The document discusses how function analysis, a core component of value methodology, is able to effectively solve problems. It does this by focusing analysis on the functions of an item rather than the item itself. This allows alternative solutions to be identified that can fulfill the necessary functions at a lower cost without reducing performance. The document also outlines the origins and development of function analysis, including how it was pioneered by Lawrence Miles at GE after WWII to reduce costs through identifying unnecessary expenses. It was further developed through the creation of the Function Analysis System Technique (FAST) diagramming method to clarify functional relationships and build team consensus.

1. WHAT MAKES VALUE METHODOLOGY WORK?
GEZA E. KMETTY AND ALFRED I. PALEY
PAGE 1
WHAT MAKES VALUE METHODOLOGY WORK?
(AN ANALYSIS OF FUNCTION ANALYSIS)
Abstract
The paper analyzes and dissects how Value Management’s (VM’s) Function Analysis
Discipline works and explains how the resulting “creative discontent” impacts
brainstorming and creativity of the Value Engineering (VE) Team. The focus is on
Function; the role of the Verb-Noun definitions as the basic element needed to obtain a
clear understanding of the item under study; and how it serves as the essential tool of
building VE Team consensus on “where and how the object being analyzed fits in the
world”. Through the use of the Function Analysis System Technique (FAST) diagram,
the paper demonstrates VM’s systematic process and how it assists in correctly
identifying the Problem and how that will lead to identifying the correct solution. It is
demonstrated that VM is not just cost cutting, but it is primarily an excellent decision-making,
team-consensus-based Problem Solving and Value Improvement methodology.
A. Problem Solving
Problem Solving is an everyday activity, conducted by individuals and groups of people.
Everyone feels that they are good problem solvers. But are we all good problem
solvers?
Let us look at a simple example: Assume that there is an accident in some public area.
A woman slips and falls on a wet floor. After attending to the woman to make certain
that there is no major damage to the individual, the problem of the wet and slippery floor
is fixed. It is dried and it is assumed that the problem of the wet floor has been taken
care of. Finished Next problem! However, it is fixed only - until the next rain! – the
cause the problem is a hole in the roof! People are very apt to define a problem in
terms of their Pet Solution – as in the example: “when a floor is wet, you need to dry it”.
Many problems, big or small, are defined by people in terms of their pet solution, and,
their belief that they know what the problem is. That is why we often
experience/hear, “How come that problem is still here? I thought we solved that
problem long ago”. It applies as well to areas of personal activities, industry, finance,
government, medical, etc. Everywhere that people are involved, they will push their Pet
Solution – it is a people problem!. Reducing costs may results in the benefit of
increasing Value. However, reducing costs can present problems that require clear
understanding of many factors. Value Engineering/Value Analysis provides a
methodology using Function Analysis that overcomes these and other problems.

