the gulf chapter...yellow 6-inch by 5-inch cards au-thored by charles bytheway which outlined the...

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THE JOURNAL OF SAVE INTERNATIONAL®VOL. 35 | NO. 2 | FALL 2012 © 2012 SAVE INTERNATIONAL®

in this issue ...1 Empowering Function Analysis to Stimulate

InnovationMohammed A. Berawi, Ph.D.

3 Finding Hidden Functions in FAST Diagrams Using Reverse HowJay Bytheway, PE, SE

10 The Idea Factory: Innovation Integrated with Discovery Driven GrowthJohn E. Sloggy, PE, CVS & Dan A. Seni, P.Eng., Ph.D.

22 If the Shoe Fits: Adjusting a Value Engineering Event to the Problem or OpportunityJoseph F. Otero, Jr., CVS-Life, FSAVE

35 What Makes Value Methodology Work? (An Analysis of Function Analysis)Geza A. Kmetty, PE & Alfred I. Paley, CVS, FSAVE

42 SAVE International® 2013 Annual Conference Call for Papers

44 SJVE Works with Japanese Visionary & Indian Innovator for ‘Sustainable Society’

1VALUE WORLD | VOL 35 | NO 2 | FALL 2012PUBLISHED BY SAVE INTERNATIONAL®

Empowering Function Analysis to Stimulate Innovation

M. A. Berawi, Ph.D., Editor

The main reason why companies need to innovate is to survive and stay competitive in the competition. The com-panies must exploit their innovative capabilities through development and utilization of innovation program and technique. The innovation has been seen as idea genera-tion in the creativity stage, formalization processes, and successful concept implementation in terms of output or product.

Value engineering/value management (VE/VM) meth-od is developed to provide a way of managing value and improving systematic innovation to create competitive advantages of a product/project. The method focuses on the understanding of functions and what can be delivered from each component or stage of an engineered product or project. The ability of VE/VM in increasing the com-petitiveness of services, manufacturing, and construction industries cannot be separated from the ability in making the right decision at the earlier stage of product/project development.

Function Analysis and Innovation

There are various definitions of innovation in which we can argue as the successful exploitation of new or im-proved ideas, such as creation of new or improved prod-ucts/projects and processes, new or improved policy, methods or techniques in a system, and the development of new markets. Improvement in a system may be passed on to the end customer in efficient, effective, and high quality of products, projects, or services. Many scholars and practitioners believe that the first step in project/product engineering is to identify the functions at play to-wards product creation and innovation.

Value engineering/value management (VE/VM) is an innovation methodology that applying functional theo-ries. In the context of innovation, functions need to be formulated in order to achieve the target of a system that has been designed. Identifying functions enables us to propose alternative ways to implement those functions in

order to create and innovate, so that the modeling func-tions will contribute to the improvement of product or project performance. Additional functions or alternative processes could contribute to increasing or reducing cost of product/project development in achieving the ultimate goal, i.e. to create additional value and worth of products/projects.

Based on the annual SAVE International 2012 Annual Conference and journal submissions, the fall issue of Value World presents four selected papers to stimulate debate and to explore the ways we create innovation based on function analysis in order to improve project/product performance.

The first paper, written by Jay Bytheway, PE, SE, dis-cusses finding hidden functions in FAST diagrams using the proposed Reverse How technique. The author argues that the Reverse How Technique is a way to create bet-ter relationship between functions in a Function Analysis System Technique (FAST) diagram and producing better function definitions for focused creativity. Furthermore, he argues that by comparing function pairs, Reverse How can produce thought-provoking functions that can en-hance creative thinking.

The second paper, written by John Sloggy, PE, CVS, and Dan Seni, Ph.D., describes the integration of Val-ue Management methodology with a discovery driven growth approach towards managing risk in new product introduction stage. The authors argue that the resulting combination will allow companies to identify new areas of potential growth by considering the overall investment risks. A discussion on Functional Innovation concept to the implementation of risk management in a portfolio ap-proach to project planning is presented.

Furthermore, Joseph F. Otero, Jr., CVS-Life, FSAVE, outlines the use of selected VE tools to be employed in specific circumstance of product or project development. The author argues that modified technical FAST diagram with etiological axis and multi-attribute function alloca-tion matrix can be used to solve complex circumstances. Furthermore, the paper discuses on the relation between

2 VALUE WORLD | VOL 35 | NO 2 | FALL 2012PUBLISHED BY SAVE INTERNATIONAL®

the suitable selected techniques and how they affect the duration and outputs of VE workshop.

The last paper, written by Geza Kmetty, PE and Alfred I. Paley, CVS-Life, FSAVE, discusses on how the resulting “creative discontent” in VE/VM methodology impacts brainstorming and creativity of the VE/VM Team. They argue that the use of function analysis and FAST which supply the ability to objectively and clearly identify and defi ne the correct problem in the problem solving proce-dure will yield the best results. As a consequence, the ar-rangement and rearrangement of functions represent the key ability of an organization to produce additional value for the product/project outputs.

I hope this edition of Value World conveys some new insights in the way we conduct our Value Methodology studies. I can be contacted at [email protected] and would be pleased to accept and respond to any comment and enquiry you may have on the direction and content of Value World.

With warmest regards from editorial desk,Dr. M.A. Berawi

Faculty of EngineeringUniversity of Indonesia

16424 JakartaIndonesia

Saudi Council of Engineers &Gulf VE Chapter of SAVE International

The 5th Gulf Value Engineering Conference“25 Years of Successful Value Engineering

Applications in the Gulf Region”

This event has been rescheduled to:

Dammam, Saudi Arabia23-24 April 2013

THE GULF CHAPTER

InternationalSAVE

Call for PapersYou are invited to submit a proposal for knowledge transfer at the 2013 AASHTO Value Engineering Peer Exchange Workshop in Minneapolis, Minnesota. The AASHTO Value Engineering Technical Committee in partnership with FHWA encourage participation from all sectors of industry and government to make this a successful workshop.

The knowledge transfer should educate, inspire, and challenge attendees at all levels of Value Engineering and Risk Analysis background and experience.

Important Dates:February 1, 2013: Peer Exchange Workshop speaker selections

May 1, 2013: Final papers and presentations due

June 15, 2013: Peer Exchange Workshop registration deadline

July 9 – July 12, 2013: 2011 AASHTO VE Peer Exchange Workshop

Send electronic submittals to [email protected].


Finding Hidden Functions in FAST Diagrams Using Reverse How

Jay Bytheway, PE, SE

AbstractFAST diagramming is a method for relating functions

to each other. When creating a FAST diagram functions are discovered that the value team was unaware of prior to starting the diagram. These functions often bridge the gap between existing functions produced in the original function list. The Reverse How technique is a way to create better relationships between functions in a FAST diagram and to produce better function definitions for focused cre-ativity. Reverse How asks the How question in the reverse direction using only two function pairs at a time to reveal any gaps in the FAST diagram. This paper also discusses various other methods for improving function defini-tions.

IntroductionMany times a FAST diagram ap-

pears complete but is missing well thought-out functions or at least functions which would produce bet-ter ideas during the creativity phase of a workshop. One of the reasons for FAST diagramming is to bring into existence functions that are unlikely to be produced by simply listing the functions of the subject being stud-ied. Using the technique of Reverse How causes study participants to come up with functions that they would not normally suggest while creating a FAST diagram. Sometimes these functions replace other func-tions in the diagram and sometimes they fill in between existing func-tions making the diagram more com-plete.

The FAST diagrams used in this paper are the classic type described

in the books FAST Creativity & Innovation (Bytheway, 2007) and Stimulating Innovation in Products and Services: With Func-tion Analysis and Mapping (Kaufman and Woodhead, 2006).

Brief History of FAST Diagramming

FAST diagramming began in the 1960s when Charles Bytheway was asked by his supervisor C.S. Gray to figure out how he was able to get better results using Miles’ tech-niques of value analysis. It appeared that when Bytheway led a workshop he was able to get more significant results

than when others did it and Mr. Gray wanted to know why. Mr. Bytheway observed that when functions of parts were listed they were also in-terrelated and he set out a way to show this interrelationship (Bythe-way, 1992, p. 229). Apparently he was unconsciously using the inter-relationships between functions (by asking how and why) to bring other more significant functions into ex-istence when performing value en-gineering workshops. When exam-ining his methods he came up with the How, Why, When logic that make up the architecture of the FAST di-agram. Over the years many have added refinements and alternate versions of FAST diagramming, but the same How, Why, When logic still remains.

In 1975 Sperry Univac published yellow 6-inch by 5-inch cards au-thored by Charles Bytheway which outlined the necessary steps for cre-ating a FAST Diagram. These cards were meant to be folded in half so that they could be placed in a shirt

Figure 1. Back side of Sperry Univac FAST diagramming instruction card.


pocket for easy reference. The backside of the folded card is shown in Figure 1 (page 3). The reader may find a full copy of the document by visiting the University of Wiscon-sin - Madison web site (http://www.wisc.edu/). This docu-ment is part of The Lawrence D. Miles Value Engineering Reference Center Collection (Bytheway, 1975).

The process of naming functions and creating the FAST diagram was so inspiring that, at the completion of one FAST diagram, a team member declared that the dia-gram should be given to the design team as a template for the design of the entire project. Of course the design team will not have the same appreciation for the FAST diagram as the value team who put so much time and creative ef-fort into making something that improved their collective understanding of the project.

When creating a FAST diagram the value team becomes aware of functions that were not listed prior to starting the diagram. These functions help bridge logic gaps between existing functions produced in the original function list. Often functions which are best for focused creativity come from bridging functions created in the FAST diagram and not from the initial function analysis list.

Reverse How is an attempt to strengthen the relation-ships between functions in a FAST diagram and to create better functions using a simple technique.

Improving Function Descriptions

Functions are what things, people, and organizations do. The verb-noun form is how the value practitioner de-scribes a function. Does one way of describing a function have more value than another in the sense of inspiring more creativity? Shakespeare stated “brevity is the soul of wit” (Shakespeare, trans. 1966, 2.2.90). Each description of a function should have a degree of wit so to speak. Con-sider the following function descriptions:

Store FoodContain FoodPreserve FoodPreserve ContentsPreserve Perishables

Are they all equal in describing the same function or does one stand out as more provocative than the others? Likewise is there a function description in the list that re-quires more creative effort to come up with ways to per-form that function?

The point of function descriptions is to cause the val-ue team to think about the problem at hand differently than anyone else who was faced with that problem before.

Hence, the function of a good function description is to promote deep thought. If at all possible the value practi-tioner wants the breakthrough moment to occur during function analysis. Any ideas that come forth during func-tion analysis will simply validate the process. In other words, the team facilitator isn’t just adding to a list of so-lutions that a team member had in his or her head before the workshop began.

Putting it in Ted Fowler’s words “Did the definition of FUNCTION change your VIEWPOINT?” (Fowler, 2006). Of course the value practitioner’s job is not just to change one new viewpoint but as many as possible in order to get the maximum value out of the workshop.

The process of defining functions not only changes the viewpoint of the value team but also better defines the problem. In other words, better understanding equals better creativity. Each problem facing a value team has some degree of viewing the problem through an imperfect viewpoint. Every member of the team enters the work-shop with his or her own perspective. Function analysis, if performed properly, has the ability to remove the imper-fections from the viewpoint of the team thereby enabling the team members to view the problem more clearly. Each member of the team comes into the study viewing the problem in part (or knowing just parts of the problem) and should leave the function analysis portion of the study knowing the problem as other team members know it and then some. This will be the result if the team is composed of a diverse group representing various backgrounds and occupations. A team composed of like-minded individuals has little chance of creating a novel idea. In other words, when the process is complete the whole, as far as under-standing the problem, should be greater than the sum of the parts (individual team members) before the workshop began.

Good function descriptions require effort. When it comes to describing functions Mr. Miles said, “While the naming of functions may appear simple, the exact opposite is the rule. In fact, naming them articulately is so difficult and requires such precision in thinking that real care must be taken to prevent the abandonment of the task before it is accomplished” (Miles, 1989, p. 27). It is during the nam-ing of functions that team members get a real understand-ing of what the problem at hand is really about.

Poor Function DescriptionsCertain words should be avoided or questioned when

describing functions. Words that indicate laziness in func-tion descriptions are the verbs provide or purchase. There are techniques that help to eliminate those words from functions, such as replacing the overused verb with a verb


form of the noun. For instance take the weak function pro-vide brush could possibly be replaced with either brush teeth or brush vehicle or even better yet a more abstract function such as brush surface. If a verb or noun shows up frequently during function analysis this is a clear indicator that team is not putting forth the proper effort to come up with good function descriptions.

It is fair to say that any function that describes the ob-vious is an average function and in some cases a poor func-tion upon which improvements can be made. These kinds of functions would be poor candidates for creative effec-tiveness and would definitely rank low on the wit meter. To use one of these functions in a FAST diagram is okay as long as it doesn’t stay there. Make every effort to remove such functions from the FAST diagram. The Reverse How technique described later in this paper is one tool a facili-tator can use to perform this task.

Improving Descriptions by Removing Hardware

The Utah Department of Transportation Value Engi-neering Manual of Instruction states:

Identify a function so as not to limit the ways in which it can be performed. For example, consider the op-eration of fastening a nameplate to a piece of equip-ment. Rather than the specific instruction “screw nameplate”, the function is better identified as “label equipment” since attaching a nameplate with screws is only one of many ways of identifying equipment (Utah Department of Transportation, n.d., p. 27).

For the recently retired manager of the Bureau of Rec-lamation Value Program, Thomas M. Cook, the main objec-tive when putting together a FAST diagram is to remove as much hardware from each function as possible. In Cook’s opinion hardware confines the team’s thinking to the ex-isting design and therefore gets in the way of creativity.

In the case of the function brush teeth the verb “brush” connotes a mechanism for removing bacteria and the food which the bacteria needs to survive. Replacing the function brush teeth with the functions remove bacteria and starve bacteria removes the implied mechanism (namely the toothbrush) from the function and replaces it with a more open term thus enhancing the team’s ability gener-ate more and varied alternatives during creativity. Alter-natives involving brush design almost always will come up anyway during the creative phase, as those are also ways to remove bacteria.

Reverse HowReverse How is a technique that can be used by value

practitioners to eliminate lackluster functions and poor function definitions from FAST diagrams. It gives the val-ue team an alternative view of function relationships that helps to strengthen the process of naming functions.

This is how the technique works: First create a FAST diagram using normal how-why-when logic. Second look for a portion of the diagram that appears to have weak or ill fitting function pairs. Third ask the question how does (function to the right) (function to the left). For example

Prevent Cavities

CleanTeeth

Avoid Eating Sweets

FlossTeeth

Use Flouride Toothpaste

Use Antiseptic Mouthwash

HOW WHY

Figure 2. FAST diagram for cavities (1 of 2) Figure 3. FAST diagram for cavities (2 of 2)

Prevent Cavities

Remove Bacteria

Starve Bacteria

KillBacteria

HardenTeeth

HOW WHY

CleanTeeth

FlossTeeth

Avoid Eating Sweets

Use Antiseptic Mouthwash

Use Flouride Toothpaste


take the function pair Clean Teeth and Prevent Cavities in the FAST diagram displayed in Figure 2 (previous page).

Now ask the question: How does “clean teeth” “prevent cavities?” A possible answer could be Re-move Bacteria.

Possible answers for some of the remaining pairs are:

How does Avoid Eating Sweets prevent cavities? – Starve Bacteria

How does Using Fluoride Toothpaste prevent cavi-ties? – Harden Teeth or Create Barrier

How does Using Antiseptic Mouthwash prevent cav-ities? – Kill Bacteria

After using the Reverse How technique on several functions a revised FAST diagram might look like Fig-ure 3 (previous page).

