Vol: 2 No: 4 February 1970

VALUE
ENGINEERING
In this issue
Editorial - A Decade of Unparalleled Opportunity for Value Engineers
What is Value Analysis?
by R. Perkins

Cost-per-pound Formula Helps Procurement 'Pound' Costs

by F. P. Lalonde

Behavioral Science in Management

by Cameron Fincher

The Interaction of Linear Programming and Value Analysis

by Shaul P. Ladany

Checklist - New Product Development

Sensitivity Training
by L. K. McLaughlin

The Suicide Club

by J. Douglas Cole

Value Engineering - Not Valve Engineering

by Joseph Sherry

Rolled Shaped Wire and the Value Engineer

by B. W. Cordon

How to Sell Ideas

by Bill Gove

The Value Engineer's Bookshelf

Selected Abstracts of Recent Literature on Value Analysis/Engineering

Pergamon Press
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 VCllue In this issue
Engineering Editorial - A Decade of
Unparalleled Opportunity
Vol. 2 No: 4 February 1970 f ° r Value Engineers

W h a t is Value Analysis ? This paper outlines the basic concepts of Value

Analysis and, after covering the theory of the
by R. Perkins subject, the author discusses the future of V.E.
Four case histories are cited.

Cost-per-pound Formula Helps Does the design represent good value to the
customer? After asking this question the
Procurement 'Pound' C o s t s author explains how to apply the technique of
by F. P. Lalonde. , V.E. to the work of the buyer.

Behavioral S c i e n c e in Dr Fincher discusses efficiency in education -

a way of getting value for money spent. He de-
Management scribes 'Institutional Research' and outlines an
by Cameron Fincher interesting investigation currently proceeding
on the R.O.I, from university education.

The Interaction of Linear The author states that V.A. and linear program-
ming are optimising techniques for the alloca-
Programming and Value Analysis tion of resources. In a thought-provoking
by Shaul P. Ladany article the author discusses these two tech-
niques and states the need for combining them
both.

Sensitivity Training High- and low-level visibility are discussed in

relation to output and morale. The author talks
by L. K. McLaughlin about sensitivity training and organising to get
the job done. In his view, V.A. is a very effective
tool in the solution of logical, rational problems.

The Suicide Club Service, Quality Control and V.E. are discussed
t I /•»-,,,„/__ fnla in this article. The author believes that the chief
oy UOUgias l*Oie problem in these sections of business is one of
establishing effective communication.

Value Engineering—Not Valve This article will be of considerable value to the

newcomer to V.E. The newcomer should follow
In future issues Engineering the Job Plan, the author explains, and not
by Joseph Sherry proceed along the lines of his previous special-
The Resource Stewards — A Survey ity, whether it be design, manufacturing or
of Value Analysts and Engineers purchasing.
by Antipodean (Parts 1-6)
The Challenge of Change - Value Rolled Shaped wire lends itself to material
Engineering Development Rolled Shaped Wire and the
Value Engineer saving, increased tensile strength, improved
by Frank R. Bowyer, Consultant, surface finish and close tolerancing. The author
Value Engineering Ltd. by B. W. Cordon goes on to discuss other advantages of shaped
Value Engineering - A Challenge to
Management
by L. W. Crum This article may at first seem unusual for this
H o w to Sell Ideas journal, but the author contends that if every
Value Engineering - Integration of by Bill Gove Value Engineer could master the technique of
Education, Training and Application selling his idea there would be more V.E.C.P.s
by Frank X. Pesuth and Joseph J. accepted.
Kaufman
Introduction to Value Engineering
by W. M. Thompson and V . E . Checklist
A. R. Tocco
Value Engineering by Scientific and
Technical Personnel in Government The Value Engineer's Bookshelf
by Everett J. Hodapp, Jnr.
The V.A. Programme and the
Construction Industry A b s t r a c t s [121] to [126]
by Nigel Pearson

Value Engineering, February 1970 193

 Regional Editors

Canada Western United States

Mr C. Bebbington, Mrs Patricia B. Livingston,
Value Program Coordinator, Management Systems Analyst,
United Aircraft of Canada Ltd., North American Rockwell Inc.,
P.O. Box 10, Longueuil, Quebec. Space Division, Downey, California.

North Eastern United States United Kingdom

Lt.-Col. Bert J. Decker, USAFR (Ret.), Mr R. Perkins,
Director, Project 3000, Technical and Works Director,
Millard Fillmore College, Barfords of Belton Ltd.,
State University of New York at Buffalo, Belton, Grantham, Lines.
Hayes A, Buffalo, N.Y. 14214. Europe
Mr P. F. Thew,
Southern United States Manager - Industrial Engineering,
Mr F. Delves, I.T.T. Europe Inc.,
Lockheed-Georgia Company, 11 Boulevard de I'Empereur,
Marietta, Georgia. Brussels 1, Belgium.