2. WHAT MAKES VALUE METHODOLOGY WORK?
GEZA E. KMETTY AND ALFRED I. PALEY
PAGE 2
B. The Inventions
Value Engineering (VE), originally called Value Analysis (VA), was the product of an
observation made after World War II. During the war, individuals were drafted out of
their civilian jobs (similar to the military draft program), and assigned to necessary
government war efforts. Some were assigned to the War Production Board (WPB)
whose job was to keep the acquisition of necessary war materiel going strong, keeping
the supply lines full. Their efforts helped the USA and its allies to win the war.
After the war was over, drafted individuals were permitted to return to their previous
civilian jobs. Some of these WPB people returned to General Electric (GE). They were
asked about their experiences at the WPB, (similar to debriefing) to see if any of their
experiences could be of help to GE. One of the observations reported was that if they
had a problem with shortness of supplies, in order to keep the supply lines flowing, they
had to find substitutes/alternatives -- and often the substitute/alternative worked just
as well, if not better, and cost less!
The GE management asked how that happened? No one knew the answer!
Management set out to find out How? Management assigned a team of people to study
this “phenomenon” so that they could do it on purpose instead of by accident. Lawrence
D. Miles, a GE employee, was assigned to form a team. After a few years of study,
Miles came to the conclusion that what had been ordered or specified at the time was
not necessarily what was needed. It was the Function of the item which was needed
by the system or product!
If the Function was analyzed, there was the opportunity to have a different choice, an
alternative that could work as well and cost less The alternate could be analyzed to see
if it could perform the function, and perhaps lower the cost without affecting
performance or reliability - and even do a better job. And so, Invention No.1 Function
Analysis as a process was formed.
Function Analysis, as introduced by Miles in the USA after WWII, followed the
methodology of Structured Problem Solving to develop a process for cost reduction, by
identifying unnecessary costs in products, processes and procedures. This has
generally been called Value Engineering.
Miles published a book, “Techniques of Value Analysis and Engineering” (Reference 1).
GE assigned him to train all GE personnel in this process of cost reduction. Later the
VE process was picked up by the Government. This was at the forefront of the Value
work that resulted in the formation of the Society of American Value Engineers (SAVE)
and all the succeeding Value societies.
Miles’ work was fundamental in introducing the importance of identifying and
understanding (analyzing) Functions as opposed to primarily “materials” and “things” in
the cost reduction effort, which was the core of his first efforts. Included in his book, and

3. WHAT MAKES VALUE METHODOLOGY WORK?
GEZA E. KMETTY AND ALFRED I. PALEY
PAGE 3
of significant importance, was the introduction of an objective way to define the
“problem” (or problems) in the structured problem-solving process.
People tend to define problems in terms of their „Pet Solution‟. But Miles taught us that
the Cost/Function relationship is a more objective way to unambiguously identify a
problem That is, by establishing the Cost/Function relationships for each Function, one
can find the cost drivers by comparison and thereby indicate where an unusually high
cost (or other) problem may exist. As the Value work proceeded in industry and
government, and Function Analysis began to be applied to more fields and to other than
just cost reduction efforts, it became clear that understanding the relationships of
Functions is the key to productivity, efficiency, and elimination of wasteful efforts in all
the efforts in which people are involved.
Invention No.2 was the Function Analysis System Technique (FAST), diagram
(developed by Mr. Charles W. Bytheway in 1964, (Reference 2) and first presented as a
paper to the SAVE conference in 1965. FAST contributed significantly to an important
phase of the development of the body of knowledge, currently being referred to as the
Value Methodology (VM).
The introduction of FAST diagramming resulted in a two dimensional presentation of the
hierarchy and relationship of Functions. This provided a clearer understanding of the
products, processes, and procedures for which individuals and teams of people were
responsible. The result of applying Function Analysis in problem solving procedures is
that consensus can be obtained more readily for decision making. Doc Ruggles, one of
the first teachers in VA/VE (Reference 3) stated “…the FAST diagram will cause the
problem to jump out at you”.
C. From Reasoning to Function Analysis
Reason is what helps us figure out how or why something happened. In a way
reason is a tool for arriving at theories to construct Stories the crucial soldering iron
required to connect the dots. And why do we make stories? Not necessarily because
they help us understand the world better, but because they help us explain the world
better. We are a story telling species. We make up stories to win arguments and we
use reason to enhance our stories with superior logic.
Lawrence D. Miles, was the “inventor” of Functional Thinking with the Active Verb and
the Measurable Noun as the “language” of Value Methodology. He makes the statement
that “With the product, the customer wants a FUNCTION”. The language of FUNCTION
(Active Verb and a Measurable Noun) is the LANGUAGE which helps us to define the
heart of the problem.
Charles W. Bytheway organized the language of Miles into sentences and paragraphs,
making full Stories, with the use of the FAST. FAST is a pictoral representation of