New functions will not always fit in between the two function pairs as shown in the previous example but sometimes will replace one of the functions in the function pair. Also note that some of the functions on the right end contain hardware and could easily be discarded without changing the effectiveness of the diagram. Some may argue that removing some of the functions to the right would remove distractors and thus improve the effectiveness of the diagram.

Reverse How, in essence, helps to answer Thought Provoking Question 3 presented on the back of C.W. Bytheway’s FAST diagram instruction card (See Fig-ure 1, page 3): “What are we really trying to do when we ...*...” For example what are we really trying to do when we Use Antiseptic Mouthwash? The answer of course is Kill Bacteria. Borrowing a phrase from the instructions for constructing FAST diagrams, Reverse How can be reworded to say “What are we really try-ing to do when we (function) to (function)?” With the rewording the question now reads: “What are really trying to do when we Use Antiseptic Mouthwash to Pre-vent Cavities.”

Using this method on every function pair can be wearisome and soon disengage a group; however, if the diagram is small, going through each function pair can be advantageous. If complete examination of all function pairs appears to be in order it would be best for the practitioner to engage the value team after a break.

Generally it is best to focus on the functions that immediately follow the basic function in the How di-rection; however, if the main decision makers are part of the team, focusing on the higher order functions would be well worth the time.

Figure 4. FAST diagram for Improve FAST (1 0f 3)

Improve FAST

Discover Overlooked Functions

Produce Better Functions

HOW WHY

UseReverse How


Improve FAST



HOW WHY

UseReverse How

Compare Function Relationships


Improve FAST



HOW WHY

Compare Function Relationships


In order to get more out of the technique the value practitioner should consider iterations of the technique using Reverse How over and over again on function pairs until the best functions and function names are discov-ered. For example taking the FAST diagram in Figure 3, a discussion over how “remove bacteria” “prevents cavi-ties” can take place. Answers to the second query would possibly involve a discussion about the acids produced by the bacteria and methods to counteract the acids.

Now consider the FAST diagram shown in Figure 4 (previous page, top). The first function displayed is Im-prove FAST. This function is an answer to the questions (Why find missing or overlooked functions?) and (Why produce better functions?). For the sake of focus, other functions which may be included in the diagram and an-swer the question “How can Improve FAST be performed” (i.e. Learn Advanced Techniques or Add Metrics) have been omitted.

Now the question is asked: “How do we discover over-looked functions?” The answer given is “Use Reverse How” and the function is placed to the right of the existing func-tions in the diagram.” The same question is asked of the function Produce Better Functions and the answer given is the same. Now the diagram is complete with the exception of performing a function check using Reverse How. Work-ing from right to left the technique is employed. The first comparison is “How does Use Reverse How Produce Better Functions”. The answer produces a new function which is Compare Function Relationships (see Figure 5, previous page, center). An alternate answer could be Check Function Rela-tionships.

The technique is used on the other function to the left of the function Use Reverse How and produces similar re-sults. Now the question is asked: Does the new function re-place any of the existing functions or should it be inserted between the functions which were used to bring it about? As a trial the new function is placed between the two func-

tions operating at the same time Discover Overlooked Func-tions and Produce Better Functions and the function Use Re-verse How. The How-Why logic in the diagram is checked to determine if the new function is properly placed in the diagram.

Next a comparison is made between the function Dis-cover Overlooked Functions and the function Improve FAST using the Reverse How technique. Since there is no obvi-ous answer as to how Discover Overlooked Functions Improves FAST, no new function is created and the relationship be-tween the two functions are considered to be as direct as possible. The relationship between the functions Produce Better Functions and Improve FAST are tested using Reverse How yielding the same results. Figure 6 (previous page, bottom) shows the finished FAST diagram after Reverse How was used to check each function relationship.

The function “Use Reverse How” has been eliminated from the FAST diagram since it represents a specific meth-od and has little creative value.

Fish Barrier ExampleThe following example shows the changes to a FAST

diagram for a fish barrier where the objective was to pre-vent a certain species of fish from migrating upstream. In the following example each function pair was gone over using Reverse How with the value team; however, only one function pair was of particular interest to the team. Figure 7 (below) shows the finished diagram before asking the Re-verse How questions. The function with a dash line around it represents the basic function.

Once the question how does Dissipate Energy Minimize Scour was asked, the team came up with four possible func-tions as shown in the cloud shown in Figure 8 (next page). Note that the team defined scour as the force created by

EliminateNon-Native Competition

CreateBarrier

MInimizeScour

DissipateEnergy

MinimizeImpacts

DropElevation

Prevent Migration

HOW WHY

WH

EN

Figure 7. FAST diagram for a fish barrier (1 of 5)


moving water that causes the material at the bottom of the drop to wear away and create an undesirable hole.

Through some discussion the list of functions was reduced down to one function as shown in Figure 9 (cen-ter).

At this point the group was asked if the function “Transfer Energy” should be placed between the two functions “Minimize Scour” and “Dissipate Energy” or if it should replace the function “Dissipate Energy” to avoid a redundant function. The group decided to replace the ex-isting function “Dissipate Energy” with “Transfer Energy” as shown in Figure 10 (bottom).

Figure 11 (next page) shows the finished FAST diagram with an additional function of Harden Surface added. The function Harden Surface could have easily followed Transfer Energy in the how direction; however, the team felt that the two functions worked at the same time to Minimize Scour. Although each function pair was looked at, it took about thirty minutes to examine the entire diagram.


MInimizeScour

DissipateEnergy

HOW WHY

Spread Energy

Transfer Energy

Eliminate Energy Source

Reduce Energy Source


MInimizeScour

DissipateEnergy

HOW WHY

Transfer Energy


MInimizeScour

TransferEnergy

HOW WHY

Use Reverse How When Branching Is Required

Typically when constructing a Customer FAST diagram team members are encouraged to branch the diagram into two or more functions working in the How direction. If only one function in the How direction is present and pro-ducing a second function seems almost impossible, then


Bytheway, Charles W. 2007. FAST Creativity & Innovation. J. Ross Publishing, Inc.

Fowler, Theodore C. 2006. “Why Bother With Function Analysis?”; SAVE International [SAVE International Online Knowledge Bank].

Kaufman, J. Jerry, and Roy Woodhead. 2006. Stimulating In-novation in Products and Services: With Function Analysis and Mapping. John Wiley & Sons, Inc.

Miles, Lawrence D. 1989. Techniques of Value Analysis and En-gineering, 3rd ed. Miles Value Foundation.

Shakespeare, William. 1966. The Tragedy of Hamlet. Trans-lated by Tucker Brooke and Jack Randall Crawford, New Haven and London: Yale University Press.

Utah Department of Transportation. n.d. Value Engineering Manual of Instruction. Utah Department of Transporta-tion, Engineering Services.

About the AuthorJay Bytheway PE, SE, has been facilitat-ing value studies since 1994, and serves as a VE coordinator for the Bureau of Reclamation, U.S. Department of the Interior. He is a member of the Rocky Mountain Chapter of SAVE Internation-al and is the owner of Bytheway Solu-tions LLC.

try using the Reverse How technique to get the other func-tion.

Conclusion A high amount of effort is required to produce function

descriptions (naming functions) that are both descriptive and inspire creativity. Reverse How is a new tool to improve FAST diagrams. The improvement takes place by finding missing or overlooked functions by asking the question “How does (function to the right) (function to the left)? This technique has the potential to produce better func-tions than would have been discovered using normal How-Why logic. Reverse How works because it compares function relationships using a question that is unconventional for FAST diagram development which causes team members to think differently about the function relationships. Re-verse How is a method that can be used to fill in weak gaps in a FAST diagram. By comparing function pairs Reverse How can produce thought provoking functions that can enhance creative thinking. The FAST diagram examples used in this paper are the Classic FAST type, Reverse How can also be used on Customer Oriented FAST diagrams and Technical FAST diagrams.

ReferencesBytheway, Charles W. 1975. University of Wisconsin –

Madison, Accessed September 1, 2012 http://digital.library.wisc.edu/1793/3722.

Bytheway, Charles W. 1992. “Fast - an Intuitive Thinking Technique”, SAVE International Conference Proceed-ings (pp. 229-31).


EliminateNon-Native Competition

CreateBarrier

MInimizeScour

TransferEnergy

MinimizeImpacts

DropElevation

Prevent Migration

HOW WHY

WH

EN

Harden Surface


The Idea Factory:Innovation Integrated with Discovery Driven Growth

John E. Sloggy, PE, CVS, MBA & Dan A. Seni, P.Eng., Ph.D.

AbstractNew product introductions entail various degrees of

risk, depending on the amount of change incorporated into the new concept, with small changes displaying rela-tivity little risk and totally new concepts representing an unknown level of investment, market and technological risk. Such totally new concepts often fail, some resulting in substantial losses. As organizations become success-ful their appetite for risk typically recedes and the focus of new product introduction tends towards incremental modifications of existing products. Innovation is what separates high performing and growing organizations from lesser performing rivals.

This paper discusses how to integrate the Value Man-agement (VM) methodology with a Discovery Driven Plan-ning approach towards managing risk in new product introduction. The resulting combination allows organiza-tions to identify new areas of potential growth while lim-iting the overall investment risk typically associated with emerging technologies and improve the success of iden-tified opportunities (Continuous Innovation). This allows the organization to identify the areas where opportunities lie and to field more entries that can drive future growth in new markets.

The core of VM, Functional Innovation, has the poten-tial to help discover new ideas that can fuel organizational growth and provide a route to structured innovation on a continuous basis. What is needed is a process that can develop these ideas in conjunction with the Product De-velopment Process (PDP) all the while managing the high level of risk typically involved. That process exists, and it is Continuous Functional Innovation linked with the Discov-ery Driven Planning (DDP) model (McGrath & MacMillan 2009). A discussion ensues of the strengths of Functional Innovation and practical application strategies to maxi-mize product innovation. Further discussion consists of the application of DDP to manage project implementation risk through the use of real options theory thinking and a portfolio approach to project planning. Finally the organi-zation needs to consider the project from the perspective

of organizational learning and the resultant increase in valuable organizational knowledge that has occurred.

Introductiona. The Value Proposition

Organizations need to provide value to their customers and continuously create new value to retain customers and remain competitive. How do we create new value?

The competitive environment is rapidly changing. Yesterday’s competitive advantages are eliminated as competitors introduce new products and business models and customer requirements change. As the level of quality and variety available in the marketplace rises, the custom-er is no longer solidly attached to specific brands and all competitive offerings become available for consideration. The customer enters the market place seeking the best value proposition available that he is willing to pay for, the so-called “unit of business”, according to McGrath and MacMillan. That value proposition consists of a combina-tion of function, quality, cost, and delivery. Functions that the customer desires (both use and aesthetic) at an accept-able quality level with a competitive cost and a delivery model that makes the transaction viable.

b. Innovation in the Business Model

Innovation is what drives long-term organizational prof-itability and secures the growth of sales in current and future markets. What is required to achieve real profitability in today’s marketplace is continuous new product innovation on multiple fronts that can look into the future at the margins beyond the firm’s present core business.

With the rise of the global marketplace and advances in technology and transportation that effectively empow-er small and mid-size companies with competitive tools formerly available only to large organizations, aggressive global competition now comes continuously on multiple fronts and locations; from powerful multi-nationals, local based mid-sized companies, and state supported entities.


“Frugal innovation” in India and China is introducing a new channel for low cost, high tech products. Affordable products now sprout the latest technology for the “bot-tom of the pyramid” entering the market at a rate of inno-vation that can best be described as continuous. Business models are being redefined as the Internet drives markets to new efficiencies, creating new methods to deliver prod-uct in increasingly efficient systems.

Many companies struggle to adapt to this accelerat-ing pace of change, as they simply don’t recognize change coming that will erode their core business model, especial-ly if it is coming from non-traditional competitive sources. But how does an organization identify and react to these changes in the marketplace? The natural tendency is to double down on what has worked in the past, which may not adequately address new challenges outside the exist-ing defined competitive sphere when disruptive technolo-gies take the market in new directions. Consider Sony re-acting to the market change from CRT to LCD screens and the evolution of smartphones, Microsoft with tablets and smartphones, and the new mirrorless camera technology redefining the market for DSLR cameras.

Organizational growth can be generated externally through the acquisition of high growth opportunities that already exist in the marketplace or investment in organic (internal) growth projects identified and developed within the organization. External acquisitions tend towards more complexity, large high-risk propositions and all or noth-ing financial commitments that are organizationally chal-lenging to successfully integrate. Organic growth is often focused on the current core products and markets and consequently does not easily address competitive threats emerging from non-traditional sources. While both ap-proaches certainly can be successful growth strategies and deserve consideration, the internally driven organic growth strategy has the greater potential to target small but promising growth areas while limiting the organiza-tions overall exposure to risk. The internal approach also has inherent risks, in that profitable organic growth re-quires a disciplined program that can both drive innova-tion and manage the downside risk inherent in the inevi-table failures that will occur.

To protect today’s market share, organizations need innovation targeted at core product that keeps pace with market developments protecting the core business mod-el. Innovation is needed that drives organic growth and productivity enhancement (process innovation) with the understanding that today’s core business may not be the growth vehicle of the future. To secure that future, orga-nizations need innovation that breaks through the cur-rent competitive paradigm with the potential to establish a new business model with the corresponding changes

in profitability and market share that result. Developing new growth platforms and investing in future orientated strategic options that have the potential to develop into substantial growth opportunities requires the generation of creative thought and a method that allows us to de-velop those new ideas with a minimum of risk, while con-currently increasing organizational learning about what works, what doesn’t and why.

We need a better innovation framework to look into the future. What is needed is a systematic method of man-aging the internal innovation process that provides a cor-responding reduction of uncertainty, a method to manage innovation risk. We need a process that provides a struc-tured form of continuous innovation and can do so with predictability and consistency on demand. That process is the Continuous Functional Innovation model integrated with the Discovery Driven Planning portfolio model.

I. Functional Based Innovationa. Product Design

Product design typically consists of a series of successive iterations of synthesis and analysis to produce a product that achieves an acceptable approximation of the desired result. Value management is a parallel process that complements the design process with different inputs and output (Sturges 1992) with the objective of improving a design to provide the best com-bination of functionality, cost and quality for the user utilizing the tools of function analysis, the multi-disciplined team, and the structure of the job plan.

We construe the design disciplines to include all tech-nologies including engineering, architecture, medicine, accounting and finance, agronomy, management and many of the applied sciences, both social and natural. In other words, we take a broad view of design. Moreover, the act of design itself is not confined to these disciplines alone since it is intimately involved both in the crafts and in the arts. Even further, the case can be made that design is a common conceptual problem-solving process in which all participate on a daily basis. In other words, we take de-sign, broadly speaking, to be a particular form of problem solving that deals with the improvement of value.

Product designers usually pursue a single design con-cept and they will modify and repair their original idea rather than abandon it in the face of difficulties to gener-ate new alternatives. This situation occurs due to the men-tal connection and investment of effort the designer has in a particular design, and often the enormity of starting the task over. Fixing the current design is simply easier than restarting the process. Further, once started down a


particular path, it becomes difficult to envision a differ-ent solution; after all, it was our best idea, and the origi-nal concept remains dominant in our thinking. This single concept strategy does not conform to the traditional view of what the design process ought to be (Finger & Dixon 1989), which is an optimization process that continually challenges and improves a design that concludes with the optimal solution. The conceptual phase, from which the initial design concept arises, attempts to address the problem of innovation: coming up with a variety of new ideas or new solutions to existing problems. Good concep-tual design requires innovation and an innovative design comes about when one deliberately tries to create one (Pugh 1981). This iterative innovation process is acceler-ated when a large number of concepts considering differ-ent perspectives and constraints are available for review something inherently difficult for the individual designer to achieve.

