Value World Spring 2014

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The Journal of SAVE International
VOL. 37 | NO. 1 | SPRING 2014

2014 SAVE International
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ISSN 1553-8508 (print)

ISSN 2326-0327 (online)
Editors Message: Achieving Efciency by Unlocking

Innovation in System Design and Engineering
Mohammed A. Berawi, Ph.D.
Value Engineering Advisory System in Construction

Projects (VEAS)
I. Albalushi, F. Usman, and A. Alnuaimi
21 Business Sustenance through Open Innovation at Tata

Motors Limited
G. V. Srirama Kumar
32 Improving Feasibility of Mega Infrastructure Project

Development Using Value Engineering Method
Mohammed Ali Berawi, Bambang Susantono, Suyono Dikun,
Tommy Ilyas, Herawati Zetha, Abdur Rohim Boy Berawi, Teuku
Yuri Zagloel, Perdana Miraj, and Jade Sjafrecia Petroceany
32 Do Your VEERP?
Arnecia Williams, AVS
47 Numerical Value Analysis and Evaluaton Techniques of

the Esteem Function
Kayo Uchida
VALUE WORLD | VOL 37 | NO 1 | SPRING 2014

PUBLISHED BY SAVE INTERNATIONAL
Achieving Efciency by Unlocking

Innovation in System Design and
Engineering
M. A. Berawi, Ph.D.
During the process of developing innovative
products or projects, the use of a method-based
principle on an integrated product/project development is highly importance. A holistic perspective to
optimize system performance can lead to innovative,
cost-ecient and robust solutions.
When designing new products/projects/services,
the innovation breakthrough often leads to an increasing production cost, but in a system view it can
be resulted in cost eciency since it brings additional
values and optimizing the value for money. On top
of that, it can also be used to create and, further, gain
more market share since most innovative products/
projects have come up with new processes, functions
or purposes. Lets take an example of innovation in
mobile phone industry. Although in terms of production cost the conventional mobile phone (with basic
function to communicate through voice and text message) has lower tag price than multi-function mobile
phone (with additional functions of displaying moving pictures, accessing internet and online services,
helping further to solve oce work, etc), yet the laer
has succeeded in creating its own market. In system
engineering, the laer has a lower cost to perform
all given functions compared to multiple products.
In this context, cost eciency is an outcome that
has been resulted from improved processes or end
products/projects under study. Therefore, we can
see that VE method is highlighted on its capability to
oer wide range of possibilities or alternatives that
could lead to improve performance of new processes,
products or projects, even further seing new context
or purposes in the system design and engineering.
Innovation and Efciency = Value

for Money
Improvement of the linkage between innovative
solution and cost in a project/product/service oered
in system engineering can be used as an indicator
for dening optimum value for money. Fostering
competitive products or projects will bring more
improvements that need to be made to whole life
cycle of business process, from conceptual design to
product or project development, maintenance and
operation, including selection of processes, methods
and technologies for the realization of innovative
solutions.
Responding to this issue, this edition of Value
World presents ve selected papers from the journal
submission and CVS paper submission to stimulate
debate and to explore the application of value engineering in order to achieve eciency by unlocking
innovation in the projects/products development.
The rst paper, wrien by I. Albalushi, F. Usman and A. Alnuaimi, proposes an innovative Value
Engineering Advisory System (VEAS) that uses function analysis to achieve the project objectives, maximize value and minimize cost. The authors argue
that VEAS expands the function analysis system
technique (FAST) and performs risk-value analysis
in evaluating the projects functions, requirements,
and cost during the design stage, and produces plans
to minimize cost overrun during construction stage.
Four design alternatives in a construction project in
Oman were developed and compared with a baseline
concept. As a result, the authors argue that application of VEAS system on the alternatives yielded
improvements on value index and cost performance.
The second paper, wrien by G.V.S. Kumar,
highlights the use of value engineering for business
sustenance through open innovation at TATA Mo-
2
tors by integrating various business processes at
manufacturing site, supply and logistic chain. He
argues that open innovation with a blend of value
engineering has strengthened the company in managing material resources towards designing (new)
products that provide beer value to the customers
and stakeholders. As a result, Tata Motors is saving a
considerable amount of steel, aluminum and various
consumables materials used in the manufacturing
stage and accounting a remarkable benet in terms of
cost saving, and further, is able to gain more market
share in automotive industry.
The third paper, wrien by M.A. Berawi, B. Susantono, S. Dikun, T. Ilyas, H. Zetha, A.R.B Berawi,
T.Y. Zagloel, P. Miraj, and J.S. Petroceany, outlines
the use of VE method to improve project feasibility of
mega infrastructure project development. VE study
is used to identify additional functions, to provide
creative and innovative ideas to enhance value for
money for the project. The result of VE study on
Soekarno-Haa International Airport Rail Link
(SHIARL) indicates that SHIARL is an innovative
conceptual design to overcome congestion and ood
through the integration of airport rail link and MRT
line in one tunnel called Public Railway and Stormwater Infrastructure (PRASTI) Tunnel. Furthermore,
the life cycle cost (LCC) analysis has shown that the
feasibility of the proposed project is signicantly
increased.
The fourth paper, wrien by A. Williams, outlines
the use of value engineering process in managing Los
Angeles river ecosystem restoration project by optimizing and performing engineering-related activities
through the most cost-eective methods. During VE
study on the ecosystem restoration project, various
performance aributes were evaluated, including
habitat improvement and connectivity, sustainability,
water quality improvements, and public acceptability. As a result, more than 71 creative ideas and eight
solid combined proposals were developed from VE
study that enhancing creative decision-making and
utilization of suitable technology.
The last paper, wrien by K. Uchida, outlines the
use of methods of analysis and evaluation of esteem
function, in which she dened as a function related to
the users senses, such as preciousness or satisfaction
when they own certain products or receive certain
services, and the incorporation of the function into
VE job plans in the eld of medical services in Japan.
The author argue that by quantifying and evaluating esteem functions through sensitivity range, i.e.
the dierence between the maximum and minimum

tolerable value of parameters for each sense item, can
help to improve the added values and to optimize the
outcomes of VE study.
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 maberawi@eng.
ui.ac.id 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 Engineering
University of Indonesia
16424 Jakarta
Indonesia

Value Engineering Advisory System in

Construction Projects (VEAS)
I. Albalushi, F. Usman and A. Alnuaimi
Abstract
This paper presents an innovative Value Engineering Advisory System (VEAS) that uses function analysis to achieve project objectives, maximize value and
minimize cost. VEAS expands the function analysis
system technique (FAST) and performs risk-value
analysis in evaluating the projects functions, requirements, and cost during the design stage and produce
plans to minimize cost overrun during construction
stage. It breaks the project into components and subcomponents using the Work Breakdown System (WBS).
The system was validated using a real case study of
a construction project in Oman. Four design alternatives were developed and compared with a baseline
concept. Application of VEAS system on the alternatives yielded results of improvements on performance ranging from 1.58% to 58.51% and improvement in value ranging from 2.26% to 58.72% against
the baseline concept. The improvement in the value
index ranged from 24.3 to 38.57. The best alternative
(improvement in performance of 58.51%, and value
58.72%) was used in WBS analysis and further improvements in performance and value with reference
to the baseline design concept reached 69.57% and
75.23%, respectively. The value index improved from
38.57 to 42.58 and the cost reduced from USD 11.68
million to USD 11.32 million.
Keywords:
Value Engineering, Simulation, Decision Tool,
Function Analysis, VEAS
1. Introduction
The construction cost escalation and cost overrun cause detrimental eects on construction projects
and disturb development plans almost everywhere.
The cost escalation is related to ination and de-
mand and supply of material and workers while the

cost overrun, which occurs after the project award,
is related to planning, design and construction. The
evolution of a project from inception to completion
of construction requires striking balances between
requirements and cost at all stages. Value engineering and risk analysis should be applied to maximize
value and minimize uncertainty. The cost overrun
can be dened as the additional money spent above
the contract value to complete the project. Countless
researchers have studied cost overruns in dierent
types of projects all over the world, and identied
causes, eects and suggested remedies (e.g., Perkins
(2009), Alnuaimi et al (2010), Kaming et al (1997),
Almomani (2000), Frimpong et al (2003), Akpan and
Igwe (2001), Wu et al (2005), Lee (2008), Acharya et
al (2006), Arzai et al (2010), and Jaapar et al (2012)).
These types of studies contributed to the understanding and quantifying the variables causing cost and
time overruns, their eects and sometimes suggesting solutions that can be implemented during
construction stage. The causes can mainly be summarized as consequences of unclear owner objectives
and/or requirements, or of inadequate investigations
or study by the designers. Other research work was
directed towards developing models that can improve facilitating and managing project time and
cost overruns (e.g., Arun and Rao (2007), Al Barami
(2012), Sharma (2012)). These models concentrated
on value engineering and value management simulation that can predict time and cost overruns based
on dierent methods but do not address the project
objectives and requirements as the main source of
change orders that lead to cost and time overruns.
Researchers like Shen et al (2004), Yu (2007), Assaf
et al (2000), Stewart (2004), In et al (2009), Creedy et
al (2010), Soa (2007), and Jong et al (2009) applied
methods that dealt with the project objectives and
users requirements in a closer way. They introduced
methods which incorporate users requirements to be
satised during design to reduce change orders and
minimize cost and time overruns during construc-

Construction
Phase
TenderPhase
Subcomponents
Phase
Components
Phase
Function
Phase
Inception&
objectives
Phase
tion. Yuh and Ching (2005) and Dallas (2006) and

systematic approach and control measures to alleviothers incorporated risk analysis and risk manageate budget growth during design and cost overrun
ment in the value engineering and value manageduring construction.
ment models. the models concentrated on identifying
In this research, a Value Engineering Advisory
and controlling risks during the design and construcSystem (VEAS) model was developed for the design
tion stages. This type of work helped predicting the
of construction projects. VEAS integrates VE tools in
risk of cost overrun and examining the components
the function analysis
with risk and performance mea
of the project to deliver
projects with high value,
Inception
within budget. However, these models do
Objective Setting &Requirement Analysis
Riskfactor
not incorporate control
identification&
Performance
Criteria
&
Measurement
measures on the cost
categorization
BaselineConcept&ConceptualCost andvalue
and risk during design
stage. Ranesh et al (2012)
Function Settings
FAST
carried out qualitative
FunctionalDecomposition
research using semiRiskReview
structured interviews to
ComponentDecomposition
identify the similarities
between the risk manConceptSelection&Analysis
Riskidentification&
agement and value engiPerformance
analysisfor
evaluation
ComponentselectionwithpreliminaryCost
neering processes along
components
estimate and value
with the benets and
Comparepreliminarycostandvaluewith
critical success factors
conceptualcost andvalue
for the integration of RM
Yes
and VM in projects. They
Cost
No
found that formal
increase?
RM and VM studies are
rarely undertaken. There
WorkBreakdownStructurefortheSystem(WBS)
Riskidentification&
are barriers against the
Performance
analysisfor
integration of VM and
evaluation
Subcomponents Selection
subcomponents
RM and there is a need
DetailedEstimatedCostandValuefortheProject
for the development of
Compare Detailed Cost and value with Preliminary Cost and value
a systematic process to
Yes
enable the integration
Cost
of risk and value manincrease?
agement to occur. The
No
Minnesota Department
of Transportation (2012)
ComparetheDetailedCostEstimatewith
Riskanalysisfor
reported that they used
TenderPrice
allocatingthe
cost model, performance
constructionrisk
Yes
aribute matrix, funcmanagementplan
FurtherTender
Cost
tion analysis and FAST
Analysis
increase?
diagramming to assess
No
the risks and improve
on a baseline concept
Monitoring the construction works and
project of a road conensuring that the risk management and
nection. This is an imcontrol plans are implemented.
provement to previous
works; yet, it is limited
to a certain project and
does not show a general Figure 1. VEAS Model Diagram

surement during design stage. It aims to eliminate or
at least minimize cost overrun during construction.
The function analysis and performance measurement
techniques are used to select high value components
and sub-components of project functions in order
to maximize overall project value. A real construction project was used as a case study for testing and
evaluating the model.
2. Value Engineering Advisory

System (VEAS)
The Value Engineering Advisory System aims
to eliminate cost overrun and improve the value of
construction projects. VEAS examines, weigh, and
arrange the priorities of requirements and design
components to alleviate random changes and allows
successful and controllable risk-taking, contributing
to the implementation of innovative solutions. The
5
system involves parties that can select the best alternatives for accomplishment of project objectives. Figure 1 (previous page) shows the structural diagram
of the VEAS. The risks are systematically identied
and assessed at four stages starting from the project
inception to tender phase to ensure performance and
reduce uncertainty. The cost growth is controlled
at three dierent levels to ensure compliance with
the conceptual cost while achieving a successful
outcome. The project objectives and requirements
are used to generate project functions, component
decomposition and perform analyses using Function
Analysis System Technique (FAST). The Work Breakdown Structure (WBS) technique is used to develop
projects subcomponents, examine their elements and
evaluate their interrelations. The risk of cost overrun
during construction is prevented or minimized by
implementation of plans developed during design to
ensure performance, cost, and function value. Table
1 (below) summarizes the dierences between the
Table 1. Comparison between the traditional design system and the proposed VEAS
Traditional Design System
VEAS
Objectives may not be clear or well-described in the

brief.
Objectives are studied and revised until they become

clear.
The requirements are readily collected from the client

or users and implemented in the design.
The requirements are based on the objectives and

undergo function development and risk analysis before
being implemented in the design.
The engineer dictates the design stage. Little input

from the client or users. No team work.
The design stage includes collective inputs from the

value and design engineers, the client, and the users.
Team work.
Focus is on object-model according to methods, disciplines, or states of the art.
Focus is on system-model and surrounding environment.
Very little or no function weighing and measuring

process.
Functions are weighed and performance is measured

in a rigorous way.
It is very difcult to measure outcomes.
Outcomes are measured in terms of objectives, cost,

performance, risk and functions.
The designer develops the model based on problem

constraints.
The team develops the model based on performance

attributes and function analysis. The model should t
the required functions.
Focus is on technical constrained optimality.
Focus is on functions and values.
Consideration of risk factors is minor and depends on

client request or the design case.
Risk analysis is part of the performance and integrated

with the design system. The risk management system
starts early at the design stage and continues during
the construction.
The designer focuses on the main elements of the

requirements, which are set by the client or the users.
Analysis for value changing or improving are minor.
WBS is used in the design elements, the chances for

value improvement are very high.
Costs are hard to control and depends on the requirement presented by the client.
Costs are controlled and more analysis is done to keep

to approved level with value improvement.

6
traditional design system and the VEAS. The VEAS
approach employs a task orientation focused on
function modeling, which is a revolutionary breakthrough by comparison with traditional approaches,
as the design process becomes a collective team interaction rather than depending on a single expert. This
allows a wide range of prospective during design
and contributes in eliminating large changes during
construction. The mechanism of VEAS emphasizes
How-Things-Should-Work.
3. VEAS Phases
Table 2 (below) shows the activities that are carried out in each phase.
3.1 Phase 1: Inception and objective phase

In this phase, the idea of the project is developed
due to need or improvement of specic services. The
client identies the project objectives, and requirements. The design team reviews the objectives and
requirements for further discussions with the client
and users. Risks are identied and categorized. Performance criteria and measurement are set to ensure
quality and value. This phase ends with the selection
of baseline concept of the project and conceptual cost
estimate. It is important that the client, users and design team reach a shared understanding of essentials
and project objectives. Based on criteria set by the
project design team, a performance aribute analysis
is carried out to establish priorities, and to assist in
Table 2. Phase activities of VEAS

VEAS Phase
Function, Component and Sub-component Phases
Inception and objectives
Activities and Application of Phase

1. Set objectives and list requirements
2. Form a value and design team
3. Risks identication and categorization
4. Set baseline concept and performance criteria
5. Estimate conceptual cost
6. Allocate budget that covers the estimated conceptual cost.
1. Information
1. Collect required infromation about location and environment of

project
2. Study user and client requirements
2. Function analysis
1. Create functions using FAST technique

2. Integrate the requirements into the functions
3. Decompose functions into components
4. Risk review
5. Preliminary cost estimate
3. Speculation
1. Use creative thinking to develop alternatives

2. Repeat steps in function analysis on all alternatives
3. Select the best alternative ensuring objectives, requirements, and
cost are within allocated budget
4. Evaluation
1. Performance evaluation
2. Arrangement of components
3. Prioritizing of functions
4. Creation of WBS, cost and performance measurements, risk analysis, and rating of market prices
5. Detailed cost estimate within the allocated budget
5. Development and presentation
1. Drawings, specication, and quantities

2. Verication and reporting
3. Presentation and approval
4. Develop control plans for construction
Tender
Construction
1. Tender evaluation and cost analysis

2. Risk analysis
Monitor construction to ensure performance, cost, and function
value using control plan prepared during design

dening project values. This improves Table 3. Example of performance attributes and rating scale
achievement of project objectives
and values by assessing alternatives
Rating
for selected project components and
Attribute
Denition
Scale
Measurement Unit
sub-components. Table 3 (right) shows
5
Less than 13 months
The time to coman example of performance aributes
4
13-14 months
plete the project
and a 5-point Likert scale for a typiProject
Project planning
3
15-16 months
cal project with maximum planned
Schedule
construction period:
2
17-18 months
construction period of 20 months. The
within 20 months
generation of the rating scale depends
1
19-20 months
on the denitions of the aributes and
5
No impact
Approximation of
the project requirements, e.g. if there
4
Very minor impact
temporary issues exis a requirement for the project to be
External
ternal to the project:
3
Minor impact
Impact
completed within at most 20 months,
trafc, dust, vibra2
Moderate impact
then any shorter period will give hightion noise, etc.
1
Major impact
er value to the client and users. The
5
Very low
Hazards that affect
same concept can be applied to other
the
success
of
the
aributes. VEAS allows the number of
4
Low
project, increasing
performance aributes to be selected
3
Moderate
Risk
costs and disputes,
by the design team, utilizing knowl2
High
and minimizing
edge about project size, environment,
values
1
Very high
and conditions. The risk is integrated
in the performance measuring system
in the design and construction stages. Table 4 (below)
shows the objectives of the risk analysis and management during the design and construction stages. In
Table 4: Risk objectives and management in VEAS phases

VEAS Phase
Risk Study Objective
Risk Management
Risk Study Output
1. Inception and objectives
Requirements t the objectives of the project
Strategic risk study, risk

identication, and categorization
2. Function phase
Identify the functions

which serve the project
objectives and requirements
Project risk identication,

analysis and set management and response plans
- Risk allocation
- Risk response outputs
3. Components phase
Identify the components

of the functions
Review risk analysis for

components alternatives
and set response and
management plan
- Further risk allocation

- Update risk response
outputs
4. Sub-component phase
- Identify the subcomponents that serve the

components and functions of the project
- Optimize cost and value
Project risk review and

analysis for the selected
subcomponents, cost and
value of the project
- Risk allocation.
- Detail project risk review
5. Tender phase
Project cost analysis and

setting a contingency
Project risk analysis and

review for allocating a
risk management plan for
construction
- Risk response outputs.