A i m s and Scope A Profile of a Value Engineer

The aim of Value Engineering is to en- The value engineer has a love to expend energy, to argue, to fight and cajole as well as to
courage the wider use of Value Analysis/
Engineering techniques throughout compromise, retreat and be convinced. He has to have a broad background, yet be narrow-
industry. minded in terms of achieving value objectives. He is forceful but openminded but above
all a logical thinker. He has the gift to use his creativity to the fullest, and an innate ability
Value Engineering provides a link to visualise, to bring into existence many possible solutions that have not been present
between those who are practising and before. This he does either by influencing or modifying that which already exists, or by
studying the subject all over the world. starting anew from the foundation. He recognises poor value at a glance, and how to
It is the policy of the journal to contain improve value at a second glance. He has the ability to make decisions, and plan a course
information which promotes the wider of action, thru or around the skeptics, much like a chess player. He has a knack of being
and more efficient application of Value able to utilise others to achieve his objectives. His is an effort of providing ideas and
Analysis/Engineering methods. Its dynamic thoughts and persistent pressure for accomplishment. Teaching and selling
abstracting service will draw attention in experience are most helpful in convincing others that his ideas and opinions are valuable
a conveniently summarised form to the and should be considered. His experiences include substantial design and manufacturing
main publications on the subject activities over a wide range of products and services and managerial positions. He
throughout the world.
understands organisational structures and the politics prevalent in large and small
companies. He has an ability to recognise intrinsic values in people and products. Value
K e y - w o r d Index Engineering is the breeding ground for Program Managers and Company Directors.
Titles sometimes do not cover all the Therefore, the value engineer must be a good mixer, with stature and appearance but above
aspects of the subject referred to in an all he must understand that his efforts are a service to a better life for all at a reduced
article, book review or abstract, and in cost. - Ralph P. Halloran
order to assist readers with their infor-
mation retrieval problem key-words
have been placed at the top of each item
in the journal. Editor Subscription Enquiries
Bruce D. W h i t w e l l Subscription Orders, preferably accompanied
To illustrate-the article 'The Challenges by a cheque, should be sent to the following
that Lie Ahead' covers both Basic Con- addresses:
Editorial Offices
cepts and Management Appreciation yer*
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these subjects were not specifically
indicated in the title. Hemel Hempstead, Herts., England. Pergamon Press Ltd.,
Telephone: Hemel Hempstead 3554. Attention Mr B. Cox, Headington Hill Hall,
By referencing the article to two cards Oxford, England
measuring 5" x 3", arranged alphabeti- Publishing Offices
cally the value engineer can build up a Pergamon Press Ltd., The Americas:
system of reference to articles on Training & Technical Publications Division, Pergamon Press Inc.,
Applications and Basic Concepts. Headington Hill Hall, Attention Mr R. Miranda, Maxwell House,
Oxford, England. Fairview Park, Elmsford,
The list of key-words will be built up Telephone: Oxford 64881 New York 10523, U.S.A.
issue by issue until a useful list of key- Australasia:
words covering Value Engineering sub- Advertisement Manager Pergamon Press Pty Ltd.
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Reprints of the articles and checklists
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Oxford, England. prior notification.

194 Value Engineering, February 1970

Reprint No. 2:4:1

Editorial:

A Decade of Unparalleled Opportunity

for Value Engineers!
What are the common characteristics of value engineers of demonstrating the art of thinking creatively and positively about
companies, large and small ? Not personality traits - for studies Value Engineering problems. Members are not taken by the
have shown personalities among successful value engineers to hand and led along the inflexible road to simple solutions; rather
be as diverse as the products and services upon which they are fortified by basics, they are encouraged to think for themselves,
called upon to exercise their skills. Some value engineers are with imagination, initiative, vision and understanding.
quite reserved, seldom in the forefront; others are gregarious,
dynamic and accepting every possible opportunity to promote This is why the Society's and Association's Conference Pro-
value engineering . . . . and themselves! ceedings have been widely hailed as 'most worthwhile contribu-
tions to Value Engineering literature'. And why, over the last
From a survey of the value engineer at every stage of his career, decade-the soaring sixties-more than 10,000 people have
his most noticeable characteristic is his breadth of view. chosen to allocate some of their most precious resource - time -
to the activities of these two sister bodies and other similar
Most men enter business as specialists - engineers, accountants, organisations. A significant per cent of these people have risen
salesmen - and if they are not specialists when they begin work to positions of leadership in industry throughout the world.
they are rapidly turned into specialists through company training
and experience. In content, the programmes of these bodies has been as stimu-
lating as those of any other professional organisations.
However, those in successful value engineering posts tend to be
those who have continually broadened the scope of their experi- Clearly, the acceleration of technological change makes it
ence. They are those who have realised - perhaps instinctively - essential that there be an increasing number of trained value
that good people never stop learning. Since Value Engineering engineers. Consequently, in this sense, this is the golden age
inevitably leads value engineers to contact with persons outside for value engineers providing, however, they are prepared to
their speciality, value engineers find the foundation of their meet the challenges of increasing responsibility. In the vast,
formal education which ended in their early twenties, constantly complicated world of business, the value engineer has much to
being built upon. learn. He must learn to gain confidences, to be understanding of
human nature so as to gain acceptance for those changes which
It is interesting to note how their increasing breadth of view he sincerely believes to be in the best interests of achieving
provides a flexibility of thought which enables value engineers required function at lowest cost.
to move from one industry to another without loss of effective-
ness. Many examples of this are well known amongst the Value engineers can look forward to a golden age of personal
members of the Society of American Value Engineers and the progress . . . a decade of unparalleled opportunity. You too,
Value Engineering Association of Britain. The key that unlocks can join with value engineers everywhere by . . .
the door to the top echelon of value engineers is broad knowledge
of industry. • Taking the initiative. Don't wait for others to tell you
what you should do to become a better value engineer.
Both the Society and the Association, as well as other organised • Actively seeking all the responsibility you can possibly
bodies of value engineers, knew that the overriding objective of handle. You'll never get anywhere by avoiding tough
any programme for Value Engineering development must be to assignments.
stimulate and develop the value engineer's ability to think • Developing your ability to decide. Get all the facts, then
intelligently and constructively - not merely to stuff his mind make up your mind.
with facts. In the early days it was essential to create a programme
which would be immediately helpful while, at the same time, • Broadening your interests outside Value Engineering. The
prepare value engineers to understand more advanced techniques broader your knowledge and interests, the more easily you
for use in analysing value. Perhaps the greatest contribution of will be able to communicate with other specialists.
all these bodies was the effective methods which they adopted to The common denominator linking there four points is organised
inspire the busy value engineers who joined them to accept Value Engineering knowledge. When you make this knowledge
membership as an exciting challenge. This they only did by your "own you have secured for yourself the results of the
presenting Value Engineering as a conceptual body of know- explorations, the ideas, the successes . . . the failures . . . of the
ledge, not just a hodge podge of isolated facts. A certain amount value engineers who have preceded you. Organised Value Engi-
of informative material is, of course, necessary, but the Society's neering knowledge is within your reach. It is contained in the
and Association's programmes place a great deal of emphasis on Society's and Association's activities programmes.

