Ecosystem Interactions Class Discussion Presentation in Blue Green Lined Styl...
10a_req
1. VALUE RE-ENGINEERING
Introduction
Value engineering began at General Electric Co. during World War II. Because of
the war, there were shortages of skilled labor, raw materials, and component parts.
Lawrence Miles, Jerry Leftow, and Harry Erlicher at G.E. looked for acceptable
substitutes. They noticed that these substitutions often reduced costs, improved product,
or both. What started out as an accident of necessity was turned into a systematic
process. They called their technique ―value analysis‖.
Definition
Value Engineering (VE) is a methodology that focuses on the function of a product
or service to improve value without sacrificing quality or reliability. VE involves
assembling a cross section of multi-disciplined professionals and enabling them to work
together, each bringing a unique perspective and expertise to the assignment. VE relies
heavily on team-building principles, and focuses on effective communicating, careful
listening and understanding, the generation of creative solutions, and efficient decision
making.
Value Job Analysis Plan
Value engineering is often done by systematically following a multi-stage job
plan. Others have varied the job plan to fit their constraints. Depending on the
application, there may be four, five, six, or more stages. One modern version has the
following eight steps:
1. Preparation
2. Information
2. 3. Analysis
4. Creation
5. Evaluation
6. Development
7. Presentation
8. Follow-up
Four basic steps in the job plan are:
Information gathering - This asks what the requirements are for the object.
Function analysis, an important technique in value engineering, is usually done
in this initial stage. It tries to determine what functions or performance
characteristics are important. It asks questions like; What does the object do?
What must it do? What should it do? What could it do? What must it not do?
Alternative generation (creation) - In this stage value engineers ask; What are the
various alternative ways of meeting requirements? What else will perform the
desired function?
Evaluation - In this stage all the alternatives are assessed by evaluating how well
they meet the required functions and how great will the cost savings be.
Presentation - In the final stage, the best alternative will be chosen and
presented to the client for final decision
Benefits
Lowering Overhead & Material costs
Improving quality management
Improving resource efficiency
Simplifying procedures
Minimizing paperwork
Lowering staff costs
Increasing procedural efficiency
Optimizing construction expenditures
Developing value attitudes in staff
Competing more successfully in marketplace
3. TOTAL QUALITY MANAGEMENT
Introduction
After World War II, the U.S. was the only major power with an intact economy.
Deming and Juran found their quality improvement theories irrelevant to U.S. business
leaders. They were interested in quantity, not quality. Deming found a more
appreciative audience in Japan, where he was conducting postwar census work. He was
invited to speak about his views during a now-famous dinner in the early 1950's.
Shortly after, Dr. Deming predicted in the early 1950's that the Japanese
industry would become a world-class force equal to any other country. Everyone around
the world laughed. The Japanese didn't laugh . They worked hard to apply the lessons
learned. Henry Ford's book on manufacturing (written decades earlier) became a
Japanese best seller.
There was a weekly radio program that trained workers, lead hands,
supervisors, and managers on statistics and Dr. Deming's methods. It became a
national hit in most Japanese homes. Drs. Deming and Juran because celebrities in
constant demand as speakers and consultants.
Decades later, the Emperor of Japan awarded Dr. Deming with the highest
Japanese award for a civilian in recognition for his decades of hard work and leadership
he gave to the Japanese people and their government.
The Japanese business leaders listened, the rest is history.
Definition
A holistic approach to long-term success that views continuous improvement in all
aspects of an organization as a process and not as a short-term goal. It aims to radically
transform the organization through progressive changes in the attitudes, practices,
structures, and systems.
Total quality management transcends the product quality approach, involves
everyone in the organization, and encompasses its every function: administration,
communications, distribution, manufacturing, marketing, planning, training, etc.
The continuous process of reducing or eliminating errors in manufacturing,
streamlining supply chain management, improving the customer experience and
ensuring that employees are up-to-speed with their training. Total quality management
aims to hold all parties involved in the production process as accountable for the overall
quality of the final product or service.