At the level of core products the organization has the opportunity to do what it does best: to continue to develop product that is already well understood in terms of both technology and markets, what is called sustaining innova-tion. Most changes to core product are incremental in na-ture and the development and management of the change process is well understood and codified in the organiza-tion’s PDP. Ideas flow from across the organization in re-sponse to competitive offerings, improvements in avail-able supporting technology that can be integrated into the product, and process improvements and innovation that become available. A PDP implementing product and pro-cess changes typically incorporates product reviews and stage gates to fully vet the change and greatly increase the probability for the success of incremental change. As the proposed product change moves through the process, product performance, customer acceptance, manufactur-ing capability, and product distribution are checked and evaluated for expected performance and corrections are made to ensure a satisfactory outcome. This is organiza-tional management at its best and is what most large orga-nizations do well.

For innovations in product and business models that are less well understood by the organization and that stray from the product core, a different approach is required to successfully generate innovative new ideas. Traditionally, larger organizations have relied on some form of longer term basic R&D to discover new opportunities, and that remains an important route for many, especially for com-plex solutions that are rooted in leading edge science. Note that in the US, the manufacturing sector accounts for 70 percent of private sector R&D spending and 90 percent of US patents issued in 2012. What is needed is a short to mid-term innovation process that can generate valuable ideas

for the organization on a repeatable basis to sustain the core product line. A broader view of design is needed to develop conceptual processes that will allow for the appli-cation of VM in a larger model of design practice capable of achieving a broader spectrum of potential solutions.

b. Creative Problem Solving Through Collaboration

In the 1970s, Arthur Koestler studied the identifiable process that resulted in real innovation at large corpora-tions. (Koestler 1964) He identified what he termed the op-timal creative problem solving process. It consisted of the following components:

Gather great mindsLoad the mindCreate a receptive environment.

These factors form the basis for the model that has evolved in both the private sector and the academic arena for most successful innovative work.

Task team collaboration has been demonstrated to be the most successful academic approach available to gen-erate innovative new ideas. As reported by Ben Jones, a researcher at Northwestern University, in a study of the most highly cited of peer reviewed academic papers:

Research is increasingly done in teams across virtu-ally all fields. Teams typically produce more highly cited research than individuals do, and this advantage is increasing over time. Teams now also produce the exceptionally high impact research, even where that distinction was once the domain of solo authors. These results are detailed for the sciences and engineering, social sciences, arts and humanities, and patents, suggesting that the process of knowledge creation has fundamentally changed. (Koestler 1964)

Group innovation works and is supported by an ex-panding array of computer based collaboration tools, from personal computer based video conferencing, programs that facilitate group review and editing, to Internet based meetings capable of real time document sharing.

Further research by Isaac Kohane and Kyungjoon Lee of the Harvard Medical School Center for Biomedical Infor-matics, in what is called the “water cooler effect” analyzed peer-reviewed papers mapping the precise location of the co-authors and correlated it to the quality of the paper as measured by the number of referenced citations. (Kohane & Lee 2011) The tested hypothesis was: Do scientists who are in a close proximity with colleagues produce higher-impact re-sults? To test this they examined data from 35,000 biomed-ical science papers published between 1999 and 2003, each


with at least one Harvard author. The articles appeared in 2,000 journals and involved 200,000 authors.

“When co-authors were closer together, their papers tended to be of significantly higher quality.” (Kohane & Lee 2011) Concluding:

If you want people to work together effectively, these findings reinforce the need to create architectures that support frequent, physical, spontaneous interactions. Even in the era of big science, when researchers spend so much time on the Internet, it’s still important to cre-ate intimate spaces. (Kohane & Lee 2011)

From this we know that team collaboration is the most effective method of generating innovative ideas and projects, and that teams are most productive when there is personal interaction between the team members in an environment designed to support questioning and discus-sion of the relevant issues and alternatives. VM is a social design methodology in that it utilizes a multidisciplined team to achieve results. While it is often confused as being simply a narrowly focused exercise in cost cutting shroud-ed in technical terms, when done properly the process can result in real innovative breakthroughs. The essential idea here is that VM involves team-based design.

c. Value Methodology for Functional Innovation

The Functional Innovation model discussed in this pa-per (a form of short-term structured innovation) involves a multi-disciplinary group of five to 10 professionals with the appropriate experience (great minds) that are selected to be on a team assigned to work on a particular project (this could be a product, project or process). They immerse themselves in the detail of the project to become fully versed in all aspects (load the mind). Note that scope is critical, as the project must be selected and sized to allow the team to fully familiarize themselves with the details of the project, moving through the six phases of the VM process. The team analyzes the project from a functional perspective, developing a function logic model to visually represent the functional relationships of the project. Each component of a project is defined by a precise functional description and often the worth of that function to the user or other stakeholders is identified. The team records all information as they work through the detail of the project. This functional perspective, while often difficult to accomplish, redefines the project in an abstract manner that connects with and challenges the creative faculties (create a receptive environment).

It is this functional language, developed by the team to fully describe the project under review that transcends

the professional definitions that exist within each spe-cialty (the result of disciplined/professional training) that can often be a barrier to achieving real communication and understanding, e.g. the biologist, the environmental scientist, and the computer engineer all have a precisely different definition for the term eco-system. Functional identification and naming in the team environment en-sure a common understanding that leads to a real discus-sion of alternative solutions to perform the particular (ab-stract) function.

A fundamental tenet of VM is that basic functions (the necessary purpose of the project) must be preserved. The basic function identifies the usefulness of the project and the reason for its existence. For example, the basic func-tion of a wristwatch could be “indicate time.” Other sec-ondary functions support the basic function and these sec-ondary functions typically provide esteem, dependability, or convenience value for the user. An example is a dia-mond-studded case that performs an aesthetic function, which pleases both customers and those whom they want to impress.

It is this process, the immersion in all project detail, the questioning of definitions and approaches, the abstract functional thinking, and the perspective of involved pro-fessionals under the direction of a technically proficient and skilled facilitator in a receptive environment that often results in breakthrough thinking. Simply putting a group of experts in a room and expecting new solutions achieves little. VM brings a method that has proven effec-tiveness in overcoming the barriers that are inherent in different professional perspectives and inhibit a disparate group from creating new knowledge efficiently.

Once the function analysis phase is complete the team then moves to a creative phase to identify and develop new ideas, subsequently moving through the remaining phases of the VM process.

Integrating this approach into the organization re-quires assembling small development teams (5-10 individ-uals) of professionals with experience and backgrounds that parallel and support the project under discussion. This should involve a mix of professionals that may in-clude product designers, manufacturing, marketing, re-search, and others with skills that are deemed relevant. An understanding of the current approach is certainly ben-eficial, but the experience of the team members should not be rooted only in the current offering. Individuals from other areas of the organization should form a large component of the team, with “wild cards” in the form of academic, customer, or supplier organizations contribut-ing to the process. In this situation diversity pays. Charlan Nemeth of the University of California, Berkley (Nemeth et. al. 2004), in studying group creativity reported: “Dis-


sent stimulates new ideas because it encourages us to en-gage more fully with the work of others and to reassess our viewpoints. There’s this Pollyanna-ish notion that the most important thing to do when working together is stay positive and get along, to not hurt anyone’s feeling. Well that’s just wrong. Maybe debate is going to be less pleas-ant, but it will always be more productive. True creativity requires some trade-offs.”

This teamwork requires close proximity of the par-ticipants to be effective. The team needs to be given the opportunity to focus on the problem, to “load the mind” with relevant information related to the product, market, customer, and distribution channel, and then to develop the necessary functional perspective. This is done to en-sure that all members of the team fully understand all the issues, history, and constraints, and bring all team mem-bers to a common level of understanding. This part of the process requires “face time” for the group to effectively travel through the stages of group dynamics that lead to the creation of high performance teams, with enough time available to fully digest and discuss all the material. We have all experienced being immersed in a difficult prob-lem, surrounded by reams of information, only to have a creative solution emerge from when we are off pursu-ing an unrelated activity. Innovation takes time; time to understand the problem, time to discuss the issues, time to challenge existing solutions, time for the unconscious mind to process the information and time to develop a new solution.

II. Functionality as a Creative Discipline

A functional perspective is behind many great inno-vations, and it can provide an avenue to the organiza-tion’s organic growth. Many of our great innovators were natural functional thinkers: Leonardo Da Vinci, Thomas Edison, Albert Einstein, all approached their work from a functional perspective with powerful results. A focus on functionality is needed today to deliver high performing products and business models that command a premium in the marketplace, but today’s ways of developing func-tionality often are not providing organizations or their customers the value they need.

There is a need for an innovation process based on functionality that is repeatable and generates tangible re-sults, an “innovation kernel” that can deliver results on a continuous basis and integrates into an organization’s PDP. A methodology exists that promotes the necessary questioning of assumptions and is rooted in identifying

the precise functionality required of the product or project under review—Function Based Innovation. It has proven to be a great tool to stimulate the unconscious mind to seek innovative new solutions. Functions are precisely identi-fied using a series of questions designed to identify and simplify the product requirements from the user’s point of view.

What is it?What does it do?What must it do?

A generic function description is developed to describe the function utilizing measurable nouns that are either qualitative or quantitative and active verbs that describe transformation and control while excluding passive verbs that add no information. Searching for the most descrip-tive verb-noun combination is difficult and compromise can result in incorrectly selecting the action as the noun and using a passive verb to complete the function descrip-tion. We must not lose sight of the need to represent a function as a dynamic force that is essential to the work-ing of that object or system in which it resides.

Function: the objective of the design, the natural or characteristic action performed by a product or ser-vice

Allocation: assigning specifications or resources to a function during Function Analysis

Design Intent: the sum of a design’s functional and aes-thetic elements.

The basic function is identified along with the second-ary functions that support a particular method of achiev-ing the basic function. The function identification process continues to facilitate the development of a logic map representing each function as a component or system that can accomplish its own basic function.

This structure is intentionally abstract; i.e., focused on functions rather than parts, processes, or activities and can be divorced from the current design solution to allow for the identification of different approaches (innovation) to achieve the design objective. This structured approach to analyzing a design problem serves as an incubator for the innovation process itself; it creates a questioning en-vironment that both breaks down existing paradigms held by individual team members and challenges the mind to create entirely new solutions. The very difficultly of think-ing in functional terms stimulates the unconscious mind to become involved in the solution seeking process. It forces the team members to analyze and critically discuss every aspect of the problem, effectively taking a deep dive through the available information that ensures full under-standing of the problem before suggesting changes. The


process also moves the team through the stages of team building necessary to emerge as a high performing team. And it is done in a systematic manner in a format that can be replicated by the organization.

a. The System and Its Environment

What is it that confers upon us the ability to problem-solve on a conceptual level so as to improve the value of our artifacts, that is, to design things of value? It is exactly the ability to elevate artifacts from their factual level to a conceptual level, from the level of their concreteness to the level of ideas, so to speak. In other words, it is the abil-ity to model artifacts that allows us to anticipate and thus to shape the world around us. Function analysis and func-tion modeling is a systems approach to technological design integrating both cost criteria (economic variables) and per-formance criteria (technical variables) (Seni 2005).

This approach stands in sharp contrast to classical or technocratic design. Indeed, a systems approach coupled to team design with a task orientation focusing on for-mal function modeling constitutes a revolutionary break with traditional approaches to technological design (Seni 2005).

Whereas in classical design the designer is a lone individual, expert or craftsman, in value-based design

(functional innovation) the designer is a team engaged in “collective” design. In this sense, classical design is tech-nocratic in that the goodness or the worth of a design rests on the authority of the individual designer (his talent, his ingenuity, his education, his social standing, and so on). In collective design, the team is open-ended and the worth of a design rests on the truth and the utility of the models on which the design rests (Seni 2005).

In classical design the designer asks, “What should the thing be like?” In value-based design the key question is, “What is the mechanism? How should the thing work?” Whereas in classical design, the designer is concerned with object or thing models based on the methods and the knowledge of the state-of-the-art in a particular discipline or profession. Value-based design focuses on systems models independently of the particular disciplines. In fact system-environment relations transcend both disciplines and professions (Seni 2005).

In classical design the designer seeks to invent a thing-model that best meets the constraints of a problem. In val-ue-based design the team first elevates the system model to a more abstract level, the level of a function model. The function model then allows for the invention of a class of systems models from which the one that best meets the criteria of performance of function and value can be ana-lyzed (Seni 2005).

Finally, classical design is at best a form of con-strained optimization; that is, given a set of pos-sible solutions, find the one among them that best meets a technical goal (objective function). Alterna-tively, value-based design focuses not only on the technical constraints, but also on the integration of both function value (performance) and economic value (resources expended) (Seni 2005).

Figure 1 is a Systems-Environment Model, devel-oped by Dan Seni (Seni 2005), which uses function-ality to elevate things (product, process, project) from their factual level to a conceptual functional level, from their level of concreteness to an ab-stract level of functionality. This allows at once, both greater understanding of the thing under re-view and greater flexibility in developing new so-lutions to existing problems through the analysis of functions. The model has been used in a number of different contexts to support the process of de-sign and innovation in early stage PDP planning.

b. Function Logic Modeling

The team maps identified functions by devel-oping a Function Logic Model that provides a logi-cal representation of the functions of the project,

Figure 1. Explicit System - Environmental Model

ExplicitResource orCost Model

ExplicitSystem-

Environment Model

Problem solve or evaluate

Problem solve or invent

Problem solve or innovate TimeThings

Ideas

Level of Abstraction

Source: Dan A. Seni, P.Eng., Ph.D.

Function Model 1

Function Model 2

Object Model

Object as Should-Be

Object As-Is


first in the form of the Object As-Is (Function Model 1), and then, after development of the Explicit Resource/Cost Model, developing the Object as Should-Be (Function Model 2) logic model. The result is a reasoning structure in the form of a function logic diagram that relates each secondary func-tion to the basic function of the design. These stages are key to both completely understanding the current/pro-posed systems functions and corresponding cost and de-veloping the new abstract perspective that can result in creative breakthroughs. Note that the focus on cost is not a focus on cost reduction, but rather the recognition that cost is the key metric that identifies the location of the projects resources, particularly the required effort to cre-ate the design. In other words, the resource or cost model allows one to assign value to a design.

The application of functional analysis to the prelimi-nary design process relies on early identification of the design goals held by the appropriate stakeholders and describes them in functional terms via the function logic model. The functional logic diagram facilitates thinking in terms of what the product does instead of what the prod-uct is (the current design), beginning with a description

of the basic function of the design. This model is ideally suited to the develop-ment of different solutions, either to-tally new concepts before design has commenced or incremental modifica-tions to the existing design. As tech-nology changes new solutions to the allocation of resources become pos-sible while still retaining the required functionality.

On the function logic diagram, as a matter of convention, the functions to the left describe the reason why a function exists, while the functions to the right represent how the function is accomplished (the current design). A causal relationship is indicated in the vertical axis, as in: When this function happens, then that function happens, or conversely, this function is caused by that function. (See Figure 2.)

c. Explicit Resource/Cost Modeling

The team proceeds to develop an Explicit Resource/Cost Model that maps the desired attributes against the func-tions delivered by the project, utilizing

an Attribute/Function Matrix for project design or a RACI/RASI Matrix (Responsibility, Accountability, Consult/Sup-porting, Inform) for project planning purposes. This pro-vides an opportunity to evaluate how resources in the form of functions are allocated and how well a design meets stakeholder functional requirements. Costs can be assigned to further identify how resources are allocated to functions providing insight and understanding to the team. (See Table 1, next page.)

The creation of the functional logic diagram allows for the optimization of the given functional model vs. the modification of the model to achieve an entirely new so-lution, i.e., “what is” vs. “should be”. The team can then speculate on different function and resource allocation combinations to develop new function models (Function Model 2) that better meet the requirements of the user/stakeholders. This leads to the development of an As-Is/Should-Be Matrix in combination with the new Function Model developed for each newly identified design scenario. From here the team develops new Object Models (product design) corresponding to the newly identified Function Models.

Figure 2. Function logic model.

