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Application Examples

APPLICATION TITLE: Reduce Operational Cost

INDUSTRY: Gold Mining

VALUE METHODOLOGY APPLIED: Value Management

The Value Methodology was applied to turn around a Gold Mine in South Africa with the main purpose of reducing operational costs without sacrificing the safety, sustainability and employees rights.

In an example of good leadership the first step was to determine why such an intervention was necessary.

What would be the reason for such a change?

The answer was explained by the General Manager of the Mine:
The current operational costs are too high and will continuously increase. It is necessary to create a new way of doing things where we manage the mine together with our employees and optimise operational costs, improve efficiencies and extend the mines life to ensure sustainability for many years to come. This will have an implication on how we operate our business and we are aware that we have to come up with a new way of thinking. To achieve this we need to involve management and our employees, ensuring that our people do know where we waste money and where our in-efficiency is.

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Application Handbook – VM001 – Reduce Operational Cost – Gold Mining – Value Management

APPLICATION TITLE: Wireless Telephone Service

INDUSTRY: Utilities

VALUE METHODOLOGY APPLIED: Value Management

This organisation provided a Wireless Telephone services to the public (Rural Area) that would enhance the communication network already in place.

There was however the concern that the high cost of implementing and sustain this service could negatively impact on the organisation.

Therefore it was agreed on to apply the Value Engineering / Value Management (VE/VM) Methodology to develop a strategy to reduce annual cost of XXX Process Logistics by at least R100 Million before the end of March 20XX) & increase revenue through tripling current traffic by providing service to potential XXX customer within 14 days of validated order.

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Application Handbook – VM002 – Reduce Services Cost – Utilities – Value Management

APPLICATION TITLE: Store Development

INDUSTRY: Retail

VALUE METHODOLOGY APPLIED: Value Management

The Value Methodology was applied to align the efforts of all members of the Store Development Department to maximise efficiency in work processes in support of the Company’s strategic direction.

The Objective was:
Establish an action plan to deliver all stores on time, within minimum of 97.5% of approved budget by March 200X and ensure:
• appropriately designed stores that permit our products to be displayed to their best advantage;
• stores that are delivered timeously, within budget, and to the correct quality standards;
• store designs that support the use of appropriate technologies and finishes, supporting the company’s environmental impact plan; and
• suppliers are managed fairly, paid timeously (within appropriate quality parameters being met) to engender harmonious business relationships

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Application Handbook – VM003 – Optimise Store Development Cost – Retail – Value Management

 

APPLICATION TITLE: Group Procurement Master Data Management

INDUSTRY: Banking

VALUE METHODOLOGY APPLIED: Value Management

The main purpose of this Value Management exercise was to define & prioritise the critical elements of the Group Procurement Master Data Management (MDM) to enable credible reporting, effective sourcing and efficient transacting.

The need to identify what is being purchased from where and when at what cost (identification and classification)

The objective included the following measurable benefits:
1.) Comprehensive agreed on documentation on “as is” processes
2.) Comprehensive agreed on documentation on “to be” processes
3.) Agreed on scope of work
4.) Agreed on business requirement specification

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Application Handbook – VM004 – Optimise Procurement Cost – Banking – Value Management

 

APPLICATION TITLE: Optimise Functionality and Costs on Offshore and Onshore Expansion

INDUSTRY: Oil & Gas

VALUE METHODOLOGY APPLIED: Value Management & Value Engineering

The Value Methodology was applied to optimise Functionality and Costs of FEED development work on a major onshore and offshore facility in the Middle East.

The following areas have been included in the scope

Offshore Facilities:
New Flow Stations
Modification of Existing Flow Stations
(Demolishing of equipment and New Bridge between new and existing Flow Stations)
Gathering Lines among Flow Stations
Sub-sea Cables between Utility Platform and Flow Stations
New Transmission Line from Flow Station to onshore to transfer crude oil
New Gas Transmission Line from Flow Station to onshore to transfer gas

Onshore Facilities:
Inlet Separators
Gas Processing Plant (dehydration, boosting compressors)
Connection pipelines and cables
New Control Room & Switchgear House
The following areas have been included in the scope

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Application Handbook – VMVE001 – Offshore-Onshore Expansion Project – Oil & Gas – Value Management & Value Engineering

 

APPLICATION TITLE: Reduce Product Cost

INDUSTRY: Manufacturing

VALUE METHODOLOGY APPLIED: Value Analysis

This case study explains the Value Engineering (VE) approach of reducing manufacturing cost of a Pre-Paid Electricity Meter required in the Utility Industry.

The objective reflects a requirement of having the manufacturing cost reduced by 20% to be able to compete against competitors with similar products.

This case study will show the VM & VA processes applied:

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Application Handbook – VA001 – Reduce Product Cost – Manufacturing – Value Analysis

 

APPLICATION TITLE: Value Improvement Practices (VIP’s)

INDUSTRY: Project Applications

VALUE METHODOLOGY APPLIED: Value Management & Value Engineering

VIPs are out of the ordinary practises which can provide measurable and statistically demonstrable effects on cost, schedule and/or reliability of the constructed asset.
• Each VIP will follow a distinct and defined work process
• The VIP is not merely a detailed review of any given aspect of the project
• The results of VIP exercises will be recorded such that it is possible to assign accountability for the incorporation of those results in a project.