4. Elements
Customer-focused. The customer ultimately determines the level of quality. No
matter what an organization does to foster quality improvement—training
employees, integrating quality into the design process, upgrading computers or
software, or buying new measuring tools—the customer determines whether the
efforts were worthwhile.
Total employee involvement. All employees participate in working toward
common goals. Total employee commitment can only be obtained after fear has
been driven from the workplace, when empowerment has occurred, and
management has provided the proper environment. High-performance work
systems integrate continuous improvement efforts with normal business
operations. Self-managed work teams are one form of empowerment.
Process-centered. A fundamental part of TQM is a focus on process thinking. A
process is a series of steps that take inputs from suppliers (internal or external)
and transforms them into outputs that are delivered to customers (again, either
internal or external). The steps required to carry out the process are defined,
and performance measures are continuously monitored in order to detect
unexpected variation.
Integrated system. Although an organization may consist of many different
functional specialties often organized into vertically structured departments, it is
the horizontal processes interconnecting these functions that are the focus of
TQM.
Micro-processes add up to larger processes, and all processes
aggregate into the business processes required for defining and
implementing strategy. Everyone must understand the vision,
mission, and guiding principles as well as the quality policies,
objectives, and critical processes of the organization. Business
performance must be monitored and communicated continuously.
Every organization has a unique work culture, and it is virtually
impossible to achieve excellence in its products and services unless a
good quality culture has been fostered. Thus, an integrated system
connects business improvement elements in an attempt to continually
improve and exceed the expectations of customers, employees, and
other stakeholders.
Strategic and systematic approach. A critical part of the management of quality
is the strategic and systematic approach to achieving an organization’s vision,
mission, and goals. This process, called strategic planning or strategic
management, includes the formulation of a strategic plan that integrates quality
as a core component.
Continual improvement. A major thrust of TQM is continual process
improvement. Continual improvement drives an organization to be both
analytical and creative in finding ways to become more competitive and more
effective at meeting stakeholder expectations.
5. Fact-based decision making. In order to know how well an organization is
performing, data on performance measures are necessary. TQM requires that an
organization continually collect and analyze data in order to improve decision
making accuracy, achieve consensus, and allow prediction based on past
history.
Communications. During times of organizational change, as well as part of day-
to-day operation, effective communications plays a large part in maintaining
morale and in motivating employees at all levels. Communications involve
strategies, method, and timeliness.
Objectives
Process improvement
Defect prevention
Priority of effort
Developing cause-effect relationships
Measuring system capacity
Developing improvement checklist and check forms
Helping teams make better decisions
Developing operational definitions
Separating trivial from significant needs
Observing behaviour changes over a period of time
6. THEORY OF CONSTRAINTS
Introduction
Theory Of Constraints (TOC) adopts the common idiom "a chain is no stronger
than its weakest link". This means that processes, organizations, etc., are vulnerable
because the weakest person or part can always damage or break them or at least
adversely affect the outcome.
It was created by Dr. Eli Goldratt and was published in his 1984 book "The
Goal." According to Goldratt, organizational performance is dictated by constraints.
These are where bottlenecks occur that prevent an organization from maximizing its
performance and reaching its goals. Constraints can involve people, supplies,
information, equipment, or even policies, and they can be internal or external to an
organization.
Definition
The theory says that every system, no matter how well it performs, has at least
one constraint that limits its performance – this is the system's "weakest link." The
theory also says that a system can have only one constraint at a time, and that other
areas of weakness are "non-constraints" until they become the weakest link. The theory
was originally used successfully in manufacturing, but it can be used in a variety of
situations. It's most useful with important or frequently-used processes within your
organization.
STEPS IN APPLYING THE THEORY
Exploit the Constraint
The first step is to identify your weakest link – this is the factor that's
holding you back the most. Start by looking at the processes that you use regularly. It
can help to use tools like Flow Charts, Swim Lane Diagrams, Storyboarding, and
7. Failure Modes and Effects Analysis to map out processes and identify what's causing
issues.