Value Engineering, February 1970 195

 MISCELLANY

When value engineers get this kind of letter!

Alfred Sloan, Jnr,. in his book 'My Years with General Motors'
records that on 8 November 1921, Mr Hannum wrote to Mr du
Pont:
'With the changes that are necessary to make this a real job, it
is going to be impossible to get into production in the time
specified, in fact, to get this car to the point where, after all
tests are complete and we are ready to put our O.K. on same,
it will take at least six months.
To bridge the time when the present allotment of the old
models are completed, which will be about 15th December,
and the time we bring in the Air Cooled Car, we are planning
on bringing in a complete new (watercooled) line . . .
I want to say further the changes which we have in mind for
the Air Cooled Job have not changed my views of the proposi-
tion in the least, as I believe, when we get the first job on the
road, with the changes incorporated, there will be a great
change in the test reports.'
Thus in less than a month the adopted schedule of the corporation
was overthrown and the whole situation with respect to Oakland
and the future General Motors product line had profoundly
changed. There was disappointment and alarm in New York and
pessimism in Detroit, Flint, and Pontiac concerning the outlook
for the air-cooled car. Between Dayton and the manufacturing
divisions controversy and confusion arose over the testing of the
new car; there was no meeting of minds between Mr Kettering's
designers on the one hand and the divisional engineers and general
managers on the other. Mr Kettering felt fatigued and was so
discouraged that the Executive Committee, upon officially
cancelling the Oakland air-cooled schedule on 30 November
1921, sent him a letter of confidence, as follows:
'Dear Kettering,
It is most important in our opinion that your mind be kept free
from worries foreign to the development of the air cooled car
and other laboratory work.
In the development and introduction of anything so radically
different from standard practice as the air cooled car is from the
.regular water cooled job, it is quite natural that there should
be a lot of "wiseacres" and "know-it-alls" standing around
knocking the development.
In order that your mind may be completely relieved as to the
position of the undersigned with respect to the air cooled
cBindit. development, we beg to advise as follows:
1st. We are absolutely confident in your ability to whip all
Keep it to refer to. problems in connection with the development of our proposed
Save it f r o m damage or loss by air cooled cars.
slipping the current issue as it 2nd. We will continue to have this degree of confidence and
arrives into this handsome binder. faith in you and your ability to accomplish this task until such
Price £ 1 . Is. Od. time as we come to you and frankly state that we have doubts
as to the possibility or feasibility of turning the trick and you
Holds twelve issues. Colour: tan will be the first one to whom we will come.
Fill in the coupon below and send We are endeavoring in this letter to use language such as will
i t w i t h your payment to: result in complete elimination of worry on your part with
respect to our faith in you and this work and if this language
Promotion Manager Value Engineering fails to create this result, then won't you kindly write us quite
Pergamon Press Headington Hill Hall frankly advising in what respect we have failed?
O X F O R D OX3 OBW England Due to the fact that criticisms are bound to continue until the
Please send me binder/s air cooled cars are in active production and use, would it not
be well for you to agree with us that at any time you have
Name occasion to pause and wonder about our faith and confidence
in you and this development, that you will pull this letter out
of your desk and read it again, after which you will write to us
Address
in consideration of our frankly stating that we will write to
you first in case of any doubt ?'
The letter was signed individually by the four members of the
Executive Committee.

Value Engineering, February 1970

 Reprint No. 2:4:2

Basic concepts - Applications

W h a t is Value A n a l y s i s ?
by R. Perkins*

This paper, which was delivered at a Symposium on to talk about Value Engineering in the future and he
organised by Production Engineering Research Associa- cites four case histories from Fairfields (Glasgow) Ltd.,
tion to whom thanks for permission to publish are The Plessey Company Ltd., Cochran & Co. Ltd., and
expressed, outlines the basic concepts of Value Analysis. Barfords of Be/ton Ltd.
After covering the theory of the subject, Mr Perkins goes A useful bibliography is appended to the article.