4. WHAT MAKES VALUE METHODOLOGY WORK?
GEZA E. KMETTY AND ALFRED I. PALEY
PAGE 4
function “words”, organized into sentences and pictures to make “Logical Stories”, in
a how-why relationship. Now let’s construct a “ FAST-Story” of Function Analysis!
D. Creating a FAST Diagram of Function Analysis
Following is a list of Functions which describe Function Analysis. The list below
(relevant to the process of Function Analysis) are the Words that form the Story of
Function Analysis. The hyphenations are to keep the “Measurable Nouns” as one word.
For example, the first Function in our list “Accomplish” is the Verb and “Goals” is the
Noun. The rest follow the same logic.
Accomplish Goals
Make Proper-Decisions
Select Best-Solution
Brainstorm Solutions
Identify Correct-Problem
Maintain Quality
Obtain Approvals
Apply Standards
Obtain Public-Support
Obey Laws
Provide Audit-Trail
Measure Performance
Estimate Costs
Estimate Consequences
Obtain Consensus
Identify Required-Functions
Expose Unnecessary-Functions
Generate Creative-Discontent
Change Attitudes
Develop Understanding
Perform Function-Analysis
Use Verb-Noun Description
Apply Job-Plan
Assemble Expert VE Team
Using the above list of Function-Words, we may now construct a FAST Diagram to form
a two dimensional picture and tell a Story.

5. WHAT MAKES VALUE METHODOLOGY WORK?
GEZA E. KMETTY AND ALFRED I. PALEY
PAGE 5
Figure 1. FAST Diagram of Function Analysis

6. WHAT MAKES VALUE METHODOLOGY WORK?
GEZA E. KMETTY AND ALFRED I. PALEY
PAGE 6
E. Reading the FAST Diagram
The above FAST Diagram is telling us the Story of the Function Analysis discipline.
Follow the Diagram from Left to Right or Right to Left. It should make logical sense
either way. Each Function should answer the How and Why questions with an adjacent
Function. By observation, the most Value Improvement opportunity in this FAST is the
Identify Correct-Problem Function which is coming from the Develop Understanding
Function and followed by the Brainstorm Solution Function from the right to the left. Now
we are on the right track to Select Best Solution and Make Proper Decision, and to
Accomplish Goal which will result in improving whatever Unsatisfactory Situation on
which we are working.
F. Function Engineering
The arrangement and rearrangement of Functions and display them in such a way that
the teams agree/show consensus that the Function diagram represents the
project/system. The ability to organize one’s thinking about Functions and to reorganize
and use Logic to rearrange Functions for improvement of cost savings, time savings,
substitutions and rearrangement is Function Engineering.
Why this has not been identified as such is not clear, but could be that it worked no
matter that it was called VA, VE, Discipline or etc.? Function Engineering as a name
can bring the discipline to a new level of understanding as to why it has been so
effective for over 60 years.
We have recently heard the phrase “Financial Engineering” being used to describe
some of the activities on Wall Street that came up with investment derivatives, such as
Credit Default Swap Derivatives. During the present financial crisis, the following
thought comes to mind about Function Science:
The work done by Larry Miles in developing “Techniques of Value Analysis and
Engineering“, was the identification, arrangement and manipulation of Functions, ergo:
Function Engineering. It is now apparent that the science of Function Analysis is the
use/application of Function Engineering and is the basis of Value Engineering.
For example, in Electrical Engineering the understanding of relationship of Voltage (E),
Current (I), and Resistance (R ) results in the formula, E=IR. In Value Engineering we
start with Functions, and then through the use of logic in the How?/Why? to arrange and
rearrange those functions, we developed the process known as Function Engineering.
Our path has been through the FAST diagramming tool which can be defined as
supplying the formula that is inherent in Engineering -- the basic truth or factor.

