By Drew Algase, Bruce Lenzer, Istvan Tarjani and Janka Tarjani
Value Methodology and Value Management are well-known methods in industrialized regions and they are gaining even wider recognition. Applying these methods on the international level require a common vocabulary and a basic outline for a project. Value related standards have been developed both in the U.S. and in Europe. U.S. standards have been developed by SAVE International. The standard provides a guideline for Value Methodology projects with the brief description of the six main steps of the value job plan. Additional directions can be found in other issues of the professional society publication. The most recent published source of information is the second edition of the Value Methodology Memory Jogger. In Europe, several national standards were published before the regional EN 12973 and EN 1325 developed by the European Governing Board.
Definitions of Value Methodology and Value Management
Discussing value related topics on the international level requires both parties to be familiar with each other’s expressions and keywords. Definitions are part of both EN1325 standard and the second edition of the Value Methodology Memory Jogger. Table 1 below introduces the key definitions of the Value Methodology and Value Management standards.
As Table 1 shows, there are some definitions missing from each side. In Value Management there is no alternative for Value Methodology; however there is Value Management in Value Methodology uses but with a different meaning. Value Methodology includes Value Management, Value Analysis and Value Engineering. In the Value Methodology, Value Management is the application of the Value Methodology in the organization. On the other hand, in Value Management the definition is extended further to motivating people, developing skills and maximizing the overall performance of the organization.
Another misleading point is that both Value Methodology and Value Management are abbreviated as VM. The abbreviations in Table 1 stand for the corresponding column titles. Avoiding confusion, no abbreviation is used in the text. Definitions of Value Management are usually brief descriptions followed by several notes in the standard. There are more detailed definitions in Value Methodology.
In Value Management there are distinguished definitions for Value Study and Value Management Study. Value Management Study is part of the Value Management Program where the Value Management Policy is applied to a specific subject, but it may involve several different methods. A Value Study can be one of these methods focusing on the value increase of the study area.
Value Methodology Job Plan and Value Management Study
The comparison of Value Methodology job plan and Value Management study is presented in Table 2 below. The first column of the table is based on the Value Methodology Memory Jogger. The second and third columns are based on the Function Analysis Guide and the SAVE International Standard. The last two columns of the table are based on the EN 12973 standard. The standard describes a Value Management Study in the text as a list of 10 points, but it also has a figure with the steps; these two are slightly different. One of the columns is based on the text and the other one is on the figure.
As Table 2 shows that the Function Analysis Guide and the Value Methodology Memory Jogger have almost the same concept, except for some minor differences in phrasing. The SAVE International Standard is an essential source of information by the world organization, but it only contains a short outline of the six steps; the Value Methodology Memory Jogger is more detailed.
There are some activities that appear on both sides, but not at the same place. Identifying the goals is the first step of the Value Management study, but it only appears in the Information Phase of the Value Methodology job plan. Determining evaluation factors is in the Pre-study of Value Methodology but agreeing how to measure changes in performance is only in step d) of a Value Management study. Also, there are activities on both sides missing from the other. The most important one is the feedback of results for continuous improvement missing from the job plan of Value Methodology.
Applied methods in the Value Management study are not discussed in detail since they have to be identified based on the specific project objective. A Value Management Study can apply more than one method. Value Analysis and Value Engineering could be one of the methods in a Value Management Study. In step b) of EN 12973 standard, methods must be identified to achieve the objectives. These methods can be Value Analysis, Value Engineering, but also Six Sigma, Value Stream Mapping or other Lean tools if the method is an innovative way as later step f) specifies. The EN 1325 standard itself draws attention to the related management methods such as Lean and Six Sigma in the introduction. Even if Value Analysis is not among the method identified for the Value Management Study, the Value Management Program still establishes the framework for the study. In a Value Management Study, functions are identified and linked to objectives in step c). After linking the functions with the objectives, in step c), it is defined how to measure changes and set targets based on the functions. In step f) identified methods are applied to reach these targets.
Results and Discussion
Value Methodology and Value Management standards introduce two similar concepts, but analyzing the definitions and the job descriptions has revealed some inconsistencies waiting to be harmonized for the future integration. Both Value Methodology and Value Management use the abbreviation VM. The two concepts can easily be distinguished by using the abbreviations “VMe” and “VMa” where the second letters of the terms are also present but in lower case. This way, descriptions with both concepts in it can be clarified.
Value Methodology and Value Management both define Value Management, but one of them is on the scale of a project and the other extends it to the people and the organization. These definitions should be distinguished. In an earlier work by J. Jerry Kaufman, Value Methodology is referred to as Value Management Methodology or VM methodology. Another option would be to extend the phrase in Value Methodology to Value Methodology Management.
Both standards have ideas missing from the other; therefore, integration of the absent activities is considerable. Value Management emphasizes the importance of feedback at the end of the Value Management study, which can easily be integrated into the Value Methodology. Value Management Program establishes a framework for the project and encourages users to work with more than one method.
In Authors’ experience, in Europe, Value Analysis (VA) is a technique used in Value Management (VMa). VA is also referred to as Value Engineering (VE). According to SAVE International, the Value Methodology (VMe) includes VA, VE, and VMa. In conclusion, VMe in US is really the same as VA or VE in Europe.
Conclusion
Value Methodology and Value Management standards are discussed based on their definitions and suggested job descriptions. There are some definitions missing from each side and there are phrases with different definitions. Both standards use the abbreviation VM for Value Methodology and Value Management. In the Value Methodology job plan and the Value Management study there are similar activities sometimes at different stages and with different levels of details. Missing activities such as providing feedback and using more than one method can be easily integrated to the other side. A possible way of integrating the concepts has been introduced where ideas from both standards appear, and the application of several methods is encouraged by the Value Management Program.
Corresponding Author
Ariella Janka Tarjani, AVS
Lean Process Improvement Engineer
Chemical Engineer MSc.
FOKUSZ-2 Ltd.
1067 Budapest, Eötvös u. 29
Tel: +36 (30) 820-8682
E-mail: janka.tarjani@fokusz-2.hu
References
European Standard. (2000). Value Management (EN 12973:2000). Retrieved from European Standards Online.
European Standard. (2014). Value Management. Vocabulary. Terms and definitions. (EN 1325:2014). Retrieved from European Standards Online.
Kaufman, J. (1998). Value Management: Creating Competitive Advantage. Crisp Publications.
Lawrence D. Miles Value Foundation (2018). The Value Methodology Memory Jogger (2nd ed.). GOAL/QPC.
SAVE International (2016). Function Analysis Guide. Interspiral Press.
Value Methodology Standard. (2015. March) Retrieved from www.value-eng.org/standard_documents.
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