1. I N T R O D U C T I O N 1.3. W h o are involved in Value Analysis

1.1. What is Value Analysis All cost-generating people will be involved in Value Analysis at
Value Analysis stated simply is an organised approach to get the some time. It is apparent, therefore, that marketing, sales, research
same performance at a lower cost without affecting quality. and development, design, purchasing, production, maintenance,
Quality may be defined as reliability, eye appeal, or any other and other individuals and departments constituting the whole
feature which is contributory to sales appeal and which is desired company will be involved.
by the customer. Value Analysis is a philosophy implemented by
the use of a specific set of techniques, a body of knowledge and a It is an important function of senior management to examine
group of learned skills. It is an organised creative approach which expenditure in an organisation and decide who are the people
has for its purpose the efficient identification of unnecessary cost, generating costs, but in many industries the cost of bought out
namely cost which provides neither quality nor use nor life nor materials and components is greater than the cost of direct labour,
and whilst to date much emphasis has been placed on improving
appearance nor customer features.
management techniques, the cost of bought out materials and
Value Analysis is not a substitute for conventional cost reduction components is a most important area requiring more detailed
work. It is a completely different procedure for accomplishing far study.
greater results. It improves the effectiveness of work that has been
performed over a number of years and from its proper application 1.4. W h a t is Value
it is quite common to obtain between 10 and 25 per cent savings in Value may be defined as the relationship between function and
manufacturing costs. cost. In all cases value is greatest when the cost of obtaining a
required function or service is at its minimum. In most cases value
1.2. Where did Value Analysis Originate ? to the producer means something different from value to the user.
During the second world war when certain materials and skills
Tests for value:
were in short supply, it became necessary for many manufactur-
ing organisations to develop alternative materials and designs in (1) Does it contribute value?
order that they could continue their manufacturing programme. (2) Is its cost proportionate to its usefulness ?
It is generally acknowledged that Value Analysis started its (3) Does it need all its features?
official life in 1947 and although many people were promoting the (4) Is there anything better for the intended use?
basic ideas, it is generally recognised that L. D . Miles, a Design (5) Can a usable part be made by a lower cost method?
Engineer at that time with the American General Electric Com- (6) Can a standard product be found which will be usable?
pany, and Harry L. Erlicher, played principal roles in formulising (7) Is it made on proper tooling considering the quantities
the basic techniques in use today. The original ideas of Miles used?
produced such spectacular cost savings that in 1950 the G.E.C. (8) Does material, reasonable labour, overheads and profit
extended training facilities to firms outside their own group and total its cost ?
this spread of knowledge reached the United Kingdom some time (9) Will another dependable supplier supply it for less?
in the early 50's. (10) Is anyone buying it for less ?
(11) Are similar items being purchased or made for (propor-
Since then the technique of Value Analysis has been encouraged tionately) less?
by all parties interested in improving the efficiency of their In connection with the,last test, the following chart is given:
organisation and the maximisation of profit.

* The author, Mr R. Perkins, C.Eng., F.I.Mech.E.,

F.I.Prod.E., M.B.I.M., is Technical Director of
Barfords of Belton Ltd., Belton, near Grantham,
Lines., England.
Acknowledgements are made to the British Pro-
ductivity Council for permission to use information
set out in their Seminar papers on Value Analysis by
J. Burnside, M.I.Mech.E., M.I.C.E., and Dalton
Hunt. Acknowledgements are also made to the
following Companies for the use of Case Histories: 0 50 100 150 200
Fairfields (Glasgow) Ltd., Plessey Company, Weight, 1b
Cochran Boiler Company and Barfords of Belton.
Fig. 1. Material costs

Value Engineering, February 1970 197

This chart reveals a number of apparent anomolies, the most Ideas should only be taken from the list after consideration and
important being the sharp rise in the average price at slightly preparation of the short list. The short list of ideas is then further
above 100 lb in weight. Investigation showed this to be due to the investigated and refined. Positive recommendations are then
suppliers' practice in pricing all components weighting more further discussed and after approval by management the changes
than 1 cwt on a different basis. Small design changes in a number are implemented. For a small company with a few not very
of items permitted these to be made lighter and so to be purchased complex products, the 'brain-storming' session can achieve a
at a lower cost. Four basic types of value are: great deal.
(1) Use value. The qualities and properties which achieve a Its main virtue is in its ability to bring forth ideas as the partici-
service use or work. pants are senior members of the company and the opportunity is
(2) Esteem value. The properties, features or attractiveness afforded of discussing the products and product'policy at a high
which make ownership desirable. level by interested parties. There are disadvantages to using
(3) Cost value. The total cost of materials, labour and 'brain-storming' as the only method of analysis as it takes up
services to produce it. departmental heads' time which is valuable and, therefore, the
(4) Exchange value. The qualities and properties which enable cost of a good idea can be high.
us to trade it for something else we want.
The importance of value in a free enterprise system ensures Delegation of the refining process to subordinates is difficult to
continuity in offering the customer the best value for money. This follow up and they are rarely fired with the same enthusiasm as
value is determined by the two basic considerations of purpose the departmental head. The lack of routine policy hinders decision
and cost. making in the latter part of the analysis.

