Post on 18-Dec-2015
Value for EuropeValue for Europe
Improved cost efficiency and effectivenessImproved cost efficiency and effectiveness
Value EngineeringValue Engineering
Árpád Fodor
Certified Value Specialist-Life,Professional in Value Management
High Level Meeting on the Future of Cohesion Policy31 March – 1 April 2011, Budapest, Hungary
The European Governing Boardof the Value Management Training and Certification System
Value for EuropeValue for Europe
2
Goals of Presentation
1 Highlight the Importance of Value Engineering
2 Regulation of Value Engineering
3 Prevent Unnecessary Expenditures of € Billions / Years
The European Governing Boardof the Value Management Training and Certification System
Value for EuropeValue for Europe
3
Agenda
1 Value Engineering Approach Through Examples and Results
2 Value Engineering in Hungary and Europe
3 Next Steps
The European Governing Boardof the Value Management Training and Certification System
Value for EuropeValue for Europe
4
Agenda
1 Value Engineering Approach Through Examples and Results
2 Value Engineering in Hungary and Europe
3 Next Steps
The European Governing Boardof the Value Management Training and Certification System
Value for EuropeValue for Europe
5
Focus on the Focus on the function and notfunction and not
on existing solutionon existing solution
‘Functional Thinking’
6
We capitalise the functions!
7
Paks Nuclear Power Plant – Water Recuperation power plant
8
Paks Nuclear Power Plant – Water Recuperation power plant
9
Paks NPP - Water Recuperation power plant – Original idea
€24 million
10
Paks NPP - Value Engineering proposal
11
Paks NPP - Value Engineering proposal (cont)
12
Result of Value Engineering:Cost savings of €3.5 million and the project has commenced
Paks NPP - Visualisation – November 2009
13
The visit of Pope John Paul II in Hungary – Gyõr, 1996
Parameters: 150-200,000 believers, 15,000 cars,3,000 buses, 1 night and a half day
Original cost (before VE): €1.6 million
14
What are the functions?
Provide area – €0.4 millionParking (bus, car) Provide podium – €0.1 millionIlluminate area – €0.3 million
….….
12 VE Proposal – Total cost savings: €1.4 million (87%)
The visit of Pope John Paul II in Hungary – Gyõr, 1996
Coordinate traffic
15
Dual 2-lane motorway + emergency lane60 km, €357 million
Motorway - Planning permission
16
Motorway - Planning permission K11 Canal Track – Original Idea
17
Parameters of the object
Length: 13.2 metre
Width: 33.83 metre
Surface: 447 m²
Net unit cost €1,830 / m²
Cost estimate: €0.85 million
Motorway - Planning permission K11 Canal Track – crossroads object
18
1 m
Motorway - Planning permission K11 Canal Track (continued)
Is there room for increasing efficiency?
19
What is the function?
1 m
From perspective of the designer: ‘to cross waterway’
Interpretation of VE team: ‘to ensure water supply of the area’
Motorway - Planning permission K11 Canal Track (continued)
20
Motorway - Planning permission VE Proposal – Modification of K11 Canal Track
€125,000
Cost saving of €725,000
21
Motorway - Planning permission Dirt Road Flyover
22
60km - 12 dirt road objectsTrack width of the objects: 7.5m; Track structure size: 8.63m
Motorway - Planning permission Dirt Road Flyover
23
Motorway - Planning permission Munich Ring, North (E52) - Dirt Road Flyover
24
Width of dirt road 3.5mExisting asphalt road 4m
Width of track structures 4.5m
Motorway - Planning permission Munich Ring, North (E52) - Dirt Road Flyover
25
Current
(track width 7.5m)
Proposal A
(track width 6m)
Proposal B
(track width 5m)
€9.2 million €7.6 million €6.6 million
Cost Saving: €1.6 million (17%) €2.6 million (28%)
Impact of Value Engineering Proposal
…only 60-km motorway track!
VE proposal: Modify the width of the objects
Motorway - Planning permission Dirt Road Flyover
26
Original cost estimate: €357 million
Result of Value Engineering Study (20 proposals):Cost savings of €43 million (12%)
Motorway - Planning permission
27
Agenda
1 Value Engineering Approach Through Examples and Results
2 Value Engineering in Hungary and Europe
3 Next Steps
The European Governing Boardof the Value Management Training and Certification System
Value for EuropeValue for Europe
28
Public Procurement Act – from 1996
In the invitation to tender, the company or the government body can require the tendererto apply Value Engineering methodology
Value Engineering in Hungary
29
Value Engineering in Hungary
30
Strategies
National Autism Strategy – Preparation of Government Decree
Drafting Laws, Professional documents
Sign Language Interpreter Service
Employment Act
Projects
Public Procurement action plan (National Development Agency)
Balance of Payments – preparation of computer software(Hungarian National Bank)
Process Management System (Paks Nuclear Power Plant)Original version: 155 Processes; VE Proposal: 57 Processes
etc.
…and not only for Investment Projects
31
Since 1999VE review of 85 Motorway Investment plans
in Hungary
Total Estimated Construction Costs: €2.9 billionCost Savings: €393 million (13%)Additional Costs: €39 million (1%)
… and at higher quality!
Results of VE Studies in Motorway Investments, Hungary
32
European Transportation Market in 2007-2013:
Ten-T: €9 billion;
Structural and Cohesion Funds: €43 billion;
The Member States from their own Budget: €196 billion;
European Investment Bank: €65 billion loan.
„The available funds of €300 billion will not cover all necessary investments.”
Zoltán Kalocsai: Through the common prosperityRoads and Transportation, XX. 1. Issue Februar 2011
European Data
The European Governing Boardof the Value Management Training and Certification System
Value for EuropeValue for Europe
33
10% cost efficiencyReturn of Investment
at least 100:1
Would I spend my money this way?
The European Governing Boardof the Value Management Training and Certification System
Value for EuropeValue for Europe
34
1
More projects from the same budget
Investments and projects at higher quality
Higher standard of living in Europe
Quicker developments and reduced risk of delays
Reduction of risk management in decision making
Increased efficiency andcompetitiveness of the European Union
23456
How can the European Union gain from the application of Value Engineering?
35
Agenda
1 Value Engineering Approach Through Examples and Results
2 Value Engineering in Hungary and Europe
3 Next Steps
The European Governing Boardof the Value Management Training and Certification System
Value for EuropeValue for Europe
36
Next steps
Analyze development methodologies(i.e. Value Engineering)
Provide training and promote ‘functional thinking’
Develop pilot scheme
Mainstream implementation
The European Governing Boardof the Value Management Training and Certification System
Value for EuropeValue for Europe
37
Thank you for your attention!
The European Governing Boardof the Value Management Training and Certification System
Value for EuropeValue for Europe
38
Contact Details
Árpád FodorCertified Value Specialist-Life,
Professional in Value Management
Phone / Fax: +36-1-2838630
Mobile: +36-20-9682938
www.microva.humicrova@microva.hu
The European Governing Boardof the Value Management Training and Certification System
Value for EuropeValue for Europe