7. WHAT MAKES VALUE METHODOLOGY WORK?
GEZA E. KMETTY AND ALFRED I. PALEY
PAGE 7
The development of Function Engineering is all due to the genius of Larry D. Miles and
Charles Bytheway who developed the FAST Diagramming tool. Their work created a
powerful improvement to Structured Problem Solving through the Language of Verbs
and Nouns and the Story told by the FAST Diagram.
G. Example
FAST diagrams had been constructed during a VE workshop in the course of following
the structured problem solving procedure of the Job Plan (See Section J). The FAST
diagrams were invaluable in defining the problems. Figure 2 illustrates a simplified form
of FAST as an example:
FAST Diagramming
General Layout
Basic
Function
Function
Function Input
Driving
Function
Higher
Order
Function
Supporting
Function
WHY?
Specifications
Scope Lines
HOW?
Figure 2. FAST Diagram, Simplified Layout
In reviewing the FAST diagrams and the Functions that were beginning to be detailed
during the VA/VE workshops unnecessary costs often were identified. Following is an
actual VA/VE project on a 60 year old Railroad Bridge Maintenance and
Remodeling (a bridge redesign and rail traffic maintenance project).
60 year Old Railroad Bridge Maintenance/Remodeling
This bridge repair project began as the result of failure of the railroad lift bridge across a
major waterway to open as required to allow ship and boat traffic. Due to aging of the
railroad bridge and its pilings, the bridge support pilings had shifted over time. Bridge
inspectors found that if the lift bridge was raised, it would not properly position itself on
the shifted pilings when lowered, thus interrupting the rail traffic. Therefore the bridge
could no longer be opened. However, the Coast Guard required that the river traffic be
maintained. The bridge and its pilings had to be repaired so that both traffic
requirements were met.

8. WHAT MAKES VALUE METHODOLOGY WORK?
GEZA E. KMETTY AND ALFRED I. PALEY
PAGE 8
A design for the reconstruction effort had been made which included dismantling of the
old bridge, and redesign and construction of a new railroad lift bridge and its pilings.
Figure 3 is a FAST diagram of the project as originally designed. In order to maintain
railroad traffic during the reconstruction project, the design included a by-pass rail line
located upstream of the river crossing to by-pass the construction area. This by-pass
rail line would have required complete removal after all the reconstruction was
completed. The contract for the project included a requirement for a VA/VE study, and a
workshop was organized.
The first order of workshop business was to obtain and review all of the drawings and
specifications for the project. The VA/VE team had to identify all of the Functions and
begin to understand the Functions associated with the project. In order to get a deeper
understanding of the project, a field trip was organized for the workshop team to visit the
site of the railroad bridge -- to see the condition of the pilings, and the bridge.
60yr old Railroad Lift Bridge
Maintenance/Remodeling
Complete
Construction-
Project
Replace
Bridge
FAST Diagram
Provide
Water-
Traffic
Railroad
Lift Bridge
Needs Repair
Provide
Water and
Rail Traffic Provide
Rail-Traffic
HOW?
WHY?
Higher Order Function
Specifications
Maintain
Rail & Water
Traffic
Maintain
Rail-Traffic
Provide
Rail-
By-Pass
Environmental
Impact
Study
Figure 3. FAST Diagram of Existing Railroad Lift Bridge
As the team walked out to the railroad bridge it became immediately apparent that the
railroad bridge was actually two bridges; each with two sets of railroad tracks.

