Objective. The presentation phase involves the actual preparation and presentation of the best alternatives to persons having the authority to approve the VE proposals. This phase of the VE job plan includes the following steps:
1. Prepare and present the VE proposals.
2. Present a plan of action that will ensure implementation of the selected alternatives.
3. Obtain a decision of positive approval.
Discussion. A value engineering proposal (VEP) is almost without fail a challenge to the status quo of any organization. It is a recommendation for change. The recommendation was developed through a team effort, and its adoption is dependent upon another team effort. The success of a VE project is measured by the savings achieved from implemented proposals. Regardless of the effort invested and the merits of the proposal, the net benefit is zero, or is negative, if the proposals are not implemented. Presenting a proposal and subsequently guiding it to implementation often requires more effort than its actual generation. We review here some principles and practices that have been successfully used to facilitate the approval of VEPs:
1. Form. Presentation of a VEP should always be written. Oral presentation of study results is most helpful to the person who is responsible for making the decision; however, it should never replace the written report. A written report normally demands and receives a written reply, whereas oral reports can be forgotten and overlooked as soon as they are presented. In the rush to wrap up a project, promote a great idea, or save the laborious effort of writing a report, many proposals have fallen by the wayside because the oral presentation came first and was inadequate. The systematic approach of the VE job plan must be followed all the way through to include the systematic, meticulous, careful preparation of a written report. From this will evolve a more concise and successful oral presentation.
2. Content. Management responsible for review and approval must base its judgment on the documentation submitted with a proposal. The proposal and supporting documentation should provide all of the data the reviewer will need to reach a decision. Top management is primarily concerned with net benefit and disposition. A manager either may be competent in the areas affected by the proposal or may rely on the advice of a specialist. In either case, completely documented proposals are far more likely to be implemented. Generally, proposals should contain sufficient discussion to ensure the reviewer that performance is not adversely affected, supporting technical information is complete and accurate, potential savings are based on valid cost analysis, and the change is feasible.
3. VEP acceptance. There are many hints that may be offered to improve the probability of and reduce the time required for acceptance and implementation of proposals. Those that appear to be most successful are as follows:
a. Consider the reviewer’s needs. Use terminology appropriate to the training and experience of the reviewer. Each proposal is usually directed toward two audiences. First is the technical authority, who requires sufficient technical detail to demonstrate the engineering feasibility of the proposed change. Second are the administrative reviewers, for whom the technical details can be summarized while the financial implications (implementation costs and likely benefits) are emphasized. Long-range effects on policies, procurement, and applications are usually more significant to the manager than to the engineer.
b. Prepare periodic progress reports—“no surprises.” The manager who makes an investment in a VE study expects to receive periodic progress reports with estimates of potential results. Reporting is a normal and reasonable requirement of management. It helps ensure top management awareness, support, and participation in any improvement program. There are very few instances where managers have been motivated to act by a one-time exposure at the “final presentation,” no matter how “just” the cause. Therefore, it is advisable to discuss the change with the decision makers or their advisors prior to its submittal as a formal VEP. This practice familiarizes key personnel with impending proposals, and enables them to evaluate them more quickly after submittal. No manager likes to be surprised. Early disclosure may also serve to warn the originators of any objections to the proposal. This “early warning” will give the originators opportunity to incorporate modifications to overcome the objections. Often, the preliminary discussions produce additional suggestions that improve the proposal and enable the decision maker to contribute directly. If management has been kept informed of progress, the VEP presentation may be only a concise summary of final estimates and pro and con discussions, and perhaps trigger formal management approval.
c. Relate benefits to organizational objectives. The VEP that represents an advancement toward some approved objective is most likely to receive favorable consideration from management. Therefore, the presentation should exploit all of the advantages a VEP may offer toward fulfilling organizational objectives and goals. When reviewing a VEP, the manager normally seeks either lower total cost of ownership, or increased capability for the same or lesser dollar investment. The objective may be not only savings but also the attainment of some other mission-related goal of the manager.
d. Support the decision maker. The monetary yield of a VEP is likely to be improved if it is promptly implemented. Prompt implementation, in turn, is
dependent upon the expeditious approval by the decision makers in each organizational component affected by the proposal. These individuals should be identified and the entire VE effort conducted under their sponsorship. The VE group becomes the decision maker’s staff, preparing information in such a manner that the risk against the potential reward can be weighed. Like any other well-prepared staff report, each VEP should
• Satisfy questions the decision maker is likely to ask
• Respect the decision maker’s authority
• Permit the decision maker to preserve professional integrity
• Imply assurance that approval would enhance image
• Include sufficient documentation to warrant a favorable decision with reasonable risk factors (both technical and economic)
e. Minimize risk. If VE proposals presented to management are to be given serious consideration, they should include adequate evidence of satisfactory return on the investment. Often, current or immediate savings alone will ensure an adequate return. In other cases, life cycle or total program savings must be considered. Either way, evidence of substantial benefits will improve the acceptability of a proposal.
The cost and time spent in testing to determine the acceptability of a VE proposal may offset a significant portion of its savings potential. Committing such an investment with no guarantee of success constitutes a risk that could deter acceptance of a VEP. In some cases this risk may be reduced by prudent design and scheduling of test programs to provide intermediate assurances indicating the desirability of continuing with the next step. Thus, the test program may be terminated or the proposal modified when the concept first fails to perform at an acceptable level. Major expenditures for implementing proposed VE actions should not be presented as a lump sum aggregate, but rather as a sequence of minimum risk increments. A manager may be reluctant to risk a total investment against total return, but may be willing to chance the first phase of an investment sequence. Each successive investment increment would be based upon the successful completion of the previous step.
f. Combine testing. Occasionally, a significant reduction in implementation investment is made possible by concurrent testing of two or more proposals. Also, significant reductions in test cost can often be made by scheduling tests into other test programs scheduled within a desirable time. This is particularly true when items to be tested are part of a larger system also being tested. However, care must be exercised in instances of combined testing to prevent masking the feasibility of one concept by the failure of another.
g. Show collateral benefits of the investment. Often VE proposals offer greater benefits than the cost improvements specifically identified. Some of the benefits are collateral in nature and difficult to express in monetary terms. Nevertheless, collateral benefits should be included in the calculations. The likelihood of acceptance of the VEP is improved when all its collateral benefits are clearly identified and completely described.
h. Acknowledge contributors. An implemented VE proposal always results from a group effort. There is a moral obligation to identify all individuals and data sources contributing to a proposal. Identification of contributors also provides the reviewers with a directory of sources from which additional information may be obtained. Individuals, departments, and organizations should be commended whenever possible. This recognition promotes cooperation and participation essential to the success of subsequent VE efforts.
i. Prepare the oral presentation. The oral presentation can be the keystone to selling a proposal. It gives the VE team a chance to ensure that the written proposal is
correctly understood and that proper communication exists between the parties concerned. Effectiveness of the presentation will be enhanced if
• The entire team is present and is introduced
• The presentation is relatively short with time for questions at the end
• The presentation is illustrated through the use of visual aids such as mock-ups, models, slides, or flip charts
• The team is prepared with sufficient backup material to answer all questions during the presentation