Value Based Design. llc

Higher Order Functions

Lower Order FunctionsScope of the Project

Under Study

How? Why?

When?

When?

Treat Target DeliverProduct

Enable Transport

Support Ground Sensor

Support Plumbing

ProtectPlumbing

PositionPlumbing

MountHardware

Direct Flow

Cradle Tip

Support Hardware

PositionProduct

Identify Location

Control Flow

LocateFoamMarker

LocateStructure

Allow Rotation

Pivot Structure

RemoveImpurities

Apply Force

Regulate Zones

Convey Signals

Control Shutoff

Facilitate Changeover


This approach is meant to assist a team in identifying the functions capable of satisfying the user/stakeholder requirements of the project and allocate appropriate re-sources to those functions identified as important, i.e. those functions that lie on the major critical path of the function logic diagram. The functional perspective allows the team to look at the project from a perspective that is more abstract than simply focusing on optimizing existing project components. The abstract nature of this functional perspective frees the mind to pursue alternative designs outside the context of the current design and, combined with the visual nature of the function logic diagram serves as a powerful creative stimulus to the unconscious mind. Analyzing and identifying functions should be a rigorous and difficult exercise that provides the framework for questioning why things are done the way they are, open-ing the discussion to the possibility of a radically different solution. It is best understood as Functional Innovation and can be effective at repeated interventions throughout the PDP.

III. Continuous InnovationThat the process works is well documented; however,

its application has typically been in discrete (singular) ap-plications: a team is brought together for a specific proj-ect and disbanded when the workshop is complete. This is often due to the multidisciplined nature of the team; i.e.,

when the team disbands and individuals return to their ongoing assignments in the respective parts of the organi-zation. The real opportunity exists to utilize this process, Functional Innovation, to repeatedly review a project at the various gates or review points of the PDP to ensure that the best design is brought to market. This introduces the concept of Continuous Functional Innovation (CFI) where, through a series of interventions, small teams review the project at repeated intervals for short periods, typically three days, although this varies depending on the scope and complexity of the project.

a. Internal Organizational Growth

Internal growth can come from investment in new platforms that may deal with new technology, new mar-kets, and/or new business models. The farther we move from the organization’s core business, the less we under-stand about the requirements for success in these areas and the greater the risk in achieving a successful project. These are typically new initiatives with potentially both increased upside rewards and increased downside risk and consequently, are the projects that need a different management approach to increase the success rate while at the same time limiting the downside risk and absorb-ing the lessons learned from the project into the organiza-tion via the organization learning model. The risk to the organization is in treating these projects the same as the

Table 1. Attributes/Function Matrix

ATTRIBUTES RANK Del

iver

Pr

oduc

t

Posi

tion

Prod

uct

Dire

ct

Flow

Cont

r ol

Flow

Allo

w

Rota

tion

Enab

le

T ran

spor

t

Proj

ect

Strt

uctu

re

Resi

st

Corro

sion

Tota

l

EXAMPLEFlexibility to Change 1 X X X X X X XDurability (MTBF) 2 X XFunctionality 3 X X X XManufacturability 4 X X X X X X X XWeight 5 X X XRepairability 6 XInnovation 7 XServiceability 8 X X XMargin 9 X X

Totals $14.50 $8.43 $3.65 $2.45 $5.65 $3.55 $11.65 $2.75 $52.63Percentage of Total Cost 27.6% 16.0% 6.9% 0.0% 10.7% 6.7% 22.1% 5.2% 90.1%

Source: Value Based Design, LLC


well-understood extensions of the core product. They are different and a new approach is required to be successful.

b. Organizational Learning

The need to create a receptive environment is crucial to the long-term success of any innovation process, and the organization must actively work to create and man-age that environment. Individuals within the organization need to understand that the organization supports inno-vation and accepts the inevitable failures that will occur. This is best accomplished by creating an environment that evaluates the process through an organizational learning model, with all outcomes, even those traditionally not considered successful, as opportunities to learn and grow the organization toward a rapidly changing future. Indi-viduals must know that the organization supports and val-ues these efforts, going as far as requiring the leading of innovation initiatives as a component of successful career development, much as global assignments are today. The individuals that have just championed a project that did not meet initial expectations have gained valuable infor-mation and experience for the organization about what doesn’t work in the marketplace, information that the or-ganization needs in order to formulate successful future product offerings.

The DDP approach to managing the risk of project development accomplishes this focus on organizational learning combined with a process that limits downside risk for those projects where the technology or environment is not well understood. Authors Rita McGrath and Ian Mac-Millan (2009) define the methodology behind DDP:

“Set a direction, probe inexpensively

Redirect where necessary

Grasp emergent growth

Shut down early and inexpensively if things don’t work out

Reduce the assumption to knowledge ratio.”

Limiting the downside risk while viewing projects from an organizational learning perspective eliminates the damage associated with projects that fail to achieve results and the corresponding risk averse behavior that constrains innovation in many organizations.

Integrating CFI with a DDP approach to project man-agement creates an “Idea Factory” that can fuel organiza-tional growth and produce products of real value in the global marketplace. This powerful strategic combination gives decision makers the tool kit necessary to generate the innovation that drives exceptional results capable of delivering on a growth strategy. The organizational learn-

ing that takes place develops a more creative, flexible ap-proach to innovation and strategic decision making with-out having to depend on high risk, high cost acquisitions that have the potential of wreaking havoc on the organiza-tion. And it can be replicated throughout the organization as success is demonstrated on a project-by-project basis.

IV. Discovery Driven PlanningThe Functional Innovation process discussed in the pre-

vious section deals with projects on a one by one basis. We now need an approach to manage systems of projects within the organization as a portfolio of potential innova-tions. What does such an approach look like?

What is needed is a project portfolio decision and management process that supports and develops these internal creative ideas that are different from the core business while minimizing the downside risk by provid-ing a decision structure that supports safe risk taking; a planning process that can manage and support innovation while reducing risk; a process that can increase the upside potential of a project, while minimizing the downside risk often associated with pursuing new growth. That decision process is the DDP model, as developed by Rita McGrath and Ian MacMillan (2009) and is reviewed in the following section.

a. Reducing uncertainty

A key concept of DDP is to manage the risk inherent in new ventures; i.e., how do we develop new ideas when we lack understanding of the technology and/or the mar-ket? We seek to make our project assumptions testable attributes so that our learning benefits pass to other in-vestments and organizational learning takes place. DDP attempts to test assumptions at the lowest expenditure possible:

Bold but uncertain outcomes are not predictable – you have to discover new ideas and deliberately redirect the resulting initiatives as reality unfolds. Roughly right decisions. (McGrath & MacMillan 2009)

b. Real Options Theory Thinking

Central to the concept of reducing uncertainty is the application of real options theory thinking to the core investment principles of the organization. This entails keeping initial investments that are required to verify in-vestment potential small and reviewing all investments against developed criteria to ensure high up-side poten-


tial. Evaluation occurs through the identification of ap-propriate review points (stage gates in the PDP process) to review the investment regularly with established logi-cal exit points (not time based but financial based exit points) that allow the organization to stop making further investments should the project not meet expectations. In-vestments are made only when there exists evidence of success identified by analyzing key project checkpoints: moments in time at which assumptions can be tested and then scaling up rapidly to develop the opportunity when

Tech

nica

l & E

xecu

tive

Unce

rtai

nty

High Positioning OptionsResources = 15%

Stepping StonesResources = 5%

Medium

Platform LaunchesResources = 45%

Scouting OptionsResources = 15%

Low

Core-Enhancement Launches Resources 20%Low Medium High

Market & Organizational Uncertainty

Figure 3. Opportunity Portfolio (McGrath & MacMillan 2009)

the results meet expectations. The organization can de-velop a portfolio of innovation projects through a combi-nation of both long and short-term approaches through traditional R&D avenues and the Functional Innovation model that will represent differing levels of risk, to ensure future growth in areas beyond the current core. These are called real options. The opportunity portfolio looks as fol-lows. (See Figure 3.)

The focus must be to manage risk and return by ratio-nally building and maintaining a portfolio of risky projects

(with a potential of high return) with less risky but less profitable ones. Tra-ditional low risk core projects can con-tinue to be fully planned from start to finish and once approval is granted the organization moves rapidly towards full implementation; an approach that starts accruing costs before generat-ing the expected revenue streams. A well-balanced well-diversified risk-op-portunity portfolio might look like the following. (See Figure 4.)

DDP and the CFI Intervention

The DDP approach to managing a risky portfolio of projects envisions a continuous flow of interventions. It incorporates a review of the perfor-mance of each project deemed high risk at prescribed financial intervals to limit the inherent risk of any one proj-ect as it moves closer to market intro-duction.

The CFI model provides a struc-tured framework to achieve short and medium term innovation solutions to identified areas of opportunity for the organization and the opportunity to review and improve selected projects. The first obvious application for this process is as an idea incubator, a feed-er, to identify the new projects that will move into the DDP portfolio model and supply the organization with a stable of potential new projects. Additionally the opportunity exists for the applica-tion of the CFI model as an intervention to the project review process of DDP by

Figure 4. A well-diversified, well-balanced risk-opportunity portfo-lio (McGrath & MacMillan 2009)


introducing an innovation review (3-5 days) in combina-tion with the identified financial performance review. This intervention would introduce the requirement to review a project not meeting expectations to determine if changes to the project concept (innovation) could be introduced to improve its expected performance in the marketplace. This has the tremendous potential to increase the orga-nizations success rate of projects that were initially per-ceived as good opportunities for future growth but have deteriorated in performance from original expectations. The Functional Innovation review introduces the oppor-tunity to review a project that is perceived as marginal and through the value-based design team approach can innovate key aspects of the project with the possibility of returning the project to the stable of winners.

Additionally, including a functional innovation review in conjunction to the DDP financial review introduces the opportunity to review projects that have successfully met the financial requirements and work to make them even more successful. This is where the greatest opportunity lies: making the winners even more successful; i.e., focus organizational resources on the projects with the greatest potential. This approach feeds the organizational learning gained from the market experience into the Functional In-novation model to allow for a continuously innovated proj-ect as it moves closer to market, creating a CFI model of PDP project innovation.

Now, we can review the portfolio of projects to ensure adherence to identified financial objectives, thereby mini-mizing risk. Further, we can conduct an innovation review to improve performance in the marketplace, the organiza-tion’s potential opportunity for successful new projects. There is simply no better investment of the organization’s available human capital than optimizing the potential of new projects through focused innovation interventions with Continuous Functional Innovation.

ReferencesFinger, Susan, and Dixon, John R. (1989) “A Review of Re-

search in Mechanical Engineering Design, Part 1.” Re-search in Engineering Design, Vol. 1, pp. 51-67.

Jones, Ben, Stefan Wuchty, and Brian Uzzi (May 2007) “The Increasing Dominance of Teams in the Production of Knowledge.”Science.

Koestler, A. (1964) The Act of Creation, 1964. London: Pen-guin Group.

Kohane, Isaac & Kyungjoon Lee (Dec. 2011) “Does Colloca-tion Inform the Impact of Collaboration?” Appeared in the online journal PLoS ONE.

McGrath, R.G. and MacMillan I.C. (2009) Discovery-Driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunity. Boston, MA: Harvard Business Publishing.

Nemeth, Charlan, Bernard Personnaz, Marie Personnaz (2004) “The Liberating Role of Conflict in Group Cre-ativity.” European Journal of Social Psychology, No. 34.

Pugh, S. (1981) “Concept Selection – A Method that Works.” International Conference on Engineering Design

Seni, D.A. (2005) “Function Models: A General Framework for Technological Design”, Value World, Vol.8, No.2.

Sturges, Robert H. (1992) The Function of Value Engineering. Carnegie Mellon University Engineering Design Re-search Center.

Woodhead, R. and Kaufman, J.J. (2006) Stimulating Innova-tion in Products and Services. Hoboken, NJ: John Wiley & Sons.

About the AuthorsJohn Sloggy, PE, CVS, provides focused team leadership and facilitation for Val-ue Management workshops and training seminars. He has extensive experience in new product development & manufac-ture, equipment design & build, facility design & renovation, and environmental & transportation issues.

Trained in consumer product develop-ment and automation design, he has worked in various product design, marketing, and manufacturing positions for Fortune 500 firms and has been achieving results leading Value Management workshops focused on innovation for 25 years. His education in-cludes a Bachelor of Science (Summa Cum Laude) and MBA, both from the University of Wisconsin. He currently sits on the Board of Directors for SAVE International as the Marketing & Commu-nications Vice President.

Dr. Dan A. Seni, natural scientist, en-gineer and economist, holds a Ph.D. in the foundations and the management of technology from the Wharton School of Business and Finance of the Univer-sity of Pennsylvania. He has authored and co-authored more than 75 scientific publications. Dr. Seni has also led or has contributed to numerous major consult-

ing projects over a 20-year period for various groups, both pri-vate firms and public bodies.


Dr. Seni is Professor of innovation and technology management as well as Professor of corporate strategy in the Department of Management and Technology at the University of Quebec at Montreal. He is also head of the Science, Technology and Industry Center at the Institute for the Management of the Bio-Industries, in Montreal, Canada. He has, for some years now both taught and done applied work in the area of value engineering, value analysis and value management and their application to innova-

tion in the firm, particularly at the level of business strategy. His most recent work has centered on the relation between inven-tion, innovation and wealth in the life science industries, that is, between technological and economic value, and how these kinds of value can be analyzed, modeled, linked, and planned.

Dr. Seni is presently working on a book on the foundations and the philosophy of technology.

The Most Important Thing to Leave Behind After a Presentation

By David Stone, President, Stone & Company

I’m frequently asked two questions:

What should I leave be-hind with the audience or review panel follow-ing my presentation?

Can I get a copy of your presentation?

The answer to the sec-ond question is invariably “No.” And the primary rea-son is that my slides, without me there to present around them, are meaningless. If my slides were self-sufficient and could be read and un-derstood on their own, why did we gather for a presentation? Why didn’t I just send a memo?

The answer to the first question is a little more com-plex. Of course you know enough to not hand out copies of your presentation to the audience before you begin. They’ll read through it and then be off in their own world, paying no attention to you because they already know ev-erything you’re going to talk about.

But a leave-behind can increase memorability follow-ing your presentation and a souvenir will have them re-membering you for days or weeks.

I am a staunch opponent of the PowerPoint presen-tation that’s filled with bullet points that we all read to-

gether. It puts an audience to sleep, it’s boring and, as a result, fails to engage and excite. For all these reasons I never recommend leaving behind a print-out of your slide deck.

But there are some things that you might choose to leave behind:

A white paper or article on the same topic as the presen-tation

Supplementary information providing additional detail or back-up data

A printed page with names, contact information and photos of the presenter(s).

Specifications and information about the product or service you’ve just spoken about

Bags of jelly beans.

There is, however, one thing that you must ALWAYS leave behind following your presentation. If you gave the presentation in order to persuade, inform, excite and en-gage your audience. If were enthusiastic and authentic. If energy and optimism flowed out from you. If you sparked interest and dialogue then you have al

Speaker at SAVE 2012 Annual Conference, Or-lando, FL.


If the Shoe FitsAdjusting a Value Engineering Event to the Problem or Opportunity

Joseph F. Otero, Jr., CVS-Life, FSAVE

This document contains no technical data subject to the EAR or the ITAR.

AbstractThe Value Methodology is employed to solve differ-

ent kinds of problems of varying levels of difficulty, so the tools employed and the associated rigor should match the

This page contains no technical data subject to the EAR or the ITAR.

