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The CostProGram
From CostPro, Inc.
The Cost Professionals
Cambridge, MA
617-576-5878 |
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| Friday, January 22, 2010
Happy 208th Birthday Gothic Architect Richard Upjohn, Trinity Chapel, New York | |
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Greetings!
The new decade doesn't officially start til next year, but we wish everyone a very healthy and prosperous new year and decade!
Sincerely,
Diana and the CostPro team
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The Lowest Bidder
"It is unwise to pay too much, but it is worse to pay too little. When you pay too much, you lose a little money...that is all. When you pay too little, you sometimes lose everything, because what you bought was incapable of doing what it was bought to do. The common law of business balance prohibits paying a little and getting a lot...it can't be done. If you deal with the lowest bidder it is well to add something for the risk you run. And if you do that, you will have enough to pay for the something better."
Words of wisdom from John Ruskin (1819-1900)
John Ruskin's quote captures the spirit of true value-engineering, a term that is so often misused today to justify slashing and burning a design to cut initial costs regardless of consequences. This is not value-engineering at all.
True value-engineering evolved from the work of Lawrence Miles who in the 1940's was a purchase engineer with the General Electric Company. At that time, the manufacturing sector in the United States ran at maximum capacity to supply the allies with arms and materiel. In this time of shortages in steel, copper, bronze, nickel, bearings, electrical resistors and many other materials and components, General Electric Company had to expand its production of turbo supercharger for B24 bombers from 50 to 1000 per week.
Miles was given the daunting task of procuring the materials to permit this. Often it was impossible to obtain the material or component specified in the design, so Miles reasoned, "If I cannot obtain the product, I must obtain an alternative which performs the same function." Where alternatives were found they were tested and approved by the designer.
Miles saw that many of the substitutes provided equal or better performance at a lower cost and from this evolved the first definition of value-engineering. It is an organized approach to providing the necessary functions at the lowest cost.
From the beginning, value-engineering was seen to be a cost validation exercise, which did not affect the quality of the product. The straight omission of an enhancement or finish is not considered value engineering. This led to the second definition:
Value-engineering is an organized approach to the identification and elimination of unnecessary cost. Unnecessary cost is any cost which provides neither use, nor life, nor quality, nor appearance, nor customer features.
The following tasks are undertaken when a design team is involved in a value-engineering exercise, often during the course of a formal 40-hour value-engineering workshop:
- Preparing and administering maintenance programs.
- Forecasting expenditure flows.
- Advising on cost limits and preparing budgets.
- Advising on Cash Flow Forecasting.
- Advising on Life Cycle Costing.
- Cost Analysis.
- Cost Benefit Analysis.
- Estimating.
- Evaluating alternative designs.
- Undertaking feasibility Studies.
- Investment Appraisal.
- Measuring and describing construction work but only in terms of cost planning.
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Trivia Contest
Answers to Last Month's Questions:
Step 1. Decide to build high.
Q: It is generally agreed that the first "skyscrapers" were built in Chicago and New York in the late 19th century.
Which of these was NOT one of the factors contributing to their early development?
A: Desire of managers and clerks to be in city centres.
Q: In the later part of the 19th century, Chicago and New York saw the rise of centralised districts where business, financial and legal transactions took place. In both cities, the districts could not expand outwards. In New York, the business district grew up on the island of Manhattan, which limited its extent.
Which of the following features was a major constraint in Chicago?
Step 3. Dig the foundations.
Q: Up to the middle of the 19th century, the traditional method of supporting large structures was to drive clusters of log piles into the ground. For skyscraper construction, alternatives were developed, such as "pyramidal piers", "floating rafts" and "caissons".
What was a caisson?
A: Metal cylinder filled with concrete
THIS MONTH'S QUESTIONS:
To continue, here are this month's questions:
Step 4. Get the materials together.
Q: Any large building places huge demands on suppliers of materials. The Empire State Building needed 76,000 tons of steel girders, which were put into cars and delivered to the point of use, minimising loading and unloading times.
Which innovative technology was used to achieve this?
a) Ladders
b) Cranes
c) Hoists
d) Narrow gauge railway tracks
Step 5. Build the frame.
Q: The internal skeleton of a skyscraper is a metal frame of interlocking columns and girders to which the floors and internal walls are attached.
Which advantage of metal frame construction contributed most to increasing the height of buildings?
a) Metal frames bear the load
b) Metal frames are easier to construct
c) Metal frames cannot buckle in fires
d) Metal was more readily available than masonry
The first to answer both correctly will receive a $20 gift card to Yankee Candle. Send answers to drubino@costpro.net.
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