• The results of VIP application must be documented. This provides a basis
a) for team alignment of resultant objectives
b) against which the project team can evaluate the effectiveness of the practise, and
c) for lessons learned and root cause analysis
D) for gate release approval (FEL)

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Application Methodology – Value Improvement Practices

 

APPLICATION TITLE: Office Building: Finishing Specification

INDUSTRY: Construction

VALUE METHODOLOGY APPLIED: Value Engineering

The Value Methodology was applied to optimise Functionality and Costs of an Office Building Finishing requirements.

The terms of reference of establishing Finishing Specifications for a large Office Building are to recommend the lowest cost of ownership whilst ensuring full functionality.

The Finishing Specifications have been determined through detailed analysis of information obtained from the Client, the Consulting Team / Architects and Supplier’s.

Additionally information was obtained through the Internet looking for alternatives, new technology, test reports etc.

For each Area Type the ideal Functional Requirements was established with the purpose of testing finishing specification against functional conformance to the Area applied.
The total number of specifications analysed exceeds 200.

Each Area Type had a detailed Finishing Specifications including Area Type & Coding, Specification & Coding, cost per m²; m; unit, etc., Product Source where pricing was obtained, Product Code when applicable, Functional Requirements for the Area Type and comments when applicable.

It is important to note that the final specification can only be “frozen” after the Client, Architects and other Stakeholders approve the proposed finishes. It is also important that the specifications can be modified and updated through an Audit process at a later stage…..

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Application Handbook – VE001 – Office Building Finishes – Value Engineering

 

APPLICATION TITLE: Commercial Building: Sorting Facility

INDUSTRY: Construction

VALUE METHODOLOGY APPLIED: Value Management

A project team, incorporating the client and professionals was to design and construct a new green fields sorting facility for the XYZ Company.

The facility needed to be capable of sorting products within the required specifications and volumes. The project will have to be completed the final design by the end of April 200X, tender process and award by the end of May 200X and award site establish by the end of June 200X. Construction complete by end 200X and client fit out by mid 200X.

To ensure that the final design will be approved by the Project Office by the 09th May 200X a Value Management Study was initiated by the Project Team.
A VM Consultant / Facilitator was commissioned by the client to conduct the Value Management (VM) Study, with participation of selected stakeholders, to ensure functional conformity in order to achieve the objective. A Certified Value Specialist (CVS) was selected to lead the Value Engineering Workshop Activities, thus ensuring VM Process conformity.

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Application Handbook – VE005 – Commercial Building – Value Management

 

APPLICATION TITLE: Building Complex: Learning Facility

INDUSTRY: Construction

VALUE METHODOLOGY APPLIED: Value Engineering

The Value Methodology was applied to optimise Functionality and Costs of a Learning Facility.

The terms of reference of establishing Building and Finishing Specifications for the Learning Facility are to recommend the lowest cost of ownership whilst ensuring full functionality.

The detailed specifications have been determined through detailed analysis of information obtained from the Client, the Consulting Team / Architects and Supplier’s.

PURPOSE STATEMENT
Enhance functionality and cost of the XYZ Learning Facility Preliminary Design

EXPECTATIONS
• Satisfy the end user
• Comply to space allocation program
• Must be cost optimisation focused
• Must have functional conformance
• Selected & agreed on recommendations
• Action plans (if applicable)

SCOPE OF THE VE WORKSHOP:

• Minimal deviation of the preliminary design
• Confirmation of the designs functional and cost performance
• Enhance / improve the designs functionality and cost

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Application Handbook – VE002 – Learning Facility – Value Engineering

 

APPLICATION TITLE: Tender Adjudication – Material Handling System

INDUSTRY: Mining

VALUE METHODOLOGY APPLIED: Value Management with PIN Analysis and Perspective Modelling Matrix

This case study explains the Value Management (VM) approach of selecting the best Contractor / Supplier for a new Materials Handling System within the existing footprint of a mine (Brown Field Project).

The purpose of this Tender Adjudication was to identify the ideal partner / contractor responsible for final detail design, procurement, construction, commissioning and handover of an all inclusive materials handling system, meeting all stipulated schedule, performance and quality criteria within the agreed contract price.

PURPOSE STATEMENT
Select the best proposal for the Materials Handling System

 

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Application Handbook – VM006 – Tender Adjudication – Mining – Value Management

 

 

APPLICATION TITLE: Option Selection – Fine Residual Disposal Dam

INDUSTRY: Mining

VALUE METHODOLOGY APPLIED: Value Management with PIN Analysis and Perspective Modelling Matrix

This case study explains the Value Management (VM) approach of selecting the best location for a new Fine Residual Disposal Dam within the existing footprint of a mine (Brown Field Project).

The Mine required a new Fine Residue Disposal Dam or in old terms a Fine Tailings Dam, as the current dams is reaching their end of life.
During the concept phase, two (2) Deposition Methodologies were identified as well as four (4) potential locations. During the Pre-feasibility and Feasibility study it was necessary to review these options and make a decision before a final design could be completed.
To facilitate the decision making, it was decided to have a workshop with all relevant stakeholders to decide upfront what criteria will be utilised for the selection process and based on relevant data for the various options allowing for the final selection of the location and deposition methodology before continuing with this stage of the study.

PURPOSE STATEMENT
Determine criteria that will be utilized to select best options for the Dam Location and Deposition Methodology and utilise them to finalise the option selection.

 

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Application Handbook – VM005 – Option Selection – Mining – Value Management

 

 

 

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