, even though the
contract clause d i d not require i t . I t may be
noted that DOD stopped requir ing an expl ic i t
ident i f ica t ion by A p r i l of 1974. I t has been
stated that this issue was not stressed by the
DOE attorneys.
The Board points out, w i t h more relevance,
that i f the Contractor had submitted the infor
mat ion called for i n the VE clause, the
Government might have been on notice what
type of proposal was being submitted.
No th ing i n the record shows that PHD/C was
invok ing the VE clause or is there any
evidence that the Government recognized or
treated i t as a VECP.
Three cases ci ted i n the appeal are dismiss
ed by the DOE Board as not being relevent to
the issues. The Kromer (13) decision is ci ted
as being more relevant. F rom the po in t of
v i ew of this author (14) that m igh t be an un
fortunate choice: as we saw i n Kromer, there
was some doubt as whether or not the contrac
tor d i d , i n fact, submit a VECP.
I n a s imilar ve in as we go over the scanty
facts provided we f i n d that the contractor d i d
submit an idea; i t was accepted; i t i nvo lved a
deviat ion f r o m the contract and there were
some (?) savings. The ASBCA has he ld i n the
past that suggestions by government person
nel do not preclude share entit lement.
O n the negative side i t migh t be said that i t
does not appear that the contractor(s) in tend
ed that the February 76 proposal be handled
as a VECP. I t is clear that after eight months or
so they d i d want i t to be so treated. I f the DOE
Board had addressed this issue, i t w o u l d have
been more h e l p f u l ; can a contractor submit a
"no-cost" change and then be permit ted to
change his classification i f i t retroactively
becomes apparent that the "no-cost" change,
i n fact, reduces costs, appreciably?
Further checking has revealed that the h i g h
dol lar savings were predicated on the
assumption that a l l of the A M footings were
subst i tut ion for R footings - the h i g h cost f o r m
- w h i c h d i d not seem to be supported by the
evidence.
The seventh and f i n a l case of the year
Honeywel l (15) raises but does not answer the
issue of interactive VECP's.
O n 1 Mar 76, the A r m y awarded a contract
to Honeywel l for a quanti ty of A D A M uni ts .
The A D A M is an ar t i l lery delivered ant i
personnel mine of a wedge shape, f i t t e d in to
pie-shaped assemblies and stacked w i t h i n
an ar t i l lery projecti le. Integral to safe handl
ing of the rounds is a Safe and A r m i n g
assembly inc lud ing , among other parts, a
gasket. The gasket was the central theme of
the VECP's discussed below.
O n 26 Jan 77, Honeywel l submitted a VECP-
019R1 proposing a change i n the gasket f r o m
the lead, specified, to a cork and rubber com
bina t ion . O n 3 A u g 77 the VECP was accepted
and f u t u r e shar ing was agreed u p o n .
Honeywel l agreed to forego any instant sav
ings share. The VECP had an effect u p o n labor
as w e l l as material .
A f o l l o w - o n contract, awarded 4 May 78,
incorporated VECP-019R1. A second VECP
submitted under the f o l l o w - o n contract, pro
posed a change f r o m the cork and rubber
gasket to a f iber gasket. Th is VECP, VECP-035
contained the f o l l o w i n g reservation:
" T h i s proposal is not intended to supercede
VECP-019R1 . . . The savings associated w i t h
VECP-019R1 w i l l remain i n effect for fu ture
contracts and the use of this alternate material
retains f u l l value of VECP-019R1."
VECP-035 was submitted 10 Nov 78. I t is a
part of the record that the company engineers
discussed this reservation with A R R A D C O M
personnel in advance of its use. Further the
reservation was discussed with DCAS person-
10 Value W o r l d July/September 1983
nel dur ing periodic VE reviews. I n the record
there was no ind ica t ion of any Government
objection to the w o r d i n g of the reservation.
The Government accepted the second VECP
on 19 Jan 79. The reservation statement was
not incorporated in to the contract modi f ica
t i o n but the Government agreed that the reser
vat ion had been accepted and incorporated
into the contract.
O n 21 Nov 79, Honeywel l submitted a letter
ou t l i n ing a proposal to def ini t ize the sharing
associated w i t h the second VECP. This letter
was amended by a Honeywel l letter of 12 May
80 w h i c h corrected computat ional errors i n
the earlier letter.
Between these two letters, the A r m y had ar
r ived at a posi t ion of being unhappy w i t h the
course of events for two reasons: they alleged
l y f o u n d that the actual cost of cork and rub
ber gaskets was about $356 per 1,000 uni ts
w h i l e the VE sharing had been based on an
estimated of about $50 per 1,000 units . The
"over payment" was calculated to total over
$82,000. Secondly the A r m y fe l t Honeywel l
should repay fu ture shares relating to VECP-
019R1 on units i n the contract that used
VECP-035. When the Contracting Off icer re
quested the repayment per above on 10 May
80, the contractor f i l e d a t ime ly appeal.
The Government raised a basic issue w h e n
they pointed out that fu ture sharing is related
w h e n a VECP is "used" i n the f o l l o w - o n con
tract. I t was their contention that w h e n a f iber
gasket took the place of the cork and rubber
version, a fu ture share based on the "use" of
cork and rubber was w iped out.
VOICE OF INDIA
India 's interest i n VE began i n the
mid-1960s - a relatively early start compared
to many other countries. This was w h e n the
Tata I ron & Steel Co. L t d . , Jamshedpur sent a
couple of their engineers to USA for t ra in ing
i n industr ia l engineering w i t h emphasis on
VE. Almos t simultaneously, the Automobi le
Products of India L imi t ed , Bombay inst i tuted
a VE cel l i n their Bombay works and organiz
ed a good b i t of successful VE work , much of
it p i lo ted by Ashok Kumar Sethi who later
was to become the f i rs t President of the Ind ian
Value Engineering Society (INVEST).
Subsequently however, there was a s lump
and not u n t i l 1971 w h e n the Ind ian A r m y
constituted a small VE cell at their Head
quarters i n New Delh i , d i d VE appear on the
scene again. Meanwhi le , quite a f ew other
companies had been making use of VE techni
ques but w i t h o u t fan-fare or formali t ies and
usually on a part-time basis. W i t h the found
ing of INVEST i n October, 1977 a l l this
history cou ld be collected and publ ished. The
The Board held that w h i l e the Government
posi t ion was technically correct, such an ap
proach w o u l d be contrary to VECP po l icy and
w o u l d discourage submission of sequential,
interactive VECP's.
The Board then side-stepped the issue by
saying, i n this dispute, a reading of the VE
clause together w i t h the reservation language
leads to support of the contractor posi t ion, i .e.
Honeywel l d i d not have to repay fu ture shares
for the overlapping uni ts . The parties were
warned to avoid payment of saving shares
under the second VECP that had already been
reflected i n the savings share of the f i rs t
VECP.
I n responding to the Government c la im that
there was "inadvertence" or lack of contrac
t ing off icer authority, the Board f o u n d no
evidence that any mistake of l aw or fact cou ld
be la id to responsible Government employees,
the c la im for r e fund was denied and the
Honeywel l appeal sustained.
I n conclusion, the reservation clause may
have b lur red the issue a l i t t le but the use of se
quential , interactive VECP's w o u l d seem to be
encouraged and r i g h t f u l l y so.
Reference List
1. Cardan Co., 82-1 #BCA 15,628, 4 Feb
82
2. Hol loway Constr., 79-1 BCA #13,551,
16 Nov 78
3. J.A. McDermot t Corp. , 82-1 BCA
#15,655, 11 Feb 82
- India
p o p u l a r i t y of V A / V E increased great ly
thereafter.
Dur ing the last six years, the INVEST
gathered strength every year and now has a
membership of 229 inc lud ing 50 corporate
members. I t has successfully organized three
National Conferences attended by 100 to 150
delegates on each occasion and he ld four ex
hibi t ions for the benefit of the publ ic . The. na
t ional headquarters is at New De lh i and four
chapters have been formed at Bangalore,
Hyderabad, Jamshedpur and Chandigarh.
M u c h of the credit for this successful work
goes to its present President, P .N. Handa and
the chapter organizers, M . S . V i t t a l at
Bangalore, S.S. Iyer at Jamshedpur and Bharat
Heavy Electr icals L i m i t e d , a corporate
member and one of the biggest Ind ian com
panies, i n Hyderabad. The Fourth Nat ional
Conference of INVEST took place May 1 2 - 1 4 ,
1983 i n N e w Delh i .
Today, there are at least 40 companies and
Government departments systematically us-
4. Raytheon Corp., 82-1 BCA #15,663, 19
Feb 82
5. Value W o r l d , V o l 5 #2, Jul/Sep 82, p . 5
6. A i rmo t ive Eng., 74-1 BCA #10,517, 1
Mar 74
7. M a r t i n Lane vs US, 15 CCF #83,669, 16
Oct 70
8. K . I . M . A s s o c i a t e s , C o m p G e n
#B203876, 19 Mar 82
9. M i d w e s t C o n t r a c t o r s , 82-1 B C A
#15,722, 31 Mar 82
10. M i d w e s t C o n t r a c t o r s , 82 -1 B C A
#15,953, 20 Jul 82
11 . DAR, 7-602.50 (1977 Aug)
12. Erickson A i r Crane, 83-1 BCA #16,145,
30 Sep 82
13. Kromer Inc. , 80-2 BCA #14,465, 8 May
80
14. "Lessons f r o m Recent Dec i s ions"
SAVE Proceedings 1981, p . 121
15. Honeywel l Inc. , 83-1 BCA #16,180, 19
Nov 82
ing V A / V E and the popular i ty is g rowing .
T w o leading academic inst i tut ions, v i z . , the
Ind ian Insti tute of Management - Bangalore
and the Ind ian Institute of Technology - New
De lh i have offered VE as an elective subject
of three credits for their students. A cor
respondence course has been organized f r o m
Bombay by Nagam H . Atthreya, a SAVE
member interested i n VE since 1977. R.P.
B i l l imor i a , a top publ ic sector o f f i c i a l , has
organized the f i rs t recognized school of VE i n
New Delh i intended specifically to t ra in peo
ple to become CVSs. The school completed its
f i rs t course i n 1982 and some of the students
have appl ied to SAVE for the CVS examina
t i o n this year.
W h i l e fur ther g rowth of VE i n India is sure,
i t w i l l not be w i thou t its ups and downs.