- Construction risk plan
6. Construction phase
Elimination of cost overrun
Monitor performance, cost Construction risk plan

and function values
implementation
Recommendation for the

design

8
this phase, strategic risk factors are identied, categorized, and set as part of the performance measurement system, as shown in Table 3. Figure 2 (below)
shows the framework for identifying, categorizing
and controlling risks during the design and the con-
struction stages. The framework species six main

steps: risk denition, risk identication, risk analysis and scoring, and planning of risk control and
management, using techniques such as brainstorming, Delphi, HAZOP, and others. The system uses
IDENTIFY THE OBJECTIVES OF THE

RISK ANALYSIS FOR VEAS PHASE
PROJECT DEFINITION
RISK IDENTIFICATION
INFORMATION
- Past projects
historical data
- Output from other
planning services
- Organization
knowledge and
experience of
participants
RISK IDENTIFICATION OUTPUTS

- Register of risks with characteristics
descriptions
- Clear understanding of threats and
opportunities associated with the project by
all parties
- Initiate risk response options
RISK ANALYSIS AND SCORING
PARTICIPANTS
- Client
- Project team
members
RISK ANALYSIS OUTPUTS

- A clear understanding of which threats
require response and which opportunities
should be pursued
- Appreciation of risk exposure distribution
within the project by parties
- Most significant risks which effect cost and
value
- Probably distributions of project outcome
values
RISK RESPONSE
RISK IDENTIFICATION OUTPUTS

- The alternative strategies for dealing with
significant risks
- The strategy or strategies chosen for
implementation in each
- Allocation of risk among project parties
REVIEW THE RISK ANALYSIS FOR

OTHER PHASES
CONSTRUCTION RISK MANAGEMENT &

CONTROLLING PLAN
Figure 2. Risk Analysis Framework
TECHNIQUES
- Brainstorming
- Assumption analysis
- Delphi
- HAZOP studies
- Risk registers
- Check lists
QUALITATIVE ANALYSIS
TECHNIQUES
- Delphi
- Risk mapping
- Probability Impact tables
- Other
QUALITATIVE ANALYSIS
TECHNIQUES
- Decision trees
- Monte Carlo simulation
- Sensitivity analysis
- Other
RISK RESPONSE TECHNIQUES

- Risk control measures
- Risk finance provision
RISK RESPONSE OPTIONS

- Risk avoidance
- Risk reduction
- Risk transfer
- Risk retention
RISK RESPONSE METHODS
- Alternatives (methodologies,
design, project)
- Contingency plans
- Procurement strategies
- Insurance
- Financial instruments
- Provisions
- Other

Table 5. Performance Attribute Maxris (PAM)

Performance
attribute
A. Project
Schedule
A. Project Schedule
B. External
Impact
C. Risk
B. External Impact
Total
performance
attribute
Weight
%
33.33
33.33
33.33
100
C. Risk
Table 6. Example of Performance Rating

for the Baseline Concept Using Table 3
Attribute
Weight
Project Schedule
33.3
External Impact
33.3
Risk
33.3
Concept
Performance
Rating Scale
1 2 3 4 5
Performance
33.3
Baseline
4
3
Total Performance (P)
133.6
99.9
266.8
Cost ($ millions) (C)
10
Value Index = (P/C)
26.68
Table 7: Example of Project Baseline Description against Performance Attributes

Performance attributes
Baseline concept
Rating scale
Project Schedule
The maximum time to complete the baseline concept is 20 months as

per the initial calculation of the designer to the project schedule (Table
3)
External Impact
External impact will be very minor as the designer has prepared complete plan to control the impact of the trafc, dust, and noise (Table 3)
The risk analysis of the baseline concept is moderate (Table 3)
Risk
risk avoidance, reduction, transfer, and retention as

response options for creating risk response methodologies and managing the plan. Once performance
criteria have been nalized, a Performance Aribute
Matrix PAM is used to determine the relative importance of aributes. PAM compares performance
aributes in pairs and identies the more important
aribute by use of a leer code. A leer code (e.g. A,
B, C) is entered into the matrix for each pair, identifying which of the two is more important. If members
of a pair are considered to be of equal importance,
both leers (e.g., A/B) are entered in the relevant
box. The important criteria are chosen by collective
votes of design team and client based on priorities
and relative project objective. Table 5 (above, top)
shows a Performance Aribute Matrix (PAM) exam-
ple. In this table the vertical aributes are compared

with horizontal aributes in pairs and the selected
important aributes mark is inserted in the second,
third and fourth columns of the table. The penultimate column shows the total marks of each aribute
sequentially (i.e. total A marks = 2, total B marks =
2 and total C marks = 2). The last column gives the
percentage weight of each performance aribute (i.e.
(2/6) x 100 = 33.33%). The criteria set in Table 3 and
the weights calculated in Table 5 were used in Table
6 (above, middle) to develop performance, cost and
value of the baseline concept. The value Index (VI)
is rate of the performance to the cost. Several baseline concepts that satisfy the project objectives and
requirement are, usually, proposed and only one is
selected to be the project baseline. The project base-

10
Level 3
Required Secondary
Function
Level 4
Function
Components
Level 5
Function
Subcomponents
Component
Decomposition
Level 2
Secondary Function
Function
Decomposition
Level 1
Basic Function
Figure 3. Function Decomposition System

line undergoes measured assessment process using
the rating scale of Table 3. Table 7 (previous page,
boom) shows project baseline description and rating against performance aributes for the example
addressed in Tables 5 and 6.
3.2 Phase 2: Function analysis phase

VEAS uses a subsystem structuring approach to
break down the project into basic functions, secondary functions, components, and subcomponents, as
shown in Figure 3 (above). The system anticipates
more than one basic function serving the higher-order function of the project. The innovative approach
of VEAS is visible in how it extends the function
block from the traditional FAST diagram to present
the function components and subcomponents for the
complete scope of the project in the function analysis diagram (Figure 4, next page, top). The VEAS
function diagram constitutes four levels of analysis:
selection of functions, decomposition of functions
into Basic, secondary and required, selection of components, and selection of subcomponents. The cost
and value are addressed at each level. These levels
are connected together and any change in one part
aects the other parts. Finally, the diagram imposes
nal overall examination and analysis to ensure
performance, cost and value to the accepted levels.
Component and subcomponent selection is based on
the performance measuring system and project objectives. The features of the VEAS function diagram can
be summarized as follows:
The VEAS diagram provides full insight into the
functions of the project, components, and subcomponents, and how they relate to each other.
This includes not just basic or supporting functions but also how one function supports or creates another, and how changes to function components in terms of cost, performance, or value
aect other functions and the project as a whole.
The VEAS diagram forces all functions into a
how-why logic, using one scope line to contain
functions in a logical way in relation to components and subcomponents.
The VEAS diagram represents the cost and value
of functions, components and subcomponents.
The addition of cost data (actual or estimated)
to the diagram enhances the calculation of function/cost in relation to the elements causing the
changes.
The VEAS diagram highlights high-cost areas,
assists in providing cost distribution information
for decision-making, and pinpoints cost reduction
opportunities.

11
Level 1: Selection of
Function
Level 2: Functions decomposition
Basic (1)
Secondary
Level 3: Component selection
R. Secondary
Components A
Level 4: Sub-Component
selection
Sub components
A
Sub
Components 1
Sub
Components 2
Components 1
Cost and value
Examination &
Analysis
Cost and value

Components 2
Components 3
Components B
Sub components
B
Sub
Components 1
Final Performance
cost and value
examination
Sub
Components 2
Components 1
Components 2
Components 3
Analysis and selection of alternatives

by performance measurement system
& evaluation Matrix
Cost and value
Scope of Work
Cost and value
Selection Process 1
Selection Process 2
Figure 4. VEAS Function Analysis Diagram

The VEAS diagram is useful for cost targeting by controlling component or subcomponent costs, leading to better
control of functions costs.
3.3 Phase 3: Components phase

The aim of this phase is to dene and select the
best component alternative for meeting client objectives as per the performance criteria and function
analysis. Appropriate selection of components is
very important for enhancing project functions and
achieving the required value. Brainstorming or related techniques can be used for generation of alternatives, and components can be categorized by use and
specication (civil works, mechanical, electrical etc.).
For the selection process, the performance measuring system and risk analysis are then applied to the
proposed components. Alternatives are then weighed
and compared to components from the baseline concept for further cost comparison and value improvement (Table 8, below).
3.4 Phase 4: Subcomponents phase

In this phase, components are decomposed into
subcomponents level using WBS to identify alternative subcomponents, and to establish interrelations
between them, as shown in Figure 5 (next page). WBS
is a deliverable-oriented hierarchy of decomposed
project components representing the detailed project
Table 8. Example of Performance Rating for Component Alternatives

Alternate
Baseline Concept
Performance
% of
Total Cost
Improvement (Million Dollars)
Value
Index
% Value
Improvement
266.8
control
10
26.68
control
Components Alternative 1
270
1.2%
10.5
25.71
-3.64%
Components Alternative 2
275
3.07%
9.5
28.95
8.51%

12
WBS
Section 1
Develop
Business
WBS
Section 2
WBS
Section 3
WBS
Section 4
1. Accommodate
Staff
1.1 Facilitate
place
1.1.1 Construct
office building
2. Control
Environment
2.1 Meat Space
2.1.1 Component 1
WBS
Section 5
1.1.1.1 Substructure
1.1.1.2 Superstructure
1.1.1.3 Structural Metal
1.1.1.4 Carpentry Works
1.1.1.5 Finishes and paints
2.1.2 Component 2
2.2 Control
Humidity
2.1.3 Component 3
2.1.1.1 Subcomponent 1
3. Connect
Services
Figure 5. Example of WBS for Construction of Ofce Building

scope statement that species the work to be accomplished. The WBS process continues until the details
of components and subcomponents are nalized.
During this process, a numbering scheme is used to
indicate the interrelationships of components and
subcomponents in the hierarchy, and to facilitate
the integration of data. This assists in investigating missed subcomponents and components and
describes the interrelation between component and
subcomponent levels. Alternative subcomponents
are measured and weighed, and the overall cost and
value are identied. The risk analysis is reviewed
for further risk ranking in relation to the proposed
subcomponent alternatives. Costs and values of
alternatives are compared to the conceptual cost and
value, and to the baseline cost and value (Table 6).
This process helps to provide an accurate and detailed estimated cost and value of the project, and to
select the best high-value alternative. Ination and
safety factors of the market prices are also taken into
account.
3.5 Phase 5: Tender phase.

Here, tender submissions are analyzed and compared with the detailed cost estimate. If the conceptual cost estimate is signicantly lower than comprehensive tender amounts, further analysis of the
tenders is made. A risk review is also established to
plan risk management and control for the construction implementation phase.
3.6 Phase 6: Construction phase.

Work in this phase is limited to monitoring the
progress of works and ensuring that the risk management and control plans are implemented.
4. Case Study
The case study concerns the design of a student
hostel at a private college in Muscat, Oman. The
objective of this project was to provide decent accommodation and recreation facilities for a thousand
students. The project was established as a designbid-build contract. The designer was an international consultant, with local mechanical, electrical,
and services sub-consultants. Design of the project
was managed by a project management and technical commiee comprising members from the client,
investors, designer and end-users, from dierent
disciplines that include civil, architectural, and
structural engineering, and associated value specialists. The main requirements were submied by the
client, and the VEAS model was applied as discussed
above. Project requirements were revised to properly
meet the objectives, and a performance measuring
system was prepared. Based on brainstorming of the
team, nine performance aributes were identied.
Table 9 (next page) shows performance aributes and
rating scales. Each aribute includes dierent factors
aecting cost and value. Figure 6 (page 14) shows the

13
Table 9. Performance Attributes and Rating Scales

Attribute
Denition
Rating
Scales
Unit Measurement
5
4
3
2
1
< 12 months
12 15 months
15.1 18 months
18.1 21 months
21.1 24 months
Design Safety
Quality assurance of the design to implement

the BS codes and Oman design standards for
building safety.
5
4
3
2
1
Excellent
High
Moderate
Low
Very low/unavailable
End User Convenience
Convenience for the user of ofce spaces, landscapes, availability of required facilities, and
usage suitability.
5
4
3
2
1
Excellent
High
Moderate
Low
Constructability
Security, convenience, construction convenience, trafc control, storage control, site

safety and availability of required materials.
5
4
3
2
1
Excellent
High
Moderate
Low
Construction Impact Prevention
Temporary construction issues of trafc to the

existing facilities, dust, noise during working
hours, site housekeeping.
5
4
3
2
1
Excellent
High
Moderate
Low
Very low
Maintenance Aspects
Availability of materials and tools in local market, availability of service agents, materials suitability, materials delivery period, spare parts.
5
4
3
2
1
Excellent
High
Moderate
Low
Very low
Client/End User Satisfaction
Availability of stakeholder requirements, satisfaction of project purposes and objectives,

utilization of lands.
5
4
3
2
1
Excellent
High
Moderate
Low
Very low
Usage of Existing Services
Prevention of removing or disturbing existing

services of power, water, and sewage.
5
4
3
2
1
Excellent
High
Moderate
Low
Very low
Risks
Hazards affecting successful delivery of the project, including project techniques, building and
labor safety, constructability, maintenance and
government interventions.
5
4
3
2
1
Very low risk

Low risk
Moderate risk
High risk
Very high risk
Construction Schedule
Time to complete the project from the issue of

purchase order to the completion
Client requirements:
Construction to be completed within 24 months.

14
Table 10. Performance Attribute Matrix for Weighing the Attributes

Performance Attributes
A
Design Safety
Constructability
Contruction Impacts Prevention
Maintenance Aspects
Stakeholder Satisfaction
Useage of Existing Services
Total Score
A/E
4.49
B/F
8.5
19.10
C/D
C/E
C/G
11.24
D/I
11.24
4.49
F/I
13.48
G/I
15.73
H/I
8.99
11.24
44.5
100
Risks
Total
Weight
identied initial risk factors which are based on risk

analysis carried out by the project team, classied as
technical and management risks

valid particularly for this project.
PROJECT RISKS
As a result of the performance
TECHNICAL
MANAGEMENT
aribute classications and weighRISKS
RISKS
ing shown in Table 10 (above), it
was found that the design safety
Labor
Plant
Authorities
has the highest value. Stakeholder
Materials
Site
Economics
satisfaction, maintenance aspects,
end-user convenience, constructaSub-contractor
Construction
Physical
bility and risks are also found to
Design
Cost
Political
be high. Relatively, construction
schedule, construction impact and
Technological
Environment
Financial (Project)
using existing services are lower
Change
Location
Timeframe
than others, and are expected to
Project
have less impact on performance
Management
evaluation. Based on project
Construction
objectives and requirements, the
System
designer proposed three baseFigure 6. Risk Factors Identication
line alternatives. One baseline
concept was selected, consisting
of four buildings, two accommodation blocks, an
Table 11. Risk Level Comparison for the
administration building, and service substation. Each
accommodation building is made of seven oors,
Baseline and Alternatives in the Components
the administration building had two oors, and the
and Subcomponent Phases
substation was a single-story building. A cost model
for this baseline concept was USD 11.7 million, with
Risk level
a construction period of 17 months. An initial risk
Component
Subcomponents
identication and analysis of the baseline concept
Alternatives
Phase
Phase
and suggested alternatives were measured and comBaseline concept
High (2)
High (2)
pared at dierent phases. The risk level of the baseline was high as shown in Table 11 (right). The main
Alternative 1
Moderate (3)
Low (4)
reason for high risk level of the baseline concept was
Alternative 2
Low (4)
Low (4)
due to absence of consensus of the design compoAlternative 3
Low (4)
Very low (5)
nents and subcomponents with project objectives,
Alternative 4
Low (4)
Very low (5)

