Value-Driven Innovation: How to Create Products and Services that People Love

VALUE MANAGEMENT

Value management involves utilizing proven and structured problem-solving techniques to achieve the optimal balance between a product or project's cost, reliability, and performance. This approach can be applied to a variety of objectives and follows a specific job plan as its foundation. The value study can be standardized through different job plans created by international value associations.

The traditional five-phase job plan includes an information phase, creative phase, judgment phase, development phase, and recommendation phase. The American Society for Testing Materials has a six-phase plan, which includes information, function analysis, creative, evaluation, development, and presentation phases. Meanwhile, the Association Francaise de Normalisation has a seven-phase plan that includes preparation, needs analysis, function analysis, cost analysis, solution analysis, result implementation, and follow-up of implementation.

Value management should be considered every time there is a need for a new product or project or when an existing one needs improvement. It is especially profitable when a product is not selling well, generates complaints from customers, or when new markets need to be explored. Additionally, value management techniques can be applied when a project is not progressing according to the plan or when one of the project objectives is not met.

It is ideal to implement value management at the early stages of a project before a commitment has been made. This allows for the clear identification of the expected performance and functions of the product/project. However, it is still effective to use value management at any stage of the planning or development phases.

A value study can be applied to any size product or project, and the extent of the study and size of the team may vary. As long as the concepts of value, function, multi-disciplinary team, and job plan are present, it is considered value management.

Even without calling it value management, applying value methodology principles is still considered value management. As J. Bryant said in 1995, "it doesn't matter what you call it, as long as you apply the value methodology principles, it is still value management."

The Power of Creativity in Value Management

Value management is a process that seeks to optimize the value of a product, service, or project. It does this by identifying and eliminating unnecessary costs while maintaining or improving the product's essential functions.

One of the most important aspects of value management is creativity. The ability to generate new and innovative ideas is essential for identifying and implementing effective value improvement measures.

Pareto's Law states that 80% of the results come from 20% of the causes. This means that a small number of changes can have a big impact on value. By focusing on the 20% of the problem that is causing the most waste, value managers can achieve significant results with relatively little effort.

However, creativity can be stifled by roadblocks. These are statements or beliefs that prevent people from thinking outside the box. Some common roadblocks include:

• "It's not realistic."
• "Why change it? It's been working for 25 years."
• "This is not the right time."
• "It's not part of our mandate."
• "It would be too difficult to manage."
• "Let's form a committee."
• "It would modify habits too much."
• "It's a stupid idea."
• "It will never work."

It is important to be aware of these roadblocks and to challenge them whenever possible. By doing so, we can open up our minds to new possibilities and achieve greater value for our products, services, and projects.

Here are some tips for overcoming roadblocks to creativity in value management:

• Be open-minded. Don't dismiss an idea just because it seems unrealistic or difficult.
• Be willing to take risks. Don't be afraid to try new things.
• Be collaborative. Work with others to generate ideas and solve problems.
• Be persistent. Don't give up easily.

Creativity is essential for value management. By overcoming roadblocks and embracing creativity, we can achieve significant results that benefit our organizations and our customers.

Value Engineering: A Process for Improving Value

Value engineering is a highly specialized application of the broader value management process. Its goal is to generate a plethora of small, yet simple, ideas aimed at enhancing the initial engineering design of a project in order to reduce costs and ultimately lead to a benefit: cost ratio decision on whether or not the project should proceed.

For the value engineering exercise to be effective, it is critical to first assess the project in question. This evaluation entails defining the problem/project, identifying the required outcomes, considering various options, choosing a preferred option, and establishing the preliminary project scope and cost estimate.

The core value engineering process comprises of breaking down the project into cost, benefit, and time components, idea generation, idea evaluation, assessing and addressing risk, presenting the ideas to the client for approval, and a subsequent review of the cost breakdown.

The value engineering team will typically use a variety of tools and techniques to identify potential improvements. These tools and techniques include:

• Function analysis: This involves identifying the essential functions of the product or project.
• Cost analysis: This involves identifying the costs associated with each function.
• Creative thinking: This involves generating new and innovative ideas for improving the value of the project.
• Risk assessment: This involves evaluating the risks associated with each potential improvement.

Once the value engineering team has identified a number of potential improvements, they will evaluate each one to determine its feasibility and cost-effectiveness. The team will then select the most promising improvements and implement them.

The value engineering process can be used to improve the value of any product, service, or project. It is a powerful tool that can help organizations to save money, improve quality, and reduce time to market.

The ultimate objective of the value engineering methodology is to ensure that the end product delivers to the customer's needs at minimum cost. Consequently, value engineering helps to improve project knowledge and also cuts costs that may arise from the need for design/re-design fees, claims, loan interest, or any additional costs resulting from scope misconceptions.

The adoption and fusion of value management and value engineering practices into project management significantly impacts the value added to a project. It enables effective and informed decision making that produces a balanced outcome, fusing quality with efficiency, and ensuring customer satisfaction.

Benefits of value engineering:

• Reduced costs: Value engineering can help to identify and eliminate unnecessary costs, which can lead to significant savings.
• Improved quality: Value engineering can help to improve the quality of a product or project by ensuring that it meets the customer's needs and expectations.
• Reduced time to market: Value engineering can help to shorten the development and delivery time of a product or project, which can give organizations a competitive advantage.
• Increased customer satisfaction: Value engineering can help to improve customer satisfaction by ensuring that products and projects meet their needs and expectations.

If you are looking to improve the value of your products, services, or projects, value engineering is a powerful tool that you should consider using.