M u c h w i l l depend upon the dedication and
zeal w i t h w h i c h VE enthusiasts use and
spread the benefits derived f r o m VE. This is
the b ig task under way i n India.
S.S. Venkataramanan, CVS SAVE Director International Affairs
A paper or ig ina l ly scheduled to be delivered before the A n n u a l Conference of the Society of Amer ican Value Engineers, Chicago, I L . , May 1983 by M r . Howard M . Pryor.
The views expressed herein are those of the author and do not necessarily reflect the views of the A i r Tra in ing Command, the Uni ted States A i r Force, or the Department of Defense.
Value W o r l d July/September 1983 11
Society of American Value Engineers VOLUNTEER FOR NATIONAL OFFICE
^ f e e l I am qua l i f i ed for the f o l l o w i n g Nat ional Office(s) and am interested i n serving i n this
capacity (or suggest another qua l i f i ed i nd iv idua l ) :
Check one or more: v i c e President -President - Northeast Region
Executive Vice President - Southeast Region
Vice President - Admin i s t r a t i on - Nor th Central Region
Vice President - Finance - South Central Region
Vice President - Communicat ions - Great Plains Region
Vice President - Professional Development - Great Lakes Region
- Northwest Region
- Southwest Region
- International
Name:
Home Address:
Business Address:
Home Phone:
Business Phone:
B A S I C F U N C T I O N S AND R E S P O N S I B I L I T I E S O F S A V E N A T I O N A L O F F I C E R S
PRESIDENT
Provide leadership, management and
overall d i rec t ion to a l l SAVE activities and
operations. Promote growth and stature of the
Value Engineering profession. Preside at
Board of Director and Executive Committee
Meetings and the A n n u a l Business Meet ing.
EXECUTIVE VICE PRESIDENT
Executive Director for the l ine organization
of the Society. Assist the President as re
quested i n the overall adminis t ra t ion of SAVE
and act for h i m i n a l l funct ions relating to the
Regional Vice Presidents, the Vice President
-International, Chairman and Nat ional Direc
tors report ing to h i m .
VICE PRESIDENT - A D M I N I S T R A T I O N
To make recommendations for developing
and managing the overall area of SAVE ad
minis t ra t ion . Establish effective communica
t i o n channels and fo l low-up a l l Board action
items. Report to the Board, th rough the Presi
dent, those action items and milestones com
pleted and delinquent. A d d i t i o n a l duties w i l l
be as specif ical ly directed by the President.
VICE PRESIDENT - FINANCE
\ . Recommend and develop new sources for
increasing income.
2. Report the f inanc ia l status of the Society.
3. Recommend f inanc ia l guides and controls.
VICE PRESIDENT - C O M M U N I C A T I O N S
To develop, promote and direct a strong
and active publ ic relations act ivi ty for the ad
vancement of Value Engineering and the
Society of American Value Engineers.
VICE PRESIDENT - PROFESSIONAL
DEVELOPMENT
Promote, encourage and assist i n profes
sional development and the furtherance of
research i n the value disc ipl ine . Establish and
mainta in professional standards relating to
the performance and conduct of Value
Engineering practitioners.
REGIONAL VICE PRESIDENTS
1. Manage activities and insure complete
l ia ison between the Chapters and the National
Officers.
2. Provide assistance and consultat ion to help
Chapter Presidents supervise the Operation of
the Chapters.
3. Represent the regional members on the
Board of Directors.
4. Assure that the Chapters i n the region
operate w i t h i n the policies of the Society.
VICE PRESIDENT - I N T E R N A T I O N A L
1. Promote the growth of Value Engineering
throughout the w o r l d by developing and ex
panding international aff i l ia t ions w i t h SAVE.
2. Coordinate activities and insure complete
l iaison between the International affi l iates,
Chapters, Members, and the National Of
ficers.
3. Supervise the operation of international af
f i l ia tes .
4. Represent the international members on the
Board of Directors.
5. Assure that the international membership
operates w i t h i n the policies of the Society.
12 Value W o r l d July/September 1983
Society of American Value Engineers VOLUNTEER FOR NATIONAL DIRECTORSHIP
OR COMMITTEE CHAIRMANSHIP I feel I am qual i f ied for the f o l l o w i n g National Directorship(s) or Committee Chairmanship(s),
and am interested i n serving i n this capacity (or suggest another qua l i f ied i nd iv idua l ) :
Check one or more:
Controller
Nat ional Director - International Af fa i r s - A S I A
Nat ional Director - International Af fa i r s - EUROPE
Nat ional Director - International Af fa i r s - MIDDLE EAST
Nat ional Director - International Af fa i r s - C A N A D A
Nat ional Director - International Af fa i r s - I N D I A
Nat ional Director - International Af fa i r s - Other
(Please specify) —
Nat ional Director - Membership
Chairman - Membership Review Committee
Nat ional Director - Chapter Development Chairman - Board of Review
Nat ional Director - Chapter Effectiveness
Nat ional Director - Off icer Development
Nat ional Director - Chapter Programs
Nat ional Director - Const i tut ion & Bylaws
Nat ional Director - Honors & Awards
Nat ional Director - Public Relations
Nat ional Director - Federal Liaison
Nat ional Director - Value Management i n State and Local Governments
Nat ional Director - In format ion Services
Nat ional His tor ian
Nat ional Director - Inter-Society Relations
' Nat ional Director - Cert i f icat ion Requirements
Cer t i f icat ion Board
Nat ional Director - Career Advancement
Nat ional Director - College Relations
Nat ional Director - Technological Advancement
Nat ional Director - Nat ional Standards Committee
National Director - A n n u a l Conference Technical Program
Editor, Proceedings
Nat ional Director - Conferences
National Director - Interactions Editor
National Director - Value W o r l d Editor
I cannot serve as a Director or Committee Chairman but volunteered to w o r k on the f o l l o w i n g
committee(s): . — _ -
Name:
Home Address: ——
Business Address:
Home Phone:
Business Phone:
Value W o r l d July/September 1983
B A S I C F U N C T I O N S AND R E S P O N S I B I L I T I E S O F S A V E C O M M I T T E E D I R E C T O R S (ND) AND C H A I R M E N
Reporting to Executive Director and Executive Committee
CONTROLLER
Acts i n consort w i t h Executive Director i n
the operation and adminis t ra t ion of f inanc ia l
and other business funct ions of the Society
w i t h i n operating pol icy and procedures on a
day-to-day basis.
Reporting to Vice President - International
N D - International Af fa i r s - ASIA , C A N A D A ,
EUROPE, I N D I A , M I D D L E EAST
A N D OTHERS
1. Encourage the technical and professional
development of the Value Disciplines (VE,
V A , V M , VP, etc.) for the area represented
through the creation of an organizational l i n k
w i t h SAVE.
2. A c t as spokesman representing the i n
terests of the organizations and memberships
of the area represented to the SAVE Board,
and represent the SAVE Board to those being
represented.
Reporting to Executive Vice President
N D - MEMBERSHIP
Promote, encourage, and assist i n develop
ing and expanding the membership of SAVE.
C H A I R M A N - MEMBERSHIP REVIEW
COMMITTEE
Review and c lass i fy app l ica t ions f o r
membership i n SAVE.
N D - CHAPTER DEVELOPMENT
Promote, encourage and assist Chapter ex
pansion.
N D - CHAPTER EFFECTIVENESS
Provide standards of performance and
measurement by w h i c h Chapters can grow
and develop. Provide incentives for the
Chapters to meet these standards.
N D - OFFICER DEVELOPMENT
Promote, encourage, advise and assist i n
t h e e s t a b l i s h m e n t a n d o p e r a t i o n o f
developmental programs fo r officers of the
Society. This is to be done so that orderly and
effective steps may be taken by both i n
dividuals and organizational components of
the Society to achieve and main ta in compe
tent g rowth patterns and h i g h level of e f f i
ciency for staff and l ine off icer personnel.
N D - CHAPTER PROGRAMS
Develop techniques, methods, and ideas to
assist Chapter Program Committees i n plann
ing and preparing the type of programs that
increase membership, attendance, and profes
sional development of local Chapters and
members.
Reporting to Vice President - Administration
N D - CONSTITUTION A N D B Y L A W S
M a i n t a i n the SAVE Cons t i tu t ion and
Bylaws currently effective, as a guide fo r the
conduct of the affairs of the Society; moni tor
and review Chapter Const i tu t ion and Bylaws
to assure their conformance w i t h Society - ap
proved practices and to obtain reasonable
u n i f o r m i t y i n Chapter practices.
N D - HONOR & A W A R D S
To direct and coordinate a l l Honors,
Awards , Resolutions, and Citat ion activities
concerned w i t h ind iv idua l s . Also responsible
for establishing cri teria for these Honors and
Awards .
Reporting to Vice President - Communica
tions
N D - PUBLIC RELATIONS
Develop and promote the publ ic relations,
policies, and programs fo r the specific
discipl ine assigned.
N D - FEDERAL L I A I S O N
To foster, encourage and on request assist
i n the establishment of Value Engineering
Programs i n Federal Government Agencies.
N D - V A L U E M A N A G E M E N T I N STATE A N D
L O C A L GOVERNMENTS
To foster, encourage and assist i n the
establishment of Value Management Pro
grams i n State and Local Governments.
N D - I N F O R M A T I O N SERVICES
Develop and main ta in systems to promote
the exchange o f i n f o r m a t i o n be tween
members; develop and main ta in systems to
moni tor trade magazine articles; assist i n
communicat ing VE capabilities to other
societies, organizations and associations.
N A T I O N A L HISTORIAN
Conduct a review of available material to
obtain pertinent facts and in fo rmat ion needed
to permit w r i t i n g of the history of SAVE.
N D - INTER-SOCIETY RELATIONS
Initiate and promote greater cooperation
w i t h other professional societies i n the f i e l d of
engineering, science, and management by
jo in t programs for exchanging in fo rmat ion
and sponsoring conferences and meetings
w i t h such societies having interests and ob
jectives compatible w i t h those of the Society
of Amer ican Value Engineers.
Reporting to Vice President - Professional Development
N D - CERTIFICATION REQUIREMENTS
Assist the Vice President - Professional
Development, i n the development, review
and adminis t ra t ion of the Cert i f icat ion Pro
gram.
N D - CAREER A D V A N C E M E N T
Provide assistance to Members to p lan ,
search and secure more ga in fu l employment
of their Value Engineering talents.