15
Table 12: Value and Performance Comparison for Component Alternatives

Overall
Performance
Total
Performance
% Performance
improvement
Total cost $
millions
Value index
(P/C)
% Value
improvement
Baseline Concept
284.27
Control
11.7
24.30
Control
Alternative 1
288.76
1.58 %
11.62
24.85
2.26 %
Alternative 2
388.76
36.76 %
11.67
33.31
37.08 %
Alternative 3
450.60
58.51 %
11.68
38.57
58.72 %
Alternative 4
429.21
50.99 %
11.43
37.55
54.53 %
requirements and functions. Table 12 (above) shows

that, the performance system of the baseline concept
was 284.27, and the value index was 24.30. A VEAS
workshop was conducted using function analysis
according to the rules and objectives given in Table 1.
Figure 7 (next page) shows the VEAS function diagram for the project. A higher-order function was introduced to improve education services for students.
The basic functions of the project related to accommodating students. The secondary functions were to
control the environment, connect services, transfer
power, provide IT services, enclose the space, and
prepare the site. An idea-generation session using
brainstorming yielded further suggestions, allocating
alternative components and examining the baseline
components. Table 13 (below) shows that, a total
of 122 ideas were generated for the components of
project functions. From those, 63 ideas were accepted
for evaluation due to consensus with the objectives
and the requirements of the project. 30 ideas were
chosen from the selected 63 for development as they
indicated to give improvement to the project value.
Accordingly, 14 design proposals were presented for
the project. As a result, four categorized alternatives
were selected for further performance measurement
and comparison with the baseline concept (Table 14,
see page 17). Each alternative comprises a complete
package for development of the baseline design
proposal which includes but not limited to, total area,

mechanical electrical services, external works, roads,
architectural items, wood and carpentry works, and
structural works. The alternative categorization was
based on the components of the project and generated ideas. The selected alternatives were examined
and weighed in reference to the performance attributes to get the total performance and compare it
with baseline performance. The risk review and identication of further factors were conducted in relation
to the objectives presented in Table 4. Table 12 shows
comparison between baseline performance and VEAS
alternatives. Alternative No. 1 achieved improvements in the performance and value of the project of
about 1.58 % and 2.26 % respectively, so that the cost
of the project was lower than the baseline design.
The improvement achieved by alternative No. 2 was
greater than the baseline, at 36.76 % and 37.08 % for
performance and value respectively. The cost of alternative No. 2 also remained within the project budget.
However, alternative No. 3 was the best proposal,
with improvement in performance of 58.51 %, and
value improvement of 58.72 %. The total estimated
cost of the project was calculated as USD 11.68 million. Alternative No. 4 was the second best proposal,
with improved performance at 50.99 %, and improved value at 54.53 %.Thus, alternative No. 3 was
selected for more development and allocation of sub-
Table 13. Brainstorming Session Results for Component Selection

Ideas
Generated
Function
Ideas Accepted Ideas Chosen

for Evaluation for development
Design
Proposals
Accommodate students
25
15
Control environment
25
12
Connect services
13
Transfer power
23
10
Enclosed space
19
12
Prepare site
17
Total
122
63
30
14

16
HOW
High - order
Function
Improve
business
(Basic
Functions, Cost
Value)
Accommodate
students
Control
environment
WHY
(Secondary Functions, Cost Value)
Facilitate
place
Facilitate space
Heat space
Control
Circular
air
Remove
Illuminate
area
humid
Establish
security
waste
(Components
Cost Value)
Construction of building
Supply and
Fix HVAC
System
Supply
service
- Provide access control.

-Supply lighting system
-Provide mechanical
And plumbing services.
Construction of swage
networks and stations
Connect
services
Construction of water
network and stations
Construction of power
station
H.V network connection
Transfer
power
L.V panels and network

Power distribution system
UPS System
Internal data services
Provide tech.
service
Internal tel. network and

services
Designate space
Enclosed space
Selecting the proper land
Separate space
Construction of boundary
walls
Secure space
Construction of guard
Level pad
Prepare site
Remove waste materials
Transfer power
Establish earthworks
Landscape area
Provide landscape design
Prepare utilities
Functions
Terminal line 1
for selecting the
components
Scope of work
Figure 7. VEAS Function Diagram for the Project
Connect external water and

sewage lines
Components
Approve the
design
Table 14. Performance Measurement for Component Alternatives

Attributes
Attribute
Weights
Performance
Concept
Baseline Concept
4.49
19.10
13.47
Alternative 2
17.96
Alternative 3
17.96
Alternative 4
17.96
Alternative 1
76.40
Alternative 2
76.40
57.30
Alternative 3
11.24
5
4
Baseline Concept
Alternative 1
11.24
4.49
33.72
4
44.96
Alternative 3
44.96
Alternative 4
44.96
Baseline Concept
44.96
Alternative 2
33.72
5
Alternative 4
44.96
17.96
Alternative 1
17.96
Alternative 2
4
5
3
Alternative 1
8.99
53.92
53.92
Alternative 4
53.92
31.46
3
Alternative 2
47.19
4
62.92
Alternative 3
78.65
Alternative 4
78.65
Baseline Concept
26.97
Alternative 1
26.97
Alternative 2
Alternative 3
Baseline Concept
Alternative 1
11.24
53.92
Alternative 2
Alternative 4
Risks
22.45
Alternative 3
Baseline Concept
Use of Existing Services
22.45
40.44
Alternative 1
15.73
17.96
5
Alternative 4
Stakeholder Satisfaction
56.20
Baseline Concept
Baseline Concept
13.48
44.96
Alternative 3
Maintenance Aspects
76.40
33.72
Alternative 3
Construction Impacts
95.50
Alternative 2
Alternative 1
Constructability
Total Performance
8.98
Alternative 4
Baseline Concept
Design Safety
Alternative 1
Alternative 2
35.96
35.96
5
44.95
22.48
33.72
4
44.96
Alternative 3
44.96
Alternative 4
44.96

18
Ideas Generated
Ideas Accepted
for Evaluation
Ideas Developed
Table 15. Brainstorming Session Results for

Subcomponent Selection
Accommodate Staff
32
14
12
Control Environment
22
15
Connect Services
11
Transfer Power
Enclosed Space
15
12
Prepare Site
13
10
Total
98
63
42
Function
improving the value of construction projects within

the approved budget. The VEAS features include full
insight into the functions of the project, components,
and subcomponents, and how they relate to each
other, apply how-why logic, uses cost and value
functions in components and subcomponents, risk
management and improves performance and value.
The system was validated using a real case study of
a construction project in Oman. Four design alternatives were developed and compared with a baseline
concept. Application of VEAS system on the alternatives yielded results of improvements on performance ranging from 1.58% to 58.51% and improvement in value ranging from 2.26% to 58.72% against
the base line concept. The improvement in the value
index ranged from 24.3 to 38.57. The best alternative
(improvement in performance of 58.51%, and value
58.72%) was used in WBS analysis and further improvements in performance and value with reference
to the baseline concept reached 69.57 % and 75.23%,
respectively. The value index improved from 38.57 to
42.58 and the cost reduced from USD 11.68 million to
USD11.32 million.
% Value
Improvement
Vlalue Index
(P/C)
Total Cost $
Millions
% Performance
Improvement
Total
Performance
components using WBS. Table 15 (above) shows the

brainstorming results for the subcomponent selection
process. In total, 98 ideas for subcomponents developments were created during this session; 63 ideas
satisfying the minimum requirements and criteria were accepted
Table 16. Performance and Value Comparison Alternative No. 3
for further evaluation, including
performance weighing and risk
analysis. From this process, 42
ideas were developed. In line with
the subcomponents development
results, the performances of 9
components were also improved.
Overall performance
Table 16 (right) shows the perforBaseline Concept
284.27 Control 11.7
24.30
Control
mance and value improvements
450.60 58.58% 11.68
38.57
58.72%
for alternative No. 3. The improve- Alternave 3
(Component
Phase)
ments in performance and value
with reference to the baseline
Alternave 3
482.03 69.57% 11.32
42.58
75.23%
design concept were 69.57 % and
(Development Phase)
42.58 %, respectively. The detailed
estimated cost of components and
subcomponents was USD 11.32 million. The value
of alternative No. 3 in the development phase was
increased 10.40 % above the component level. In adAcharya N. K., Lee Y. D., and Im H. M. (2006).Condition, the application of VEAS reduced the risk level
icting factors in construction projects: Korean
of the design from high to very low (Table 11).
perspective. Engineering Construction and Architectural. Management, v13, n6, pp 543566.
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About the Authors

Ibrahim Ali Albalushi, MSc,
AVS, took his Bachelo of Science
degree in civil engineering in
2001, at Sultan Qaboos University in Oman. He obtained
his Masters degree in civil
engineering (structural specialist) in same university in
2010. Currently, he is a doctoral
researcher in Universiti Tenaga
Nasional in Malaysia. His
research topic is Development
of Value Engineering Advisory
System in Public Construction
Projects of Oman. He has worked in the public construction sector for 10 years and participated in construction of
an aluminium smelter in Oman (US$3 billion project) as a
senior project engineer for two years.
Dr. Fathoni Usman is the
senior lecturer and head of the
academic unit in civil engineering department in the College of
Engineering , Universiti Tenaga
Nasional. He took his Ph.D. and
Masters degrees in civil engineering (structure and materials) at the Universiti Teknologi
Malaysia, Malaysia, and earned
his Bachleors degree in civil
engineering at the Universitas
Sriwijaya, Palembang, Indonesia. His research expertise

focuses on structure and materials, articial intelligence,
construction information technology system design and
development, industrial building systems, and sustainable
construction.
Dr. Ali S. Alnuaimi is an
associate professor with the
department of civil and architectural engineering at Sultan
Qaboos University, Oman. Dr.
Alnuaimi took his Ph.D. from
University of Glasgow, UK;
and earned Master of Science
and Bachelor of Science dgrees from the University of
Southern California, USA. His research expertise focuses
on structural design and analysis, estimating construction
cost and administration of construction contracts. He has
published more than 33 journal papers and presented more
than 30 conference papers.

21
Business Sustenance through Open

Innovation at Tata Motors Limited
G. V. Srirama Kumar
Abstract
With rapid global change in economy, social
requirements and technological advancement, it has
become indispensable for every organization to be
agile enough to adopt the changes and perform better through delivery of enhanced value products or
services through value optimization at various nodes
right from the product conceptualization to delivery
and providing valued support and services throughout its life cycle.
This is topped up by a continuous increase in
Input raw material price (steel, aluminum, copper,
consumables etc.), availability of limited natural
resources, increase in pollution across the globe
and has compelled the organizations to explore the
ways which could reduce, reuse and recycle various
products/process byproducts in order to minimize
the waste generation and consequently the impact of
resources and pollution to the surroundings.
The only way to create value at various nodes is
by integrating the various processes at manufacturing site, supply chain, logistic chain and business
process with the systematic approach of the Value
Methodologythe soul of innovation.
In this paper we are going to present how seamlessly value management and innovation are integrated at Tata Motors at various nodes of processes,
both manufacturing and business processes to formulate both short term and long term strategy to
achieve the organizational goal of becoming a world
class organization.
1. Introduction
In the organizational context, innovation may be
linked to positive changes in eciency, productivity,
quality, competitiveness, market share, and others.
In todays tough market conditions, it has become indispensable for the industry to innovate for a sustainable business. Be it the business model, technology or
the operations, innovation is required in all spheres

of business for bringing creative and insightful ideas
successfully to the market. However, only ideation
does not give rise to innovation, but it is the process
of moving more and more ideas to market successfully and faster. So in a way, innovation is bigger
than just an idea, a thought, or a new concept. It is
the implementation of all of it to create a product.
Traditionally, technological innovation has been
within the domain of in-house research and development (RandD) departments, where intellectual equity
is created solely for in-house consumption. In this
insular corporate model, the fruits of innovation
are jealously guarded resources for corporate dierentiation, used primarily to keep an organizations
product pipeline lled, get to market faster or drive
down operational costs. This insular viewpoint
dictates that the quantity of innovation an organization can deliver correlates directly with the amount
of resource invested or in other words, the breadth of
the innovation pipeline is ultimately constrained by
the size and wealth of a companys RandD department (Embracing Open Innovation). Innovation has
been the mantra of the industry to stay ahead of the
competition. The fruits of the innovation have always
remained the propelling force behind churning out
new products and solutions to keep the core business running. But hitherto, this has been a highly
insulated model in most of the organizations, where
employees listen only to the top management while
fail to listen to the users, who want a beer value for
the product. The value of the product depends on
ability to deliver a beer product at a cheaper price.
When the companies fail to do that, the value curve
for the product starts declining. The repeated failures
of the industries to come up with innovative products and solution for the problem have forced them
to reinvent their model of innovation (Natarajan). A
very recent example from the last decade is the failure of Nokia feature phones with Symbian operating
system, which is a closed development environment,
beaten to ground by the Samsung smart phones with

22
Android OS, which has an open-source market place
where individual developers can showcase their
applications. Nokia failed to foresee the possibilities
of the impact an open development environment
could make, which eventually did happen, taking
Nokia down from the market leader to a laggard in
the smart phone market. Similar fate was shared by
Research in Motions Blackberry as well, which once
occupied the podium in the corporate mobile segment, is now struggling for survival.
Having said that, its needless to say that old
models, therefore, arent agile enough to keep product pipelines stocked and dierentiate companies
from their peers through closed, insular models of
RandD-driven innovation alone. As a result, big
organizations like Tata Motors Ltd. have realized the
importance of restructuring themselves so as to ensure a synergy not only amongst its various organizational verticals but also with vendors and channel
partners, lest the lake of innovative ideas falls short
of water which is always dangerous to the business
sustainability. This lake of ideas mentioned above
is known by the term Open Innovation, which was
coined by Chesbrough and can be described as combining internal and external ideas as well as internal
and external paths to market to advance the development of new technologies. It turns out that Innovation Networks rather than Isolated Innovation Centers is the way forward where rms will co-innovate
with customers, expand RandD productivity through
partnerships, develop suppliers to match the innovation services required and last but most importantly,
scout for talent across national borders (Radjou).
2. Innovation and Value Creation

Innovation has been the mantra of success for
industries to stay ahead of competition. The fruit of
the innovation has been the propelling force behind
churning out the valued products and services to
keep the business ahead. Basically, Innovation can be
categorized into two models:
Closed Innovation
Open Innovation
Organizational Boundary
Target
Customer
Research
Projects
Research
Development
Figure 1. Closed Innovation Model
2.1
Closed Innovation
In closed innovation (Figure 1, top), a company

generates, develops and commercializes its own
ideas.
This philosophy of self-reliance on its development and marketing process prevails. The closed
innovation model is internally focused and highly
insulated. It does not take into account any external
viewpoints (like customers, vendors and channel
partners).
This system has failed to deliver beer value to
their customers as the system is not able to reap the
benet of external ideas and technology. The repeated failure of the organizations to come up with
innovative products and services for their customers
has forced them to embrace open innovation.
2.2
Open Innovation
Open Innovation is the business model which utilizes both internal and external ideas to create value
at dierent process nodes which are involved in the
value chain, right from conceiving the product to nal delivery and aftermarket support to the customer.
Normally, product design is intrinsic to the Company, however the requirement of today is to look
beyond the organizational boundaries and exploit
external resources at the time of product design (Vendor and Channel partners, customers, Technological
partnership etc.). This system helps in synchronizing
external technical changes with internal expertise for
product development.
The above picture (Figure 2) represents the way
to address target market (customer requirements)

23
Internal
Technology
Internal
Product
External
Technology
Target
Market
External
Development
Fig. 3
Figure 2. Model combining internal and external resources
Figure 4. Tata Nano
Fig. 4
2. Companies should also create value from interby leveraging technology and ideas from various
nally developed innovations that may not be imsources. Theisinternal
technology/ideas,
synergized
Open Innovation
based on
two core ideas:
mediately applicable in their current business.
with that of external sources, give an organization
provides a mindset
in innovations
dealing with a business
the operational
likeknowledge
access to vast
of
1. Companies
shouldadvantages
use external
andpool
technology
toItstrengthen
their own
environment
where
relevant
ideas are generated by
knowledge and technology, reduced time to market
internal
and
external
sources.
Value
is created by
2. Companies
should
also
create
value
from
internally
developed
innovations
that
may
not
be immediately
at overall minimum cost while enabling it in providcontinuously synchronizing internal and external
applicable in their current business.
ing the valued products and services to the target
development eorts.
market.
These factors
contribute
the
It provides
a mindset
in dealing
withina enhancing
business environment
where
generated
internal
A goodrelevant
exampleideas
of thisare
is the
Tata Nanoby
(Figure
and external
Value is created by continuously synchronizing
internal
& external
efforts.
overall sources.
product value.
4, above), the
worlds
cheapestdevelopment
car. This was possible
This process of open innovation (Figure 3, below)
for the
reason
Nano team
wasreason
able to connect
A good example of this is Tata Nano (Fig. 4), Worlds cheapest
car.
Thisthat
wasthe
possible
for the
that the
to the customer need and aordability with its venintegrates various design, manufacturing and busiNano team was able to connect to the customer need and affordability with its vendors integrated as a part of
dors integrated as a part of the process. This car was
ness processes
drive
innovationwith
at their
dierent
the process.
This cartowas
developed
a price
tag of Rs. 1 lakh which was possible only through innovation
developed with a price tag of Rs. 1 lakh which was
nodes.
at various
nodes of different processes right from engineering
to marketing. This was achieved by building
possible only through innovation at various nodes of
Open
Innovation
based
on two everyone
core ideas: in the same
partnerships
with
vendorsisand
bringing
boat
to generate
ideas to
and
make
dierent processes
right innovative
from engineering
marketimprovements. Suppliers were engaged in very early stage
design
to co-create
a lowpartnerships
cost yet reliable
ing.ofThis
was achieved
by building
with
1. Companies should use external knowledge and
product while meeting all the features and specifications for this
segment
of
the
market.
vendors
and
bringing
everyone
in
the
same
boat
to
technology to strengthen their own innovations
generate innovative ideas and make improvements.
Suppliers were engaged in very early stage of design
3. SUSTENANCE MODEL AT TATA MOTORS
to co-create a low cost yet reliable product while
meeting all the features and specications for this
Tata Motors is aligning its entire development & manufacturing
processes
including business process towards
segment
of the market.
business sustenance by integrating Value Methodology with Open innovation. This methodology is being
utilized to manage the 3Rs (Reduce, Reuse & Recycle) through rigorous people involvement by creating an
environment conducive to creativity and innovation. This is 3.
notSustenance
only helping in reducing
of delivery to
Modelthe
Atcost
Tata
the customers but also in reducing the consumption of natural resources through optimum resource utilization.
Motors
Tata Motors is aligning its entire development