The greatest disadvantage lies in the fact that 'brain-storming' is

1.5. Results from Value A n a l y s i s a part-time activity carried out in a random manner without a
The introduction of Value Analysis leads to a general overall leader. Provision of a leader and the adoption of a more formal
increase in cost consciousness and deliberately sets out to focus approach is of great benefit and in this form the group becomes a
attention on things not on people. Product value is improved and Value Analysis Committee.
the use of any materials and processes encouraged. The basic
benefits accruing from Value Analysis and Value Engineering are
respectively: 2.1. Value Analysis Committee
(a) a reduction in cost of existing products or system. As in the 'brain-storming' group, a Value Analysis Committee is
(b) the prevention of unnecessary cost in new products and composed of representatives from sales, buying, design and
systems. production. I n addition, the Committee has a secretary whose
duties are to record the items discussed at each meeting and to
The benefits have been repeatedly demonstrated in terms of return prepare agendas and a Chairman who may be looked upon as the
on investment and the sums of money saved are appreciably group leader.
greater than the cost of making the saving. A return of between
4:1 and 10:1 is the norm expected but it is continually very much The flow of ideas is promoted by 'brain-storming' along clearly
greater. It can be used by any business but the time taken to denned routes of enquiry and particular areas can thus be
obtain the returns of the money invested will vary with different examined more closely. The provision of an agenda and minutes
types of industry. of meeting ensures that a systematic approach is adopted whilst
being of great use in following up subsequent investigations. The
It is important to note that other savings will result from incor- Chairman is usually a director of the company, thus ensuring that
poration of ideas into other products 'Trade Offs', 'Fall Outs', support from the top is automatic and his knowledge of company
and 'Fringe Benefits'.
policy is of great benefit.

2. O R G A N I S A T I O N As in the first method, subsequent investigations and evaluation is

The form that the value engineering function will take largely delegated to subordinate personnel. Unless the Committee meets
at rather infrequent intervals the cost will be high and the inter-
depends on the size of the company and industry to which the
ference with normal duties serious. Strong personalities on the
company belongs, the variety of the products the company
Committee can inhibit the free flow of ideas thus largely destroy-
manufactures and the company's profitability.
ing the value of the group and the Committees tend to be slow
There are four methods available, each having inherent advan- acting.
tages and disadvantages and the choice of method depends on the
needs of the company and are as follows: In neither of these two methods of analysis have the services of a
(1) 'Brain-storming' sessions. trained value engineer been available, also refinement of ideas in
(2) The Value Analysis Committee. both cases has been delegated to departmental subordinates,
(3) The Value Analysis Team. who were not present during the ideas finding sessions and are not
specifically directed by any one leader. To overcome these dis-
(4) The combination of (1), (2) and (3).
advantages, there exists a third type of group which is called the
The term 'brain-storming' refers to a group activity which Value Analysis Team.
products an abundance of ideas. These ideas are subsequently
refined to eliminate suggestions which are considered impractic-
able for one reason or another. The 'brain-storming' group is 2.2. Value Analysis Team
generally composed of representatives from sales, purchasing, The Value Analysis Team can be created to operate either in
design and production. Sitting around a table the group examines place of or supplement a Value Analysis Committee. I n engineer-
the product being discussed and formulates ideas on improve- ing and allied industries it is usually composed of a team of
ment that could be incorporated at reduced cost. A list is made of planning engineers, and estimators headed by a value engineer.
all suggestions, no matter how apparently revolutionary, this list Specialist services are given by sales, design, purchasing and
is then reviewed and the ideas assessed. A short list is then technical departments whenever required. I n some manufacturing
prepared of those ideas considered to be possible and practical. industries the estimating function may be performed by the cost
department.
This kind of treatment produces a catalytic atmosphere in which
suggestions come forward very quickly and in the first stage of The essence of the Value Analysis Team is that the complete
preparing a long list of ideas the rules of 'brain-storming' deter- analysis of any project is handled by the team enabling 'brain-
mine that no suggestion, however impracticable, shall be rejected. storming' cost comparison and refining to be completed before

198 Value Engineering, February 1970

 TEAM-COMMITTEE RELATIONSHIP

V. A. committee

Head Head planning Head design

purchasing & Est. & Technical

Fig. 2

V. A. team

any recommendations are made. Rapid analysis is possible since personnel, decisions on cost reduction policy and implementation
preparation of cost comparisons is easily controlled and priorities of ideas can be issued by the Committee. The Value Analysis
can be quickly changed if necessary. Since the team leader, that is Team through the value engineer would be responsible for report-
the value engineer, reports directly to the Board of Directors, he is ing progress made on suggestions and for ensuring that the
assured of support from the top, decision making is rapid and activities being carried out under the various departmental heads
recommendations implemented with the least delay. Senior receive the right kind of priority to enable continuing progress to
personnel are free to perform their everyday duties and the be made.
operation of Value Analysis can be pursued on a full-time basis.
The disadvantages of the Value Analysis Team is that the team 3. T H E M E T H O D S U S E D IN V A L U E A N A L Y S I S
tends to work in a vacuum and heads of departments view savings 3.1. Introduction
made as a criticism of themselves and their departments. Value Analysis is an organised approach to obtain the same
performance at the lowest cost without affecting quality. The
minimising of product value depends on a systematic appraisal
2.3. Composite structure of every product that the company manufactures to decide which
Whilst the three foregoing methods have been used with success in products offer the greatest potential savings followed by the
different types of companies, current thinking believes that the formal application of the analytical process called Value Analysis.
major advantages lie with a composite approach in the form of a
team/committee relationship. There are twenty rules which must be followed at all times i f the
maximum product value is to be achieved and these are as
The Value Analysis Committee is composed of the heads of follows:
departments or senior representatives of the departments of (1) Prepare a Value Analysis programme for each product.
purchasing, planning, sales and design, technical and the value (2) Apply creative thinking at all times.
engineer with a Director as Chairman. This way 'road blocks' in (3) Remove obstructions as they are met, do not be deterred
communications or problems of prestige and status are reduced by 'road blocks'.
to a minimum. Since the Committee is composed of senior (4) Improve internal communications by example.