N D - COLLEGE RELATIONS
Develop a program to encourage univer
sities and colleges to offer Value Engineering
courses and seminars and to promote the i n
terest of both instructors and students i n the
value engineering descipline.
N D - TECHNOLOGICAL A D V A N C E M E N T
Advance the art and science of Value
Engineering
DIRECTOR - N A T I O N A L STANDARDS
COMMITTEE
Establish u n i f o r m and recognized de f in i
tions and terms w h i c h iden t i fy and describe
the activities, techniques, and disciplines
employed i n the Value Engineering profes
sion.
Reporting to National Director - Conference
N D - A N N U A L CONFERENCE TECHNICAL
PROGRAMS
Develop and manage Conference Technical
Program.
Reporting to National Director - Annual Conference Technical Programs
EDITOR, PROCEEDINGS
1. Sol ici t and select speakers fo r annual con
ference, i n coordinat ion w i t h the Conference
Staff.
2. Select papers to be p r in ted i n the annual
Proceedings.
a) Establish guidelines, edi tor ial po l icy ,
and due dates for the papers.
b) Edit papers before acceptance, to
c o m p l y w i t h (a) above.
c) Ensure that the accepted papers meet
SAVE professional standards established
i n (a) above. ,
3. Perform such other related duties as
directed.
Reporting to Executive Director
N D - CONFERENCES
Exercise administrat ive control and guide
the operation of a l l Nat ional and Regional
Conferences, par t icular ly w i t h regard to
theme, program, scheduling, organization
p lanning , and f inanc ia l p lann ing . Approve
and coordinate a l l conference dates to avoid
conf l ic t .
Reporting to Executive Committee
N D - INTERACTIONS EDITOR
Manage and edi t publications of the SAVE
INTERACTIONS Newsletter.
N D - V A L U E WORLD EDITOR
A d v i s e o n p u b l i s h a b l e m a n u s c r i p t
materials; recommend po l i cy matters and
potential sources of manuscript materials.
14 Value W o r l d July/September 1983
CLIP AND SAVE SAVE 1983-1984 BOARD OF DIRECTORS CLIP AND SAVE and NATIONAL DIRECTORS (ND) and COMMITTEE CHAIRMEN
(1) Denotes National Board of Directors Member (2) Denotes Executive Committee Member
President (1,2) William F . Lenzer, CVS Value Engineering, Inc. 10712 North Stemmons Freeway Dallas, T X 75220 Phone: 214/357-0870
V.P. - Northeast Region (1) Hal Goldman, CVS Goldman Associates 470 Park Ave. South New York, N Y 10016 Phone: 212/481-3422
Executive V.P . (1,2) John A. Jonelis, CVS 7281 Steinmeier Dr. Indianapolis, IN 46250 Phone: 317/352-2723
V.P. - Finance (1,2) Beverly A. Zolezzi, CVS Value Engineering Dept. (T2) Detroit Diesel Allison, Div. of GM Box 894 Indianapolis, IN 46206 Phone: 317/242-5985
V.P. - Administration (1,2) Nathan Borsuk, CVS Port Authority of N.Y. & N.J. 1 World Trade Center 72E New York, N Y 10048 Phone: 212/466-8852
Immediate Past President (1,2) and Nominating Committee Chairman John W. Bryant, CVS 4 Pinebrook Lane S. Easton, MA 02375 Phone: 617/238-9541 or
714/548-8018
V.P. - Communications (1) Edward W. Mitchell, CVS Northern Telecom Canada Ltd. 304 The East Mall Islington, ON M9B 6E4 Phone: 416/232-2000
V.P. - Prof. Development (1) R. Glenn Woodward, CVS 9215 Dewberry Lane College Park, MD 20740 Phone: 301/935-5338
V.P. - Southeast Region (1) and Certification Director Peter S. Megani, CVS E-Systems Inc. /ECI Division P.O. Box 12248 St. Petersburg, F L 33733 Phone: 813/381-2000 ext 2401
V.P. - Northcentral Region (1) John H . Maurer, CVS Westinghouse Productivity Center P.O. Box 160 Pittsburgh, PA 15230 Phone: 412/778-5129
V.P. - Southcentral Region (1) Robert C. Pumpelly Value Engineering, Inc. 10712 North Stemmons Freeway Dallas, T X 75220 Phone: 214/357-0870
V.P. - Northwest Region (1) Douglas M. Hood, CVS 821 N.W. Flanders Portland, OR 97209 Phone: 503/223-2876
V.P. - Southwest Region (1) Julian J. Pennello, CVS 1509 Mission Ave. Carmichael, C A 95608 Phone: 916/440-3476 ext 264
V.P. - Great Plains Region (1) Teresa A. Barlow, CVS Barlow Associates
ND - Membership Glenn Lee Adams A V C O Aerostructures Div. P.O. Box 210, Dept. 530 Nashville, T N 37202
ND - Chapter Effectiveness William H. Lynch 450 West Rd. , 400S Kokomo, IN 46902
ND - Chapter Development John D. Jackson, CVS 1745 Hilltop Circle Fort Worth, T X 76114 Phone: 817/777-2224
ND - Chapter Programs Rafael R. Dominguez, CVS Bendix Corp., H.V.S .G. 901 Cleveland Street Elyria, O H 44036 Phone: 216/329-9386
ND - Individual Honors and Awards Howard H . Burroughs Western Electric Company P.O. Box 1104, Dept. 5352 Indianapolis, IN 46206 Phone: 317/352-2517
ND - Constitution & By-Laws Howard Rooks Route #3 Marion, IA 52302 Phone: 319/395-2204
ND - Federal Liaison Harold Tufty, CVS Value Engineering Digest 986 National Press Bldg. Washington, DC 20045 Phone: 202/347-8998
2272 Chestnut St. Quincy, I L 62301 Phone: 217/224-9751
V.P. - Great Lakes Region (1) Eugene R. Smith, CVS 2215 N. Allison Ave. Speedway, IN 46224 Phone: 317/244-9149
ND - Public Relations Russ C. Brannen, CVS 28717 Osborn Road Bay Village, O H 44140
V.P. - International (1) William J. OP de Beeck 26 Lombaard Street 2580 St. Katelijne Waver Belgium Europe Phone: 03/317 17 17 ext 1704
Value W o r l d July/September 1983 15
ND - Value Management -State and Local Government Paul Rezachek Dept. of Admin. - State of MN Division of Procurement 50 Sherburne Avenue 112 Administration Bldg. St. Paul, MN 55155 Phone: 612/296-2621
ND - Information Services Bert J. Frattini, CVS Dravo Engineers & Constructors One Oliver Plaza Pittsburgh, PA 15222 Phone: 412/566-4710
ND - Career Advancement Richard G. Bradyhouse, CVS The Black & Decker Mfg. Company 701 E Joppa Road Towson, MD 21204 Phone: 301/583-3863
ND - College Relations Paul T. Filipi, CVS 12713 Morrison Drive Omaha, NE 68154 Phone: 402/221-3908
ND - Value World Technical Editor and Editor - Proceedings O. James Vogl, CVS 4909 via el Sereno Torrance, C A 90505 Phone: 213/414-6212
National Standards Committee Brian Higgins, CVS 7053 S. Lewis Court Littleton, CO 80127
ND - Technological Advancement Thomas Cook, CVS Thomas Cook Associates, Inc. 2970 Maria Dr. #109 Northbrook, IL 60062 Phone: 312/498-3870
C E R T I F I C A T I O N R E Q U I R E M E N T S National Director and ND - Int. Affairs - Asia J. Jerry Kaufman, C V S J.J. Kaufman Associates 12006 Indian Wells Drive Houston, T X 77066 Phone: 713/444-6887
Secretary Jimmie L . Carter, CVS Cooper Mining & Construction P.O. Box 632 Salem, V A 24153 Phone: 703/389-7213, ext. 284
Recertification Director Larry W. Zimmerman, CVS L-Z Associates, Inc. 6110 Executive Blvd., Suite 203 Rockville, MD 20852 Phone: 301/984-9590
Workshops Director Samuel C. Lashutka, CVS 4916 Arbor Village Drive #A Columbus, OH 43214 Phone: 614/888-0144
A V S Director W. T i m Baun, CVS Detroit Diesel Allison Div. General Motors Corp. Mail Drop T-2 P.O. Box 894 Indianapolis, IN 46206 Phone: 317/242-5165
Workshop Backup Tom King, CVS Joy Manufacturing Co. Liberty Street Franklin, PA 16323 Phone: 814/432-1335
SJVE Representative Akira Kodama Secretary General Soc. of Japanese Value Engr. c/o Sanno Institute of
Business Administration 6-39-15 Todoroki, Setagaya Tokyo,Japan Phone: 704-111
CVS Recertification Backup and ND - Int. Affairs - Middle East Paul V. Dobrow, CVS 4112 Stoconga Drive Beltsville, MD 20705 Phone: 202/272-0450
V.P. - Int. Affairs Clive Bebbington 575 Trottier St. St. Bruno, PQ Canada Phone: 514/653-3164
ND - Int. Affairs - Canada Robert P. Charette, CVS Roy Hanscomb Associates 433 Place Jacques Cartier Montreal PQ H2Y 3B1 Canada Phone: 514/871-0020
ND - Int. Affairs - India S.S. Venkataramanan, CVS Venconvave Private Limited 814, Chiranjiv Tower 43 Nehru Place New Delhi - 110019 India
ND - Conferences Ginger Willingham Value Engineering, Inc. 10712 N. Stemmons Freeway Dallas, T X 75220 *• Phone: 214/357-0870
ND - Business Manager, Interactions Editor and Value World Managing Editor Rita Bates S A V E Business Office 220 N. Story Rd. , Suite 114 Irving, T X 75061 Phone: 214/253-5171
Controller James A. Dziekonski, CVS Cost Improvement Management Services, Inc. P.O. Box 1248 Golden, CO 80402 Phone: 303/839-1980
Senior Vice President C ^ Smith, CVS RouV.6, Box 327 Kemp/r%75143 Phone: 214/357-0870
S A V E Secretary Desiree Smith 220 N. Story Road, Suite 114 Irving, T X 75061 Phone: 214/253-5171
16 Value W o r l d July/September 1983
Society of American Value Engineers May 24, 1983
1982-1983 Financial Report Chicago, Illinois
We feel all the loose ends have been tied together and we know of no previous commitments that have not been honored.