The sustenance model at Tata Motors can be divided into four pillars:
3.1 Reduce
3.2 Reuse
3.3 Recycle
Figure 3. Open Innovation Model
Fig. Innovation
3
3.4 HR Involvement Fostering
at TML
and manufacturing processes including business

process towards business sustenance by integrating
the Value Methodology with Open Innovation. This
methodology is being utilized to manage the 3Rs
(Reduce, Reuse and Recycle) through rigorous people
involvement by creating an environment
Fig.conducive
4

24
to creativity and innovation. This
is not only helping in reducing the
cost of delivery to the customers but
also in reducing the consumption of
natural resources through optimum
resource utilization.
The sustenance model at Tata
Motors can be divided into four pillars:
Table 5. Levers for Cost Reduction

Levers for Enhancing Contribution
Specications
Levers
De-specication
Material Substitution
Weight Reduction
Technical Levers
Design Leavers
Complexity Reduction
Parts Substitution
3.1 Reduce
3.2 Reuse
3.3 Recycle
3.4 HR Involvement Fostering
Innovation at TML
3.1 Reduce
Feature De-contenting
Modularization
Manufacturing
Levers
Commercial Levers
Supplier
Management
Levers
Manufacturing Process Change

Make vs. Buy
Joint Process Improvement
Alternate/Global Sourcing
Negotiation Improvement
The Value Methodology is a

Feature Addition
Value Enhancement Specications
major contributor in reducing the
Levers
Levers
Specication Upgradation
consumption of valuable non-renewable natural resources like steel,
B.1 Through Workshop/Suggestion: Various
aluminum, rubber, fuel, power etc., which go into the
workshops involving people from dierent disciproduct as raw materials or as inputs to the various
plines are organized by VE and ICR cell and the sugvalue addition processes. In line with the concept of
gestion team against the various themes:
Open Innovation, Tata Motors exploits the innova Terminate rust and corrosion
tions, ideas, proposals generated in house by its own
people and at the same time taps the expertise of its
Eective utilization of oil, grease and coolant on
channel partners for the same.
the shop oor to reduce our carbon foot print
3.1.1 Involvement of Internal Resources

Various forums have been established to maximize the involvement of internal resources including
top managements.
A) Top Management: Because of intense global
pressure on reducing the selling price of the product
and increase in cost of input materials, the organization integrates and aligns cost reduction opportunities with its business plan. The target is decided
based on the above points and opportunities identied which is cascaded down to plant level, then to
division level and nally to every individual level.
This becomes an important key performance measure
for every individual. In order to drive the process
and extend the support to the divisional coordinator, the value engineering central team, the sponsors from senior management team of the plant are
identied and are reviewed by the plant head with
regular frequency and high value ideas are reviewed
by steering commiee comprising of senior management of the company.
B. Employee
Recycling of treated euent on shop oor for

various applications to reduce carbon footprint
Enhancing safety at work and home
Managing climate change
Improvements in materials procurement and
logistics
Improvements in manufacturing processes
These activities help in identication of various
improvement opportunities. Various levers are used
for identifying such opportunities and optimization
potential with regard to design and process. These
are further evaluated using systematic methodology
of value engineering (job plan) by a panel called the
Syndication Panel. Ideas then go through a series of
testing, validation and implementation. Robust systematic process based on the job plan is positioned
which helps in reducing input material through identication of optimization opportunities. Table 5 (previous page) lists the various levers through which
the potential for VA/VE for cost reduction at Tata
Motors Ltd. is identied. These are broadly classied

into Technical, Commercial and Value Enhancement
levers.
Once the potential is identied, it has to go
through a systematic validation process in order to
reach the implementation stage. Table 5 (below) gives
a condensed layout of this methodology.
B.2 Through Concept competition: Tata Motors
has separate cell called ICM (integrated cost management) which arranges the concept competition
with regard to design optimization, improvement on
driver ride and comforts and various value enhancement concepts for both passenger and commercial
vehicles. This competition runs through all location
of Tata Motors. The best idea is implemented to provide beer value to the customer.
B.3 Through CFT formation: The current challenging environment demands the companies to be
agile and responsive enough to the changes occurring around them. This requires the involvement of
all its stake holders and channel partners. With this
objective various CFTs are formed in order to tap
the internal as well as external resources to meet the
increased business challenges jointly.
B.3.1 CFT for waste minimization at suppliers end:
Tata Motors hand-holds the existing channel partners
to make them agile to adopt the faster change in business challenges with regard to quality and delivery.
Idea Generation
Key
Activities
Key
Activities
Idea generation
workshops cum
Benchmarking
Identification of
aggregate for
VA/VE Study
Detailed study
using VA/VE
systematic
approach JOB
PLAN
Idea Evaluation
Develop ideal
cost for each
element
Clean sheet ideal
cost build-up if
appropriate
Evaluate
feasibility/timing
of ideas
Verify potential
cost savings
Prepare
discussion/
negotiation
strategy for
suppliers
Identify
investment
required
Choice of projects to
pursue
Ideas for Commonization
of components
25
This helps in partnering for longer term and even in
contingent situation.
B.3.2 CFT for Direct Material reduction VA/VE:
In order to mitigate the increase in input raw material price and reduce the consumption of non-value
adding raw materials, CFT approach is practiced. The
recurring benet accrued contributes to the boom
line (i.e., prot line) thereby improving the selling
margin which is important for long term business
sustenance.
B.3.3 CFT for Logistic Cost Optimization: For an
automobile giant like Tata Motors, logistics is one
of the major non-value adding cost head. Especially
with its Go Green policy for long term sustenance,
its optimization is very critical. Thus, with the objective of reducing fuel consumption during outbound
logistics and improvement in supply chain, reduction
in inventory carrying cost and avoidance of transit
damage, CFT is working on creating a vendor park
near the company premises. TML, Pantnagar has established a vendor park nearby its premises and the
same concept is under implementation stage at TML,
Jamshedpur and is being horizontally deployed at
other locations.
Apart from this, for the vendors who are not
able to shift immediately we are trying to reduce the
logistic cost through optimization of logistic routes.
Consultants have been involved for such optimizaIdea
Syndication
Design &
Market Testing
Technical
feasibility
clarified
Go-ahead given
by all
stakeholders
o QA
o ADD
o Marketing
o Service
o ERC
Design drawings
approved
Supplier
contracts signed
Marketing &
service approval
obtain
Customer Focus
Exhaustive list of rigorously evaluation

with syndication estimate of the total
savings potential
Go-no decision on ideas taken by the
Steering Committee
Figure 5. Value Engineering Methodology at TML
Test Reports
DML Release
Idea
Implementation
& Audit
Identify
implementation
requirements
Get change
approvals
Initiate
engineering
changes
Discuss savings
ideas with
suppliers and
agree on price
Idea installed
in vehicle
Bottom line
impact validated
EPA
Try out
Material
Clearance
MBPA
BOM updation
Cost audit by
Finance
26
tion. The improvement in logistics of goods not only
reduces the cost but also reduce the consumption of
fuel. This also helped in reducing the line interruption by just-in-time delivery of goods from various
vendors thereby delivering the required quantity to
our customer. It also reduces the pollution impact
to the surrounding which is important for long term
sustenance of the globe.
B.4 Awareness on VA/VE through Training: As a
part of induction training, all the new recruits have
to undergo compulsory training on VA/VE and TML
perspective of it. The training is imparted by a pool
of internally created Associate Value Specialists
through and internal training module to employees
at dierent levels (operator, supervisory and managerial level).
B.5 In-house KAIZEN Activities: In order to
reduce the non-value adding process steps and optimizing the necessary process steps thereby improving productivity, quality, delivery and reducing
waste generation, Tata Motors has a dedicated Kaizen
department, thereby helping providing beer value
to both internal and external customers. This process
is well aligned and integrated with our Balanced Score
Card (BSC) which takes care of monitoring, review
and the progress of corrective and preventive action
against identied key performance measures (KPMs)
from nancial, customer, process and learning and
sharing across location at all levels.
3.1.2 Involvement of External Resources
A) Vendors and Their Technology: For the entire new products introduction, the vendors are
involved very early at the conceptualization stage to
avoid unnecessary cost and value improvements. For
improving the value of already established products,
the central team organizes IGS wherein the related
suppliers are enrolled for their valuable suggestions.
TML systems allow passing on the cost benet if the
ideas are originated from suppliers end. This is how
the vendors motivation levels are kept up and, in
return, they suggest options which may be valuable
to both customers and the organization. Implementation of parabolic and value engineered springs
instead of conventional ones is one of the classic
cases of vendors and their technical and technological capability involvement.
A.1 Front Suspension with Parabolic Spring (Figure 6, above): This was developed for beer life, ride
and comfort, improvement in load carrying capacity
and KMPL thereby improved value. This also helped
in reducing consumption of spring steel by approxiFig.407percent
Parabolic
Spring
mately
and consequently
in consumption

Fig.
7 Parabolic
Figure 6. Parabolic
Spring
Spring
of natural resources consumed in making this steel

and pollution level to this extent.
A.2 Rear Suspension with Value Engineered
Spring: Weight reduction of spring steel (Figure 7,
below) by 11Kg through systematic VA/VE study at
the vendors end.
B) Through Expert Consultants: With a challenge
of maximizing the product value, continuous eorts
are being made for cross fertilizing the internal practices with the best one being used at competition end.
For such cross fertilization, Tata Motors is involving
experts in such domain as per the need.
Figure 7. VE Spring
Fig. 8 VE Spring

Launch of CREST Program: This program was
launched by Tata Motors in year 2010 with involvement of a team of consultants (M/s A. T. Kearney)
expert in this domain. The program Cost Reduction
through Engineering and Sourcing Transformation
(formally called CREST) is aligned towards one of
the major strategic planks; i.e., to become a low-cost
manufacturer.
Internal resources from dierent disciplines
across all locations were identied for joint study
with M/s A. T. Kearney to identify opportunities for
cost reduction and value enhancement. During the
journey, technical expert at international level on
dierent aggregates were also engaged to identify
and help in syndication from dierent stake holders.
Teams had to work with the target of 6 percent cost
reduction across each aggregate blending the expertise of internal, external, and suppliers and experts
which is core of the open innovation.
27
Figure 8. Turbocharger: prole repair by gas welding with

the help of ller.
3.2 Reuse
Tata Motors has a well laid down process to
ensure the reuse of parts with minor modication at
some other business unit (the second requirement of
Open Innovation). Tata Recon is a well-established
unit which is accountable for reconditioning of old
aggregates (engine, gear box, cooling systems) and is
sold as Recon exchange in the market. In this process
the old aggregates are brought in, dismantled and
segregated followed by inspection as per well-established Recon norms.
1. Items which can be directly consumed.
2. Items which can be used after salvaging and testing.
3. Items which cannot be used at all (scrapped
items).
Items which cannot be salvaged are replaced with
newly manufactured parts. Salvageable items undergo a well proven salvaging process and testing and
are used after rigorous testing. Recon products are at
par with the OE products and have similar warranty
period.
It is one of the key processes contributing to business sustainability by reducing the consumption of
natural resources in supply chain but also impacts
the boom line of the organization positively.
Major aggregates with almost 70 percent buy in
a vehicle (e.g. engine, gear box, turbocharger, cooling package etc.) are being reconditioned, reiterating
Figure 9. Cylinder head cover: crack repairing and atness

checking.
Tatas corporate responsibility towards environmental sustenance with higher value to the customer at
lower cost.
Following is the list of aggregates which are reconditioned for reuse at Tata Recon:
S.No
1 Long Block
2 Gear Box
3 Turbocharger
4 FIP
5 Power Steering
6 Oil Pump
7 Air Compressor
8 Clutch
Product

28
S.No
Product
9 Alternator
10 Starter Motor
11 Release BearingAssly-1.75
12 Carrier Housing
13 Air Dryer
14 Brake Actuator
15 Aux. Coolant Tank
16 Oil Separator
17 Brake Valve
18 Relay Valve
19 Brake Caliper
20 System Protection Valve
21 Quick Release Valve
22 Intercooler
23 Radiator with Frame
24 Tire
3.2 Recycle
Recycling is a key component of modern waste
reduction and is the third component of the Reduce,
Reuse, Recycle waste hierarchy.
Tata Motors has been promoting recycling activities both at in-house and suppliers end to enhance
the use value of items being scrapped. Major breakthrough has been recycling of paint sludge. The
worldwide accepted process for paint sludge disposal is incineration. However, Tata Motors pioneered
that project of developing useful products from this
hazardous non-biodegradable waste. These products
are being as casting sealers and anti-corrosive paint
being used for painting engines, truck chassis frames,
transmission housings and axle assemblies.
Benets obtained through this innovation are:
Air is cleaner by 207 tCo2e per annum
Natural resources are saved by 360 MT, which
otherwise would have been used in fresh paints
Incinerator load reduction by 85%
Energy savings : 87000KWH/ annum
Fuel savings: 42000 Liter/annum
A net value generated of Rs.1.35 Cr. /annum in
terms of direct material and not operating the
incinerator.
Figure 10. Canopy (to be recycled)

Similarly components being scrapped at various
nodes of the manufacturer-customer-supply chain
are also being recycled and reused. Some of them are
listed below:
Recycling of covers for transit to avoid dust entry.
Recycling of components complying CMVR
regulations later modied by customers. For
example, canopy recycling at Tata Motors Ltd.
Jamshedpur. All the cowl vehicles are ed with
a canopy shown (Figure 10, above). The canopies
are collected back from all the distribution centers
and are returned to
the plant through
a contractor. The
company saves
around Rs 1000
per vehicle in this
process which, for
an average production of 20,000 cowl
vehicles, turns out
to be around Rs 2
Crore per annum.
Figure 11 (right)
depicts the overall
performance trend
of recycling activity
at Tata Motors Ltd.
Figure 11. Recycled material

per vehicle

29
3.4 HR-Fostering Innovation at TML
3.4.2 Internal Inputs
HR Department has a very important role to play

in creating an environment conducive to innovation and at the same time keeping the employee (the
brain) motivated enough to be receptive and responsive to the changes occurring around and eectively
manage the blend of knowledge acquired through
internal and external sources.
A) Fostering Innovation through Inter/Intra

Company Competition: In order to recognize innovation and incorporate best of best ideas in product
design to deliver beer value, Tata Motors organizes
various competitions. Few design themes are as follows:
3.4.1 External inputs

A) Creating Knowledge Pool through Lateral
Recruitments: Lateral recruits at all levels of competition bring in their best practices and critical third
party views and inputs for system improvement.
B) Acquiring Knowledge through Domain Experts: HRD, apart from incorporating group policy
for employee management and motivation also
involves external consultants to upgrade itself are the
subject and know the global best practices for higher
employee motivation and talent management to ensure the eective management of the acquired blend
of internal and external knowledge /resources.
Concept competition: window winding unit

Vista/Manza
Concept Competition - clutch operating system
Vista/Manza
The ideas are collated, evaluated by expert team
and suggestors are recognized through award mechanism.
B) Creation of Internal Trainer Pool: The amount
of knowledge and experience an organization has
acquired over a period of time requires to be transferred from one generation to next generation and
even the horizontal sharing in the same generation
level. Tata Motors HR has created a pool of internal
Capturing ideas across the value chain

Systematic processes to capture ideas
Processes to capitalize on diverse ideas, cultures and

thinking
Examples of ideas captured and implemented
From employees
Team structures, Suggestion scheme, share
caf, idea generations, Job rotations, Systematic
employee movement within domestic and
international business, etc.
NPI, Material cost movement for model LPT2515/

48TC through employee CFTs, EDP programme
From customers
VOC, Customer clinic, Dealer/Distributor meets, key
accounts by leaders, Naka visits, Auto Expo, CRM,
etc.
Improvements in rear axel. Strong chassis frame.

Load body & clutch plate.
From suppliers
Supplier meets, Technology day, SRM availability, etc. Advanced Break System, Hydro forming.
From community
Development of volunteers, Community centres,
Periodic group meetings, Government liaison,
Student community, etc.
Soak pits, Bunds, Alternate energy, anti pollution

drives, Nirmal Gram plans
From international business related customers/employees

Product/Country managers and regional managers
along with focus team from distributors capturing
customers requirements, etc.
Figure 12. Capturing Ideas
Engine heating system in extreme cold conditions,

Reducing Engine wear in extreme hot conditions

30
Data analytics
Supplier discussion and visits
Internal cross-functional
workshops
Organized supplier workshops

with teardowns
Internal benchmarking across

models
Ideas from other platforms (e.g.,
Ace, LCVs)
Industry experts with prior

experience with OEMs/suppliers
Joint programs for critical

suppliers (e.g., Cummins)
Internal
Suppliers
Experts
Competitors
Feature and specification
comparisons
A.T. Kearney Subject Matter

Experts (SMEs)
Idea workshops using competitor

teardowns
Applicable ideas from A.T.