Copyright© 2012 United Technologies Corporation—reprinted by SAVE International© with permission from United Technologies Corporation. Other than by United Technologies Corporation and/or SAVE International©, this document may not be copied, in whole or in part, without the express written permission of both SAVE International© and United Technologies Corporation.

problem. Just as one shoe does not fit all feet and one shoe is not suited to all purposes, the tools and rigor of the Value Methodology should fit the problem or opportu-nity. For example, a three-day VE event with cursory style tools may be perfect for conceptual design work whereas a set of multiple six-day VE events employing tools that demand rigor may be needed for solving a thorny issue as a product nears production. A conventional FAST model

Table 1. First Five Phases of Value Methodology and Some of Their Tools

PhaseTool with Greatest Rigor Tool with Least Rigor

Information Three questions; Value Model

Three Questions; Product Performance Profile or Prior An-choring Method

Mission Statement Problem Statement Goal(s)

Function Definition Technical FAST employing etiological axis

Comprehensive Cus-tomer FAST

Technical FAST em-ploying WHEN axis

Random Function Determination

Simple Query: What is the function?

Analysis of Defined Functions

Multi-attribute func-tion allocation matrix employing worth index

Multi-attribute func-tion allocation matrix

Single attribue func-tion allocation matrix

Down-select through team consensus

Down-select via Nominal Group Tech-nique

Idea Generation Employ at least six different brainstorm-ing methods

Sketching, brain-storming, and similar techniques for “invention required” problem

Sketching, Brain-storming

Conventional and Re-verse Brainstorming

Conventional Os-borne brainstorming technique

Evaluation Brief discussion and ROM assessment followed by Gut Feel Index

Cursory estimate of cost savings

Nominal Group Tech-nique

Individuals pick ideas they want to advance

Development Full, non-recuring ex-pense spreadsheets and attribute impact sheets for each scenario/proposal plus a Choosing By Advantages table for comparing proposals

Full, non-recurring ex-pense spreadsheets and attribute impact sheets for each sce-nario/proposal plus a rank and rate sheet for evaluating them

One scenario cre-ation menu for evlau-ating all proposals

One simple spread-sheet that assumes only one proposal

No spreadsheet used during event. Ideas are reviewed as a team, but initiative impacts are rolled up later.


using a WHEN axis may be fine for one study but the next may benefit from a modified technical FAST that employs an etiological axis instead of the WHEN axis. This paper makes general recommendations about what tools in the value methodology to employ in specific circumstances.

Key Points to Be CoveredLet’s cover some tools used in the first five phases of

the Value Methodology. Table 1 (previous page) is by no means exhaustive. The placement of a few tools within the table may be debated; the primary purpose, however, is to lay out the notion that different tools can be used depend-ing on the time constraints, the nature of the problem and the rigor required to address the problem.

DiscussionEach of the tools listed in Table 1 (previous page) is

briefly discussed in this section. Included in the discussion is a brief description of the benefit of a tool.

Three Questions (Figure 1) is a tool that employs three questions to frame a problem or opportunity in the context of its related tactical and strategic issues. It is a powerful tool that typically takes two to four hours to exercise, en-gaging the team in brainstorming and serious discussion to arrive at the reason, framework and problem defini-tion for the VE team to address in its event. A chapter in J. Jerry Kaufman’s book Value Management for the Practitioner (Kaufman 1996) is dedicated to the treatment of this tool and a discussion of how to employ it to define complex or unwieldy problems.

Upon completing the problem definition through the Three Questions exercise, the team can turn its attention to creating a model of how the outcome of the problem or opportunity will be val-ued. The most rigorous method for doing this is to employ a value model (Figure 2) as defined through the value-driven design process (Collopy, 2006). A robust value model is created through the aid of marketing analysts employing conjoint analysis.

This model is exceptionally accurate in predicting the value of a new product.



It has no limits on how individual metrics can be formu-lated within the model—a metric can be formulated as a linear, curved, or stepped function. Expectations of mul-tiple customers can be modeled. It can, however, consume weeks to create and therefore should be part of the pre-event preparation.

Less rigorous but quicker to build is a Product Perfor-mance Profile from a paired-comparison exercise and its associated star chart (Kaufman 1986). (See Figure 3, next page.) Its conclusions, however, can be flawed (Woodhead 2005). Some practitioners prefer using a Prior Anchoring Method of Choosing By Advantages (Suhr 1999). Neither is as analytically robust as the value model created by us-

Information Phase

Value Engineering Event

3 Questions:1) What is the problem we are about to resolve?

Our customer complain that our projectors require a lot of maintenance and are awkward to transport.

2) Why do we consider this a problem?

This is a problem because recently our projects have become expensive vs. competition and they’re not selling well. Previously we were first to market, and had the top-of-the-line product. Competitors have since produced units that are more portable and require less upkeep.

3) Why is a solution necessary?

A solution is necessary because our customer base is eroding, threatening name recognition that may impact future sales of not only projectors, but other products.

Figure 1. Example of 3 Questions.

Sample Value Model High Level Equations of Commercial Aircraft:

Goodness = NPVP(Production Profit) + Societal Good - Development Cost

Production Profit = Market Share x Market Size x (Price - Manufacturing Cost)

Price = NPVC(Customer Profit) + Charm - Competition

Customer Profit = Utilization x (Value per Flight - Cost per Flight)

Figure 2. Example of the equations that form a value




ing conjoint analysis, but both are quicker: a product per-formance profile and star chart is compiled in two to four hours and a Prior Anchoring Method exercise can be com-pleted in about the same time. Use of any of these tools fo-cus the team on the metrics with the greatest gap in value versus potential value or worth.

Not as useful for addressing a complex or unwieldy problem but acceptable for a moderately straightforward problem or opportunity with only a few metrics that af-fect worth, a mission statement or process mandate can be quite adequate and typically only takes a half hour to an hour to craft and refine.

Slightly less robust is a problem statement, but it is useful for simple problems. (See Figure 4, below.) It entails answering this simple question: “What is the problem or opportunity that the team is about to address?” About 15 to 45 minutes are required.

Current GoalReduce costs by 30% $34.50 $24.15Reduce scrap rate by 22% 13.00% 10.14%

Figure 4. Set of goals for steering event.

Figure 3. Example of a product performance profile.

Example - ProjectorP iPrice

PerformanceStar ChartScore: 319Target: 700

DecreasingNoiseImportance

Bulb Life

e ancee ility bility ance

LifePortability

DurabilityAppearance

ATTRIBUTEPrice

Perform

anNoise

Durability

Portability

Appearan

Bulb Life

TOTALA WEIGHTING FACTOR 27 27 14 14 10 4 4 100B AVAILABLE POINTS 270 270 140 140 100 40 40 1000

Portability

B AVAILABLE POINTS 270 270 140 140 100 40 40 1000YOUR SCORE (1-10) 4.0 2.5 4.0 2.8 1.5 4.0 4.2

C YOUR SCORE (Weighted) 108 68 56 39 15 16 17 319DELTA (B-C) 162 203 84 101 85 24 23 681




All of the above scoping tools can be enhanced with the addition of one or more measurable goals. In a very simple problem and where limited time is a hard constraint, a goal may suffice. How-ever, if employing only a goal or two as the definition of scope of a VE event, it is wise to ask if the scope is oversimplified. Realize that an oversimplified scope can lead to many missed opportunities in the event itself.

Function Analysis PhaseModified technical FAST with etiological axis plus use of multi-attribute function allocation matrix can be used for complex problems

In 2004 Dr. Roy Woodhead intro-duced a more robust method than the technical FAST “WHEN” axis—to capture etiological relationships (caus-al relationships as opposed to engineered relationships) (Woodhead & Berawi 2004), which he later elaborated on in his 2005 paper co-written with Dr. Mohammed Berawi, “The If-Then Modeling Relationship of Causal Function

Increase Element

Life

EmitHeat

Apply Power

Dissipate Heat

TransferInfo

ProjectImage

EmitLight

Position Glass

PositionMirror

ReflectImage

IlluminateImage

HeatElement

HOW WHY

Etiological Axis

increases rigor

of TechnicalFAST

Caused

by;

If

Then

Figure 5. Technical FAST with etiological axis.

Function Allocation Matrix for Housing Casting

FUNCTION 1. Create M

old

2. Melt

Material

3. Control Atm

osphere

4. Rem

ove M

aterial

5. Improve

Finish

6. Rem

ove M

old

7. Repair

Defects

8. Clean H

ousing

9. Inspect Features

1 0. Perform

Metallurgical

Inspections RAW PART ValueHARDWARE

Dimensional Discrepancies 40 30 5 3 15 2 5 520.00Latent Defects 20 27 15 2 25 3 7 1 245.00FPI Indications 7 6 25 6 30 1 20 1 4 120.00

TOTAL 265 73 67 168 123 24 119 12 31 2 885.00

Percentage of Total 30.0% 8.3% 7.5% 19.0% 13.9% 2.7% 13.5% 1.3% 3.5% 0.3%

Figure 6. A multi-attribute function attribute allocation matrix. This matrix does not include worth values.

and Their Conditioning Effect on Intentionality” (Kaufman 2006). Employing this method drives more rigor into the placement of functions in a FAST model. Creating a model of this vigor can easily occupy a team for four to 10 hours. (See Figure 5, above.)

Add to that a rigorous method of analyzing the worth




Dissipate Heat

TransferInfo

ProjectImage

EmitLight

Position Glass

PositionMirror

ReflectImage

IlluminateImage

HOW WHY

WHEN

Figure 8. Conventional Technical FAST with WHEN axis.

Figure 7. Customer FAST diagram.

TransferInfo

ProjectImage

EmitLight

Position Glass

PositionMirrorReflect

Image

IlluminateImage

HOW WHYNeeds — Basic Functions

Task or Mission

Increase Product Life

AssureDependability

Dissipate Heat

AttractUser

AssureConvenience

Three support functions always addressed:

Assure DependabilityAttract UserAssure Convenience

Wants — Support Functions

of functions—a multi-at-tribute function allocation matrix. Analyzing thus for function worth can take up to a full day or two. Not quite as valuable, but less subjective is analyzing it for value; this takes about two to three hours. (See Figure 6, previous page.)

A comprehensive Cus-tomer FAST model (Figure 7, top) seems to me to be rare. Now I will make a declara-tion that will ruffle many feathers among advocates of the classical Technical FAST model: a comprehen-sive Customer FAST model more truthfully reflects a product than the classical Technical FAST model (but this is a topic for a sepa-rate paper). Couple it with a customer dialogue driven derivation of worth indices for key functions and a team has a powerful tool for selecting functions. Ted Fowler told me that this process can take a few days (he also believed that two weeks was the mini-mum time needed for a truly outstanding VE event and bemoaned the “brevity” of the Module I workshop of five days).

Creating a conven-tional Technical FAST (Figure 8, bottom) takes about four to six hours. Adding it to a function allocation matrix (Fig-ure 9, next page, top) can take as much time as listed above for multiple functions; however, a more typical attribute function allocation ma-trix with a single attri-bute is suitable for a less complex problem. For establishing worth in-

dices, the exercise can take about a day; for establishing value it can take one to two hours.

Not commonly em-ployed by itself, but effec-tive for simple problems is a random function deter-mination exercise followed by a gut feel assessment such as Nominal Group Tech-nique to select functions for brainstorming. (See Figure 10, next page, bottom left.)

Function analysis in its inception by Larry Miles spent a few minutes on a function query exercise that consisted primarily of asking: What are the func-tions of this part or this feature? And of those func-tions, which drive the cost? This method worked for

Miles for many years and it still works! (See Figure 11, next page, bottom right.)

Consider as a team a few questions related to nega-tive functions—undesirable functions, such as one of the negative functions of a light bulb, Generate Heat. The es-sence of the dialogue is to determine what negative func-

tions drive product cost. Give this some thought; it is a powerful exercise for changing perspec-tive about root cause in cost drivers (here is also a topic for a paper). Kaufman and Woodhead touch upon this subject (Kaufman 2006, pp. 156-159).

Improvement of a process, especially a manufacturing process, usually includes some kind of walk-the-process exercise—where the en-




Conventional Attribute Matrix with Worth Index

Component/Function

Attr

ibut

e

Asse

mbl

e Co

mpo

nent

s

Cond

ucts

Cu

rren

t

Dis

pla y

Dat

a

Dis

play

Tex

t

Dis

play

s Co

nnec

tivity

Iden

tifies

Fa

ilure

Join

As

sem

bly

Ope

n Ci

rcui

t

Secu

res

Com

pone

nt

Sens

e O

v erle

ad

$ $ $ $ $ $ $ $ $ $

Resistance STrip 2.00 0.10 0.40 0.00 0.00 0.40 0.20 0.20 0.50 0.00 0.20Glass Tube 3.20 0.10 0.00 0.20 0.00 1.30 0.00 0.20 0.00 1.40 0.00Terminal Ends 4.20 0.60 1.00 0.00 1.60 0.00 0.00 1.00 0.00 0.00 0.00Bonding Media 0.60 0.20 0.00 0.00 0.00 0.00 0.00 0.10 0.00 0.30 0.00

Attr. Value 10.00 1.00 1.40 0.20 1.60 1.70 0.20 1.50 0.50 1.70 0.20

How much of the attribute (cost, weight, time, etc.) does the function consume?

Worth 10.00 0.40 1.50 0.40 0.50 2.65 1.20 0.50 0.95 1.00 0.90How much is the function worth to the customer?

Worth Index 0.40 1.07 2.00 0.31 1.54 6.00 0.33 1.89 0.59 4.50

Figure 9. Conventional Function Allocation Matrix showing measure of value of a single attribute, their corresponding worth (as determined by a set of customers) and the resulting worth index.

WHY FUNCTION HOWOVERHEAD PROJECTOR

Transmit Info Project ImageIlluminate Image

Reflect ImageBASE

Protect Components

House Components

Reflect Components

Position Glass Create LedgePosition Mirror Attach Arm

LIGHT BULBIlluminate Image Emit Light Energize Bulb

Produce HeatFAN

Protect Components

Dissipate Heat Run Fan

Figure 10. Table is a result of Random Function Determination exercise.

Function Comment

Project Image Basic FunctionShare Information Higher Order FunctionEmit LightRefract LightReflect LightEmit Heat Negative FunctionEmit Noise Negative Function of a cooling fan

from addressing Neg. Function, Emit Heat

Figure 11. Example of result of exercise of asking: “What is the function”; “What are negative functions?”; and, What are the value drivers?”




Process-At-A-Glance fields of Information:

1. process step number2. short descriptor of process3. set-up time4. touch time5. duration6. rates of scrap rework and repair7. value added costs of scrap

Figure 12. Process-at-a-Glance Chart fields. The charts are used in a Walk-the-Process exercise.

tire team walks the steps of the manufacture of a product. (See Figure 12, above left.)

Innovation PhaseEmploy at least six different brainstorming methods

for maximum idea generation potential. I employ up to three brainstorming methods simultaneously and prog-ress a VE team through several different techniques with the intent of engaging different cognitive processes in arriving at a broad spectrum of categories of ideas. The company I work for considers its suite of idea generation techniques proprietary, so I will not go into details about what methods we use and how we combine them.

Sketching, brainstorming, “change the perspective” exercise and similar techniques for “invention required” problems

Sometimes we are not looking for hundreds of ideas to distill into 60 useful ones; rather, a team may be charged with developing a handful of new concepts. In this case, asking team members to sketch ideas and post them on a wall is quite productive. In 1998 at the SAVE International® Annual Conference held in Washington, DC, Roger Syver-son presented a 12-hour workshop on creativity and inno-vation. One of the techniques he shared for helping a team to view a problem from a different perspective is to have them get on their backs on the floor and put their heads under a large table—this absolutely changes one’s physical perspective and results in dramatic shifts of thought. Un-

der-the-table and sketching brainstorming do not gener-ate a lot of ideas for the time they use, but they often result in entirely new concepts—the kind that can be patented.

Conventional Osborne brainstorming technique and reverse brainstorming

These two techniques are near opposites. Convention-al Osborne technique asks, “How can I deliver function X at high value?” Reverse brainstorming starts by asking, “How can I make function X worse?” There are a few rea-sons that I recommend it:

It releases tension and can be humorous. Both are use-ful for enhancing the effectiveness of a brainstorming session.