We as a Board have,
1. Cleared out more of our dead inventory ($17,793 last year down to $15,105 this year), but have more to go.
2. The inventory control system is working and you can get answers, if you need them. And, it's on the money.
3. Paid chapter dividends on time and the full amount when we know where to send them.
4. Entered into new contracts on books and publications.
5. Challenged the State of Texas on their levying of personal property taxes.
6. As some of you know, rejected
Rita Bates plea for a word processor for the last two years due to our financial condition. But, this year we did a study on our typesetting costs and found that we could justify it. But, instead we purchased a Osborne Computer and a Qume Daisywheel Printer. (Typesetting $8,000 - Computer & Printer $3,600). This produces cah^era-ready copy, as seen in the May edition of Interactions.
7. Returned to the membership more than in the past, even in this past year's economic slide. We have lost membership, and figured on that, but membership even slipped further than anticipated. (124 less or about $5,000).
8. Had our share of turnover in the way of secretaries this past
year, but feel we have a fantastic staff on board at the present time. Also, Rita's bout with the flu played havoc with our Office operation and will take a while to get back on an even keel. We would like to thank everyone for their help and assistance.
It has been our intent that Expense and G&A would match Income (not including Conference Income) so that this Society could grow. We are not at that point and probably won't be there for a few more years.
You have handouts covering our financial status from this year, prior years and we would entertain any questions from the floor at this time.
Functionally,
James A. Dziekonski, Controller and Beverly A. Zolezzi, CVS Vice President - Finance
1982-1983 year ending April 30, 1983 Presented May 24, 1983
INCOME EXPENSE G E N . & ADMIN. D I F F E R E N C E
Membership Dues & Fees
59,436 26,016 46,255 (12,835)
Conference 69,036 42,446 10,590 16,000
Publication Sales
26,799 16,658 1,913 8,228
Publications Rental
1,160 86 417 657
Certification 1,584 3,543 445 (2,404)
Chapter Dividend
11,021 11,047 1,148 (1,174)
Interest 2,039 — 0 — 10 2,029
Workshop — 0 — 377 365 (742)
Totals 171,075 100,173 61,143 9,759
Value W o r l d July/September 1983 17
Society of American Value Engineers, Inc. Financial History
Presented May 24, 1983
As of the close of Business, April 30th each year
1978 1979
*
1980
* *
1981 1982
* * *
1982 1983
1. Sales 144,868 142,772 154,220 171,829 165,313 164,815 171,075
2. Direct Mat.
3. Direct Labor
4. Overhead
5. Cost Sales 148,295 159,392 158,481 155,157 154,501 96,195 100,173
7. Programmed Expense 60,320 61,4*98 60,680
8. Before Tax Profit 7,122 10,222
9. State Taxes 31 463
10. Net Income (3,427) (16,620) (4,261) 16,672 10,812 7,091 9,759
11. Cash 20,056 12 ,778 20,400 30,445 39,052 39,052 49,451
12. Receivables 4,573 6 ,571 11,678 6,709 15,210 2,870 10,035
13. Inventory 20,316 16 ,494 20,360 18,561 17,852 17,793 15,105
14. Cur. Assets 44,945 35 ,843 52,438 55,715 71,862 59,715 74,591
15. Current Liab. 26,291 32 ,955 52,955 38,504 43,600 6,518 7,006
16. Work. Invest 18,654 2 , 8 8 8 (517) 17,211 28,262 53,197 67,585
17. Fixed Invest 17,761 18 ,389 18,977 17,116 16,977 16,977 18,228
18. Total Invest 36,415 21 ,277 18,460 34,327 45,239 73,174 85,813
19. Equity 28,813 12 ,193 7,932 24,604 35,416 70,174 79,933
20. Debt 7,602 9 , 0 8 4 10,528 9,723 (9,823) (3,000) (5,880)
21. Ret. on Sis. (2.4%) (11.6%) (2.8%) 9.7% 6.5% 4.3% 5.7%
22. Ret. on Inv. (9.4%) (78.1%) (23.1%) 48.6% 23.9% 9.7% 11.4%
23. T .I . to Sis. 25.1% 14.9% 12.0% 19.9% 27.4% 44.4% 50.2%
24. Debt Ratio 20.9% 42.7% 57.0% 28.3% (21.7%) (4.1%) (6.9%)
25. Ret. on Equ. (11.9%) (136.3%) (53.7%) 67.8% 30.5% 10.1% 12.2%
* Jim Dziekonski appointed VP-Finance September 22, 1979 to complete unexpired te rm of A l i ce Mozley
** Translation f r o m depreciated assets per depreciation schedule to f ixed assets at appraised value. ($9,723 adjustment)
*** Accountant 's translation f r o m accrual to cash basis of accounting per W i g n a l l , Chapman, McGee, and Company (Auditors)
18 Value W o r l d July/September 1983
SOCIETY OF AMERICAN VALUE ENGINEERS, INC. IRVING, TEXAS
COMPARATIVE BALANCE SHEET AS OF APRIL 30, 1983
1981 1982 1983
ASSETS
Cash on hand and in bank
Accounts receivable
Prepaid expenses
Conference advances
Inventory
Furniture and Fixtures
Office equipment
Security deposit
Total assets
$ 30,445
6,356
353
18,561
6,895
9,780
441
$ 72,831
$ 39,052
10,185
1,213
3,371
17,852
6,895
10,082
441
$89,091
$ 49,451
10,137
1,421
7,861
15,105
6,895
11,333
503
$102,706
LIABILITIES
Credits for returns
Accounts payable
Payroll taxes payable
Chapter rebates payable
Conference income (advance payments)
Dues received in advance
Society fund balance
Total liabilities and fund balance
$ -
12,617
43
3,349
22,495
34,327
$ 72,831
$ -
- 560
648
6,927
16,040
19,425
45,491
$ 89,091
$ 720
604
724
6,402
35,382
31,788
27,085
$102,706
Value W o r l d July/September 1983 19
What Did We See in '83?
If you were looking for "innovation" at a SAVE International Conference, let's hope you were in attendance, at the 1983 S A V E , International Conference, recently conducted in Chicago, Illinois.
Here, you would have immediately noted that Hoshang Karani, Robert Redford, Tom Cook, Don Lenef and their associates were very creative in expanding the normal three concurrent session configuration to a four concurrent session arrangement. How they did it, we really don't know, but suddenly we now have added a new series of technical sessions known as "Outreach -Other Worlds". As the Conference rolled along toward its very successful conclusion, we realized the "Chicago Crowd" had done it again! We had another winner on bur hands with the fourth session. Our attendees want more of this in the future.
Then right along in the same vein of International Outreach, our President,. Bill Lenzer, arranged for special "executive communication" sessions geared to meaningful expansion of value applications and recognition throughout the upper management levels of American Industry and Commerce, plus the International environment of value that has become such a vital growing force for S A V E and all it stands for during the past 3-5 years.
Meanwhile, close examination of the technical programs in progress
Jack Reichert Brunswick Corporation
Keynote Speaker
1983 Conference Report by C. P. Smith
revealed many interesting approaches for education in value. Beginning on Sunday, we caught George Fridholm conducting the perennial Introduction to V E Session. Then you ask, what happened to Art Mudge? Well, you take a look at Monday's schedule and see that Art is now conducting a special "Executive Sess ion" for Industry Leaders, listed as "By Invitation Only".
Also on Sunday, in the Exhibit Area, we all had an opportunity to meet the authors and publishers,
* I
Dr. William H. Copperman Hughes Aircraft Company
"Collateral Savings—The Real Challenge"
which was a good touch for all concerned. This year video tapes were in abundance for our view and edification in the exhibit area.
Monday's opening session was a dynamic, energetic kickoff for our Conference thanks to Jack Reichert, C E O , Brunswick Corporation. There must have been 325 people out there in the audience who wished they had a boss like Jack who would speak about them the way he spoke about Hoshang Karani. We think Tom Cook was sort of proud of Hoshang also. After the kickoff, we had a terrific game plan ready for the technical sessions. Let me share a few of the titles with you; Government and Defense Collateral Savings, Life Cycle Costing, V E in Transportation, Evaluating V E in Construction, One Person V E , One Day Studies, The Third Wave, A More Constructive Community, Workshops for Problem Solving
-Analysis of Creative Products, Center on the Client Communications Results through Creativity. Diversion was provided in sessions on V E in Department of Transportation, Waste Water Treatment, V E and Sizzle, Strategy Workshop, Value Purchasing, Problem Solving and Neuro-Linguistic Programming!
Then if you prefer panels, we had them on value, quality circles, construction/design modifying techniques, management mandate, and then further International Exchange of techniques - the International Discussion Session, various application testimonials *and continuing workshops.
In conjunction with this very heavy dose of technical transfusion and mental enhancement, certain functions were also very successful for the lighter side of Conference attendance. The Ladies Program gave a beautiful insight to the inner beauty of an otherwise sort of plain appearing City of Chicago. The "Special Nite" gave us an opportunity to "go to the top of the world'' in the Sears Tower and see the four corners of the earth from the top of Chicago.
So whatever you wanted in a S A V E Conference was ready for you in Chicago. Get your reservation in early for Sacramento in '84 so you don't miss any nuggets in the S A V E Goldrush of '84.
We'll Show You More in '84!
Hoshang Karani Brunswick Corporation
Conference General Chairman
20 Value W o r l d July/September 1983
HABITS AND ATTITUDES Walter J. Kirst
Value Engineering Coordinator • Control Data Corp. Terminals and Small Systems Division
Habit is One of the Deepest Laws of Nature
H a b i t is general ly unders tood as a
stereotyped f o r m of response; doing the same
th ing always i n the same way, under the same
condit ions. Habits are automatic reactions
and responses that we 've learned to per form
w i t h o u t having to T H I N K or DECIDE. Because
our habits are so int imately fami l ia r to us,
their effects are of ten overlooked.
Usually, w h e n we t h i n k of the w o r d
H A B I T , i t 's a bad habit that we have i n m i n d .
This is because i t 's usually easier for us to
recognize the role a bad habit plays i n our l i f e .
We a l l recognize that " smoking can be hazard
ous to your hea l th" or "overeating is bad for
y o u " , but h o w of ten do we t h i n k of the
benefits of habit w h e n getting dressed or dr iv
ing a car. Being able to do these things
w i t h o u t T H I N K I N G or DECIDING gets us
through our day ef f ic ien t ly and smoothly. We
have T h i n k i n g Habit Patterns and Decision
M a k i n g Habits that cause us to do things that
are both good and bad for us.
