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43 GLOSSARY This glossary of value engineering is adapted from SAVE "How is the function to its immediate left per- International. formed?" b. The sequence of functions on the critical path pro- Cost--The expenditure necessary to produce a product, ser- ceeding from right to left answer the question "Why vice, process, or structure. is the next function performed?" Cost, Design to--A procedure that establishes an estimated c. Functions occurring at the same time or caused by cost objective for each project, then designs to that cost functions on the critical path appear vertically below objective to produce a reliable product or service. the critical path function. Cost, Life-Cycle--The sum of all acquisition, production, d. The basic functions of the study are always farthest operation, maintenance, use, and disposal costs for a prod- to the left of the diagram of all functions within the uct or project over a specified period of time. scope of the study. Cost Model--A diagramming technique used to illustrate the e. Two other functions are classified: total cost of families of systems or parts within a total i. Highest order--The reason or purpose that the complex system or structure. basic function exists. It answers the "why" ques- Cost/Worth Ratio--The ratio used to determine the maxi- tion of the basic function, and is depicted imme- mum opportunity for value improvement. diately outside the study scope to the left. Function--The natural or characteristic action performed by ii. Lowest order--The function that is required to a product or service. initiate the project and is depicted farthest to the Function, Basic--The primary purpose or most important right, outside the study scope. For example, if action performed by a product or service. The basic func- the value study concerns an electrical device, the tion must always exist, although methods or designs to "supply power" function at the electrical con- achieve it may vary. nection would be the lowest order function. Function, Secondary--A function that supports the basic Job Plan--A structured discipline to carry out a value study. functions and results from the specific design approach Performance--The physical characteristics required to meet to achieve the basic function. As methods or design the users needs. Factors such as reliability, maintainabil- approaches to achieve the basic function are changed, ity, quality, and appearance are typical. secondary functions may also change. There are four kinds Price--A fixed sum of money expended by the user/customer of secondary functions: to purchase the product under study. 1. Required--A secondary function that is essential to Product--For the purposes of value studies, a product is the support the performance of the basic function under subject of the study. It may be a physical product such as the current design approach. a manufactured item, or a structure, system, procedure, or 2. Aesthetic--A secondary function describing esteem an organization. value. Scope--The portion of the overall project that is selected for 3. Unwanted--A negative function caused by the method the value study. The analysis accepts everything within used to achieve the basic function such as the heat gen- the defined scope in order to focus attention on the func- erated from lighting, which must be cooled. tions within those limits. 4. Sell--A function that provides primarily esteem value. Value--The lowest cost to reliably provide the required func- For marketing studies it may be the basic function. tions at the desired time and place with the essential quality Function Models--A graphical depiction of the relationships and other performance factors to meet user requirements. of the functions within a project. There are two commonly Value, Monetary--There are four classes of monetary value: used styles: 1. Use value--The monetary measure of the functional 1. Hierarchy--A vertical "tree" chart of functions. Recent properties of the product or service that reliably accom- practice has been to include within one branch user- plish a user's needs. oriented functions such as assure convenience, assure 2. Esteem value--The monetary measure of the proper- dependability, assure safety, and attract user. Some ties of a product or service that contribute to its desir- practitioners prefer to lay out this model horizontally ability or salability. Commonly answers the question and refer to it as "user FAST." "How much do I want something?" 2. Function Analysis System Technique (FAST)--A hor- 3. Cost value--The monetary sum of labor, material, bur- izontal chart depicting functions within a project, with den, and other elements of cost required to produce a the following rules: product or service. a. The sequence of functions on the critical path pro- 4. Exchange value--The monetary sum at which a prod- ceeding from left to right answer the question uct or service can be freely traded in the marketplace.
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44 Value Methodology (VM)--The systematic application of 2. Value methodology advanced seminar--The objective recognized techniques that identify the functions of the of this seminar is to extend the knowledge base of product or service, establish the worth of those functions, those wishing to become professionals in the VM field. and provide the necessary functions to meet the required Topics include both advanced methodology and areas performance at the lowest overall cost. of management. This seminar is referred to as the Value Methodology Proposal--A proposal by the value Module II program. The seminar requires a minimum study team to its management to provide one or more of 24 class hours. Module I is a prerequisite, and it is functions for financial and/or performance improve- expected attendees will have enough practical experi- ments that is within the current terms and conditions of ence in VM to contribute to the seminar. the contract. Value Analyst--Synonymous with Value Specialist. Value Methodology Training--There are two levels of SAVE Value Engineer--Synonymous with Value Specialist. International-approved training specifically designed to Value Engineering Change Proposal (VECP)--A formal pro- provide the minimum knowledge of VM practice. It is posal submitted to the customer/user that requires their expected that VM professionals, as in all professional fields, approval before implementing the Value Analysis change. will continue to keep themselves current through seminars, The result will be a modification to the submitter's contract. conferences, and associated educational opportunities. Value Specialist--One who applies the VM to study and 1. Value methodology workshop--The objective is to search for value improvement. provide VM education to the degree that participants Value Study--The application of the value methodology will be able to successfully participate in future value using the VM Job Plan and people previously trained in studies under the guidance of a qualified Value Spe- VM workshops. cialist with minimum additional training. This is called Worth--The lowest overall cost to perform a function with- the Module I program. out regard to criteria or codes.