It helps a team to look at the problem differently by seeking the opposite of the desired end.

It goes into the area of negative functions, which I briefly discussed earlier in this paper.

Conventional Osborne brainstorming technique

Used by itself, not many ideas are generated, but for a single problem it may be adequate.

Warning: VE teams are rarely formed to address simple problems. Most teams that use only conventional brain-storming don’t know of other techniques are not given time to explore other methods.

Evaluation PhaseI sometimes suspect there are as many ways to filter a

long list of ideas as there are Certified Value Specialists. I will share only a few methods here.

If a team has produced over 1,000 ideas, the filter methods employed—to get that number down to a set that can be expanded in the development phase—are critical for the value event facilitator and team. The company that I work for considers our method proprietary, so I will in its place offer some generic tools and techniques.

One of the most robust set of techniques is shared by Kaufman in his book for practitioners (Kaufman 1986). He uses a simple nomination process for the first pass fol-lowed by Gut Feel Index (Figure 13, next page, top) voting

1.

2.

3.


Nominal Group Technique

Prioritize ideas on the basis of the number of votes.

One Technique: Each person get to vote for 10 ideas, thus:

10 votes for favorite idea 9 votes for next idea ... votes for idea X 1 vote for last idea that a person wants to vote on.

Figure 14. One method of conducting a group voting exercise called Nominal Group Technique (NGT). Many other NGT methods exist.



Development PhaseA full non-recurring expense spreadsheet and attri-

bute impact sheet for each proposal plus a rank and rate sheet (Figure 15, next page) for evaluating them can ad-dress complex, expensive problems where a high value so-lution is essential. Such a process can take 12 to 16 hours or more for a suite of 80 ideas.

A Choosing By Advantages table (Suhr 1999) (Figure 16, next page) can substitute for a conventional rank and rate sheet and deliver as good or better separation between competing proposals. This avenue takes a couple hours more than employing a rank and rate sheet if there are several possible proposals (where a proposal is a group of initiatives), but the evaluation takes into account more than just key attributes employed in a rank and rate sheet and therefore represents a more comprehensive consid-eration.

For less complex problems and limited time, a team may use one scenario menu for evaluating all proposals (Figure 17, page 31), but stick with at least one non-recur-ring expense sheet. This can reduce the amount of time needed to consider a set of ideas by about a third versus using a separate attribute impact sheet for each potential proposal.

Sometimes a team is pursuing only one proposal be-cause the problem definition clearly outlines what kind of proposal to pursue. In this instance a simple spreadsheet that factors in risk probabilities may suffice, supplemented by Choosing By Advantages applied to select between mutu-

preceded by a brief discussion of each nominated idea. The ideas with the highest average votes are then assigned au-thors; authors can also volunteer for ideas that don’t make the cut. Using this set of methods would likely require 10 hours.

Respected VE practitioner James A. Rains, Jr., CVS-Life, FSAVE, likes to ask the VE team to give a cursory estimate of the cost savings of each and every idea, then consider for write-up the ideas with the greatest savings potential. I estimate that applying this method to 1,000 ideas will oc-cupy about two days.

Nominations followed by a form of nominal group technique (Figure 14, below) is less rigorous and subject to the groupthink errors, but can plow through hundreds of ideas in a short time. Using this set of methods requires about three to four hours for a thousand ideas.

Figure 13. Gut Feel Index rules (on left) and rubric (on right).

Can it be made to work? Will it contribute to the goal?Can it be implemented in a reasonable time & for a reasonable investment?

GFI Scoring

1 NO WAY, TOO RISKY

2 I JUST DON’T LIKE IT

3 YOU HAVEN’T

6 I’LL GIVE THE IDEA THEBENEFIT OF THE DOUBT

7 THE IDEA HAS SOMEMERIT WORTH

Can it be implemented in a reasonable time & for a reasonable investment?

3 YOU HAVEN’TSATISFIED THE “YES,IF...”

4 THERE ARE SOMESMALL REDEEMING

MERIT – WORTHEXPLORING

8 IT LOOKS PRETTY GOOD

9 GOOD IDEA I’LL BUY INSMALL REDEEMINGBENEFITS

5 ( NO CARD )

9 GOOD IDEA, I LL BUY IN

10 SUPER, GO - A WINNER




1-Mfg. & Model 1 - Microwave Oven 2-Mfg. & Model 2 - Microwave Oven

Factor Attribute Advantage

Score of Impor-tance of Advan-

tage Attribute Advantage

Score of Impor-tance of Advan-

tage1. Size - Interior Volume

1.2 cu. ft. 1.4 cu. ft. 0.1 cu. ft. 30

2. Weight of Unit 20 lb. 3 lb. 3 23 lb.3. Power 1500 watts 200 watts 60 1300 104. Control Fea-tures

Popcorn, frozen veg., frozen meat,

quick choice, 3 fan speeds

Popcorn, potatoes, frozen veg., frozen meat, delay timer, quick choice, 3 fan speeds

Potatoes, delay time, quick choice minutes

15

5. Temperature Control

Built-in thermostat

Built-in thermostat

80

6. Filter Mesh filter and carbon filter

Carbon filter 100 Mesh filter

7. Reliability 3 yr. avg. life 35 yr. avg. life 0.5 avg. life 20Total Score of Items that Cannot Be Converted to Dollars

163 155

Price $350.00 $325.00Value per Dollar $0.47 $0.48

Figure 16. Example of a simple table resulting from a Choosing By Advantages exercise.

Ref. No. IDEAS GFI RISKATTRIBUTES Cost

Save.Invest Exp.Wt. Time Perf. Safe Main Stds

A23 Reduce cosmetic reqmnts. 7.8 sm 0 + + 0 + $11.5K $35KB15, 18 Eliminate side covers 8.2 lo + 0 + 0 0 0 $3,8K min.B1, C7 Redesign valve pack 7.4 sm 0 - 0 + + 0 $5.3K $12KD14, 16 Eliminate zoning on winch 8.7 sm + 0 - - 0 0 $35K 0A1,23,6

Smaller, lighter ROV-less horse power 6.3 med 0 | + - 0 0 $145K $300K

F1, G3 Standard subsea hardware - free valve 9.6 sm | 0 0 0 + - $225K TBD

E11 Place transformers on winch skid 7.4 lo 0 + + 0 + 0 $67.4K $25K

I13 Vessel deployed ROV 8.8 med 0 + 0 + 0 - $7K/day 0G2,6 Eliminate A60 zoning 8.9 lo + + - - 0 - $70K 0

Figure 15. Scenario Impact Worksheet in first stage of evaluation. Next step is to replace plus and mi-nus symbols with values.




ally exclusive initiatives were the separation between ben-efits is not obvious; be cautious, however, about electing to use only one metric, such as cost savings, as a measure of merit. While a team may be forced into this corner by time constraint or management directive, it is a narrow path that frequently leads to a proposal that is not the high-est value proposition; for example, if consideration of risk probability is not included, then the solution would not stand the scrutiny of decision analysis (Kirkwood 2011). A simple spreadsheet with risk analysis can be compiled by a team in two to three hours as they review about 30 ini-tiatives.

Figure that write-ups—converting each of the ideas that have the most potential into a single page write-up with a moderate level of detail—are a part of any value en-gineering event. Regardless of the rigor of various tools, write-ups remain nearly constant and take one person about half an hour to write. The greatest variation in write-up time typically results from the number of ideas that each member of the team writes up. Allow a minimum of an hour—two ideas per person—to two hours—four ideas per person.

CautionsToday’s business management environment goes for the one shoe fits all approach. Let’s suppose you tailor an event for a straightforward problem and it yields a 3-day event. When the event is a success, there is a good chance that a highly placed manager is going to insist on using that 3-day model for all future events. Your own knowledge of what is best for the company might not be sought and if it is, it might be dismissed (and you along with it if your protests are deemed dis-ruptive). My advice: Be cautious and clearly commu-nicate the limits of your event before it is undertaken. Failure to do so can lead you to discovering that you are the root cause of the 3-day events becoming the new norm of the organization that writes your pay check.

On the other hand, realize that a full-blown 6-day event is not the single shoe that fits all either: its re-source hungry nature prevents some organizations from employing VE when a less rigorous event would do. Furthermore, this paper has tried to show that a single set of tools isn’t right for all events. The tool se-

1.

2.

Ref. No. IDEAS GFI RISK

ATTRIBUTES

Cost Save.

Invest Exp.

SCENARIO

NOTESWt.

Tim

e

Perf

.

Safe

Mai

n

Stds

A B C D E F

A23 Reduce cosmetic reqmnts. 7.8 sm 0 + + 0 + $11.5K $35K X X

B15, 18 Eliminate side covers 8.2 lo + 0 + 0 0 0 $3,8K min. X X

B1, C7 Redesign valve pack 7.4 sm 0 - 0 + + 0 $5.3K $12K X XD14, 16

Eliminate zoning on winch 8.7 sm + 0 - - 0 0 $35K 0 X X X

A1,23,6

Smaller, lighter ROV-less horse power 6.3 med 0 | + - 0 0 $145K $300K X X

F1, G3 Standard subsea hardware - free valve 9.6 sm | 0 0 0 + - $225K TBD X X X

E11 Place transformers on winch skid 7.4 lo 0 + + 0 + 0 $67.4K $25K X X X

I13 Vessel deployed ROV 8.8 med 0 + 0 + 0 - $7K/day 0 X X

G2,6 Eliminate A60 zoning 8.9 lo + + - - 0 - $70K 0 X X X X X

Figure 17. Example of a Scenario Creation Menu




lection should be tailored to the nature of the problem or opportunity addressed by the event.

The far right column (Table 2) represents the least rig-orous tools and techniques. If only the least rigorous tools are employed in a VE event, it is highly improb-able that the goals of the event will be achieved unless they are small—like a five percent reduction in a single part cost of a new product. My own experience is that a VE event of less than 28 hours does not yield high value results—results that the team has a high level of confidence in promoting and results that yield one or more high value proposals—and those events em-ployed proprietary tools and methods that are not in-

3.

Table 2. Time of Processes Included

Phases of Value Methodology and Some of Their Tools

PhaseTool with Greatest Rigor Tool with Least Rigor

Information Phase Duration: 0.2 hr - 12 hr plus up to 8 weeks preparation

3 questions: 4 hr.Create Value Model: 4-8 hr.Conjoint Analysis: 4-8 weeks

3 Questions: 4 hr.Product Performance Profile or Prior Anchoring Method: 2-4 hr.

Mission Statement: 0.5 - 1 hr.

Problem Statement: 0.25 - 0.75 hr.

Goal(s):0.2 - 0.4 hr. per goal

Function Definition & Modeling Duration: 0.5 - 10 hr.

Technical FAST employing etiological axis: 4 - 10 hr.

Comprehensive Cus-tomer FAST: 4 - 8 hr.

Technical FAST em-ploying WHEN axis: 4 -6 hr.

Random Function Determination: 0.5 - 1 hr.

Simple Query: What is the function?:0.5 - 1 hr.

Walk the Process for Manufacture: 2 - 3 hr.

Walk the Process:3 - 4 hr.




Walk the Process:1 - 1.5 hr.

Analysis of Define Functions Duration: 0.2 - 16 hr.

Multi-attribute Funcation Allocation matrix employing worth index:8 - 16 hr.

Multi-attribute Function Allocation matrix:2 - 3 hr.

Single Attribute Function allocation matrix:1 - 2 hr.

Down-select through team consensus:0.25 hr.

Down-select via Nominal Group Technique:0.2 hr.

Idea Generation Duration: 2 - 10 hr.

Employ at least sixdifferentbrainstormingmethods:6 - 10 hr

Sketching brainstorming and similar techniques for “invention required”problem:3 - 6 hr

Sketching brainstorming:2 - 4 hr

Conventional and Reverse brainstorming:3 - 6 hr.

Convention Osborne brainstorming technique:2 - 4 hr.

Evaluation Phase Duration: 0.5 - 12 hr.

Brief discussion and ROM assessment followed by Gut Feel Index:6 - 10 hr

Cursory estimate of cost savings:6 - 12 hr.

Modified NGT:4 - 8 hr.

Nominal Group Technique:3 - 4 hr.

Individuals pick ideas they want to advance:0.5 - 1 hr.

Development Phase Duration: 3 - 18 hr.

*Not part of this paper2 - 3 hr.

2 - 3 hr. 1.5 - 2.5 hr. 1 - 2 hr. 1 - 2 hr.

Totals: 51 - 83 hr. + 4 - 8 wk. prep.

38 - 60 hr. 23.5 - 37.5 hr. 14 - 23 hr. 8.4 - 14.1 hr.

cluded in the table and the primary purpose of which is to speed up a phase with little or no sacrifice of its robustness. Look closely at the tools and techniques of the 9.4 to 16.6 hours event and you will likely reach the conclusion that it is a mediocre innovation session with little resemblance to VE; I hold that conclusion as well.

Not included in this paper is an essential consider-ation for planning an event: team dynamics. Recall the common coined names of phases of team develop-ment: forming, storming, norming, and performing. (See Figure 18, next page.) One of the big challenges with trying to do a 2- or 3-day event is that the team

4.


is usually in the storming phase for most of day two and part of day three. This means that their jockey-ing for influence—even if polite—slows the progress of the team; it also means that there is often widespread disagreement about the event conclusion—this means buy-in by key team members may be lacking in the implementation phase. By contrast, in a 5-day event, the team has nearly always reached the performing stage and moves along crisply with minimal guidance of a facilitator; they are aligned and enthusiastic about their final proposal and ready to move forward on im-plementation in a united effort.

ConclusionThe VE practitioner can place many tools and tech-

niques in his or her quiver and form an event tailored to the specific needs, challenges, and opportunities of the event. A set of the most rigorous tools and techniques that requires two weeks to execute will rarely be needed or ap-propriate for all circumstances. A week long event also is not always the answer. On the other end of the spectrum, a 1- or 2-day event should be contemplated for only the very simplest of problems—and I have not encountered a prob-lem so simple that it lent itself to even a 2-day workshop, much less a 9½ hour workshop.

I have, however, encountered managers who insisted on using no more than a day or two for an event. I usually respond that I will not sign up for high expectations—re-sults that are typical of a stellar event—and will only facili-tate if the manager agrees to a lowered set of expectations.

Furthermore, because such short events water down func-tion analysis, I will insist that the activity not be called a VE event. After all, it is short because it has a simple goal statement, shallow function analysis, only a few hours of brainstorming, and rushed, oversimplified idea filtering and development. Will that path work for your company?

Be wise in your choices of tools and techniques and ex-pert in applying your skills of persuasion. Aim to be clear, honest, and professional.

ReferencesCollopy, Paul D., Ph.D. & Joseph F. Otero, Jr., CVS-Life.

“Value Driven Design.” Value World, 2006: 18 -25.

Kaufman, J. Jerry. Value Engineering for the Practitioner. Ra-leigh, NC: North Carolina State University, School of Engineering, 1986.

Kaufman, J. J. & Woodhead, R., Ph.D. Stimulating Innovation in Products and Services: With Function Analysis and Map-ping. Hoboken, NJ, USA: John Wiley & Sons, Inc., 2006.

Kirkwood, Craig W. Decision Tree Primer. October 28, 2011. http://www.public.asu.edu/~kirkwood/DAStuff/de-cisiontrees/DecisionTreePrimer-1.pdf (accessed Au-gust 2011).

Suhr, Jim. The Choosing By Advantages Decisionmaking System. Westport, CT: Greenwood Publishing Group, Incorpo-rated, 1999.

Woodhead, Roy, Ph.D. “Paired Comparison: Why Tools and Techniques Fit within the Value Methodology.” SAVE International Conference Proceedings. San Diego, CA, USA: SAVE International, 2005.