Value Engineering, February 1970 199

 (5) Bring new information into each area to be considered: 3.4. Information
do not be content with established custom and practice. All essential information should be assembled: specifications,
(6) Obtain information from the best sources: do not accept drawings, costs, quantities, manufacturing methods, planning
that existing sources are necessarily the best. sheets, names of suppliers, actual samples of parts and assemblies
(7) Get all the facts: be prepared for irrational answers to where applicable.
rational questions.
(8) Evaluate each function separately. The design engineers will be expected to explain the basic
(9) Evaluate design by comparison. engineering build up in the components, answer questions, listen
(10) Deal with the obvious first. and develop thoughts with the other members of the Committee
(11) Know the manufacturing cost. that they may get a complete understanding of the experience
(12) Put a £ sign on every tolerance. built into the product. The production engineer should be
(13) Put a £ sign on every main idea. available to advise on the current manufacturing process, ask
(14) Spend the company's money as you would your own. questions, listen and debate the current and possible alternative
(15) Make full use of your company's services, facilities and manufacturing methods.
resources.
(16) Use standards whenever possible. The Buyer should be available to explain the present buying
(17) Use proprietary products whenever possible. practices.
(18) Use proprietary processes whenever possible. The Sales should be available to explain essential sales features.
(19) Work on specific items, resisting the temptation to
generalise. Also in the Information Phase an assessment must be made of the
(20) Use your own judgment; the judgment of others may be amount of time which can be reasonably expended by the Com-
biased. mittee based on the current cost of the product and the possible
Before commencing the analysis of any product a programme savings which may accrue from the Value Analysis.
must be formulated.
In a co-ordinated exercise all products that a company manu- 3.5. Speculation
factures must be examined to establish an order of priorities. The The speculation stage is that part of the analysis where 'brain-
appraisal must include an assessment of the sales appeal of each storming' sessions can be used to the best advantage. The object
product and to what degree the product satisfies a customer's of this is to arrive at alternative methods of achieving the same
demand. Sales potential and market research trends must also be function, exact cost information does not matter at this stage,
considered. It must be emphasised that Value Analysis can only ideas are the important thing. The free use of the imagination
be really effective where there is a market for a product. Where a must be encouraged during the 'brain-storming' sessions and no
demand exists, Value Analysis can greatly increase the sales ideas, no matter now 'offbeat' should be ridiculed. All suggestions
potential by reducing cost and increasing product value. I f there must be accorded. The session will aim at some or all the follow-
is no product demand, obviously Value Analysis will fail. ing items:
Preparation of a programme indicating the order of treatment for (a) the elimination of parts or assembly operations.
each product and the allocation of analysis time to each is essen- (b) simplification of parts and assembly operations.
tial. It is best to analyse one product at a time and to have a fixed (c) use of standard parts in place of special items.
timetable for its analysis, otherwise the law of diminishing {d) simplification of design so that high speed manufacturing
returns will apply. With very complex products, it is customary to or assembly methods can be used,
break the product down to convenient sections treating each (e) cheaper alternative materials.
section as a separate product and, of course, if the size of the i f ) elimination of unnecessary finishing operations.
products warrant it, there is justification for two or more sections (g) alteration to manufacturing tolerances to reduce machin-
being analysed simultaneously by separate value engineering ing time and scrap.
teams. In drawing up the programme, factors to be considered (A) modification to enable automatic assembly methods to be
are: used.
(1) Areas which appear to offer the best savings. (/) substitution of low cost processes for high cost processes.
(2) The preparation of total cost attributable to bought out (;") use of high cost material to simplify design and reduce
items and finishing. labour content thus resulting in a net saving.
(3) The preparation of total cost attributable to material. (k) reduce purchase costs by standardisation on dimensions.
(4) The preparation of total cost attributable to labour. (/) reduce purchase costs by blanket ordering or purchasing
(5) The analysis time estimated to be required for dealing in larger quantities.
with each sub-assembly or section. (m) alternative manufacturing processes, for example, die-
casting instead of forging.
3.2. J o b Plan (H) use of proprietary parts instead of made in parts.
The plan or job plan has its equal in Value Analysis and provides (e>) use of proprietary processes which may be less expensive
the framework for successful teamwork and it has a number of than low volume internal processes at present used.
phases. O) use of pre-finish materials wherever possible, for example,
These are: pre-finished steel sheet.
(1) Orientation It is important that all ideas and possible alternatives be listed
(2) Information during the speculation stage and 'brain-storming' sessions and
(3) Speculation that nothing be rejected.
(4) Evaluation
(5) Planning Subsequent evaluation will automatically eliminate many of the
(6) Consultation suggestions and time should not be spent during this sessions in
(7) Implementation judging the value of each suggestion.