Habit Limits Our Options
I f we a l low our t h ink ing and decision mak
ing patterns to become inf lex ib le , we stunt
our oppor tuni ty for g rowth . We l i m i t our op
tions for ways to accomplish a task or behave
i n a part icular manner. As we age, our habits
cause us to become "set i n our w a y . " They
cause us to be less creative, less receptive to
new ways, and we become more judgemental .
Negative Habits
Negative t h ink ing habits restrict g rowth
and l i m i t change. We use k i l l e r phrases l ike :
" I t can't be done . . . " , "We 've always done i t
that way . . . " , " I ' m too o l d for tha t" . We
l i m i t our o w n progress by operating f r o m a
negative posi t ion.
We come by negative t h i n k i n g unin ten
t iona l ly because we l ive i n a negative society.
Fami ly structure, education, place of work ,
and other inst i tut ions teach us the automatic
" N O " . The f i rs t w o r d a c h i l d learns after
mama and daddy is " N O " . I f ch i ld ren hear
t h e m s e l v e s b e i n g c a l l e d " s t u p i d , "
"naugh ty , " etc., they develop negative
thought patterns, and w i l l get i n the habit of
t h i n k i n g they are " s t u p i d , " or "naugh ty" .
Chi ldren are condi t ioned to develop negative
habits that later support negative attitudes.
We can choose to condi t ion them i n a positive
way so they can develop the habit of t h i n k i n g
they are w o r t h w h i l e and can search for op
t ions. We can choose to change our o w n
habits i n a posit ive way . It 's just as easy to ' 'be
on t i m e " as i t is to be f ive minutes late for a
meeting. It 's much easier to "do something
r igh t the f i r s t t i m e " , i t 's benefic ia l to you and
those around you to "develop safe w o r k
habi ts" .
The f o l l o w i n g synopsis of a poem, of
u n k n o w n authorship, makes the po in t of early
negative condi t ion ing very w e l l .
Once a l i t t le boy went to a b ig school. W h e n
he f o u n d his way around, school d i d n ' t seem
so b ig and he was happy.
One day the teacher said "Today we are go
ing to make a p ic tu re" . The l i t t le boy took out
his crayons and paper and started to draw, but
the teacher said, "Wai t ! I t is not t ime to
beg in . " When everyone was ready the teacher
said "we ' re going to make f l o w e r s , " and she
showed the class how to draw a red f lower
w i t h a green stem. The l i t t l e boy l i ked his pic
ture better but he turned the paper over, and
drew a f lower just l ike the teacher's. The same
th ing happened again and again w i t h clay,
paper cutouts, and many other things. The l i t
tle boy started to make what he had thought
of, but the teacher t o l d h i m exactly what to
make and he d i d .
Then one day the boy and his f a m i l y moved
to another c i ty . He had to go to another, even
bigger, school. His f i rs t day i n school the
teacher announced "Today we are going to
make a p ic tu re . " The l i t t le boy wai ted for the
teacher to te l l h i m what to make. But the
teacher said nothing. Final ly , w h e n the
teacher noticed the l i t t le boy wasn ' t d rawing
she said, " D o n ' t you l ike to make pictures?"
" O h yes" said the l i t t le boy, " W h a t are we to
make?" " I don ' t know u n t i l you make i t , "
said the teacher. " H o w shall I make i t ? " said
the l i t t l e boy. " W h y , anyway y o u l i k e " the
teacher said. " I f everyone made the same pic
ture, how w o u l d I know w h o made w h a t ? " " I
don ' t k n o w , ' ' said the l i t t l e boy as he began to
draw a red f lower w i t h a green stem.
Conditioning
Habits usually are not created by one
monumental experience or an i n d i v i d u a l ac
t i v i t y . Habit occurs one b i t at a t ime. We are
usually condi t ioned very gradually, unaware
of acquir ing that habit u n t i l i t has control of
us. Since condi t ion ing is so subtle and easily
picked up , in tent ional ly surround yourself
w i t h posit ive inputs (positive people, motiva
t ional books and tapes, etc.) I f you don' t , the
automatic " N O " can take control , then you're
not as usefu l to yourself or your job.
Resistance to Change
Habit causes us to c l ing to the past.
Resistance to change is a p o w e r f u l force i n a
person's l i f e . There is the story of a group of
people i n South America who for generations
have gone b l i n d and died i n their late 30's. I t
was discovered that an insect l i v i n g i n the
wal ls of their m u d huts was the cause of their
blindness and eventual death. Once the cause
of the problem was discovered, this group of
people had several alternatives:
• They cou ld fumigate the huts.
• They cou ld b u r n the huts to the ground
and rebui ld .
• They could relocate to an area free of i n
sects, or
• They cou ld do noth ing .
They chose to DO NOTHING! Because of
fear and resistance to change, they chose
blindness and early death. We make a lot of
sacrifices to stay w i t h our comfortable rut ,
called Habit .
There is Hope — You Can Change
Habits can be usefu l i f they help us be pro
gressive and product ive. However, i f habits
immobi l ize us or cause us to be in f lex ib le , we
are our o w n worst enemy. Behavior can be
changed; you alone control your destiny, the
fu ture is up to you .
Confucius said, "Habits take us where we
were yesterday and our attitudes keep us
there."
Habits and At t i tude go hand-in-hand;
change one and you w i l l automatically i n
fluence the other. Our habits support our at
titudes and, at the same t ime, we cult ivate
habits as a result of our attitudes.
Att i tudes can enrich our lives or rob us of
the enjoyment of l i f e . W i t h the wrong at
t i tude, we accept the ROADBLOCKS to pro
gress. A negative attitude allows us to accept
roadblocks as reasons, rather than the excuses
they are, to keep us f r o m acting. We become
satisfied w i t h on ly what i t takes to get by. We
may get by, but do we really live?
Y o u can enrich your l i f e w i t h a positive at
t i tude. Minute-by-minute l i v i n g can be more
rewarding for yourself and others. Y o u can
develop the attitude, there is a better way . . .
search for alternatives. Create a W I N - W I N
si tuation.
A W I N - W I N atti tude takes cooperation - be
ing w i l l i n g to share the spotl ight - want ing
(Continued on Page 23)
Value W o r l d July/September 1983 21
VALUE MANAGEMENT OF
LOGISTICS SUPPORT Edward B. Lowe
Manager
Value Management
Integrated Logistics Support Divisions
Westinghouse Electric Corporation
Introduction
Logisticians are fami l ia r w i t h the terms of
Logistics Support Analysis (LSA), Level of
Repair Analysis (LORA), Sensitivity Analysis ,
L i fe Cycle Cost, Design Reviews, Design to
Cost, and many others. We need to incor
porate into the logisticians " tools of the
t rade" the knowledge and desire to apply
Value Analysis (VA) techniques to the
logistics support system, and to its technical
as w e l l as business aspects. This w i l l result i n
a 25% to 40% improvement i n product cost
w i t h addi t ional increases i n value, qual i ty ,
re l iabi l i ty , and produc t iv i ty .
The use and appl icat ion of the Value
Analysis techniques provides the Program/
Project Manager w i t h an advantage i n
management of a program. W h e n appl ied to
the logistics support elements a more improv
ed, complete and cost-effective logistics sup
port package w i l l result. Likewise, u t i l i za t ion
of the V A techniques assists management i n
surfacing the problems or opportunit ies
w i t h i n the logistics support business. I t pro
vides techniques for establishing prior i t ies for
the opportunit ies, i den t i fy ing the corrective
action required, and provides the appropriate
V A techniques for the resolution of problems.
Logistics Value Management Planning - Value
Management Planning can be appropriately
appl ied to a logistics organization or the
management of a logistics program w h i c h
supports items i n DoD inventory. Al so , this
p lanning can be appl ied by the DoD and the
mi l i t a ry services i n managing their programs/
projects.
A review of the elements of a Value Job Plan
and a review of the type of in fo rma t ion re
quired as w e l l as the tasks required fo r i m
plementat ion w i l l provide us an ins ight as to
the make-up of a central value management
organization. Disciplines that are shown i n
the value job p lan are those i n the area of
f inance, engineering, manufactur ing opera
t ions, and program management (mul t i - func
t i o n discipl ine) .
Program management w o u l d be an ideal
d isc ipl ine for integration i n the central value
management o r g a n i z a t i o n because tha t
d i s c i p l i n e has experience i n d e f i n i n g ,
organizing, and sell ing m u l t i - f u n c t i o n pro
grams and runn ing those programs as a
business. I t is proposed that a typ ica l central
value management organization consist of a
representative f r o m the controller 's depart
ment, a representative f r o m engineering, a
representative f r o m manufactur ing opera
tions, and a representative that has had m u l t i
f u n c t i o n program experience. The central
value management organization provides
leadership and funct ions as a catalyst i n
achieving the company or logistics program
goals. The cen t ra l va lue management
organization should report to h i g h level
Manager or to an organizational pos i t ion that
w i l l enhance the Value Management ac
t iv i t ies .
Strategy
The implementa t ion of Value Management
i n a program, business un i t , or support
system requires a strategic approach. A
representative strategy is ou t l ined as fo l lows :
1. Establish a central value management
organization that w i l l provide leader
ship and f u n c t i o n as a catalyst i n achiev
ing the goals.
2. T ra in the value management organiza
t i o n and the funct ion/department value
representatives i n Value Analysis u t i l i z
ing the resources available.
3. A p p l y V A b y p r o d u c t / h a r d w a r e
workshops on logistics-deliverable pro
ducts. This w i l l result i n lower product
costs, higher re l iab i l i ty and qual i ty for
those products, as w e l l as, t ra in ing i n
the appl ica t ion of the value process.
T h r o u g h workshops teamwork w i l l
become prevalent and barriers w i l l be
overcome.
4. Establishment of V A w i l l increase the
sensit ivity to " V A L U E " and enhance the
Value Engineering Change Proposal
(VECP) act iv i ty . This w i l l result i n more
proposals and potential savings as p ro f i t
margin .
5. A p p l y V A (after i t has been established)
to non-hardware areas such as pro
posals, software, technical publications,
p u r c h a s i n g , spares d o c u m e n t a t i o n ,
qual i ty , components, shippers, w o r k
processes, faci l i t ies , program manage
ment, etc.
6. A p p l y V A to business systems areas.
Logistics Applications
Project candidates and selections are for
mulated f r o m inputs obtained f r o m the func
t ional and program areas. The candidates can
be categorized as: product candidates; pro
cess candidates; business system candidates.