Kearney Idea database
Figure 13. Open Innovation at Tata Motors Ltd. a birds eye view
trainers for such sharing and keeps on increasing the
pool strength.
Eorts are continuously on to upgrade, enlarge
and motivate this internal training resource through
HR initiatives like iteach. This ensures an atmosphere
congenial to improving value to the customer at all
levels.
4. Conclusion
The most common issue that is plaguing the
companies is to manage the proper utilization of
input materials while designing new products commensurate to its use value, complete exploitation
and enhancement of the use value of the already
used products. The concept of open innovation with
a blend of systematic approach of value engineering
has strengthened us in managing the above points
thereby providing beer value to the customer and
benets to all stake holders including nature.
Tata Motors is saving considerable amount of
steel, Aluminum and various consumables being
used in manufacturing and accounting the remarkable benets in terms of handsome money ( more
than Rs. 600 Crore every year) through management
of such blend as a byproduct. Open innovation model is helping us harness the knowledge and expertise
available with all our external channel partners and
Tata Motors is able to produce and deliver the right
product at right time to its target customer at over all

lowest cost and hence, beer value over their competition. This is why the organization is leading its segment with a market share of 67 to 70 percent. Figure
12 (next page, top) shows the various processes/avenues to capture ideas from all stake holders across
the value chain.
The essence of open innovation lies in taking
inputs from of all the stakeholders of the value chain
for the process of value engineering and subsequent
cost reduction, which for Tata Motors, can be depicted as following.
References:
Embracing Open Innovation: A new approach to creating sustainable value by British Telecom
Mahesh Natarajan (Solution Architect), Ragavendra
Prabhakar (Design Analyst), VALUE CREATION THROUGH OPEN INNOVATION.
Navi Radjou Innovation Networks
Henry Chesbrough, Open Business Models: How to
Thrive in the New Innovation Landscape, Boston: Harvard Business School Press, 2006

C.K. Prahalad and M.S. Krishnan, The New Age of
Innovation: Driving Cocreated Value Through
Global Networks, McGraw-Hill, 2008
Venky Rao , INSIGHTS, White paper on Innovation
Networks: Harnessing the Power of Ecosystems
to Transform Organizations.
About the Author

Mr. G. V. Srirama Kumar has been employed by Tata
Motors since 1981, and has 31 year of technical and managerial experience. He has as M.Tech degree in foundry
technology-metallurgy from IIT Kharagpur. Presently
he is head of purchases and supply chain at Tata Motors,
Jamshedpur. He is an Associate Value Specialist, chairman
of the Eastern Zonal Council of the Indian Value Engineering Society (INVEST), and vice chairman of the Indian
Institute of Materials Management, Jamshedpur, and
secretary of INSSAN, EIC.
31
Are Your Questions Sabotaging

Your Relationships?
Most people dont put much thought into the questions they
aska mistake that can cause relationships to deteriorate
and misunderstandings to abound. Geoffrey Tumlin shares
seven tips to help you become a better questionerand as
a result, build better, more productive relationships at work
and at home.
New York, NY (April 2014)Its usually not hard to pinpoint the moment when a conversation goes south. Often,
that downward spiral begins with a question. Maybe you
ask a colleague, Why did you format the report like this?
Or you ask your spouse, Are your parents coming to dinner
again? Or you ask a stranger on the bus, Could you move
over? These questionsand many othersmay have
seemed innocent when they were coming out of your mouth.
But fail to provide context, emphasize the wrong word, or
just forget to add please, and youre suddenly in hot water.
Yes, questions can be tricky territory. The colleague in
the scenario above gets defensive, the spouse assumes you
hate her parents, and the stranger hears, Youre taking up
too much space, fatso! Communication consultant Geoffrey Tumlin says abrupt questions and the unanticipated
responses they trigger are a peril of the times we live in.
Consider the ease with which we can turn to the
Internet to answer virtually any question, says Tumlin,
author of the new book Stop Talking, Start Communicating:
Counterintuitive Secrets to Success in Business and in Life
(McGraw-Hill, August 2013, ISBN: 978-0-0718130-4-4, $20.00,
www.tumlin.com). It lulls us into thinking that questions are
simple and that answers exist to meet our needs.
Plus, its not always easy to divine another persons intent behind a face-to-face queryand the task is that much
harder in the digital age, where we so often lack visual cues
and the ability to gather immediate feedback, he adds.
And the frantic pace of life today just isnt conducive to
thoughtfulness or deliberation, which are two prerequisites
of effective questioning.
Tumlin says questioning is a higher-order communication skill that we havent taken seriously for centuries.
The days of Socrates masterfully using questions to lead a
conversation are long past. Yet even in 2014 we can make an
effort to improve our questioning skillsand the rst step is
to curb our tendency to ask faulty questions.
In general, faulty questions are those we ask to
indulge our personal, I-based cravings to get an answer, to
hammer home a point, or to satisfy a narrow, personal curiosity, Tumlin explains. Whether theyre critical, tactless,
unwanted, offensive, embarrassing, intrusive, or loaded,
these types of questions are likely to stie dialogue and can
cause relationships to deteriorate.
Instead, he says, focus on what you can learn from or
about another person. This we-based perspective, which
reects a broad curiosity about the person or topic youre
discussing, will fuel more meaningful conversations and
develop richer relationships.
Here, Tumlin shares seven specic tips to help you
improve your questions:
Clarify your intent. The inimitable Yogi Berra once said,
Youve got to be very careful if you dont know where you
Continued on page 46
32

Improving Feasibility of Mega Infrastructure

Project Development Using Value
Engineering Method
Mohammed Ali Berawi, Bambang Susantono, Suyono Dikun, Tommy
Ilyas, Herawati Zetha, Abdur Rohim Boy Berawi, Teuku Yuri Zagloel,
Perdana Miraj, Jade Sjafrecia Petroceany
Abstract
According to RPJMN 2010 2014, the Government of Indonesia stated that the priority of infrastructure development was an increase of 10 14
percent in transportation sector. Railway transportation provides a signicant role in national economic
development with investment required about 41.20%
from the total investment in transportation sector.
Soekarno- Haa International Airport Railway Link
(SHIARL), as one of mega infrastructure projects, is
expected to provide accessibility and mobility for
people and goods from and to the airport. Currently,
the project realization by using PPP scheme is not
able to aract private investors. Incomplete PPP project proposal preparations are argued to be the major
obstacles which causes lack of quality in the feasibility study.
Therefore, it is required an alternative approach
to obtain values added to the project feasibility using value engineering (VE) method. VE is used to
identify additional functions, to provide creative and
innovative ideas and to produce the best options for
the project development. This research is aimed to
improve the quality of SHIARL feasibility study by
implementing value engineering method in the planning stage.
The research methodology is conducted by a
combination of qualitative and quantitative approaches through questionnaire surveys, action
researches and focus group discussions. The result
of VE study indicates that Soekarno-Haa International Airport Rail Link (SHIARL) is an innovative
conceptual design to overcome congestion and ood
through the integration of airport rail link and MRT
line in one tunnel called Public Railway and Stormwater Infrastructure (PRASTI) Tunnel.
Keywords
Innovation; Mega Infrastructure; Airport Railway;
Mass Transportation; Value Engineering
1. Introduction
Priority of the infrastructure development in
Indonesia is an increase in transportation sector
of 1014 percent with investment projection up to
US$64 billion or 44.8 percent of the total infrastructure investment in 2010 2014. Railway infrastructure will play a signicant role in national economic
development by contributing 41.20 percent from
the transportation sector investment (Dikun, 2010).
Private sector is expected to contribute about 51.20
percent from the total railway project nancial.
Soekarno Haa Airport Rail Link (SHIARL)
is one of mega infrastructures in Indonesia railway
transportation. As one of the busiest airport in the
world, Soekarno Haa airport has signicant
growth of passengers around 14% per year and
serves 44 million passengers per year. Access to the
airport depends mainly on the intercity roads and
Sediyatmo highways, which naturally causes congestion and travel time uncertainty while in peak hours.
On the other hand, ooded highways near the airport
duringrainy season are worsening the accessibility
and potentially reducing the transportation sector
performance. In such condition, alternative mode
of transportation through railway construction is

required in order to provide high mobility of passengers and goods from and to the airport. Therefore,
SHIARL project is expected to increase punctuality
and to provide a beer mass transportation for the
public.
SHIARL feasibility project was rst employed in
2002 by PT.RAILINK and oered to the investors in
Infrastructure Summit in the period of 2005 and 2006.
Due to failure in its nancial feasibility, the project
was re-developed to aract private investors. Currently, SHIARL project downgrades its status from
ready-to-oer project into priority project. Major
gap between the initial cost and the return on investment to the private investors is argued to be the main
reason why SHIARL is lacking of interest from the
private investors. Therefore, alternative approaches
are required by creating added values to improve the
feasibility study of the project.
This paper aims to improve the quality of the feasibility study of Soekarno Haa International Airport
Railway Links (SHIARL) by applying value engineering (VE).VE has been applied in various projects,
particularly in mega infrastructure projects. VE is a
proven systematical method in analyzing functions
of a system in order to provide optimum outcome
for a project in term of quality (Sik-wah Fong and
Shen, 2000; Woodhead and Berawi, 2007), technology breakthrough (Berawi,2013; Yang, et al., 2012),
eciency (Berawi andWoodhead,2005; Abdul-Rahman, et al., 2008) and innovation (Berawi and Woodhead, 2008; Chen, et al., 2010) Application of VE at
the initial and conceptual stages of an infrastructure
project will increase eciency and eectiveness of
the project. VE approach in SHIARL project is started
by seeking additional functions that can be integrated
into the project. The result is expected to provide an
innovative conceptual design to address problems in
Jakarta.
2. Methodology
This research employed a combination of quantitative and qualitative approaches (Green & Caracelli,
1997). Quantitative approaches are characterized by
the use of control variables and objectivity that are
conducted through questionnaire survey and Life
Cycle Cost (LCC) analysis. Qualitative approaches
(Creswell, 1998) are conducted by using a participatory action research (participative action) which criticizing the assumptions and allowing for the learning process (Carr & Kemmis, 1986) and grounded
33
theory (Strauss & Corbin, 1998) through focus group
discussions.
The questionnaires were distributed by way of
online (soft copy) and oine (mail/hard copy) surveys and aimed to identify the stakeholders perception on the ideas generation produced by value
engineering process. The respondents for oine
questionnaires were government and private companies related to infrastructure development, including
PT Kereta Api Indonesia (KAI), PT Railink, PT INKA,
Ministry of Transportation, Ministry of Public Works,
PT Jasa Marga, PT Wijaya Karya, Bappenas, PT IIGF
(Indonesia Infrastructure Guarantee Fund), PT Sarana Multi Infrastructure (SMI), Special Commiee for
the Acceleration of Infrastructure Indonesia, and the
Investment Coordinating Board. While online survey
questionnaires were sent to the respondents via email to six mailing groups of construction industries
and value engineering practitioners in Indonesia. The
data collected from the questionnaire surveys was
then analyzed by using inferential statistics, Croncbachs Alpha and one sample T-test to determine
the respondents proportion and the reliability of the
responses to the questionnaires based on a 95 percent
condence level.
3. Results and Discussion

The process of questionnaire surveys took a
month (30 days) from August 1st, 2012, to August
30th, 2012, with 32 returned questionnaires. Once the
analysis of questionnaire survey was completed, the
next stage, focus group discussions (FGDs) commenced. FGDs were conducted as a validation and
verication in order to gain more inputs from various
stakeholders of SHIARL project on the ndings.
3.1. Questionnaire Survey

Most of the respondents work for private companies with a coecient of 43 percent and the second
largest part of the respondents work for government
agencies. Meanwhile, more than 50 percent of the
respondents are post graduate holders and 26 percent of them hold managerial and general director
positions.
According to the respondents answers, most of
them agreed that punctuality was the major factor in
selecting public transportation, particularly when using railway transport. Additional functions that could
be integrated into SHIARL project were residential,

34
business centers and city checkin. Extra cost from
these additional functions to SHIARL project can be
tolerate up to 30 percent from the previous SHIARL
total investment. Questionnaire results also showed
that private sectors were expected to be much more
involved in nancial support with proportion of 40
percent government and 60 percent private sectors.
Focus group discussions (FGDs) also conrmed that
the questionnaire results on ood mitigation, ber
optic and transit-oriented development (TOD) as
potential additional functions to the project.
Table 1. Innovative Ideas for SHIARL

Reference
3.2. Value Creation

Valuable data gained from the questionnaire
surveys and focus group discussions was used to create ideas by seeking additional functions that can be
integrated into the project through a FAST diagram.
Innovative ideas for SHIARL project are generated
from various problems found in Jakarta region, targeted development set by the government in a period
Innovative Ideas
Limited land
Underground infrastructure
Lack of public
transportation
Mass rapid transit (MRT) integration
Flood
Flood tunnel integration
Needs in
communication
Fiber optic integration
Renewable
energy
Utilizing natural resources (solar,

kinetic energies)
Increase regional economy
Developing commercial areas

(residences, business centers)
of 20 years and potential transportation development

to be integrated in the project.
One of the problems in Jakarta is devastating annual ood in rainy season and periodically disturbed
accessibility of users to the airport which depends
largely on the intercity roads and Sediyatmo high-
Figure 1. FAST Diagram for Kereta API Bandara (Soekarno Hatta Airport Railway Link [SHIAARL])

35
the application of natural
resources to the project is
expected to increase efciency and quality of the
environment. These ideas
lead to the development of
FAST diagram as shown
in Figure 1 (previous page,
boom).
3.3. Public Railway

and Stormwater
Infrastructure (PRASTI)
Tunnel
Figure 2. Route of PRASTI Tunnel

ways. This dependency also leads to congestion and
travel time uncertainty during peak hours while commuters struggling to access or leave their oce. The
increasing number of commuters using their private
vehicles is considered as a result of the poor public
transportation and the limited land availability in
Jakarta to serve the city functions and people activities makes the people moves to the city perimeters.
On the other hand, the development of roads which
are used for the commuters vehicles accessibility
is nearly below 1 percent per year and compared to
over 1,000 new vehicles sold every day, the roads are
predicted to be stuck in 2020. Railbased project development is argued as the best solution to solve the
transportation problems in Jakarta region. Potential
railway project, particularly for urban development,
is mass rapid transit (MRT) Jakarta planned along
110.8 km line, which is divided into north and south
corridors. (See Table 1, previous page, top.)
Various problems that occurred in Jakarta and the
potency of development provoke innovative ideas for
the project. Underground infrastructure is proposed
as a solution for the limited land in Jakarta by integrating MRT line and ood tunnel that will be used
to solve Jakartas lack of public transportation and
annual ood. Economic aspect is also considered by
proposing commercial area and ber optic integration to generate regional income. In the meantime,
Public Railway and

Stormwater Infrastructure
(PRASTI) Tunnel is a conceptual design of multi
function tunnel generated
from function analysis
stage of value engineering method. It is aimed to
overcome congestion, reduce ood in Jabodetabek
area and increase accessibility from and to Soekarno
Haa airport by integrating three main functions,
namely MRT, airport railway, and ood control, in
one tunnel development. The proposed diameter
of the tunnel is 19 meter, about25 40 meter underground and span along 9 kilometer from Dukuh Atas
station to Pluit. (See Figure 2, above.)
The tunnel is divided into three (3) levels; the rst
level is served as ood control, the second level is
Figure 3. Cross-Section View of PRASTI Tunnel

36
Figure 4. Diameter Analysis of PRASTI Tunnel

served as airport accessibility through SHIARL and
the third level is expected to increase public transport
through MRT line. The cross-section visualization of
PRASTI Tunnel concept is shown in Figures 3 (previous page, boom) and Figure 4 (above).
As the result, a total route of about 38.5 kilometers connects Halim airport in Eastern Jakarta
with Soekarno Haa airport in Western Jakarta
by using median road of the intercity toll road. This
route is divided into three sections; the rst section
is from Halim airport to Dukuh Atas with elevated
lane along 12 kilometers, the second section is from
Dukuh Atas to Sedyatmo Toll Road near Pluit, which
will be built by using PRASTI Tunnel along nine
kilometers, and the third section from Sedyatmo Toll
Road near Pluit to Soekarno Haa airport with
elevated lane along 17.5 kilometers.
3.4. Construction,
Operational and
Maintenance Cost
of PRASTI Tunnel
The construction
cost for PRASTI tunnel will be divided
into four functions,
namely Flood, Transportation which
consists of airport
train and MRT, telecommunication, and commercial

area development. Although the construction cost for
tunnel around the world vary depends on numerous factors, the initial cost for PRASTI Tunnel will be
determined through benchmarking tunnel projects
with similar diameter and functions. Comparisons
for unit prices for the tunnel projects were gathered
from benchmarking various tunnels in the world,
from SMART Tunnel in Malaysia to Channel Tunnel
in UK. Since PRASTI Tunnel diameter (19 m) is much
larger compared to SMART Tunnel (13.2 m), interpolation approach is then used for calculating PRASTI
Tunnels initial cost. On the other hand, operational
and maintenance costs for the tunnel are assumed
0.5 percent from the initial cost (Baumgartner, 2001)
or equals to US$78,554,192.63 increasing with annual
ination per year.
Initial cost for the function of transportation
comprises of airport train and MRT. Both have
similar components consisting of tracks, electricity
for 18 km as well as signal and telecommunication
for 9 km, and additional two units of sub-stations
are added for the airport train. Therefore, the initial
cost for transportation function is estimated about
US$93,217,500.00 with US$622,575.00 per year for
operational and maintenance cost in airport train section and US$720,450.00 per year for operational and
maintenance cost in MRT section.
Considering the ber optic construction cost
proposed by PT Telkom, an Indonesias state owned
enterprise for telecommunication, which is about
US$15,933.33/km, the 9 km-long ber optic construction in PRASTI Tunnel will cost about US$143,400.00.
Meanwhile, operational and maintenance cost for
ber optic of PRASTI Tunnel will require about
US$10,687.50 and increasing with annual ination
every year. Furthermore, there is a 5,600 square
meters, commercial area located underground and
divided into six MRT underground stations and Du-
Table 2. Summary of PRASTI Tunnel Cost