Remember that constraints may not just be physical. They can also include
intangible factors such as ineffective communication, restrictive company policies, or
even poor team morale. Also bear in mind that, according to the theory, a system can
only have one constraint at a time. So, you need to decide which factor is your weakest
link, and focus on that.
Subordinate and Synchronize to the Constraint
―Subordinate everything to the constraint." This means that all other
organizational processes should also focus on eliminating the constraint. Solutions will
vary depending on the team, your goals, and the constraint you're trying to overcome.
Evaluate Performance of the Constraint
Review how the system is performing with the simple fixes you've put
into place.
Repeat the Process
Once you've eliminated the constraint, you can move back to step 1 and
identify another constraint.
8. LIFE-CYCLE COSTING
Introduction
Life-cycle cost analysis (LCCA) is a method for assessing the total cost of facility
ownership. It takes into account all costs of acquiring, owning, and disposing of a
building or building system. LCCA is especially useful when project alternatives that
fulfil the same performance requirements, but differ with respect to initial costs and
operating costs, have to be compared in order to select the one that maximizes net
savings. Lowest life-cycle cost (LCC) is the most straightforward and easy-to-interpret
measure of economic evaluation.
Definition
Procurement and production costing technique that considers all life cycle costs.
In procurement, it aims to determine the lowest cost of ownership of a fixed asset during
the asset's economic life. In manufacturing, it aims to estimate not only the production
costs but also how much revenue a product will generate and what expenses will be
incurred at each stage of the value chain during the product's estimated life cycle
duration.
The purpose of an LCCA is to estimate the overall costs of project alternatives and
to select the design that ensures the facility will provide the lowest overall cost of
ownership consistent with its quality and function. The LCCA should be performed early
in the design process while there is still a chance to refine the design to ensure a
reduction in life-cycle costs (LCC).
The first and most challenging task of an LCCA, or any economic evaluation
method, is to determine the economic effects of alternative designs of buildings and
building systems and to quantify these effects and express them in dollar amounts.
There are numerous costs associated with acquiring, operating, maintaining, and
disposing of a building or building system. Building-related costs usually fall into the
following categories:
Initial Costs; Purchase, Acquisition, Construction Costs
Fuel Costs
Operation, Maintenance, and Repair Costs
Replacement Costs
9. Residual Values; Resale or Salvage Values or Disposal Costs
Finance Charges; Loan Interest Payments
Non-Monetary Benefits or Costs
Only those costs within each category that are relevant to the decision and
significant in amount are needed to make a valid investment decision. Costs are relevant
when they are different for one alternative compared with another; costs are significant
when they are large enough to make a credible difference in the LCC of a project
alternative.
Life-Cycle Cost Calculation
LCC = I + Repl — Res + E + W + OM&R + O
LCC = Total LCC in present-value (PV) dollars of a given alternative
I = PV investment costs
Repl = PV capital replacement costs
Res = PV residual value (resale value, salvage value) less disposal costs
E = PV of energy costs
W = PV of water costs
OM&R = PV of non-fuel operating, maintenance and repair costs
O = PV of other costs
10. In Partial Completion of the Requirements for
COST MANAGEMENT (Acc10a)
―FOCUS NOTES‖
Submitted to:
Mr. Ricardo Marcellones, CPA
Submitted by:
Kristine Joyce Tinga
March 21, 2013
11.
12. REFERENCES
Value re-engineering
http://www.ncs.com.sg/html/Brochures/Services/Business_Application_Services/Proc
ess_Re-engineering_for_Value.pdf
www.invest-in.org/invest/ve/index.php
Total Quality Management
http://asq.org/learn-about-quality/total-quality-management/overview/overview.html
www.economist.com/node/14301657
www.wiley.com/college/sc/reid/chap5.pdf
Life-Cycle Costing
www.businessdictionary.com/definition/life-cycle-costing.html
www.barringer1.com/pdf/LifeCycleCostSummary.pdf
Theory of Constraints
www.scholarpedia.org/article/Theory_of_Constraints
www.mindtools.com › Strategy Tools
www.focusedperformance.com/toc01.html