Some examples of process candidates are:
Prof i tab i l i ty of a func t iona l product
Proposal process
Purchasing resale process
Provisioning documentat ion process
Technical publ icat ions process
Software
A n example of a system candidate w o u l d be
a computer system that is proposed for an ex
pansion to a completely automated business
system.
Some product candidates w o u l d encom
pass:
• A conceptual design of an i t em of test
equipment.
• A test equipment i t em that has been pro
duced previously and the reorder quanti
ty and value is suf f ic ien t fo r workshop
candidate.
• Spare parts regardless of the support
phase, includes post product ion spare
items. Through appl ica t ion of the value
job p lan to post p roduc t ion spare i tem,
results are obtained i n the ref inement of
the manufactur ing process as w e l l as i n
the selection of alternative materials,
design improvements/changes and test
methods/levels.
Value Management/Value Analysis of the
maintenance and logistics activities w i l l also
provide lower operational costs. The total cost
of ownership is affected by operating,
maintenance and other logistics costs. Reduc
ing these costs ( in excess of any attendant i n
crease i n procurement cost) results i n a lower
l i f e cycle cost. Larger potent ial savings ju s t i fy
the investment fo r the value study and subse
quent implementa t ion expenses du r ing the
operational phase. Value studies i n the
maintenance areas du r ing the operational
phase have been very successful. Dur ing
maintenance of equipment, failures, major
points of wear, and trouble areas become ap-
22 Value W o r l d July/September 1983
parent to maintenance and repair personnel.
The collective ski l ls , knowledge and ex
perience - of these personnel is an asset that
can be u t i l i zed to great advantage i n the value
process.
There is an u n l i m i t e d resource of ideas
available f r o m maintenance and repair per
sonnel. Some of the applications and benefits
of using V A techniques i n maintenance-
oriented activities are:
a. A value program can respond to unfore
seen problems that develop after an i t em
has been i n service, such as early fa i lure
i n c i d e n t s , excessive f r e q u e n c y of
replacements i n the f i e l d or depot, ex
cessive or repeated increases i n the cost
to manufacture or repair, restricted
avai labi l i ty or replacements, or changes
i n mission ( funct ion) .
b. The value process can develop, evaluate
and implement new and expanded repair
methods to extend the l i f e of existing
hardware, reduce reject and disposal
rates, reduce costly and t ime-consuming
processing, s i m p l i f y inspect ion and
testing procedures, and take advantage of
new and improved indust r ia l too l ing ,
equipment and processes.
c. VE can propose changes to technical
data, repair manuals, qual i ty inspection
cri ter ia and the various standards,
specifications and tolerances that govern
the inspection, repair, overhaul, testing
and acceptance of items undergoing
depot-level maintenance. Maintenance
and repair personnel are i n the best posi
t i o n to observe the cond i t ion of items
received after varying service intervals
the types, causes and effects of damage
and the effectiveness of prescribed
(Habits and Att i tudes Continued)
the new to work . Rather than shr inking f r o m
change, support progressive change. Become
involved i n improvements. Because so many
people fear and resist change, quite of ten new
methods are subtly undermined. We can
choose to t h ink posi t ively. We can be proud of
ourselves and our job.
How Do Attitudes Develop?
We are born w i t h an attitude screen. W h e n
we are very young, our attitude screen is
crystal clear, l ike clean panes of glass. As we
grow older, our attitude screen becomes
cloudy and f i l l e d i n w i t h the results of past i n
d i v i d u a l experiences, l ike a di r ty w i n d o w .
Our fu ture success depends on what we do
w i t h our attitude and how we see things
through our attitude screen. We react to
things not as they are, but as we see them.
The Conscious and Subconscious Mind
Dr. Abrham Maslow compared man's m i n d
to an iceberg.
The conscious m i n d (exposed 10%) is sup
ported by and relies on the tremendous
maintenance methods. Areas can be iden
t i f i e d i n the technical data package that
can be el iminated or relaxed w i t h o u t
reducing the re l iab i l i ty or necessary per
formance standards of the end i tem.
d . V A can provide a systematic problem-
s o l v i n g technique f o r maintenance-
r e l a t e d p r o b l e m s s t e m m i n g f r o m
eng inee r ing designs, spec i f i ca t ions ,
modif icat ions, etc.
e. The value process can be used i n prepar
ing and reviewing specifications for pro
curement of equipment, materials and
services.
Summary
Value Management/Value Analysis has
developed specific techniques that have ap
p l ica t ion i n business systems, procedures,
processes, services, and products. This also
encompasses the s ignif icant opportunit ies
that are available i n Logistics Support.
Value Management provides a v i t a l and key
cont r ibut ion to logistics p lanning tasks. A p
pl ica t ion of the V A techniques to logistics
elements and system could result i n an
estimated 25-40% improvement i n costs w i t h
addit ional increases i n quali ty, re l iabi l i ty ,
and product iv i ty . A successful value task
must f o l l o w the Value Job Plan completely
w i t h no short cuts. Preparation and u t i l i za t ion
of a Logistics Value Management Plan w i l l
provide the discipl ine for t h i n k i n g i n terms of
" V a l u e " and seeing that the process is seeded
w i t h i n the logistics disciplines.
Logistics Value Management Planning re
quires:
-A central Value Management organization
-Training of the iden t i f i ed personnel
volume of energy stored i n the subconscious
m i n d (submerged 90%). A t the same t ime, the
vast power of the subconscious m i n d is sub
jected and control led by the conscious m i n d .
Charles Kettering once said;
" T H E ONLY DIFFERENCE BETWEEN A
M A N BEING OBSOLETE A T 35 OR A
PIONEER A T 70 LIES I N HIS A B I L I T Y TO
CHANGE HIS A T T I T U D E . "
The Choice is Yours
Y o u can m o d i f y your behavior. Y o u can
CHOOSE to be positive — you can inf luence
your surroundings. FEELINGS FOL L OW
BEHAVIOR. W h e n you A C T POSITIVE, you
w i l l FEEL POSITIVE.
The attitude you have is yours by CHOICE,
whether i t 's positive or negative. Y o u control
your attitude, i n fact . . . YOUR's is the only
attitude you can control . W i t h a negative at
t i tude, y o u ' l l get negative results and develop
a habit of b locking alternatives. W i t h a
positive, healthy attitude, y o u ' l l get posit ive
results and develop the habit of searching for
alternatives and possibilities. The choice is
-Seeding of the process v ia p roduc t
workshop
-Appl ica t ion of the value process to non-
hardware areas
-Appl ica t ion of the value process to
business systems
-Appl ica t ion of the value process to
maintenance areas
The fu ture for the value analysis discipl ine
is l i m i t e d only by the creative imaginat ion
and energies of logisticians and supporters.
REFERENCES
1. Miles, Lawrence D. , Techniques of Value Analys i s and
Engineering, McGraw Hi l l Book Co. , Inc. 1961
2. Pendergast, John F . , "Profit and Research and Improve
ment", and "Value Leadership - A n Approach to Organiz
ing and Managing Your Value Program", Value Programs
for Industry, Inc.
Edward B. Lowe received a BSEE degree
from the Universi ty of Cinc innat i i n Ohio,
and a Master of Science degree i n Electrical
Engineer ing from Drexel U n i v e r s i t y i n
Phi lade lph ia , Pennsylvania . He recently
completed the National Security Management
Course of the Nat ional Defense Universi ty i n
Washington, D . C , and has completed the A d
vanced Logistics Engineering course from G e o r g e W a s h i n g t o n U n i v e r s i t y i n
Washington, D.C. Mr . Lowe is a member of the Society of Logistics Engineers (SOLE),
SAVE and par t ic ipant i n the Nat ional Secur
i ty Indust r ia l Associat ion (NSIA). Mr . Lowe
has twenty years of experience in logistics
that have addressed a l l the elements of logistics support. His most recent eight years
of experience have been i n Integrated
Logistics Support Program Management.
UP T O Y O U ! What w i l l you do w i t h this most
precious gif t?
FEELING POSITIVE FEELS GOOD! ! !
B I B L I O G R A P H Y
Sidney F . Randolph, "Attitude - constructive or destructive,
you have one", Chevrolet Value Engineering, undated arti
cle, pp 1-3
Sidney F . Randolph, "Habts - habits - habits", Chevrolet
Value Engineering, undated article, pp 1-3
W. B. Dean, Value Engineering Handbook, {(Professional
Value Service) 1980
Value Workshop Seminar Handbook, (Value Analysis , Inc.)
1980
Dr. Berlie J. Fal lon, Keys to Creative L iv ing (Success Motiva
tion Institute) audio tape
David D. Burns, M.D . " Y o u can change the way you feel",
Magazine article of unknown origin with reference to Dr.
Burns' book, "Feeling Good: T h e New Mood Therapy"
(Signet)
Faith in the future is taking out a four year loan on a car that is guaranteed
for only one.
Value W o r l d July/September 1983 23
PSYCHOLOGICAL ASPECTS OF VALUE ANALYSIS
Value Analysis (VA) or Value Engineering (VE) is basically a scientific problem solving method. Yet, in a field of many effective problem-solving techniques, V E / V A has demonstrated a much higher success than others, especially in the cost-effective areas. E v e n those who have practiced this methodology ask what makes it so outstanding - we have more than an academic concern. The practitioner also has found a managerial paradox - the very tool that efficiently serves management goals does not enjoy commensurate support in return. This lack of support is primarily due to a lack of understanding of the tremendous benefits that V A provides more than commonly used problem solving techniques. Most of the answers are evident in the behavorial aspects of V A . If we examine the behavioral aspects of this successful method we wi l l find the reasons for the potential improvements which many organizations enjoy by fully implementing the sound psychological aspect of V A .
Much of V A is practiced i n group decision environment. A n integrated team is generally productive for complex tasks. Also, consider that people's individual behavior tends to be constrained in most task situations. We bring people together in a group decision mode primarily 1) to bring more information to the situation; 2) to analyze information more critically; and 3) create ideas in cross-talk.
At the same time we should recognize that there may be situations in which the manager: 1) already has all the information he needs; 2) is perfectly capable of processing the information himself; and 3) does not require the commitment of others for implementation. In some situations V A may not be appropriate or required. Notwithstanding, research shows that decisions are put into action more effectively with group consensus. Decisions imposed from the outside or by a minority are not likely to be lasting or effective. Restrictive authorization is a poor tool for effecting important changes and attitudes.