PRASTI Tunnel Function
Flood Function
Initial Cost
Annual Operational and

Maintenance Cost
1,636,545,679.70
78,554,192.63
a. Airport Train
44,161,875.00
622,575.00
b. MRT
49,055,625.00
720,450.00
143,400.00
10,687.50
Transportation Function
Telecommunication Function
Commercial Area Development Function
Total Initial Cost
382,678,365.83
7,653,567.32
2,112,584,945.53
87,561,472.45

kuh Atas station. Construction cost for the commercial area is estimated about US$14,000,000.00. While
six MRT and Dukuh Atas stations will cost about
US$368,678,365.80. On the other hand, operations
and maintenance costs are assumed 2 percent from
the initial cost, which will cost about US$7,653,567.32.
The overall calculation for the identied functions is
summarized in Table 2 (previous page, boom).
Currently, separate projects of related functions in PRASTI Tunnel have been proposed to be
developed in Jakarta area. Firstly, the MRT project
proposed by the Indonesian government to reduce
congestion in Jakarta requires about US$3,388.8 million for 23.3 km from Lebak Bulus in South Jakarta
to Kampung Banda in North Jakarta. Meanwhile,
according to the Ministry of Development Planning
(2013), airport train construction from Halim airport in Eastern Jakarta to Soekarno Haa airport
in Western Jakarta along 38.5 km requires about
US$2,580 million and will be built with three main
stations. Lastly, a ood control system is proposed
with a cost of about US$1,700 million to reduce
annual heavy ooding that caused a loss of about
US$2,000 in 2013. Compared to US$7,668.8 million
of separate projects that have been proposed before,
US$2,112.58 million of PRASTI Tunnel investment,
which integrates all the functions, is an eective way
to overcome various problems in Jakarta and an innovative solution to obtain nancial feasibility of the
project.
On top of that, the revenue estimation generated from transportation, commercial areas, utilities
and benets from ood control have shown that the
feasibility of PRASTI Tunnel is increased with Public
Private Partnership (PPP) nancial scheme.
4. Conclusion
Value engineering (VE) has been widely applied
to produce optimum result for projects development
through the fulllment of the required quality, application of advanced technology and achievement of
innovative ideas. VE application for mega infrastructure, particularly in SHIARL, has produced added
value to the project. This method improves the existing conceptual design of SHIARL project by creating
innovation through the development of Public Railway and Stormwater Infrastructure (PRASTI) Tunnel
that combined the following functions: 1) transportation function through airport train and MRT; 2);
ood function 3) telecommunication tunction, and
37
4) commercial area development function. Initial
cost for multifunction tunnel is US$2,112,584,945.53
with operational and maintenance costs about
US$87,561,472.45, increasing with annual ination
every year.
Acknowledgement
This research was fully supported by the University of Indonesia Research Grant and the Ministry of
Education, Republic of Indonesia.
References
Abdul-Rahman, H., Yahya I.A., Berawi M.A., WaiWah
L. (2008), A Conceptual Model for Mitigating
Delay in Construction Projects Using a Project
Learning Approach, Construction Management
and Economics.
Baumgartner, J.P. (2008), Prices and costs in the railway sector. Institut des transports et de planication.
Berawi, M.A., Susantono, B. (2013), Developing Conceptual Design of Mega Infrastructure Project: Creating Innovation and Added Value, Value World,
Vol. 35, Numver: 1, pp. 12-20, SAVE Press, USA.
Berawi, M.A.,Woodhead, R.M. (2005), Application of
Knowledge Management in Production Management, Human Factors and Ergonomics in Manufacturing, Vol. 15, No. 3, pp.249 257, Wiley and
Son.
Berawi, M.A.,Woodhead, R.M. (2008), Stimulating Innovation Using Function Models: Adding Product
Value, Value World, Volume: 31, Number: 2, pp.
4-7, SAVE Press, USA.
Carr, W.,Kemmis, S. (1986), Becoming Critical: Education, Knowledge and Action Research,Falmer
Press.
Chen, W.T., Chang, P.-Y., Huang, Y.-H., (2010), Assessing the overall performance of value engineering
workshops for construction projects. International
Journal of Project Management, 28, 514-527.
Creswell, J. (1998), Qualitative Inquiry and Research
Design; Choosing Among Five Traditions, Sage
Publications, London.
Dikun, S, (2010), The Interface Report: Substances to
Support the National Railway Master Plan.Jakarta
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Greene, J. C.,Caracelli, V. J. (1997), Dening and
describing the paradigm issue in mixed-method
evaluation, in J. C. Greene and V. J. Caracelli (eds.),
Advances in mixed-method evaluation: The challenges and benets of integrating diverse paradigms, New Directions for Program Evaluation,
No. 74., pp. 5-18, San Francisco.
Ministry of Development Planning. (2013), Public Private Partnership (PPP) Infrastructure Project Plan
in Indonesia. Jakarta.
Sik-wah Fong, Shen, Q. P. (2000), Is the Hong Kong
construction industry ready for value management? International Journal of Project Management, 18, 317-326.
Statistics Indonesia (2013), Statistical Yearbook of Indonesia, Jakarta, Statistics Indonesia.
Strauss, A., & Corbin, J. (1998),Basics of qualitative research: Techniques and procedures for developing
grounded theory (2nd Ed.). Thousand Oaks, CA:
Sage Publications.
Woodhead, R.M.,Berawi, M.A. (2007), An Alternative
Theory to Idea Generation, International Journal of
Management Practice, Volume 3,No. 1, pp.1-19.
Yang, L.R., Chen, J.H., Wang, H.W. (2012), Assessing impacts of information technology on project
success through knowledge management practice.
Automation in Construction, 22, 182-191.
About the Authors

Dr. Mohammed Ali Berawi received his Ph.D. in innovation management from Oxford Brookes University at
Oxford, UK. He currently researches value engineering/
value management and innovation in the context of infrastructure, construction and manufacturing industries.
He has authored and co-authored more than 50 scientic
publications. Dr Berawi has also been involved in many
national and international research collaboration and
consultancy works. He is currently the Head of Integrated
Design and Technology (IDTech) Research Group, Faculty
of Engineering, University of Indonesia.
Dr. Susantono holds a Ph.D. in infrastructure planning from the University of California at Berkeley. He
is the Head of Infrastructure Management Graduate
Program, Faculty of Engineering, University of Indonesia. He has authored and co-authored numerous books,
articles and scientic publications. Besides teaching in the
university, Dr. Susantono has been appointed in various
positions both in the public and private institutions. He

is currently the President of Intelligent Transportation
System (ITS) of Indonesia, and serves as the Vice Minister
of Ministry of Transportation, Republic of Indonesia.
Dr. Suyono Dikun received his PhD in Transportation System Planning from the University of WisconsinMadison, USA. Dr. Dikun is a professor in infrastructure
management at the University of Indonesia and has more
than 30 years professional experience in infrastructure and
regional development policy and planning for the National
Development Planning Board (Bappenas). He is also a
member of many national and international professional
organizations in transport science and project management.
Dr. Tommy Ilyas is a professor in geotechnical engineering at the University of Indonesia. He holds a PhD in
Geotechnic from Sheeld University (UK). His research
interests are in Engineering Mechanics, Soil Mechanics
and Infrastructure Management.
Dr. Abdur Rohim Boy Berawi holds a PhD in High
Speed Train management from MIT Portugal. He currently researches value management and innovation in
infrastructure and transportation industries and has published many scientic articles in international journal and
conferences. Besides teaching in the university, Dr. Boy
Berawi is also served as AUSAIDs Advisor to the Ministry of Transport (MOT), Republic of Indonesia.
Dr. T. Yuri M. Zagloel is a professor in Industrial
Engineering Department, University of Indonesia. Prof.
Yuris research interests area in Quality Management and
production system eld. He is currently served as the Head
of Production System Laboratory.
Herawati Zetha Rahman is a Ph.D. candidate at the
Department of Civil Engineering, University of Indonesia.
Her doctoral research focuses on the improvement feasibility study on Public Partnership Project. She is a senior
researcher at IDTech research group, University of Indonesia since 2008.
Perdana Miraj is a senior researcher at IDTech research group and involved in mega infrastructure project
research. He holds master degree in project management
and has worked for a design and consultant company
before joining IDTech research group.
Jade Petroceany is serving as teaching faculty in Civil
Engineering Department, University of Indonesia and
researcher at IDTech. She earned her master degree in
Infrastructure Management from Queensland University
of Technology, Brisbane, Australia.

39
Do You VEERP?
Value Engineering for Ecosystem Restoration Projects
Abstract
The objective of this paper is to explain the value
engineering processmanaging the methodology
objectives, study approaches and aributes, and barriers of ecosystem restoration projects. Additionally,
it will discuss encouring the VE team to pursue tools
that can enhance the traditional techniques. This
technical paper veries the ability to enhance creative
decision-making capability available in value engineering studies by explaining how environmental
and new techniques can enhance the study results.
This paper will discuss water quality, habitat improvements and connectivity, sustainability, public
acceptability, and team management. Improving the
function of a project includes employing qualitative
proposals. This paper will be intertwined with a real
case study situation. As always for value engineering,
this paper will introduce ways to create and maintain professional standards for ecosystem restoration
projects by optimizing and performing any engineering-related activities through the most cost-eective
methods.
Introduction
What are ecosystem restoration projects? Are
they recreation projects? Are they vegetation planting projects? Are they both? The goal of an ecosystem
restoration projects is to restore a damanged ecological system to a more stable and sustainable state by
returning the ecosystem to its original intent, restoring the operation of natural biogeochemical cycles.
This could include water purication, erosion prevention, habitat connectivity, and addition of community structures or recreation facilities.
Ecosystem restoration is growing across the
country. More agencies are producting projects that
provide ecological benets now than in the last 30
years. Virtually all of Earths ecosystems have been
signicantly transformed transformed through hu-
man actions. The growing demand for ecosystem

services and other increased pressures on ecosystems, begins upon the development and diusion of
technologies designed to increase resources used to
reduce impacts to the environment. The performance
aributes for ecosystem restoration projects include
habitat improvements, sustainability, water quality
improvements, and public acceptability.
This paper will answer some of the lingering
questions: What has caused ecosystem changes? How
have these changes aected human well-being? How
might ecosystems change in the future and what are
the implications for human well-being? What options
exist to enhance the conservation of ecosystems and
their contribution to human well-being? You will
learn what value engineering opportunities unfold
within ecosystem restoration projects and the specifics for tailoring the study for these project types.
Value Integrated Approaches

The Ecosystem
The structure of the worlds ecosystem has
changed more rapidly in the second half of the twentieth century than at any time in recorded human
history (Reid 2005). Although the most rapid changes
in ecosystems are now taking place in developing
countries, industrial countries have historically experienced comparable rates of change. With the increasing number of large reservoirs and dams, the amount
of water stored behind or in these areas has caused a
loss in mangroves, coral reefs, and native vegetation.
The use of these systems is understandable due to
the growing population. The worlds population has
increased from about 200 million in 1900 to 2.9 billion
in 2000. Overall the nation is an urban system with
high human density with built environments; however, more urban systems are located on the East Coast.
Another characteristic of the worlds ecosystem
is a dryland system, which is generally in the west-

40
Figure 1. Characteristics of the Worlds Ecological Systems

ern portion of the nation. Drylands are lands where
plant productivity is limited by water availability.
Fresh water availability in drylands is projected to be
further reduced from the previous average of 1,300
cubic meters per person per year in 2000, which is
already below the threshold of 2,000 cubic meters
required for minimum human well-being and sustainable development. Approximately 1020 percent
of the worlds drylands are degraded (medium certainty) (2005). Lastly, the polar system is a high latitude system frozen for most of the year. See Figure 1
(above) for characteristic of urban systems, dryland
systems, and polar system.
Humans are fully dependent on the Earths ecosystems and the services that they provide, such as
food, clean water, disease regulation, climate regulation, spiritual fulllment, and aesthetic enjoyment.
Human well-being depends on ecosystem services
but also on the supply and quality of social capital,
technology, and institutions. For these reasons, there
is a need for ecosystem restoration projects. Can the
Value Methodology improve these types of projects?
Yes, it can.
Managing Value Methodology Objectives

Developing a value engineering team for a specic task is dicult. The team has many challenges
during their short time together. The team prepares
a plan and work according to the plan. The teams
plan includes improving project understanding
(information phase), taking steps to achieve the
intended functions (function analysis phase), de-
veloping a Function Analysis Systems Technique

(FAST) diagram, brainstorming new ideas based on
the intended functions through positive thinking
(creative phase),evaluating the feasibility of incorporation of the ideas into the project (evaluation phase),
documenting the ideas in the form of proposals that
will improve the value of the project (development
phase), and determining life cycle cost, all in a very
compressed period of time.
When developing the multidiscipline team one
must consider the project details and what disciplines
have expert opinions on that specic project. For an
ecosystem restoration project, the expertise includes:
Geotechnical engineering
Hydraulics engineering
Environmental/biologist
Civil engineering
Cost engineering
Representatives from the sponsor, operations

and maintenance (O&M) groups, and end users are
always welcomed and preferred. These individuals
can discuss the current issues and the future O&M
requirements based on the creative ideas.
Study Approach
Most U.S. Army Corps of Engineers (USACE)
ecosystem restoration projects require a study during the planning and design phases of the project. A
typical value engineering study following the Value
Methodology has the team to identify the function(s)
of the project and construct a FAST diagram through

41
utilization of a numTable 1. Ecosystem Restoration Function Characteristics

ber of creative processes.
Action Verb
Measurable Noun
Action Verb
Measurable Noun
One of the main
Restore
Ecosystem
Restore
Aquatic Habitat
reasons the Value
Restore
Riparian Habitat
Establish
Aquatic Habitat
Methodology is
Establish
Riparian Habitat
Restore
Hydrologic Processes
dierent than other
Reduce
Flood Risk
Restore
Hydraulic Processes
value based or cost
Maintain
Flows
Maintain
Interior Drainage
reduction processes
is that it focuses on
Stabilize
Bank
Restore
Channel
the functions of the
Protect
Trails
Prevent
Erosion
project. So, what is
Maintain
Safety
Control
Seepage
a function? A funcEnhance
Recreation
Minimize
O&M
tion is the natural or
Restore
Impacted Habitat
Obtain
Rights-of-Way
characteristic acMaintain
Wildlife Connectivity
Maintain
Baseline Riparian Habitat
tion performed by
a product or service
Maintain
Public Access
Divert
Flows
(SAVE International,
Meet
Customer Requirements
Protect
Property
2013). The function is
Ensure
Safety
Protect
Freeway
expressed by using
Enhance
Public Use
Protect
Infrastructure
an active verb and
Improve
Water Quality
Maintain
Aquatic Habitat
a measurable noun.
Install
Vegetation
Minimize
Habitat Disturbance
One must rst underPublic
Terrace
Banks
stand that everything Inform
has function, e.g.,
Lower
Elevations
Improve
Inltration
a light bulb, chair,
Create
Geomorphology
Construct
Weirs
and stapler. When
Construct
Project
beginning to think of
improving a project
sifying functions in the FAST diagram are limited
such as an ecosystem restoration project, we need to
to basic and secondary functions. The FAST model
break down the project into characteristic functions.
(Figure 2, next page, top) further contain subsets
Whenever these functions are described in the Value
such as higher and lower order functions unique to
Methodology study it becomes evident where the
the specic technique. A Basic function is the priteam should focus their eorts to make potential immary purpose(s) for which the project or service was
provements. See the Sample Ecosystem Restorations
designed or created. Secondary functions support the
Project Functions listed in Table 1 above.
basic functions. These functions result from a specic
As the facilitator of the team, time management
design approach to achieve the basic function.
is very important. For approaching Ecosystem RestoThe project site visit is essential to the value enration project, a facilitator may divide the team into
gineering
study. The team must see the site in order
subgroups to obtain maximum breadth and diversity
to appreciate the current condition and to view any
of ideas within a relatively short period of time. Each
constraints. If time is limited, a Google earth yover
work group will focus on the delineation of project
is benecial, but may cause additional questions
objectives (also known as aributes) and specic
measures to optimize the aainment of those objecdue to uncertainties. Conducting a site visit durtives (Degenhardt, 2011). The workgroups will be
ing the information phase greatly improves project
assembled into separate areas and brainstorm objecunderstanding. After a site visit, the facilitator should
tives and the means to accomplish those objectives
inquire about the team specics about the project site
separately. If the team is a fairly small group, the
to ensure a common understanding. Such questions
facilitator can pair the team members or remain in a
may include:
single group.
The ground rules for the FAST diagram vary
1. What features were interesting about the project?
based on the projects techniques and type. Clas2. What are the existing undesirable conditions?