Woodhead, Roy, Ph.D. and M. A. Berawi, Ph.D. “An Etio-logical Explanation of WHEN Logic.” SAVE Internation-al Conference Proceedings. Montreal, Quebec, Canada: SAVE International, 2004.

Woodhead, Roy, Ph.D. and M. A. Berawi, Ph.D. “The If-Then Modeling Relationship of Causal Function and Their Conditioning Effect on Intentionality.” Value World, 2005, Vol. 28, No. 2, pp. 16-17.



Figure 18. Graphical depiction of the stages.


About the AuthorJoseph F. Otero, Jr., CVS-Life, FSAVE, is a program risk management advisor and value engineering methods specialist at Pratt & Whitney Aircraft, a division of United Technologies Corporation. He served as vice president of education for SAVE International®. He serves in the following volunteer capacities: Value-Driven Design Program Committee of AIAA; member of Toastmasters Interna-

tional; leader of a group a volunteers in tree and branch removal after a tornado struck his community June 1, 2011; leader and instructor at church. Otero is a Fellow of SAVE International®. He is married, has four adult children and two grandchildren. He has a bachelor of science degree in engineering science from Brigham Young University, Provo, UT.



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What Makes Value Methodology Work?(An Analysis of Function Analysis)

Geza E. Kmetty, PE & Alfred I. Paley, CVS, FSAVE

AbstractThe paper analyzes and dissects how value manage-

ment’s (VM’s) function analysis discipline works and ex-plains how the resulting “creative discontent” impacts brainstorming and creativity of the value engineering (VE) team. The focus is on function; the role of the verb-noun definitions as the basic element needed to obtain a clear understanding of the item under study; and how it serves as the essential tool of building VE team consensus on “where and how the object being analyzed fits in the world”. Through the use of the Function Analysis System Technique (FAST) diagram, the paper demonstrates VM’s systematic process and how it assists in correctly identify-ing the problem and how that will lead to identifying the correct solution. It is demonstrated that VM is not just cost cutting, but it is primarily an excellent decisionmak-ing, team-consensus-based, problem solving and value im-provement methodology.

Problem SolvingProblem solving is an everyday activity, conducted by

individuals and groups of people. Everyone feels that he or she is a good problem solver. But are we all good problem solvers?

Let us look at a simple example: Assume that there is an accident in some public area. A woman slips and falls on a wet floor. After attending to the woman to make cer-tain that there is no major damage to the individual, the problem of the wet and slippery floor is fixed. It is dried and it is assumed that the problem of the wet floor has been taken care of. Finished. Next problem! However, it is fixed only—until the next rain!—the cause the problem is a hole in the roof! People are very apt to define a problem in terms of their pet solution—as in the example: “When a floor is wet, you need to dry it.”

Many problems, big or small, are defined by people in terms of their pet solution and their belief that they know what the problem is. That is why we often experience/hear,

“How come that problem is still here? I thought we solved that problem long ago.” It applies as well to areas of per-sonal activities, industry, finance, government, medical, etc. Everywhere that people are involved, they will push their pet solution—it is a people problem! Reducing costs may results in the benefit of increasing value. However, reducing costs can present problems that require clear understanding of many factors. value engineering/value analysis provides a methodology using function analysis that overcomes these and other problems.

The InventionsValue engineering (VE), originally called value analysis

(VA), was the product of an observation made after World War II. During the war, individuals were drafted out of their civilian jobs (similar to the military draft program), and assigned to necessary government war efforts. Some were assigned to the War Production Board (WPB) whose job was to keep the acquisition of necessary war materiel going strong, keeping the supply lines full. Their efforts helped the USA and its allies to win the war.

After the war was over, drafted individuals were per-mitted to return to their previous civilian jobs. Some of these WPB people returned to General Electric (GE). They were asked about their experiences at the WPB, (similar to debriefing) to see if any of their experiences could be of help to GE. One of the observations reported was that if they had a problem with shortness of supplies, in order to keep the supply lines flowing, they had to find substitutes/alternatives—and often the substitute/alternative worked just as well, if not better, and cost less!

The GE management asked how that happened? No one knew the answer! Management set out to find out How? Management assigned a team of people to study this “phe-nomenon” so that they could do it on purpose instead of by accident. Lawrence D. Miles, a GE employee, was assigned to form a team. After a few years of study, Miles came to the conclusion that what had been ordered or specified at


the time was not necessarily what was needed. It was the function of the item which was needed by the system or product!

If the function was analyzed, there was the opportu-nity to have a different choice, an alternative that could work as well and cost less The alternate could be analyzed to see if it could perform the function, and perhaps lower the cost without affecting performance or reliability-and even do a better job. And so, Invention No.1 Function Analysis as a process was formed.

Function analysis, as introduced by Miles in the USA after WWII, followed the methodology of structured prob-lem solving to develop a process for cost reduction, by identifying unnecessary costs in products, processes and procedures. This has generally been called value engineer-ing.

Miles published a book, Techniques of Value Analysis and Engineering1. GE assigned him to train all GE personnel in this process of cost reduction. Later the VE process was picked up by the government. This was at the forefront of the value work that resulted in the formation of the Soci-ety of American Value Engineers (SAVE) and all the suc-ceeding value societies.

Miles’ work was fundamental in introducing the im-portance of identifying and understanding (analyzing) functions as opposed to primarily “materials” and “things” in the cost reduction effort, which was the core of his first efforts. Included in his book, and of significant impor-tance, was the introduction of an objective way to define the “problem” (or problems) in the structured problem-solving process.

People tend to define problems in terms of their pet so-lution. But Miles taught us that the cost/function relationship is a more objective way to unambiguously identify a prob-lem. That is, by establishing the cost/function relation-ships for each function, one can find the cost drivers by comparison and thereby indicate where an unusually high cost (or other) problem may exist. As the value work pro-ceeded in industry and government, and function analysis began to be applied to more fields and to other than just cost reduction efforts, it became clear that understanding the relationships of functions is the key to productivity, ef-ficiency, and elimination of wasteful efforts in all the ef-forts in which people are involved.

Invention No.2 was the Function Analysis System Technique (FAST), diagram (developed by Mr. Charles W. Bytheway in 19642, and first presented as a paper to the SAVE confer-ence in 1965. FAST contributed significantly to an impor-tant phase of the development of the body of knowledge, currently being referred to as the value methodology (VM).

The introduction of FAST diagramming resulted in a two dimensional presentation of the hierarchy and rela-

tionship of functions. This provided a clearer understand-ing of the products, processes, and procedures for which individuals and teams of people were responsible. The re-sult of applying function analysis in problem solving pro-cedures is that consensus can be obtained more readily for decision making. Doc Ruggles, one of the first teachers in VA/VE3 stated “… the FAST diagram will cause the problem to jump out at you.”

From Reasoning to Function Analysis

Reason is what helps us figure out how or why something happened. In a way reason is a tool for arriving at theories to construct Stories the crucial soldering iron required to connect the dots. And why do we make stories? Not neces-sarily because they help us understand the world better, but because they help us explain the world better. We are a story telling species. We make up stories to win arguments and we use reason to enhance our stories with superior log-ic.

Lawrence D. Miles, was the “inventor” of functional thinking with the active verb and the measurable noun as the “language” of Value Methodology. He makes the statement that, “With the product, the customer wants a FUNCTION”. The language of FUNCTION (active verb and a measurable noun) is the LANGUAGE which helps us to define the heart of the problem.”

Charles W. Bytheway organized the language of Miles into sentences and paragraphs, making full stories, with the use of the FAST. FAST is a pictoral representation of function “words”, organized into sentences and pictures to make “Logical Stories”, in a how-why relationship. Now let’s construct a “ FAST-Story” of function analysis!

Creating a FAST Diagram of Function Analysis

Following is a list of functions which describe function analysis. The list below (relevant to the process of func-tion analysis) are the Words that form the Story of func-tion analysis. The hyphenations are to keep the “Measur-able Nouns” as one word. For example, the first function in our list “Accomplish” is the verb and “Goals” is the noun. The rest follow the same logic.

Accomplish GoalsMake Proper-DecisionsSelect Best-SolutionBrainstorm Solutions


Identify Correct-ProblemMaintain QualityObtain ApprovalsApply StandardsObtain Public-SupportObey LawsProvide Audit-TrailMeasure PerformanceEstimate CostsEstimate ConsequencesObtain ConsensusIdentify Required-FunctionsExpose Unnecessary-FunctionsGenerate Creative-DiscontentChange Attitudes

Improve Product, Process,

Procedure, Regulations,

Law

Accomplish Goals

Maintain Quality

Obtain Approvals

Obtain Public

Support and coo-pration

Make Proper

Decisions

Obey Laws

Provide Audit Trail

Apply Standards

Identify Correct Problem

Brainstorm Solutions

Select Best

Solution

Develop Un-derstanding

Perform Function Analysis

Measure Performance

Estimate Costs and/or

Consequences

Obtain Consensus

Identify Required Functions

Expose Unnecessary

Functions

Use Verb-Noun

Description

Assemble Expert VE

Team

Apply Job Plan

Generate Creative

Disoncent

Change Attitudes

FAST Diagram of the Function Analysis DisciplineFAST (Function Analysis System Technique) is used to illustrate the relationships of functions within the function analysis discipline by utilizing a How-Why logic pattern.

How? Why?

The Value Methodology

Figure 1. FAST diagram of function analysis

Develop UnderstandingPerform Function-AnalysisUse Verb-Noun DescriptionApply Job-PlanAssemble Expert VE Team

Using the above list of function-words, we may now construct a FAST diagram to form a two dimensional pic-ture and tell a story.

Reading the FAST DiagramThe below FAST diagram (Figure 1) tells us the story of

the function analysis discipine. Follow the diagram from left to right or right to left. it should make logical sense


either way. Each function should answer the How and Why questions with an adjacent function. By observation, the most value improvement opportunity in this FAST is the Identify Correct-Problem function which is coming from the Develop Understanding function and followed by the Brain-storm Solution function from the right to the left. Now we are on the right track to Select Best Solution and Make Proper Decision, and to Accomplish Goal which will result in improving whatever unsatisfactory situation on which we are working.

Function EngineeringThe arrangement and rearrangement of functions and

display them in such a way that the teams agree/show consensus that the function diagram represents the proj-ect/system. The ability to organize one’s thinking about functions and to reorganize and use logic to rearrange functions for improvement of cost savigns, time savings, substitutions and rearrangment is function engineering.

Why this has not been identified as such is not clear, but could that it worked no matter that it was called VA, VE, discipline, or etc.? Function engineering as a name can bring the discipline to a new level of understanding as to why it has been so effective for over 60 years.

We have recently heard the phrase financial engineer-ing being used to describe some of the activities on Wall Street that come up with invest-ment derivatives, such as credit de-fault swap derivatives. During the present financial crisis, the follow-ing thought comes to mind about function science:

The work done by Larry Miles in developing Techniques of Value Anal-ysis and Engineering was the identifi-cation, arrangement and manipu-lation of functions, ergo: function engineering. It is now apparent that the science of function analysis is the use/application of function engineering and is the basis of value engineering.

For example, in electrical en-gineering the understanding of re-lationship of voltage (E), current (I), and resistant (R) results in the formula E=IR. In value engineering we start with function and then, through the use of the logic in the How?/Why? to arrange and rear-

range those function, we developed the processed known as function engineering. Our path has been through the FAST diagramming tool which can be defined as supply-ing the formula that is inherent in engineering—the basic truth or factor.

The development of function engineering is all due to the genius of Larry D. Miles and Charles Bytheway who de-veloped the FAST diagramming tool. Their work created a powerful improvement to structured problem solving through the language of verbs and nouns and the story told by the FAST diagram.

ExampleFast diagrams had been constructed during a VE work-

shop in the course of following the structured problem solving procedure of the job plan (see Conclusions). The FAST diagrams were invaluable in defining the problems. Figure 2 (below) illustrates a simplified form a FAST as an example.

In reviewing the FAST diagrams and the functions that were beginning to be detailed during the VA/VE work-shops, unnecessary costs often were identified. Following is an actual VA/VE project on a 60 year old railroad bridge maintenance and remodeling (a bridge redesign and rail traffic maintenance project).

Higher Order

Function

Basic Function Function Function

Input Driving

Function

Supporting Function

Specification

HOW? WHY?

Scope Line

FAST Diagramming General Layout

Figure 2. FAST diagram, simplified layout.


a requirement for a VA/VE study and a workshop was or-ganized.

The first order of workshop business was to obtain and review all of the drawings and specifications for the proj-ect. The VA/VE team had to identify all of the functions and begin to understand the functions associated with the project. In order to get a deeper understanding of the proj-ect, a field trip was organized for the workshop team to visit the site of the railroad bridge—to see the condition of the pilings and the bridge.

As the team walked out to the railroad bridge it be-came immediately apparent that the railroad bridge was actually two bridges; each with two sets of railroad tracks. The workshop team investigated the impact of their find-ing two railroad bridges at the site instead of one. If one bridge could be worked on at a time, railroad traffic could be maintained on the two tracks of the other bridge. If the rail traffic could be maintained, the unnecessary cost of construction of the by-pass, its later removal, and the ex-pensive environmental impact study, which had no func-tion or value after the project was completed, could be avoided.

The VA/VE workshop team found that the pilings could be reinforced with more modern materials and con-struction methods. Safety requirements that prohibited

heavy work to be done too close above the live rail tracks were satisfied by the fact that there were two bridges and that one could be worked on at a time. The team also located heavy drilling equip-ment that was used in mine construction that could be used for setting pilings. This equipment had low enough profile so that it could operate below the bridges. Figure 4 (previous page) is the FAST diagram of the revised design where the unnecessary by-pass rail line had been eliminated.

Function analysis and the FAST dia-gram allowed the team to identify the costs of the functions being performed. The team then identified a piece of in-formation that had not been identified at the time the original design had been made—the existence of two separate bridges. These factors brought out creative discon-tent in the team to find new solutions to the problem rather than the pet solution—using a by-pass rail line to maintain rail traffice during construction. The project time line as shortened which, by itself, significantly reduced the estimated cost of the project.

Higher Order Function

Figure 3. FAST diagram of existing railroad lift bridge.

Provide Water &

Rail Traffic

Complete Construction

ProjectProvide

RailTraffic

ProvideWaterTraffic

MaintainRail

Traffic

Replace Bridge

ProvideRail

By-Pass

Environ-mentalImpact Study

HOW?

Railroad Lift Bridge

NeedsRepair

SpecificationMaintain

Rail & Water Traffic

WHY?

60 Year Old Railroad Bridge Maintenance/Remodeling

This bridge repair project began as the result of failure of the railroad lift bridge across a major waterway to open as required to allow ship and boat traffic. Due to aging of the railroad bridge and its pilings, the bridge support pil-ings had shifted over time. Bridge inspectors found that if the lift bridge were raised, it would not properly position itself on the shifted pilings when lowered, thus interrupt-ing the rail traffic. Therefore the bridge could no longer be opened. However, the Coast Guard required that the river traffic be maintained. The bridge and its pilings had to be repaired sot hat both traffic requirements were met.

A design for the reconstruction effort had been made which including dismantling of the old bridget and rede-sign and construction of a new railroad lift bridge and its pilings.

Figure 3 (below) is a FAST diagram of the project as originally designed. In order to maintain railroad traffic during the reconstruction project, the design included a by-pass rail line located upstream of the river crossing to by-pass the construction area. This by-pass rail line would have required complete removal after all the reconstruc-tion was completed. The contract for the project included


Reasons of Poor Quality and Wrong Decisions

Lack of informationHonest wrong beliefsHabitual thinkingRisk of personal lossReluctance to ask for adviceTime pressuresPolitical pressureNegative attitudesRapidly changing technologyStrict adherence to requirementsPoor human relations.

VE workshops are successful because they use impar-tial multi-disciplined teams to break down a project into its basic functions and then use creative discontent and creativity to find different ways to perform these func-tions.