9. WHAT MAKES VALUE METHODOLOGY WORK?
GEZA E. KMETTY AND ALFRED I. PALEY
PAGE 9
The workshop team investigated the impact of their finding two railroad bridges at the
site instead of one. If one bridge could be worked on at a time, railroad traffic could be
maintained on the two tracks of the other bridge. If the rail traffic could be maintained,
the unnecessary cost of construction of the by-pass, its later removal, and the
expensive environmental impact study, which had no Function or value after the project
was completed, could be avoided.
The VA/VE workshop team found that the pilings could be reinforced with more modern
materials and construction methods. Safety requirements that prohibited heavy work to
be done too close above the live rail tracks, was satisfied by the fact that there were two
bridges, and that one could be worked on at a time. The team also located heavy
drilling equipment that was used in mine construction that could be used for setting
pilings. This equipment had low enough profile so that it could operate below the
bridges. Figure 4 is the FAST diagram of the revised design where the unnecessary by-pass
rail line had been eliminated.
60yr old Railroad Lift Bridge
Maintenance/Remodeling
Complete
Construction-
Project
Replace
Bridges
FAST Diagram
Provide
Water-
Traffic
Railroad
Lift Bridges
Need Repair
Provide
Water and
Rail Traffic Provide
Rail-Traffic
HOW?
WHY?
Higher Order Function
Specifications
Maintain
Rail & Water
Traffic
Maintain
Rail-Traffic Eliminate
By-Pass
Two Parallel
Railroad
Lift Bridges
x
Change
Figure 4. FAST Diagram of Revised Railroad Lift Bridge
Function Analysis and the FAST diagram allowed the team to identify the costs of the
Functions being performed. The team then identified a piece of information that had not
been identified at the time the original design had been made -- the existence of two
separate bridges. These factors brought out “creative discontent” in the team to find
new solutions to the problem rather than the ”pet solution” -- using a by-pass rail line
to maintain rail traffic during construction. The project time line was shortened which, by
itself, significantly reduced the estimated cost of the project.

10. WHAT MAKES VALUE METHODOLOGY WORK?
GEZA E. KMETTY AND ALFRED I. PALEY
PAGE 10
H. Reasons of Poor Quality and Wrong Decisions
 Lack of Information
 Honest Wrong beliefs
 Habitual Thinking
 Risk of Personal Loss.
 Reluctance to Ask for Advice
 Time Pressures
 Political Pressure
 Negative Attitudes
 Rapidly changing technology.
 Strict Adherence to Requirements
 Poor Human Relations
VE workshops are successful because they use impartial multi-disciplined teams to
break down a project into its basic functions and then use “creative discontent” and
creativity to find different ways to perform these functions.
I. The VE Job Plan
1. Identify the major elements of a project;
2. Analyze the functions these project elements perform;
3. Use brainstorming to develop several design alternatives to perform those
functions;
4. Evaluate the alternatives to insure they do not degrade the project;
5. Assign costs (including life-cycle cost) to each of the most promising
alternatives; and
6. Develop the promising alternatives into acceptable recommendations.
VE teams will provide management with as many recommendations as practical. The
recommendations are then evaluated by the client’s staff whose specialty areas are impacted by
the proposed recommendation. Management then decides, based on all available information,
whether or not to approve and implement the recommendation.
J. Conclusions
This paper has described the VE Methodology processes and procedures. It
demonstrated the value of the Verb Noun definition of Functions, and the use of FAST
diagramming and Function Analysis to find the Correct Problem and make the Best
Decisions.

11. WHAT MAKES VALUE METHODOLOGY WORK?
GEZA E. KMETTY AND ALFRED I. PALEY
PAGE 11
After the unnecessary functions and costs are identified and eliminated, the solutions
appear to be obvious and generally simple. However, as in the example given, the
wrong problems were real to the people working on the project. The solutions were not
obvious to them until they were identified during the VE effort in the relatively short time
of the workshop.
It is recognized that all the work in any process is accomplished by human beings who
work with possibly incomplete and perhaps incorrect information -- and generally under
various pressures at that.
Function Analysis and FAST diagramming provide the ability to obtain better and
objective understanding of products, processes, and procedures so that unnecessary
functions and costs are more readily recognized. It is the use of Function Analysis and
FAST which supplies the ability to objectively and clearly identify and define the “correct
problem” in the problem solving procedure that yields the best results.
The Value Methodology is the language of reason and logical thinking. The VE
effort will result in identification of the correct problem and an intimate
understanding of the required functions which lead to the best possible solution
of which the VE team is capable.
References
1. Larry D. Miles; 1949, Techniques of Value Analysis and Engineering: Publisher
McGraw-Hill Book Company.
2. Charles Bytheway,1975, inventor of the FAST diagramming technique.
3. Doc Ruggles, 1976, Value Analysis Incorporated (VAI) was a teacher of FAST
diagramming.