42
3. What are the driving
factors regarding the
project?
4. What are possible
constraints with the
project?
Once the team has
common knowledge of
the project and the project objectives/aributes
are identied, the team
will brainstorm measures
to optimize and accomplish each objective or
aribute.
Study Attributes
Ecosystems operate from day-to-day by
exchanging energy. The
energy exchanged within
an ecosystem is recycled
between the physical and Figure 2. FAST Diagram Model
biological components.
The plants within an
ecosystem convert the suns energy into plant food,
the plants are in turn grazed upon by animals, and
animals are then consumed by predators. Microorganisms within an ecosystem, such as fungi and bacteria, also exchange energy within the ecosystem by
breaking down waste material to substances that can
be used by plants for food. In this way, each element
within the ecosystem depends upon the others for
survival (Anderson, 2000). The objectives or performance aributes for ecosystem restoration projects
include, but are not limited to, habitat improvements
and connectivity, sustainability, water quality improvements, and public acceptability.
Habitat Improvement involves the improvement
of all existing aquatic and non-aquatic habitat within
watershed or nearby tributaries. A watershed is an
area of land over which water ows to reach a common body of water. This can be accomplished by
adding additional habitat areas or by improving existing habitat. Areas in which habitat improvements
could be implemented include the lakes within the
system, the lioral zone and the bank zone. For nonaquatic habitat we refer to habitat connectivity. Habitat connectivity between signicant ecological areas
is critical for certain regions. Connectivity involves
creating wildlife corridors from specic mountain

areas to the rivers.
Sustainability is a critical component of the
planning objectives. The 1980s restoration outputs
worked well for about 20 years, but gradually the
ecosystem has declined again. The objectives are to
learn from previous restoration eorts to develop a
more sustainable restoration plan.
Water Quality Improvement: Water quality is a
term used to describe the chemical, biological, and
physical characteristics of water. Water quality is not
simply good or bad, but usually is applied to its
purpose (Anderson 2000). For example, water that
is suitable for washing a car may not be suitable for
drinking. For most purposes water quality refers to
water for drinking, swimming, and shing. This objective refers to the improvement of the water quality
within the study area, including phosphorus, salinity
and dissolved oxygen levels, as well as mean water
column temperatures. See Figure 3 (next page). As
the population increases so does development, which
creates greater potential for harmful substances to
enter our water supplies.
Public Acceptability: To appropriately satisfy
the projects objectives, public concerns must be addressed. The public is composed of the local sponsors

43
considerable distances from urban centers. Understanding the relationship is important because the
ecosystems (living and non-living things) depend
upon and impact each other. Early coordination with
the public is important. The team must understand
and ensure that the developed ideas consider public
opinion.
Implementing the Study Attributes
Figure 3. Pollution Sources Affecting Water Quality

and residents, as well as local groups that utilize the
proposed area on a regular basis. These concerns can
be determined through interaction, such as meetings
and/or surveys.
Overcoming Barriers
Unfortunately for most ecosystem restoration
projects, there are only conceptual levels engineering designs directly associated with the ecosystem
improvements. More designs can be associated with
recreation construction. Nevertheless, you want to
ensure the agency that ecosystem restoration is the
primary focus. Additional roadblocks could include
land owner(s) and real estate concerns.
Coordination with the people and organizations
that may be aected by the project can help build
the support needed to get the project moving and
ensure long-term protection of the restored area. In
most ecosystem restoration studies there are more
project constraints then opportunities. Ways to reach
the goal of the value engineering study is to discuss
the constraints, opportunities and risk prior to the
studys Function phase. The risk can help identify
if the constraints are truly constraints. Additionally,
the team may explore alternative solutions. This allows for utilizing those ecological theories during the
creative phase of the job plan. The goal is to produce
a sustainable ecosystem that satises the needs of
nature and society.
Particularly in the planning stage of a study, it

is critical to focus on whether the proposed restoration activity is feasible. Public support for a project is
needed to ensure its long-term viability. An ecosystem
with integrity is a resilient and self-sustaining natural
system able to accommodate stress and change (EPA
2012). In an environmental restoration project, one
must understand the functions of the project. Additionally one must dene the type of restoration.
For the purpose of tracking net gains in wetland
acres, restoration is divided into re-establishment
and rehabilitation. See below (EPA 2012).
Re-establishment: the manipulation of the physical, chemical, or biological characteristics of a site
with the goal of returning natural/historic functions
to a former wetland. Re-establishment results in
rebuilding a former wetland and results in a gain
in wetland acres.
Rehabilitation: the manipulation of the physical, chemical, or biological characteristics of a site
with the goal of repairing natural/historic functions
of degraded wetland. Rehabilitation results in a gain
in wetland function, but does not result in a gain
in wetland acres.
Each restoration project the team sets goals for
measuring the success of the project, this increases
study eciency and strategy for moving forward. For
these types of projects, it is valuable to keep the team
focused on the overall project which includes O&M
recommendations, habitat establishment recommendations, and water quality recommendations.
Whats in It for the Public?
Case Study (Los Angeles River Ecosystem

Restoration VE Studies)
Changes in ecosystem services aect people living in urban ecosystems both directly and indirectly.
Likewise, urban populations have strong impacts on
ecosystem services both in the local vicinity and at
The Los Angeles River Ecosystem Restoration

Project was one of the rst value engineering studies
to use similar approaches at the Los Angeles District.
During the information phase, the VE study team
44
discussed the purpose and primary aributes of the
project. One of the primary aributes of this project
was to provide habitat connectivity by establishing wildlife corridors. This project wanted to bring
multiple wildlife species such as the Canadian goose,
coyote, great blue heron, bobcat and red-tail hawk
to the restored area. The team discussed the areas
where these wildlife species would migrate from to
provide the most opportunity. In order to restore
connections to the adjacent Santa Monica Mountains,
nodal connections must be provided to the Verdugo
Hills, and connectivity through the nearby watershed
to the San Gabriel Mountains.
Secondly, the team discussed the sustainability of
the project. This project proposed to increase the riparian and marsh habitat. The team briey discussed
maintenance of these areas but more importantly
establishing native species which will help with selfsustainability and longevity. The project will have to
ensure that maintenance includes monitoring invasive species that could aect the ecosystems growth.
The LA River is listed as impaired according
to the Clean Act Section 303 due to pollutants such
as metals, ammonia, algae, and pesticides. Additionally, the water quality is signicantly aected by the
storm water runo. Keeping this in mind, the team
discussed the current ood control system to learn
the history and anticipate the future changes.
After completing the initial information phase,
which continues throughout the workshop, the team
evaluated the functions and current estimated cost
for the project. The team determined the higher-order, basic, and secondary functions. While reviewing
the cost model, the team assigned cost to the various
functions, then eliminated unnecessary functions
and combined functions when necessary. The VE
study team moved into the creative phase and brainstorm on the determined functions. Using the positive thinking approach, the facilitator listed all ideas
and encouraged out-of-the-box ideas. The study
team evaluated all ideas in the evaluation phase and
selected the most feasible ideas to move forward. A
handful of these ideas were combined and others
were rened to develop in the developmental phase.
The team documented advantages and disadvantages
for the proposed ideas as well as included sketches,
cost and justications.
The outcome from this value engineering study
was remarkable. The team came up with over 71
creative ideas and developed eight solid combined
proposals. During the preparation phase, the study
team discussed the FAST diagram, presented the nd-

ings, and potential cost avoidance. The project delivery team was able to identify the project function and
understand how the project would ow. It allowed the
project team to see what actions needed to take place.
Integrating New Ideas and Technology

Establishing a planting area prior to the start of
construction can assist with the cost of the project
and provide quality vegetation. Most of the Districts
projects are completed in phases over several years,
and there is a signicant amount of vegetation and
trees that will be planted. Therefore to add value
and save cost, the team considered having an initial
phase of the project include establishing a nursery or
plant farm that will be used through the rest of the
project. For example, if one proposed area is restored
right away with tree plantings that will be needed in
another 7-10 years at another location, then the cost
of purchasing mature trees in 10 years is eliminated
or reduced and replaced with the cost of nurturing
the trees, which may be lower. This oers signicant
aesthetic and ecosystem benets as well by establishing mature plants in the restoration area.
Another idea is to use bioengineering techniques
where possible. Bioengineering is a method of construction which combines live plants with dead
plants or inorganic materials to produce living, functioning systems to prevent erosion, control sediment
and other pollutants, and to provide habitat. Bioengineering techniques can often be successful for erosion control and bank stabilization, ood mitigation,
and even water treatment. Specic projects can range
from the creation of wetland systems for the treatment of storm water, to the restoration of vegetation
on river banks to enhance natural decontamination of
runo before it enters the river (EPA 2012).
Conclusion
The idea of restoring the land dates back centuries, but modern restoration ecology and its practice
began in the early 1900s. Ecological research on restoration has largely focused on community ecology
and ecosystem ecology, with particular aention to
plants. However, animal reintroduction, a common
element of conservation biology, is also essentially
restoration. When conducting a value engineering
study on ecosystem restoration projects, the team
should evaluate performance aributes that include
habitat improvements and connectivity, sustainability, water quality improvements, and public accept-
ory of the area and if the project is a re-establishment or rehabilitation

s uncertainty, ecological restoration is a rapidly growing field that represents
VALUE
WORLD | VOL
| NO
1 | SPRING
2014
ge in our
relationship
to 37
the
natural
world.
45
Appendix
Definitions
Bioengineering- application of concepts and methods
of biology using engineering analytical and synthetic methodologies.
Dissolved oxygen- is a relative measure of the
amount of oxygen that is dissolved or carried in a
given medium. It can be measured with a dissolved oxygen probe such as an oxygen sensor or
an optode in liquid media, usually water.
Ecology - the study of how living things relate to the
environment
Ecosystem a natural unit of living and non-living
parts that interact to produce a stable system
Exotic Plant A plant that is transported from its
place of origin and introduced into a new environment
ability. The team should understand the history
of the area and if the project is a re-establishment
or rehabilitation project. Despite this uncertainty,
ecological restoration is a rapidly growing eld that
represents a foundational change in our relationship
to the natural world.
References
Reid, W. V., Mooney, H. A., Cropper, A. Millennium
Ecosystem Assessment, 2005. Ecosystem and Human Well-Being: Synthesis. Island Press, Washington, DC.
Anderson, Paul A., University of South Florida. Project Oceanography. Neighborhood Water Quality.
hp://www.marine.usf.edu/pjocean/packets/f00/
nwq1.pdf
United States Environmental Protection Agency.
2012. Washington, DC. hp://water.epa.gov/type/
wetlands/restore/
SAVE International 2013. Dayton, OH. hp://www.
value-eng.org/value_engineering.php
Degenhardt, E. Clarence Cannon National Wildlife
Refuge Value Engineering study. 2011. USACE St.
Louis District.
Native Plant A plant that lives and thrives in its

place of origin
Phosphorus is a chemical element of atomic number 15, a highly reactive, poisonous, nonmetallic
element occurring naturally in phosphates
Phosphates- Phosphorous can come from natural
sources such as phosphate- containing rocks and
human sources such as fertilizers, pesticides,
detergents, and industrial wastes
pH- is pH is a measure of the hydrogen ion concentration; is a measure of a samples acidity and is
the most commonly used water quality test.
Restoration- the manipulation of the physical, chemical, or biological characteristics of a site with the
goal of returning natural/historic functions to
former or degraded wetland.
Re-establishment- the manipulation of the physical,
chemical, or biological characteristics of a site
with the goal of returning natural/historic functions to a former wetland.
Rehabilitation- the manipulation of the physical,
chemical, or biological characteristics of a site
with the goal of repairing natural/historic functions of degraded wetland.
Salinity- is the mass of the dissolved salts in a sample
of water.

46
Questions continued from page 31
are going because you might not get
there. Once you untangle that quote,
youll have to admit that Yogi was right. Its
especially important to know where youre
going before you ask a question, because
opening your mouth thoughtlessly can
put distance between you and the other
person. Think about what youre trying to
learn, as well as your motives and the possible effects of your question, before you
ask it. Remember, I-based questions are
often better left unasked.
The perception of a meaningful
underlying intent is vital to effective questioning, conrms Tumlin. If you believe
youre asking a good question but still
sense uncertainty in your conversational
partner, clear it up by saying something
like, Im trying to gure out how we might
improve our future client pitches, or, Id
like to know more about the way you work
so our collaboration can be more effective, or, I want to learn how the Smitheld
presentation went off track so we can try
to win them back.
Get and give permission. No one likes
to have their personal space invaded.
When youre asking questions, remember
that personal space isnt just physical. It
can extend to others memories, beliefs,
identities, motives, etc. Before entering
these territories conversationally, dont
overlook the simple idea of asking permission: May I ask you a question?
You can also tell the other person
he doesnt have to answer, comments
Tumlin. For instance, you might say, Can I
ask you some questions about the Smitheld account? You dont have to answer
them if you dont want to. Giving people a
sense of control in the conversation and a
choice about answering often helps them
feel like the conversational ground is safe
for responding.
Ask open questions whenever possible If you are trying to gather information and expand your understanding, youll
want to encourage the other person to talk
more, not less. Thats why open questions, which are designed to be answered
in paragraphs, not in a few words, are
so helpful. They give the other person
freedom to respond and help you to avoid
unintentionally shutting off helpful information.
Asking, Did you feel like the Acme
presentation went well? is structured to
produce a yes-or-no response, explains
Tumlin. Even if the respondent tells you
more, the question focuses attention on
the success of the past presentation,
when what you really need to talk about
may be something the presenter heard
the client say to a colleague or perhaps
a funny feeling the presenter has about
the clients new marketing director. These
things might come out in response to a

closed question about the presentation,
but the responder would have to make
an effort to swim against the tide of the
closed question.
Remember, people are busy, so when
we ask questions that can be answered
in a few wordswhen we give them the
ability to take a shortcut as opposed to a
more extended responsetheyll often
take it, he adds.
Here, according to Tumlin, are some
of the most versatile open questions:
What do you think?
How do you feel about this?
What else should I know?
What questions can I answer?
Additionally, you can readily construct open questions by using the phrases
how did, how was, please describe, please
explain, please discuss, and please tell me
more, Tumlin adds. For example: Please
tell me more about your idea. How did you
feel about that? Please discuss the Gatorville account proposal. Please explain
your conclusion in more detail.
and use closed questions prudently.
Despite Tumlins warning not to use closed
questions too frequently, he admits they
can be helpful in the right circumstances.
Closed questions (in other words, those
that can be answered in a handful of
words) are easy to spot because they
often start with words like who, when,
where, is, or do: Who can help us get
this done? When is the project due?
Where do I get more information? Is
this the job you want? Do you like your
boss?
Closed questions are useful for
simple informational queries (When is the
meeting? Is Sally still our HR contact?),
for limiting the range of potential responses, or for expediting a conversation,
he shares. But be very careful not to slip
into the habit of closing off your questions
when you are trying to establish dialogue
and encourage conversational participation.
Be polite. Youll notice that please
occurs frequently in many examples and
phrases above. This is pragmatic etiquette.
(Yes, your mother was on the right track
when she insisted that you use please
and thank you.) Remember the stranger
on the bus? When you asked, Could
you move over? you got an icy glare in
response and then suffered through an
uncomfortable 20-minute ride. What if
instead you said, Im sorry, could I please
trouble you to move over just a bit? Thank
you so much!
Its very simpleso simple, in fact,
that you may be tempted to overlook
itbut making a point to be polite when
asking questions can greatly change the

outcome, says Tumlin. Adding a please
to your questions helps to signal your positive intent, can foster trust, and can reduce
reexive resistance.
Let people talk. In a world lled with
constant chatterboth spoken and digitalsilence is a rarity, and it often makes
us uncomfortable. When theres a pause
in conversation, your rst impulse may
be to jump into the breach and ll it with
whatever words rst come to mind. But
especially when youre asking important
questions, do your best to tame that impulse and hold your tongue.
People require some space to absorb
information, formulate their responses, and
deliver them effectively, shares Tumlin.
So sit back and let your good questions
work their magic. Dont sabotage your
questions by being afraid of silence. A
pause following a good question usually
signals contemplation, not consternation.
If you jump in too quickly, you shortchange
the process.
Use nudges liberally. Nudges are
stand-alone phrases like tell me more, I
see, and go on, which are often used following an open question to maintain the
smooth ow of information.
Nudges are a simple but effective
way to keep a line of inquiry active, comments Tumlin. Theyre also a good way to
let the speaker know that you are paying
attention. People will almost always be
willing to share more if they believe that
you are receptive and interested.
Without a doubt, learning to ask
better questions will improve your relationships at work and at home, concludes
Tumlin. Youll avoid some conicts and
youll insert less confusion and anxiety
into your conversations. Better questioning skills will reduce resistance to your
queries and will help you establish more
productive and meaningful dialogue.
About the Author

Geoffrey Tumlin is the author of Stop
Talking, Start Communicating: Counterintuitive Secrets to Success in Business and in
Life. He is the founder and CEO of Mouthpeace Consulting LLC, a communication
consulting company; president of On-Demand Leadership, a leadership development company; and founder and board
chair of Critical Skills Nonprot, a 501(c)(3)
public charity dedicated to providing communication and leadership skills training to
chronically underserved populations. His
writing on communication and leadership has appeared in Discourse Studies,
the International Leadership Journal, the
Encyclopedia of Leadership, the Austin
American-Statesman, and ve editions of
Professional Communication Skills.

