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Value engineering

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Value Engineering process

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Value engineering

  1. 1. ©2015–HervéBaron We are all trying to reduce Project costs. A methodology has recently been introduced: the Value Engineering. This presentation walks you through this procedure and, most importantly, aims at sharing cost saving items among ourselves. Please contribute by sharing the cost savings that you have implemented. Value Engineering
  2. 2. ©2015–HervéBaron What is Value Engineering? Value Engineering
  3. 3. ©2015–HervéBaron What is Value Engineering? A process aimed at reducing CAPEX • Equipment cost • Bulk cost • Quantities (piping, structure, concrete) • Manhours • Site Construction manhours • Construction cost • Project duration • Weight (offshore) Value Engineering
  4. 4. ©2015–HervéBaron What is Value Engineering? When shall it be done? Value Engineering
  5. 5. ©2015–HervéBaron What is Value Engineering? When shall it be done? The sooner, the more impact it can have Value Engineering
  6. 6. ©2015–HervéBaron What is Value Engineering? When shall it be done? Value Engineering features  Scope  Participants  Method Value Engineering
  7. 7. ©2015–HervéBaron What is Value Engineering? When shall it be done? Value Engineering features  Scope Value Engineering
  8. 8. ©2015–HervéBaron What is Value Engineering? When shall it be done? Value Engineering features  Scope: Plot Plan, PFD, discipline Value Engineering
  9. 9. ©2015–HervéBaron What is Value Engineering? When shall it be done? Value Engineering session  Content: identify technical alternatives  Scope: Plant Layout, Process scheme, special equipment  Participants: Engineering, Engineering Head of Departments, Vendors, Sub-Contractors Value Engineering
  10. 10. ©2015–HervéBaron What is Value Engineering? When shall it be done? Value Engineering session  Scope  Participants  Method Value Engineering
  11. 11. ©2015–HervéBaron A stepped Method  Focus on highest cost areas  Identification of the cost saving idea Value Engineering
  12. 12. ©2015–HervéBaron A stepped Method  Focus on highest cost areas  Identification of the cost saving idea Value Engineering Category Key words Reduce Can the equipment capacity be reduced? Is over design justified? Is spare required? Is it a nice to have? Standardize Use existing/vendor standard Standardize materials Simplify Easy to build Is automation required? Technology Could another technology be applied?
  13. 13. ©2015–HervéBaron A stepped Method  Focus on highest cost areas  Identification of the cost saving idea  Evaluation of the idea (feasibility, impact, risk and mitigation)  Decision  Monitoring of the implementation Value Engineering
  14. 14. ©2015–HervéBaron What is Value Engineering? When shall it be done? Value Engineering features  Scope  Participants  Method Examples Value Engineering
  15. 15. ©2015–HervéBaron  De-packaging to remove mark-up of package vendor  Project specifications (piping class, instrument specifications): do not apply to packages, especially utility packages, use Vendor standards  Review different types of equipment technology, e.g., for compressors, waste heat boilers (fired or water tube?)  Review and challenge sizing criteria: Contractor self imposed?  Perform Value Engineering with Vendor: focus on most expensive item (materials/manhours/NDE etc.) Value Engineering Examples 1/2
  16. 16. ©2015–HervéBaron  Review if another technology exists when not very familiar, e.g., for water treatment  ANSI centrifugal pumps instead of API for non-hydrocarbon services  Manufactuer standard instead of API for SRU air blowers  Single mechanical seals for pumps in non-hazardous fluids service  Service test in lieu of hydrotest for ASME B31.3 cat D fluids (non- flammable non-toxic + design P<10 bar). Value Engineering Examples 2/2 Did you implement any other cost saving? Please share as a comment on this presentation.

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