3.3. Orientation 3.6. Evaluation

This is the preliminary phase in which the stage is set by establish- The evaluation stage is the point at which a price is put against
ing what is to be accomplished by selecting a specific product or every idea and the cost of alternatives fully investigated. High
section of a product and defining the general scope, restriction cost alternatives are automatically eliminated and thus ideas
and aims of the study. When .commencing Value Analysis work, which are of doubtful value functionally must be tested and
the products selected will be obviously those most likely to pro- proved to be satisfactory before deciding to give them further
vide the greatest return. attention. It will be necessary to call on the purchasing, produc-

200 Value Engineering, February 1970

tion and cost departments to obtain information on cost whilst 3.9. Implementation
queries on safety and appearance must be referred to the technical At the implementation stage, full details should be available of
and sales departments respectively. The proposed changes should the cost of new tools, cost of scrapping existing tools and finish
also be discussed with the service department since some parts, the cost of maintaining stocks of obsolete parts for service
apparently unnecessary feature may have been included at the purposes and a pay-off comparison must be prepared for each
service department's request after complaints from the customers. change recommended. In accordance with the overall Value
It is important at this stage of the analysis that 'road blocks' and Analysis programme, a specific plan on a time basis for the
obstructions be eliminated or removed without antagonising the introduction of each change should be prepared for each product
personnel A 'road block' may be defined as a mental obstruction or section of a product.
preventing reception of new ideas. While the root cause of road
blocks are very numerous, in every case the result is the same With provision for formal reports to be made at stated intervals
unwillingness to consider any ideas or proposals which deviate of time to the Value Analysis Committee to ensure that the pro-
in any way from custom and practice. cess of implementation is achieved in a minimum period of time.
The other absolute essential, of course, is to check that the
One of the commonest causes is the erroneous assumption by estimated savings are, in fact, being achieved.
personnel that they or their departments are being criticised. Minds
immediately become closed to new ideas and prejudices quickly Fig. 3 shows a typical implementation procedure for a company
form producing conditions which if not handled with great tact having a Value Analysis Committee and a Value Analysis team.
and understanding result in an irremovable 'road block' being
erected. It is the duty of the Value Analysis team and the Board ,
of Directors to ensure that everyone is aware of the object of the " 4. D O C U M E N T A T I O N
analysis and that no criticism of any personnel is intended or To gain the full benefit from Value Analysis the organised
implied. It should also be borne in mind that good personal rela- approach must be used in preparing analysis documents so that
tions largely prevent this type of problem arising in the first these documents can not only be used during the analysis itself
instance.
but be on a form suitable to use as permanent records.
Having taken both cost and performance into consideration, the There are numerous types of documents and systems suitable for
best value ideas are selected for further development. use in Value Analysis but the time available precludes a detailed
discussion. The books and papers referred to in the bibliography
3.7. Planning give examples of the various types of documentation used by
After completing the evaluation stage, a decision must be made different companies and each have their own peculiar advantages.
on the line of enquiry to be pursued in order to make a final selec- The important thing to remember is that without formal docu-
tion. There are two methods of approach to this part of the mentation the organised approach essential in Value Analysis
analysis: cannot be achieved.
(1) The functional approach
(2) The cost analysis approach. In broad detail, the majority of products require only three
different types of analysis sheets:
The functional approach directs attention towards eliminating (1) part analysis.
parts. Thus ideas which achieve this end are considered first and (2) sub assembly analysis summary.
it is only after a complete investigation that the cost analysis (3) total product analysis summary.
approach is adopted. Very often it will be found that two ideas
provide the same advantages as far as function and parts reduc- From the company's point of view, it is important that an
tion are concerned, but that on a cost basis one of the suggestions accumulative record preferably in graphical form be maintained
is more attractive. Alternatively, the decision may be taken to on the return of investment from Value Analysis. Regular reports
make the first selection by cost comparison, final selection being should also be made to the Board of Directors.
on the basis of function. There are no hard and fast rules as to the
order in which these two methods should be applied. It is very A record should be kept of the ratio of accepted and unaccepted
much a matter of personal choice although occasionally dictated recommendations and the rejected sub-assembly analysis sum-
by the kind of product being considered. maries should be filed in such a way that future reference is a
simple matter. It is not uncommon for a previously rejected
It cannot be over-emphasised that a formal disciplined approach proposal to be subsequently accepted as a result of a change in
must be used to determine and differentiate between primary and specification.
secondary functions of the subject being studied.
Details of such an approach are contained in Value Engineering, 5. V A L U E E N G I N E E R I N G A N D T H E F U T U R E
Vol. 1, No. 2 and Vol. 1 No. 3 in articles written by Arthur E.
The technique of Value Analysis as previously described can also
Mudge, these show quite clearly that parts can be eliminated
be used at the early design stages on new products. This applica-
and/or modified without effecting the functional worth of the
tion is called 'Value Engineering' and whilst it is more difficult to
product.
make direct measurements of the savings made, they are fre-
quently far greater than those accruing from Value Analysis of
3.8. Consultation existing items.
The consultation stage takes further the preliminary enquiries
which were made during the evaluation stage. The further refine- The boundaries between Value Analysis and Value Engineering
ment of ideas that have taken place since the evaluation stage will are by no means clear cut since few new products, systems, etc.,
have given a much clearer idea of the possible final recommenda- are designed without reference to previous products or experi-
tion. ences. The general education of all design engineering staffs in
Value Engineering and Value Analysis can be of lasting benefit
The Value Analysis team must be absolutely certain that their
to the company but it is essential that the formalised examination
recommendations are feasible and meet all requirements of
as laid down in these techniques is used and constantly referred to
function and quality before firm proposals are finalised. The final
by the supervisory personnel, namely senior designers, draughts-
proposals will be the joint recommendations of all the members
men and chief engineers.
of the Value Analysis Committee comprising the sales, produc-
tion, technical and service departments. It may be necessary to Cost information in an understable form is not easily available to
bring in external experts to discuss with the Committee new designers, draughtsmen and other cost generating personnel. It is
techniques, materials or processes which are not familiar to the very important that this particular area is given very serious
company. Also with certain products it will be necessary for thought as without cost information it is very difficult to create
prototypes to be manufactured and field tested. the right type of co-operation and motivation.