Consequently, it profits us to understand the basic methods available to change opinions, attitudes and habits:
1. Coercion or power has an important role in relationships. This role may be from implicit to explicit, ranging in acceptance of authority from mutual respect of private property to an agreement not to use physical force.
2. Brainwashing, which is commonly used in various forms involves a rather subtle exploitation of some well-known truths under which some people may be forced to change their attitudes and behavior. The line between coercion and persuasion becomes very delicate.
24 Value World July/September 1983
by Fred Spiegl Staff Value Engineer Space Division
3. The brainwashing that some of us deplore, utilizes principles not very different from the education that most of us value positively.
4. Manipulation seems a sometimes slippery method commonly used by such phrases as:
"You've got to make them think it is their idea."
"You've got to make them like you."
"You've got to sell yourself."
"You've got to be sincere."
These are all forms of manipulation.
The manipulative model tends to develop dependent relationships. The manipulators are sensitive to needs of the other person and tend to act by indirection rather than by direction. In many situations this is a useful, acceptable and moral method.
5. Perhaps a much more powerful model of influence on human behavior is called the collaborative model. The collaborative model is similar to that of the Alchol ics Anonymous concept and depends on a person wanting to be helped. It is predominantly an argumentative process in which the responsibility never leaves the person that desires to change.
6. Counselling and psychiatry have moved rapidly in this direction, non-directive therapy being a current predominant form of behavior modification. But many people may be psychologically weak and not willing to change until the pain becomes crippling enough to warrant
To present a paper to the S A V E International Conference you must have a paper published in the Proceedings.
The first step is to select your subject. Please check with the Conference Chairman or the Proceedings Editor to see if your subject is compatible with the Conference theme.
Once the subject has been approved, the Editor wi l l send you a brochure on how to prepare a paper for the S A V E Proceedings. Please follow the directions carefully for if you do not, your paper wi l l be unacceptable and we wi l l lose your services as a speaker.
The brochure wi l l direct you to prepare a draft of your paper, complete with abstract and biography. These should be sent to the Editor for editing as soon as possible. The
help. Yet others may see the problems more clearly and want more immediate action. People may not feel the tension of their unsatisfactory behavior and may have different aspiration levels.
One of the reasons V E is most successful in Japan is a strong compulsion for people wanting to change once the V E change teams have agreed on results.
7. Effective performance appraisals also provide a successful approach to encouraging and implementing V E by providing the following:
People want to know where they stand;
Employees want recognition for extra effort; and £
Employees would like feedback about where they can improve their work and get more pay.
We can encourage performance on a continuing basis with people on all levels of management. Personal motivation, training and reinforcement used to generate sufficient desire are recommended methods in the daily working routine. V A consequently has been and is a proven successful tool to bring about major changes effectively and lastingly.
References
1. Managerial Psychology, Harold J . Leavitt, 4th Edit ion 1978,
University of Chicago Press.
2. Value Analys i s , Carlos Fal lon, 2nd Edit ion 1978, Triangle
Press.
3. Management of Organizational Behavior, Paul Hersey and
Kenneth H . Blanchard, 4th Edit ion 1982, Prentice-Hall, Inc .
T H E W O R L D IS CHANGING SO F A S T . . . that you couldn't stay wrong all the time even if you tried, says the newsletter of the Assn Execs of Upstate NY.
edited paper wi l l be returned to you for typing on the special S A V E paper which wi l l accompany the edited copy.
The final typed copy M U S T be received by the indicated date else it can not be given to the printer by his deadline for having the Proceedings ready for the Conference.
Please contact: Jim Vogl, Editor 4909 via el Sereno Torrance, C A 90505 (213) 378-1803
or Julian J. Pennello, Conference Chairman 1509 Mission Ave. Carmichael, C A 95608
CALL FOR PAPERS 1984 CONFERENCE
"MARKET BASKET" SIGNODE
(May 4, 1983 interview on channel 26, Chicago, Illinois)
T V Interviewer: M r . John Deininger, Presi
dent of Signode, a w e l l -
k n o w n manufactur ing f i r m
here i n the Chicago area. M r .
Deininger, you were part of
a seminar this morn ing , that
took place here at the Hyatt
Regency, discussing Value
Engineering as a means of
making Amer ican industry
more competi t ive. Just h o w
d i d you go about doing this ,
and w h y do y o u feel this is
the answer to making us
more competitive?
M r . Deininger: W e l l , Value Engineer ing,
w h i c h has been around fo r
some t ime , we f i n d i t purely
a formal d isc ipl ine of apply
ing i t th rough and immers
ing a l l the employees in to
this s k i l l , i t enables us to
achieve outstanding perfor
mance. A t Signode, we
employed this f o r m of pro
gram last September, and
since have appl ied i t to three
products and have had
s ignif icant savings i n the
magnitude of 40-50% on
each product .
T V Interviewer: W e l l I w o u l d say that cer
ta inly has value. N o w a f ew
years ago we were t o l d , at
least here, there w o u l d
reports that we were sort of
overloaded w i t h engineers,
and now i t develops that we
have a shortage. Is this pro
gram of Value Engineering
have an impact on that situa
tion?
M r . Deininger: Not as far as adding more
engineering to the w o r k
force, but I th ink that we
have done to prove to
ourselves that our engineers
are able to work more pro
duct ively w i t h this new con
cept.
T V Interviewer: N o w then, before this con
cept came about, just how
d i d you go about complet ing
or comput ing these tasks
before you , and just what is
the pr imary th ing that makes
the d i f f e r e n c e i n y o u r
results?
M r . Deininger: I t h ink that our company
was typ ica l of most U.S.
companies that t radi t ional ly
operated w i t h diverse func
t i o n a l a reas , w h e r e
eng inee r ing , m a n u f a c t u r -
. ing , marketing were operat
ed pretty m u c h on a separate
basis. But we f o u n d that by
b r ing ing a l l parties together
to use this func t iona l cost
approach i n analyzing the
product that we were able to
come up t h rough group
dynamics of investigating
and problem-solving that
achieves these results.
T V Interviewer: Do you mean that you are ac
tua l ly w o r k i n g i n tandem
w i t h your competitors?
M r . Deininger: No, I ' m ta lk ing about the
i n t e r -depa r tmen ta l m u l t i -
funct ions of dif ferent people
f r o m different departments
w o r k i n g together and the
formed teams that actually
concentrate on a g iven pro
duct to f i n d alternative ways
to improve how i t funct ions
or to lower its cost, and
p r imar i ly to provide better
value to our customers.
T V Interviewer: A s f o r t h e e n g i n e e r s
themselves, M r . Deininger,
is this going to open up any
p o s i t i o n s f o r e x t r a
engineers, either i n this
f i e l d , or some other areas?
t i T.G.I.M." For a number of years i n the past, we have
seen pins or signs w i t h the letters " T . G . I . F . " As we a l l recongize these four letters stand for the statement, "Thank God I t ' s F r iday" . I t goes w i t h o u t saying that many ind iv idua ls , i n the past and present, have had the fee l ing.
I n today's economic environment each of us must take another look at the part icular situat i on . When we do, we may and should be replacing " T . G . I . F . " w i t h " T . G . I . M . " or "Thank God I t ' s M o n d a y . "
Keep i n m i n d , as you read this , that y o u are among the fortunate ones today. Y o u do have a job to come to on Monday morn ing . This is reason enough to " T . G . I . M . " . Being among those employed you have the oppor tuni ty to assist your company i n reducing its costs through the Cost Improvement A c t i v i t y .
Y o u may ask w h y this second reason is so important . By reducing our costs, w h i l e reta ining the necessary qual i ty and re l iabi l i ty , we become the low cost producer. This i n t u rn adds to our and other's job security. Then as the economy turns upward , we w i l l be among the f i rs t companies to recover f r o m the recession, thereby necessitating the rehi r ing of our f e l l ow workers that were not as fortunate as ourselves.
Yes, I say, "Thank God It 's M o n d a y . "
A . E . Mudge, CVS
M r . Deininger: What we're f i n d i n g is that
the engineers are c o m
plemented by other people.
From manufactur ing, f r o m
m a r k e t i n g a n d o t h e r
disciplines, so to improve
their insights as to what the
product is expected to do,
and how i t provides greater
value for the customer, and
i n so doing, I t h ink we are
c o m p l e m e n t i n g t h e
engineers to be more effec
t ive and eff ic ient .
T V Interviewer: Thank you M r . John Dein
inger, President, Signode
Company, Chicago area. M r .
Deininger, thank you very
much, and good luck Sir.
LIFE. . .is what happens to you w h i l e you are
mak ing other plans.
"When You're Hot, You're Hot!"
The words of this popular song are used by many of us w h e n we w i n something, gain a v ic tory i n a tennis match, handball , or whatever. I t is used by many teams to be boast ful ly modest.
But where are the other words that go w i t h these, " W h e n you ' re not, you're no t ! " We usual ly don ' t hear them or don ' t wan t to hear them. Why? A l l of our t ra in ing has been devoted to preparing us to be winners , not losers. We a l l k n o w that i n sports there w i l l be winners and losers. The object is to have more victories than defeats. Seeing the replay of the game can show the errors that were made. Then the errors can be counted and new strategy planned for the upcoming game, w i t h confidence that these changes w i l l change the outcome of the next game.
I n industry, fo r the most part, we haven't learned this s imple l i t t l e lesson. There is a great tendency to cri t icize the opposi t ion, m in imize the things that produced results, and continue on our merry way not changing a t h i n g w h e n we pursue the next job. When , i n fact, we should:
1. Replay the events. a. What d i d they do right? b . What d i d we do wrong?
2. Correct the errors that were made. a. What has to be corrected? b. H o w can they be corrected to make
sure they don ' t occur again? 3. Plan a new strategy.
a. W h o has to do what? When? Where? How? Why?
b . Have we planned for achievement? Inc lud ing price?
4. Have confidence. Do you have that inner feel ing that tells you you have a winner?
Then, w h e n our competitor asks how y o u achieved the result, you can say v
" W h e n You ' re Hot , You're H o t ! "
James A . Dziekonski , CVS
Value W o r l d July/September 1983 25
WINDOW ON VALUE
V A L U E PAVES T H E W A Y -General Dynamics, Fort Worth Division
Value Engineering (VE) techniques have
paved the way to Cost Reduct ion success at
General Dynamics, Fort W o r t h Div i s ion .