The VE Job PlanVE teams will provide management with as many rec-

ommendations as practical. The recommendations are then evaluated by the client’s staff whose specialty areas

are impacted by the proposed recom-mendation. Management then decides, based on all available information, whether or not to approve and imple-ment the recommendation.

ConclusionsThis paper has described the VE

methodology processes and procedures. It demonstrated the value of the verb-noun definition of functions and the use of FAST diagramming and function analysis to find the correct problem and make the best decisions.

After the unnecessary functions and costs are identified and eliminated, the solutions appear to be obvious and gen-erallyl simple. However, as in the exam-ple given, the wrong problems were real to the people working on the project. The solutions were not obvious to them until they were identified during the VE effort in the relatively short time of the workshop.

It is recognized that all the work in any process is ac-complished by human beings who work with possibly in-complete and perhaps incorrect information—and gener-ally under various pressure at that.

Function analysis and FAST diagramming provide the ability to obtain better and objective understanding of products, processes, and procedures so that unnecessary functions and costs are more readily recognized. It is the use of function analysis and FAST which supplies the abil-ity to objectively and clearly identify and define the correct problem in the problem solving procedure that yields the best results.

The Value Methodology is the language of reason and logical thinking. The VE effort will result in identification of the correct problem and an intimate understanding of the required functions which can lead to the best possible solution of which the VE team is capable.

ReferencesBytheway, Charles (1975) Inventor of the FAST diagram-

ming technique.

Miles, Larry D. (1949) Techniques of Value Analysis and Engi-neering. McGraw Hill-Book Company.

Higher Order Function

Figure 4. FAST diagram of revised railroad lift bridge.

Provide Water &

Rail Traffic

Complete Construction

ProjectProvide

RailTraffic

ProvideWaterTraffic

MaintainRail

Traffic

Replace Bridge

EliminateRail

By-Pass

HOW?

Railroad Lift Bridge

NeedsRepair

SpecificationMaintain

Rail & Water Traffic

WHY?

Two Parallel Railroad Lift

Bridges

ChangeX


Ruggles, Doc (1976) Value Analysis Incorporated, teacher of FAST diagramming.

About the AuthorsGeza E. Kmetty, PE, is a registered profe-sional civil engineer with over 40 years of transportation, flood control, and urban infrastructure design consulting expe-rience. He established and was the pro-gram manager of the value engineering program for the Flood Control District of

Maricopa County, Phoenix, AZ for 10 years. He is currently the value engineering program coordinator for the California High Speed Rail Project.

Kmetty taught creative value management in the MBA program at the International Management Center in Budapest, Hungary, and is a guest lecturer on value engineering at Arizona State Uni-versity in Tempe, AZ. He is a past president and life member of the Arizona Section of the American Society of Civil Engieners and currently vice president of the Arizona Chapter of SAVE In-ternational®. He is the 1999 recipient of the Distinguished Service Award from SAVE International®.

Alfred I. Paley, CVS, FSAVE is a gradu-ate of the Polytechnic Institute of Brook-lyn with a bachleor of science degree in electrical engineering. He taught VA/VE workshops at Hofstra University Con-

tinuing Education Department, Long Island, NY.

During his career in industry, Paley held many management po-sitions, including vice president of programs for a military-in-dustrial, R&D and production company. He worked for the U.S. Army, CECOM, Ft. Monmouth, NJ, where he held the position of value engineering program manager for eight years before his re-tirement. Paley was a director of the Miles Value Foundation and serves as its secretary. During his career at CECO he was awarded the Department of Defense 1991 Outstanding Value Engineer-ing Individual; SAVE International® 1991 Distinguished Service award in Government; and the Department of Defense 1995 Out-standing Achievement through Value Engineering award.

Recognize Excellence

with SAVE Honors & Awards

SAVE International® offers 27 honors and awards to recognize the contributions and accomplishments of members, individuals, corporations, governments, agencies, and others that surpass very high standards and achieve a high level of accomplishment. Catego-ries range from competitive awards to those bestowed in acknowledgment and appreciation of a lifetime’s dedication and achievements.

Many awards do not require membership in SAVE International®; however, all do require exemplary use of the Value Methodology. Some are project-based, others are program-based. Still others focus on an in-dividual and his or her accomplishments.

SAVE presents these prestigious honors and awards during its annual conference. The SAVE 2013 Annual Conference will be held June 24-27 at the Crys-tal Gateway Marriott in Arlington, Virginia.

SAVE will accept nominations for honors and awards through March 31, 2013. Nomination appli-cations can be found in the Recognition Manual, which can be downloaded from the society’s website or re-quested directly from SAVE.

Mail honors and awards applications to Honors & Awards Director, SAVE International®, 136 South Keowee Street, Dayton, Ohio 45402 USA or email to [email protected].

2012 Rising Star Award presented to Benjamin Robertson, AVS, U.S.

Army Corps of Engineers.

2012 Presidential Citation presented to Marc Pauwels, CVS, TVM, President, Vereine Deutcher Ingenieure.


SAVE International® 2013 Annual Conference Call for Papers

The application process for prospective technical pro-gram speakers at the SAVE International® Annual Confer-ence has changed.

All authors are required to submit a formal written paper following the guidelines as follows. Conference or-ganizers reserve the right to edit for grammatical style, length and clarity. In submitting a paper, authors give their agreement to such editing. Papers and presentations must be in English using U.S. spelling.

Incorrectly formatted papers and presentations can-not be accepted and will be returned to the author(s).

Assistance or clarification of these instructions is available from VP-Conferences Rick Johnson by email.

FormatThe paper template has been formatted in accordance

with the following instructions and provides all heading formats in the style toolbar.

The paper should be prepared using any version of Microsoft Word for IBM PC (.doc extension). A maximum length of 4,200 words (and not more than 8 pages) includ-ing tables, figures, graphs, illustrations, references and ap-pendices. · Single column format,

Margins = 1 inch (2.54 cm) all around.

Paper size = 8 ½” x 11” portrait.

Font = Arial, left justified.

First page – as example. The abstract and author de-tails should not take up more than one page.

Headings:

Paper Title: Heading 1

Author Name: Heading 1

Heading 1: 12 point bold, small caps, 6 pt. before, 12 pt. after

Heading 2: 12 point bold, 6 pt. before, 6 pt. after

Heading 3: 11 point bold, italics, 6 pt. before, 3 pt. after

Body Text: 10 point, 0 pt. before, 6 pt. after, line space: at least 12 pt.

Table/Figure Title: Heading 4 = 10 pt., bold, cen-tered.

Do not underline, do not use all capital/upper case characters, and do not number paragraphs.

GraphicsAll graphics must be embedded in the main paper file.

All graphics must have a title and be numbered in the order in which they appear.

Please print a hard copy to ensure your graphics ap-pear as expected.

ReferencesAlways acknowledge the work of others used in your paper.

Do not use footnotes or automatic endnotes, please type all references manually.

Use the author-date system of reference, i.e., (Author, publication year, and if applicable, page number) e.g., (Smith, 2002) or (Smith, 2002, 24).

Include a Reference List at the end of your paper.

Speaker at SAVE International® 2012 Annual Con-ference, Orlando, FL.


Examples of reference formats from books and articles are as follows:

Books: Author(s), year of publication, Title (in italics), relevant pages (if applicable), publisher, where published

Articles: Author(s), year of publication, title of pa-per, Journal (in italics), issue, page number

Submission of PapersPapers must be received by 11:59 PM Eastern Time,

November 30, 2012. All papers and presentations will be reviewed by the Technical Committee and changes may be requested. Earlier completions and submissions would be greatly appreciated.

Submit an electronic version (email or disk) in Word format (not .pdf) and one hard copy to:

Rick Johnson, PE, CVSPMA Consultants LLC

4901 Vineland Road, Suite 330Orlando, Florida 32811

[email protected]

An email acknowledgement will be sent to you on re-ceipt of your paper. Do not fax your paper. Check the fol-lowing before submitting:

You have not exceeded either limit of 4,200 word and eight pages including the front sheet and all graphics

The paper is formatted as per template

Tables, figures, graphs are properly formatted, titled and numbered and embedded in the file

All references are included and complete. Use APA ref-erencing conventions.

Conference InformationThe 2013 Annual Conference will take place at the

Crystal Gateway Marriott in Arlington, VA. The hotel is surrounded by Arlington’s best shopping and dining and the Crystal City Metro train station can be accessed from the hotel lobby. With its proximity to Washington, DC, the 2013 conference venue is just a short Metro ride away from the nation’s most famous museums, monuments, and attractions.

Event Program

The conference planning committee has planned sub-stantive changes for the 2013 conference program, which will begin on the evening of Monday, June 24, with the President’s Reception.

The technical program will return to three tracks covering 2½ days. Track 1 will be dedicated to workshops: Introduction to Value Engineering on Tuesday and FAST Diagramming, Introduction to Facilitation, and Introduc-tion to Life Cycle Costing on Wednesday.

Technical presentations fill Track 2 and forums Track 3. The former Government VM Conference will be fully integrated into the technical program. On Thursday, June 27, technical presentations will fill all three tracks. A benchmarking field trip will be scheduled for Thursday afternoon, following lunch. Admission for the excursion will be in addition to conference registration.

Registration fees have yet not been determined.Pre-conference activities see little change. The Mod-

ule I workshop will begin on Thursday, June 20, and the Module II seminar will begin on Saturday, June 23. Four courses developed through SAVE’s Continuing Education Initiative will be held on Saturday, Sunday, and Monday.

Meetings of the SAVE Board of Directors, SAVE Certifi-cation Board, and Miles Value Foundation Board of Direc-tors will be scheduled for Saturday, Sunday, and Monday, respectively. The Certification Board will split off affiliate presentations to a dedicated session on Monday morning, concurrent with certification testing.

The schedule for evening events will follow the 2012 conference precedent. The annual business meeting will be held on Tuesday evening and the awards banquet on Wednesday evening. No evening activities are scheduled for Thursday.

Registration is scheduled to open in March, 2013.

Event Location

SAVE International has negotiated a discounted, sin-gle room rate of $184 per night. Hotel room rates are sub-ject to applicable state and local taxes in effect at the time of check-out. Discounted rates will be available three days pre- and post-conference to accommodate those attend-ees who wish to extend their visit to the Washington, DC area.

All hotel room reservations at the Crystal Gateway Marriott will be made, modified, or canceled through the online group reservation system powered by Passkey.

The cut-off date for discounted hotel room reserva-tions is 6:00 PM Eastern Time, Wednesday, May 8, 2013.


SJVE Works with Japanese Visionary & Indian Innovator for ‘Sustainable Society’Satoko Uesugi, Chief Overseas Liaison, Society of Japanese Value Engineering

On October 5, 2012, the Society of Japanese Value En-gineering (SJVE) brought together two famed innovators, Arunachalam Muruganatham and Takuto Motomura. They have been working together to promote greater availabil-ity of affordable sanitary napkins to low income people, changing women’s lives for the better.

Mr. Muruganatham (“Muru”), who runs Jayaashree Industries, is an inventor from Coimbatore, India. He is famed for almost single-handedly creating a model for manufacturing affordable sanitary napkins in India. The invention received an Indian National Award.

The decision to design and build award-winning ma-chine was based upon his wife’s experience in using dirty cloths during her periods because she could not afford commercial sanitary napkins. Through her experience, Mr. Muru understand that many women in India endured the same hardship. After eight years of hard work and effort, he was successful in making low-cost production machines for the manufacture of affordable and hygenic sanitary napkins.

Mr. Muru delivers the machines to rural areas in India and throughout six countries in Southeast Asia and South Africa. The plants do more than ease women’s lives, they provide employment opportunities for local women. The success of this effort is evidenced in the growing econom-ic self-sustainability of women. This achievement has re-cently received a great deal of domestic and international attention t hrough various newspapers, magazines, and other media.

Japanese visionary and entrepeneur, Mr. Motomura established Granma in 2009 as an organization for social change. Through Granma, founder Takuto Motomura has implemented several projects with Japanese com-panies to solve social issues. Projects include designing and distributing salt water purification plants and solar

lanterns to off-grid areas in south Asia. The effort focuses on designing social change driven not by high technology, but by grassroots-based low technology.

In working with Mr. Muru to improve the production machines and expand the facilities to more needy com-munities, Mr. Motomura called for Japanese engineering and design expertise. He commented, “We can hardly say that the current machines are of good quality, and, in fact, they have problems. If Japanese technology were applied with some creative ideas, then they would be much im-proved.”

SJVE agreed to support such initiatives as the partner-ship between Jayaashree Industries and Granma by pro-viding proposals for solutions with the use of the Value

Methodology.SJVE will sponsor pro

bono value engineering workshops with volunteer Certiifed Value Specialists and hopes that value engi-neering recommendations will be of great help in im-proving the lifes of families in developing countries.

Related information can be found at Granma (http://www.granma-port.jp/english/) and at Jayaas-hree Industries (http://newinventions.in/).

From left: Y.Kumasaka, S. Uesugi, A, Miyamoto, A. Murugan-antham, Y. Suzuki, Indian press crews and T. Motomura.

Value World Editorial PolicyValue World is published by SAVE International® and is distributed internationally.

Value World welcomes articles on value engineering and related disciplines. Reprints

or abstracts from other journals and periodicals are acceptable, provided that prior

permission is obtained from the copyright holder(s). Value World’s policy is to

provide a medium for contributors to express themselves professionally on advanced

in the state of the art. The views expressed in Value World are neither approved nor

disapproved by SAVE International®.

SAVE International® Board of DirectorsPresident: Craig L. Squires, CVS

Executive Vice President: James D. Bolton, PE, CVS, PVM

Vice President-Finance & Administration: J. Jeffrey Plant, P.Eng., CVS

Vice President-Certification: Tom Wiggins, CVS

Vice President-Global Affairs: Drew M. Algase, CVS-Life, FSAVE

Vice-President Education: Don H. Stafford, PE, CVS-Life

Vice President- Membership: Randy Thomas, CVS

Vice President-Conferences: Richard L. Johnson, PE, DEE, CVS

Vice President-Marketing & Communications: John E. Sloggy, CVS

Immediate Past President: David C. Wilson, P.Eng., CVS-LIfe, FSAVE

SubscriptionValue World is published electronically and may be downloaded from the SAVE

International® website at no charge. To subscribe to Value World, simply send a subscription request to [email protected].

SAVE International®136 South Keowee StreetDayton, OH 45402 USA

T (937) 224-7283 | F (937) [email protected] | www. value-eng.org

©2012 SAVE International®

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DAYTON, OHPERMIT NO. 1519

SAVE INTERNATIONAL136 SOUTH KEOWEE STREETDAYTON, OHIO 45402 USA

InternationalSAVE

THE JOURNAL OF SAVE INTERNATIONAL®VOL. 35 | NO. 2 | FALL 2012 © 2012 SAVE INTERNATIONAL®

in this issue ...1 Empowering Function Analysis to Stimulate

InnovationMohammed A. Berawi, Ph.D.

3 Finding Hidden Functions in FAST Diagrams Using Reverse HowJay Bytheway, PE, SE

10 The Idea Factory: Innovation Integrated with Discovery Driven GrowthJohn E. Sloggy, PE, CVS & Dan A. Seni, P.Eng., Ph.D.

22 If the Shoe Fits: Adjusting a Value Engineering Event to the Problem or OpportunityJoseph F. Otero, Jr., CVS-Life, FSAVE

35 What Makes Value Methodology Work? (An Analysis of Function Analysis)Geza A. Kmetty, PE & Alfred I. Paley, CVS, FSAVE

42 SAVE International® 2013 Annual Conference Call for Papers

44 SJVE Works with Japanese Visionary & Indian Innovator for ‘Sustainable Society’

the gulf chapter...yellow 6-inch by 5-inch cards au-thored by charles bytheway which outlined the...

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