47
Numerical Value Analysis and Evaluation

Techniques of the Esteem Function
Kayo Uchida
Abstract
In this paper, the author shows methods for
analysis and evaluation of Esteem Function and its
incorporation into VE job plans. The author has developed a new evaluation method for esteem functions
by building on the existing Sense VE which has
been practiced widely in Japan. So far, the author has
found it dicult to deal with esteem functions: Unlike use functions, esteem functions cannot be quantied. The author has introduced original graphs as
vital tools for familiarizing various industries with
VE. The graphs shown in this paper will go a long
way to applying VE to such elds as medicine and
service, which commonly deal with esteem function.
Keywords
Esteem Function, Sense VE, Medical Services,
Dentistry, Classication
Introduction
The objective of VE is to study problems with
products or services from a customers viewpoint
and increase their value. The Society of Japanese
Value Engineering (SJVE) denes VE as concerted
eorts for studying certain products or services to
denitely achieve their required functions at the minimum life-cycle costs. In other words, VEs purpose
is to increase values for certain products or services
by representing their value in the relations between
their function and cost. Its formula is:
Value = Function/Cost
Wherein, generally, there are two functions: the
use function and the esteem function. Each of their performance is evaluated from a customers viewpoint.
The use function is a function related to the intended
purpose of certain products or services, whereas the
esteem function is a function related to users senses

such as preciousness or satisfaction when they own
products or receive services. In Japan, VE has been
applied mostly to the manufacturing industry and is
relatively unknown to other industries. It was during
1960s when VE was rst introduced in Japan. Some
manufacturers began to use VE for cost reduction.
To choose lower-cost materials, its use spread from
these companies material departments to planning,
design, and manufacturing departments. Recently,
VE has been applied to the non-manufacturing
industries. However, VE has yet to be applied to the
service sector. To let VE crack the connement of
manufacturing and get stages in medicine and service sectors, it is essential to establish steady study,
standardization, and evaluation methods for esteem
function. This paper presents how I devised Sense
VE and its on-site use in medicine and the service
sector.
Value Engineering in Japanese

Medical Services
In Japan, dental practitioners are currently under
a tough climate with more dentists or dental clinics
than necessary, resulting in cuhroat competitions
among themselves. There are 68,000 of them, topping the number of ubiquitous convenience stores
by 20,000, which is said to be many. In the Tokyo
metropolitan area for example, one clinic per a day
goes out of business. The ailment is aributed in part
to the diculty in drawing patients. In the sphere
of Japans medical services, most people still think
dental clinics to be places for pain relief rather
than health maintenance or preventive care. As a
freelance dental hygienist, I have participated in the
start-ups and reforms of dental clinics, and conducted drawing-in activities for them throughout Japan.
The vast majority of dental hygienists in Japan work
full-time; freelancers such as I account for not more

48
than 5 percent of the total. While there are various
improvement methods in the dental service industry,
VE is not among them. This competition-stricken
industry wanting something to change the current
situation is the one that benets the most from VE
introduction. It seems that the inadequate evaluation
of esteem function has rendered VE underutilized.
What it takes to raise its awareness is prominence of
the fact VE works, that is, It boosts values. Since
any new methods need to be not only eective but
also ecient, I have newly developed techniques to
analyze senses by adding two novel analysis methods such as introduction of original graphs to existing Sense VE.
1. Sense Value Analysis (by existing VE)
2. Sensibility Value Analysis
VE and Ones Sense

Sense VE
Medical and service industries are highly dependent on ones senses. In Japan, there is a VE called
Sense VE, purpose of which is to apply VE to ones
senses. The greatest advantage of using Sense VE is
that it enables us to evaluate esteem functions. The
major problem with esteem functions lays in the
fact that they are dicult to embody before they are
quantied and evaluated. When employing Sense
VE, we have a questionnaire as follows:
Quantication of VE
The application of Sense VE enables us to enhance repeatability of requirement for esteem functions, but there are still some shortcomings in its
quantication and evaluation. The use of the existing Sense VE was nothing more than a platform for
improvement. It is dicult to evaluate unquantiable
esteem function whereas use function can be described
by using quantiable objects. Development of methods for quantication and/or evaluation of esteem
function is called for.
Sense Value Analysis

Outline of Sense Value Analysis
Merits of this method are as follows:
Analysis of the questionnaire gives clear pictures
of what problems users have and what improvements they call for;
Organizing and visualizing users latent demand
on an interest tree chart facilitates comprehension;
Users interest level can be quantied.
Procedure
Use questionnaire sheets;

Conduct in open- ended answer styles
1.
2.
3.
4.
The following are the advantages of adopting

questionnaires:
Actual cases
Understand users demand directly from them;

Know what users think are the advantages and
disadvantages of things of interest;
Know users comfort and discomfort;
Measure users interest levels.
In making FAST diagrams by conventional VE,
Esteem Functions are represented in the lump as
Keep Beauty or Give Comfort. On the other
hand, this formula of Transitive Verb + Object is
represented in more detail by Sense VE as I like or
dislike it because XX (sense item) of its YY (part) is
ZZ (status description), and it is reected in making
FAST diagrams.
Conduct a questionnaire by VE;

Draw up an interest tree chart;
Work out measures to improve favorability;
Draw up an improvement check list.
To identify what to improve about dental clinics

in general, instead of a particular one, I conducted a
questionnaire as follows:
I like/dislike dental clinics because is/are .
I picked men and women in their twenties

through sixties as questioners by random sampling.
Seventy percent of them were ones invited over the
internet, and the rest thirty percent were patients
at dental clinics: To minimize the response bias by
clinic-going patients, who likely have good opinions of clinics, I made questioners from the internet
the majority. Table 1 (next page, top left) shows the
results.

Sense Item
Status
49
Like
Dislike
2
Building
Neat and clean

Not hospitallike
11
Dentists
Dental
Hygenists
Polite, Nice,
Crude, Skilled,
Pretty, Beautiful,
Handsom
53
Sound
Smell
Offensive, Scary,
Peculiar
36
Appointment
Flexible,
Troublesome
11
Time
Tying, Keeping You

Waiting, Lenghty
25
Fee
Expensive, Reasonable, Not Covered by Insurance
Treatment
Frightening, Painful, Not Painful,

Preventive, Refreshing, Uncommunicative, Wellstreamlined
Facilities
Dentist
Human
Dental Hygienist
17
Sound
Dental Clinic
Five Senses
Smell
Time
Contents of
Treatment
Medical Treatment
Cost
65
64
Figure 1. Interest Tree Chart
Table 1. Like/Dislike Dental Clinics

Three hundred open-ended comments were obtained from 111 questionees. Based on this research,
results were broken into the following ve categories.
1.
2.
3.
4.
5.
Reservation
Amount of Time,
Number of Visits
Personnel (sta, dentists, dental hygienists);

Building (clinic equipment);
Objects of ve senses (sound, smell);
Duration, number of treatments;
Treatment.
It has caught the eye that the highest interest is

then the issues on ve senses. A lot of users feel
a sense of displeasure on smell and sound and is
very strong on that. Interest is higher in amount
of time, number of visits and reservation. Visits to
dental clinic bind your time for a long time or take a
number of times. It is found as a requirement to end
in a short time or in a short period of times and is
higher in a sense of displeasure than of likability.
Using Sense VE, we can learn of invisible likability and displeasure. Dental clinics are originally
the place to receive medical treatment. However, we
can nd that the users are interested in many things
other than the treatment.
Based on the ndings above, the author reorganized the FAST diagram as below (Figure 2, boom).
I drew up an interest tree chart (Figure 1, top right)
by categorizing the comments extracting sense items
Figure 2. FAST Diagram

from them, and listed measures to take at clinics to
improve favorability in Figure 3 (next page). Based
on these items, I drew up the check list (Figure 4,
next page) available at clinics for reviewing the status
of clinics. By completing the list, they can raise users
satisfaction. This check list can be used universally

50
Keep the clinic interior clean
The less hospital-like, the better
Staff and practitioners should be polite
The prettier the dental hygienists, the better

(constant smiles make you look pretty)
Treatment noise should be inaudible to anyone

by the undergoing patient
Do not use distinctively smelling chemicals
Make use of aroma
Brief patients on treatment fees
Give patients as less pain as possible
District patients from pain
Use silent equipment
Figure 3. Favorability Improvement Check List

1) Building
Keep the interior of the clinic looking
clean (Give patients visibility of cleanliness. Messy places do not look clean even
if they are.)
Minimize hospital-like atmosphere about
the building and its interior
Play soothing BGM
Treatment noise should be inaudible to
anyone but the undergoing patient
Do not use distinctively smelling chemicals
such as form cresol
Handle distinctively smelling chemicals
with care
Pay attention to management and storage
of distinctively smelling chemicals
Use indoor aroma
2) Staff
Be polite to patients
Be nice to patients
Female staff must keep their beauty (Note
that beauty does not mean only facial
beauty. Wearing a smile all the time makes
you look beautiful.)
3) Treatment
Do not use ultrasonic scalers (maybe unrealistic, though)
When treating decay, use triple-speed cutting tools instead of high-speed ones
Be considerate of patients, especially when
using noise-making equipment
Practice pain-free treatment
Figure 4. Improvement Check List
at various places and by dierent sta. Each clinic

can make more use of this list by conducting customized survey with questionnaires on senses to
come up with more specic measures. The measures
to be taken include givens, which, however, at
times tend to be overlooked. Looking at the check
list means reviewing daily routines, which leads to
service improvement resulting in increased patient
draw and adoption rates.
Sensibility Value Analysis

Outline
I found that Users Sense can be measured if
we know its range. There is a dierence in peoples
senses and its range. Senses such as users experience
and feel are considered relative and they vary from
user to user. For example, ve minutes is a xed
period of time at any place on the globe, but people
have dierent senses of ve minutes, depending
on how they spend it or where they are. Evaluation
in Sense Value Analysis is made feasible by quantifying esteem function. To this end, I have dened
Sensitivity Range as the dierence between the
maximum tolerable value and the minimum tolerable
value of parameters for each sense item. Thus, esteem
function can be quantied.
Procedure
1. Draw users interest by Sense VE (See procedure
in Sense Value Analysis);
2. Specify items to improve;
3. Questionnaire;
4. Graph analysis;
5. Analysis
Case Analysis
In the following case, I chose dental check-up and
cleaning as the subject to study. Shown below is the
question I asked.
Assume that you are here for a dental check-up and
cleaning for every three months. Cleaning could be
very comfortable with no pain. Within how many
minutes do you feel it is short for cleaning? Over
how many minutes do you feel it is long for cleaning?

From this questionnaire, I drew the following two
parameters:
Minimum tolerable time (minimum value);
Maximum tolerable time (maximum value)
To analyze variability and relationships among
each sense datum obtained from the above questionnaire, I drew up the graph (Figure 5, below), where
the horizontal axis denotes sample values (cleaning
time), and the vertical axis is shared by the percentage of questioners who expressed their satisfaction
(shown by the bars) and that of those who gave each
of maximum value (the solid line) and minimum
value (the doed line). Take 22 minutes cleaning
time for example: 37 percent of the questioners felt
it to be too short, and 10 percent of them, too long.
The intersection of the two lines gives the following
information.
To analyze variability and relationships among
each sense datum obtained from the above questionnaire, I drew up the graph (Figure 5), where the horizontal axis denotes sample values (cleaning time),
and the vertical axis is shared by the percentage of
questioners who expressed their satisfaction (shown
by the bars) and that of those who gave each of
maximum value (the solid line) and minimum balue
51
(the doed line). Take 22 minutes cleaning time for
example, 37 percent of the questioners felt it to be too
short, and 10 percent of them, too long. The intersection of the two lines gives the following information.
Sample values that have high satisfaction ratings
Variability of satisfaction ratings
The range of sample values with high satisfaction ratings is obtained from the horizontal axis, and
the variability of satisfaction ratings from the vertical
axis. For example, the range of cleaning time with
which 50 percent or more of the questioners are satised is from 22 minutes to 29 minutes, in which range
the satisfaction ratings assume various values. The
samples, 23 and 24 minutes have the mode, which
has only a 63 percent satisfaction rating.
The graphs for this application can be categorized
into the following three types:
Satisfactory Type: Graphs having no intersection
of lines (Figure 6, below);
Average Type: Graphs with the intersection sitting below the 30% line (Figure 7, below);
Unsatisfactory Type: Graphs with the intersection
siing above the 30% line (Figure 8, below).
I have found the following tendencies:
The lower the intersection is, the less dispersion
of parameter values there is.
The higher the lines are, the more dispersion of
parameter values there is.
I have found the following two facts by comparing these three types of graphs:
1. The longer the bars are, the beer.
2. The fewer the bars are, the beer.
Figure 5. Cleaning Time
Figure 6. Satisfactory Type
The average type satises the both; the unsatisfactory type needs improvement. By this method, I have
successfully quantied esteem function, which was
Figure 7. Average Type
Figure 8. Unsatisfactory Type
52
so far an abstract concept. In this case of Time for
Dental Check-up and Cleaning, I evaluated esteem
function sensory time. Its graph shows that the
intersection appears below the 30 percent line, which
means it is Average Type. Thus, it can be concluded
that the cleaning time cited for this case satises
roughly half of all people.
Application of Sense VE
Incorporation of Sense VE into VE Procedures
I propose that VE be incorporated into existing
VE procedures. The ow varies with the methods of
analysis. Sence value analysis can use Step1 (information collection on VE objects) and Step 5 (evaluation
of function).
Sensibility value analysis can use Step 1 (information collection on VE objects) and Step 4 (cost analysis by function).
Future Outlook
The analysis method that I have developed can
help improve value by quantifying and evaluating
esteem functions. We can use this method to understand things relatively and can apply it to other VE
studies.
Conclusion
In this paper, I have described the following:
An analysis method for esteem functions and its
ow;
An evaluation method for quantifying esteem
functions which are sensitive to human feeling
and atmosphere and are considered dicult to
quantify;
VE that was rst introduced to the Japanese dental industry;
Findings of a way to correct the shortcoming of
the existing Sense VE;
A new VE method applicable to other VE studies.
I have developed an unprecedented method to
quantify esteem functions. I hope that this method
will be introduced to many other industries such as
the service sector. Indeed, VE has changed my own
work aitude. With the use of VE, I have found it

much easier for me to work. My next mission is to introduce VE in the Japanese medical services, to begin
with, where very few people know what VE is. They
can benet greatly from VE application.
References
Mitsuo Nagamachi,1989, Sense Engineering, Kaibundo, Japan
Hiroshi Kobayashi, 1990, Introduction to Sense
Study, Sanno University Press, Japan
Koji Yamamoto, 1997, Target Cost Management and
Value Engineering for Sensitivity, Osaka Prefecture University Economics Study, Japan
Hirohiko Asano, 2001, The Practical Guide to Preference-based Design, Kaibundo, Japan
Ichirou Ueno, 2007, VE Handbook, SJVE, Japan
Hisaya Yokota, 2008, One-up Problem Solver: An Invitation to the Functional Approach for Switching
Your Gear, Discover Twenty-One, Japan
Hisaya Yokota, 2010, Functional Approach Introductory Book for Problem Solving, Discover TwentyOne, Japan
Hisaya Yokota, 2012, Functional Approach Chief Researcher Course Textbook, Functional Approach
Institute, Japan
About the Author

Kayo Uchida holds a
Bachelor of Dental Science from
Tokyo Medical and Dental
University. She currently works
as a dental hygienist and smile
trainer. As a smile trainer, she
has conducted numerous lectures and seminars throughout
Japan, including the one for the
Miss Universe Japan. She has
also made many appearances on
TV programs and in magazines.
Meanwhile, as a freelance dental
hygienist, she has provided consultations for dental clinics
throughout Japan. At Functional Approach Institute Co.,
Ltd., Miss Uchida serve as a functional approach trainer,
applying VE to the dental industry for its improvement.
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The Journal of SAVE International
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ISSN 1553-8508 (print)

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Editors Message: Achieving Efciency by Unlocking

Innovation in System Design and Engineering
Mohammed A. Berawi, Ph.D.
Value Engineering Advisory System in Construction

Projects (VEAS)
I. Albalushi, F. Usman, and A. Alnuaimi
21 Business Sustenance through Open Innovation at Tata

Motors Limited
G. V. Srirama Kumar
32 Improving Feasibility of Mega Infrastructure Project

Development Using Value Engineering Method
Mohammed Ali Berawi, Bambang Susantono, Suyono Dikun,
Tommy Ilyas, Herawati Zetha, Abdur Rohim Boy Berawi, Teuku
Yuri Zagloel, Perdana Miraj, and Jade Sjafrecia Petroceany
32 Do Your VEERP?
47 Numerical Value Analysis and Evaluaton Techniques of

the Esteem Function
Kayo Uchida

Value World Spring 2014

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The Journal of SAVE International

VOL. 37 | NO. 1 | SPRING 2014

Value World Editorial Policy

SAVE International Board of Directors

President: James D. Bolton, PE, CVS-Life, PVM, FSAVE

Value World is published electronically and may be downloaded from the

ISSN 1553-8508 (print)

Editors Message: Achieving Efciency by Unlocking

Value Engineering Advisory System in Construction

21 Business Sustenance through Open Innovation at Tata

32 Improving Feasibility of Mega Infrastructure Project

47 Numerical Value Analysis and Evaluaton Techniques of

VALUE WORLD | VOL 37 | NO 1 | SPRING 2014

Achieving Efciency by Unlocking

Innovation and Efciency = Value

VALUE WORLD | VOL 37 | NO 1 | SPRING 2014

VALUE WORLD | VOL 37 | NO 1 | SPRING 2014

Value Engineering Advisory System in

mand and supply of material and workers while the

VALUE WORLD | VOL 37 | NO 1 | SPRING 2014

tion. Yuh and Ching (2005) and Dallas (2006) and

VALUE WORLD | VOL 37 | NO 1 | SPRING 2014

2. Value Engineering Advisory

Objectives may not be clear or well-described in the

Objectives are studied and revised until they become

The requirements are readily collected from the client

The requirements are based on the objectives and

The engineer dictates the design stage. Little input

The design stage includes collective inputs from the

Focus is on object-model according to methods, disciplines, or states of the art.

Focus is on system-model and surrounding environment.

Very little or no function weighing and measuring

Functions are weighed and performance is measured

It is very difcult to measure outcomes.

Outcomes are measured in terms of objectives, cost,

The designer develops the model based on problem

The team develops the model based on performance

Focus is on technical constrained optimality.

Focus is on functions and values.

Consideration of risk factors is minor and depends on

Risk analysis is part of the performance and integrated

The designer focuses on the main elements of the

WBS is used in the design elements, the chances for

Costs are controlled and more analysis is done to keep

VALUE WORLD | VOL 37 | NO 1 | SPRING 2014

3.1 Phase 1: Inception and objective phase

Table 2. Phase activities of VEAS

Function, Component and Sub-component Phases

Inception and objectives

Activities and Application of Phase

1. Collect required infromation about location and environment of

1. Create functions using FAST technique

1. Use creative thinking to develop alternatives

5. Development and presentation

1. Drawings, specication, and quantities

1. Tender evaluation and cost analysis

VALUE WORLD | VOL 37 | NO 1 | SPRING 2014

Table 4: Risk objectives and management in VEAS phases

Risk Study Objective

Risk Study Output

1. Inception and objectives

Requirements t the objectives of the project