Three thousand t w o hundred twenty eight
employees have received certificates fo r com
ple t ion of t w o week VE Seminars. The lessons
learned help employees develop ideas fo r the
Cost Reduction and Employee Suggestion
Programs. I n t u r n , ideas submit ted as
Employee Suggestions have become VE
Change Proposals.
Results have been excellent. Recently 235
men and w o m e n were honored at the annual
Awards Banquet fo r outstanding performance
i n Cost Reduction i n 1982. Each employee
documented a savings of $100,000 or more for
the calendar year. Sixty-seven of these receiv
ed recognit ion for having saved more than
$1,000,000 each. I n total , over $221 m i l l i o n i n
savings was documented fo r 1982.
The Fort Wor th Faci l i ty lead a l l of the
General Dynamic Divisions for Employee
Suggestions i n 1982 and was recognized by
the Nat ional Associa t ion of Suggestion
Sytems for having obtained the highest dollar
savings per employee. The Fort W o r t h D i v i
sion saved an average of $332 per employee
w h i c h was best i n the nat ion for Aerospace
Equipment Manufacturers.
I n add i t ion the Fort W o r t h Div i s ion was
selected as the 1982 recipient of the U.S. A i r
Force Contractor VE Achievement A w a r d .
Vice President and General Manager,
Herbert F. Rogers, i n a ceremony at the Pen
tagon on A p r i l 19, 1983, accepted a plaque
and certificate on behalf of the entire d iv i s ion .
The certificate as signed by Secretary of the
A i r Force, Verne Orr, and reads as fo l lows :
"General Dynamics has demonstrated a
sincere interest i n reduc ing F-16
weapon system costs through a con
certed Value Engineering effort . Value
Engineering Change Proposals approv
ed by the F-16 System Program Off ice
i n Fiscal Year 1982 contr ibuted to a
cost avoidance of 24 m i l l i o n dollars.
G e n e r a l D y n a m i c s F o r t W o r t h
Divis ion 's continued ef for t to provide
qual i ty Value Engineering Change Pro
posals is most commendable ."
The Cost Reduction and Value Control Pro
grams compl iment each other at General
Dynamics, Fort Wor th Div i s ion . Both are pro
mot ing cost reduct ion as a way of l i f e fo r a l l
employees, w h i l e p rov id ing our customer the
utmost i n value for each dol lar they spend.
Perry C. Bales
Div i s ion Cost Reduction Coordinator
Editor, "Cost Reflect ions" General Dynamics, Fort W o r t h D iv i s ion
V E SAVINGS IN EPA REGION IV
Charles R. Jeter, EPA Regional A d
ministrator reported recently Value Engineer
ing has saved more that $100 m i l l i o n on 48
wastewater treatment projects i n EPA's
Southeast region (Region IV) since 1975. " V E
has been par t icular ly successful i n the
Southeast, w i t h Region I V showing an
average net savings of eight percent on con
struct ion projects, and a net re turn of $25 for
each dollar spent on V E " .
EPA began using value engineering on a
voluntary basis i n its $18 b i l l i o n national con
struct ion grants program i n 1975, and later re
quired i t for any project costing $10 m i l l i o n or
more. The procedure is voluntary for projects
costing less than $10 m i l l i o n .
The reason a dollar won't do as much
for people as it once did
is that people won't do as much for
a dollar as they once did.
WRITING A BOOK . . . is like scrubbing
an elephant - there's no good place to
begin or end, and i t 's hard to keep
track of what you 've already covered,
says Association Trends Newsletter.
ESTIMATING S O F T W A R E A N A L Y Z E D IN JUNE OF ISSUE C O S T ENGINEERING MAGAZINE
"Computer-Assisted Est imating—Analyz
ing the Opt ions" by Lawarence C. Bacher w i l l
be featured i n the June issue of Cost Engineer
ing magazine, w h i c h also supplies a handy
reference l is t of commerc ia l ly available
estimating software.
The entire issue w i l l be dedicated to com
puter topics and w i l l also feature t w o articles
co-authored by Steven Z immerman and Leo
M . Conrad, "Programming the Cri t ical Path
Method i n B A S I C " and Programming PERT
i n B A S I C " .
For more in fo rma t ion on the June issue and
other issues of Cost Engineering, contact
Judith L . Wal ls , editor and advertising
manager, or Tracy Novak, associate editor at
the Amer ican Association of Cost Engineers
Headquarters, 308 Monongahela B u i l d i n g ,
Morgantown, W V 26505-5468 304/296-8444.
Take comfort in simple rules that never change
Theories may come and go, and modes of management may vary, so isn't it reassuring to know that there are a few simple laws that never change?
Here they are: 1. Nothing is as easy as it appears to be. Everything takes longer than expected, and if anything can go wrong it wil l , and at the worst possible time; 2. Anytime things seem to be going better, something has been overlooked.
3. Nothing is impossible for the person who doesn't have to do it; 4. A l l employees have the right answers to all problems. These answers evaporate when people are promoted to a position of responsibility; 5. Once a job has been fouled up, any attempt to correct the situation only makes it worse; 6. It is always difficult to make things simple; 7. It is always simple to make things difficult; 8. The specialist learns more and more about less and less , and ends up k n o w i n g everything about nothing; 9. The generalist learns less and less about more and more, and ends up knowing nothing about everything; 10. Whatever happens, there is always someone who knew it would.
You wil l gain a new sense of security by placing your absolute trust in these laws — try it, and see.
Capsules Comments, quoted in Candy Wholesaler, Nov. 1982
Nat'l Candy Wholesalers Assn.
A teenager can do at least
one thing his parents cannot
and that's to answer
a telephone in the middle
of the first ring.
26 Value W o r l d July/September 1983
CALENDAR OF EVENTS
SAVE-NATIONAL J U L Y , 1983 22- 23 Executive Committee Meeting, Irving, T X
A U G U S T , 1983 V 1 Dues not paid are considered delinquent 15 Deadline for October Interactions and Oct/Dec Value World
SEPTEMBER, 1983 15 Deadline for November Interactions 23- 24 S A V E Board of Directors Meeting, Easton, MD
SAVE CHAPTER MEETINGS As most S A V E Chapters usually take a break during the summer months, we have not received their scheduled meeting dates for the upcoming year. If you intend to be in the area, contact the local President for current information on their meeting schedule.
056 - Northern Ohio - Contact President Rafael R. Dominguez 216/329-9386
Preliminary Schedule September 14 Joint Meeting with NCS C A D / C A M Society October 12 Panel Discussion
067 - Dallas/Fort Worth - Contact President Mike Deming 214/266-4780
Preliminary Schedule September 13 Gerry Ennis, Factory for the Future October 13 Quality Circles
OTHER ITEMS OF INTEREST Federation of Materials Societies
Sept. 6-9 International Conference on Lasers, Canton, China, sponsored by the Optical Society of China. Contact Prof. Wan Daheng, P.O. Box 8211, Shanghai, China.
Sept. 26-28 6th International Symposium on Ceramics, Bologna, Italy, Contact Segretaria del SIMCER, Centro Ceramico Via Martelli, 26-40138 Bologna, Italy.
Nov. 14-17 Annual Meeting of the Materials Research Society, Boston, MA. Contact MRS Secretariat, 110 Materials Research Lab, University Park, PA 16802.
Nov. 14-17 International Congress on the Application of Lasers and Electrooptics, San Francisco, CA, sponsored by the Laser Institute of America. Contact LIA 5151 Monroe Street, Toledo, O H 43523 419/882-8706.
Institute of Industrial Engineers, 25 Technology Park/Atlanta, Norcross, GA 30092 404/449-0460
August 11-13 Three day seminar "Productivity Measurement and Improvement Strategies", covers control system fundamentals, productivity process modeling and various systems of measurement, improvement and management planning to link the entire process and Techniques, Dallas, T X .
August 15-17 Three day seminar on robotics at the IIE Education Center in Technology Park/Atlanta. Designed to acquaint participants with the variety of equipment available, and how and where robots might be used most effectively, includes a full-day laboratory experience and a workshop session.
Sept. 28-30 Repeat of robotics seminar.
University of Wisconsin-Extension, Management Institute, 432 N. Lake Street, Madison, WI 53706 Joan Hamann 608/262-2668 or Sandy Courier 608/262-2703.
August 25-26 Two day seminar "Informal and Formal Report Writing Using the Word Processor" designed for managers of all levels, engineers and technical personnel.
A SAVE SERVICE TO MEMBERS
Value World July/September 1983 27
i A
F R O M T H E S A V E B O O K S T O R E SUBSCRIPTIONS VALUE ENGINEERING & MANAGEMENT DIGEST - A publication of the Tufty Communications Cc ' , (One year subs.) International Subscribers add $15.00 for Air Mail Postage.) $150.00
CORRESPONDENCE COURSES
AN INTRODUCTION TO VALUE ANALYSIS & VALUE ENGINEERING 14.4 CEU's - Independent study course emphasizes the application of VA/VE to products and services, uses the text, "Techniques of Value Analysis and Engineering", 2nd Edition by Lawrence D. Miles. $182.00 Tuition and Service Charge, $34.95 Text $216.95 Total
FUNCTION ANALYSIS FOR ARCHITECTS, ENGINEERS, AND BUILDERS 10 CEU's - Independent study course designed to introduce architects, engineers and builders to the principles of Function Analysis (Value Management/Engineering) uses the text "Value Management for Construction", Macedo, Dobrow and O'Rourke, 1978. $182.00 Tuition and Service Charge, $39.50 Text, $221.50 Total
VIDEOTAPE RENTALS
"COST IMPROVEMENT'S CONTRIBUTION TO FINANCIAL FLEXIBILITY" by Andre R. Horn, Chairman of the Board, Joy Manufacturing Company (Tape #3) (NEW - RELEASED MAY, 1983)
"VALUE ENGINEERING AT JOY MANUFACTURING COMPANY" by Jim Wilcock, former Chairman of the Board, Joy Manufacturing Company (Tape #1) • ..'
"VALUE ENGINEERING FOR MANAGEMENT" by George J. Rabstejnek, President, Harbridge House, Inc. (Tape #2)
All three videotapes are available for two weeks rental. Please request Letter Agreement for Tape #1, #2 or #3. The Letter Agreement, signed by your President of Vice President, must be returned to the Business Office with your check for $50.00 (per videotape) before the videotape can be shipped to you for your meeting.
SEND COMPLETED ORDER FORM AND CHECK PAYABLE TO SAVE TO:
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