What are the VE requirements? Is CPI project required to meet all of them to be VE project? What are BBP requirements?
Value Engineering (VE) requirements are derived from a known problem, a cost driver study, or anything indicating that a product or a process should be improved. One overarching checklist of VE requirements does not exist, but there are several guides to help analyze and determine if your project should implement VE. While your project teams and signature authorities are determining the Continuous Process Improvement (CPI) project type, it’s important to note that VE is a management tool that can used alone or with other management techniques and methodologies to improve operations and reduce costs. The current iteration of Better Buying Power (BBP) 3.0 was announced on April 9, 2015 and included 34 principal actions organized into the following eight major areas: 1) Achieve Affordable Programs, 2) Achieve Dominant Capabilities While Controlling Lifecycle Costs, 3) Incentivize Productivity in Industry and Government, 4) Incentivize Innovation in Industry and Government, 5) Eliminate Unproductive Processes and Bureaucracy, 6) Promote Effective Competition, 7) Improve Tradecraft in Acquisition of Services, and 8) Improve Professionalism of the Total Acquisition Workforce. VE can assist with implementation of BBP 3.0 across a few of the eight major areas. See the following for BBP 3.0: (https://www.acq.osd.mil/fo/docs/betterBuyingPower3.0(9Apr15).pdf)
For more information of VE, see the following guide: “Value Engineering: A Guidebook of Best Practices and Tools”, dated 13 June 2011. Can be found at https://www.acqnotes.com/Attachments/Value%20Engineering%20A%20Guidebook%20of%20Best%20Practices%20and%20Tools.pdf, or https://ac.cto.mil/wp-content/uploads/2020/07/value-engineering-guidebook-of-best-practices-and-tools-SD-24.pdf
From “Value Engineering: A Guidebook of Best Practices and Tools”:
While almost any activity is a possible VE opportunity, selecting VE projects should be based on the potential yield from the time, talent, and cost that will be invested. In the early stages of VE application within an organization, sophisticated project-selection criteria are not usually needed. VE can frequently offer substantial benefits, particularly when one or more of the following applies:
• High cost;
• Deficiencies in performance, reliability, or producibility;
• Multiple product applications; or
• Executive management interest.
Once the organization’s use of VE is more fully established, additional criteria may be applied to select subsequent tasks. Worthwhile candidates usually involve one or more of the following:
• An excessively complex product;
• An accelerated development program;
• An item that field use indicates is deficient in some way, such as high failure rate, low reliability, or low availability;
• An item that uses older technologies for which modernization appears promising;
• A process with long cycle time; or
• A sole-source procurement.
The VE methodology should be applied in the following manner:
1. Form a multidisciplinary team.
2. Identify process functions.
3. Identify potential failure modes.
4. Calculate a risk priority number as a function of the probability the potential failure will occur, the seriousness of the failure, and the probability of detecting a defect.
5. Identify controls to detect or eliminate the failure cause.
6. Develop actions to reduce risk.
7. Reassess the risk priority number with the corrective actions in place.
8. Assign actions and track them.
The value methodology (or job plan) is used to develop recommendations and implement solutions for an identified problem. The VE job plan breaks out the VE project being studied into functions. It provides time for the essential creative work and its necessary analysis so that the best choices can be made for further development. The job plan leads to the establishment of an effective program to select the best value alternative. It concludes with specific recommendations, the necessary data supporting them, a list of implementing actions, a proposed implementation schedule, and a required follow-up procedure.
The job plan is normally organized by a value team leader. It is typically conducted in eight sequential phases (which may overlap in practice):
1. Orientation Phase
2. Information Phase
3. Function Analysis Phase
4. Creative Phase
5. Evaluation Phase
6. Development Phase
7. Presentation Phase
8. Implementation Phase