Value Engineering, February 1970 201

 V. A. TEAM

Accepted ideas recorded Rejected ideas recorded

and documents filed for Refined ideas and documents filed for
future reference future reference

V. A . COMMITTEE -Accepted ideas-

Authorised for implementation,
Date of introduction fixed.
Minutes prepared and circulated

PRODUCTION PROD. CONTROL

PURCHASING SALES DESIGN
ENGINEERING ACCOUNTS

Suppliers and Specs, Revised sales literature Revised design Re-plan For information only
of stocks
Sales force advised of New drawings Raise cap. sanctions for
changes new tools
Revised manufacturing
Service department specifications Prepare tool drgs.
advised of changes
Change notes raised Revise inspection equip.
Change notes raised
New shop drawings
Fig. 3 New work values

With the introduction of Value Analysis techniques into a wide 6.4. Barfords of Belton Ltd.
range of industries and Government Departments, an increasing These are examples of how savings were made on small
number of future supply contracts are likely to contain clauses batch components.
requiring the application of Value Analysis and Value Engineer-
ing by the contractors. 6.1. Fairfields ( G l a s g o w ) Ltd.
It must be appreciated that however effective Value Analysis and Value Engineering at Fairfields {Glasgow) Ltd., Shipbuilders
Value Engineering have proved to be, they are complimentary to It is important to stress that Fairfields is a national proving-
and not a substitute for good management and other skills. In ground and behind the experiment there lies a long-term objective
addition to the wider application of these techniques, the future which can be of vital significance to British industry as a whole.
objective will be the development of the value concept throughout
the organisation. Successful case histories are available where the First stage: JanuaryI December, 1966
concept has been applied to areas of administration, marketing, Build good quality ships at the right price and deliver on time.
overheads, distribution, etc. Provide the yard with first-class management, reliable negotiating
machinery, real productivity agreements and innumerable train-
Factual information available to date based on the experience of ing schemes.
the introduction of the techniques over the last 20 years have
proved that savings averaging from four and ten times the cost of Introduce modern management techniques under the director of
implementation are a normal result. productivity services, of which Value Engineering is part.
Second stage: January)December 1967
If this return is compared with the volume of sales required to
produce an equivalent profit, then it clearly cannot be ignored. Release the result of the negotiating machinery and the techniques
of management.
A return of 300 per cent plus on an investment is good business by
any standard. Produce monitored data of achievements either by the application
of work study, quality control, O and M , OR, programming and
6. C A S E S T U D I E S planning, Value Engineering, personnel administration or
In this section are shown four diverse examples of Value Analysis/ purchasing, etc.
Engineering:
Third stage: JanuaryI December 1968
6.1. Fairfields (Glasgow) Ltd.
Through the introduction of all known management techniques
This illustrates how Value Analysis/Engineering was
introduced in a large shipbuilding Company. and practices produce a viable set of accounts.
6.2. The Plessey Company Ltd. Introduction
This is an example of how a simple large volume component Fairfields is not unlike heavy engineering, because many of the
was Value Analysed. problems arising are of a similar nature. One-off types are signifi-
6.3. Cochran and Co., Annan, Ltd. cant, although this trend may change shortly and more than one
This shows how large boiler components were Value ship of the same type will brighten the prospects for greater
Analysed with considerable savings in prefabrication work. savings and profitability.

202 Value Engineering, February 1970

 10,000 Value Engineering department
savings chart for 1967
£89,602 •
90,000

Target £82,000
£82,133—^-
80,000
Legend
— Target
£70,771
70,000 Proposals
/
Implemented
60,000 h-
£58,709 TK

£ 50,000 £48,683

£41,148
40,000

£32,550
30,000

20,000

£14,502 .
10,000 £10,262 L.

_L
Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec.

Fig. 4

Value Engineering began in January 1967, with the appointment Value Engineering department personnel first of all work as a
of a value engineering manager, along with an allocation of team, helping each other to finalise the information required for
money to build up the department to a strength of six, including each project. In shipbuilding the collecting of all relevant facts
the manager. is a 'must' before a value task force team is inaugurated.
Depending on the project, invitations are extended to any one
Accomplishment of the following:
From March/December 1967 Value Engineering has accom-
plished: Design, production, electrical, industrial or mechanical
Proposals submitted to date 33 engineers, draughtsmen, purchasing or outside suppliers, to
become members of the team.
Value of proposals . . .. .. .. .. £89,602
Number of proposals rejected .. .. .. l The value task force teams may, if necessary, request either the
Value of proposals rejected £530 owners, Board of Trade, Lloyds or Admiralty representatives to
Number of proposals being implemented .. 25 attend a team meeting in an advisory capacity.
Value of proposals being implemented . . .. £74,412 Through purchasing a Value Engineering brochure has been
Number of proposals in hand 10 enclosed with every order being put out, informing suppliers that
Estimated value of proposals in hand .. .. £43,000 they too can contribute to the V.E. programme. This is the first
Capital expenditure (e.g. machinery, tools, etc.) . . £1,720 step to encourage suppliers to discover methods of reducing the
Actual departmental cost (e.g. salaries, heat, light costs of their products to Fairfields.
and power) £9890
Value of proposals implemented (audited) (March/ The purchasing buyer constantly attends team meetings. Purchas-
December 1967) £7,100 ing and Value Engineering work in harmony for the benefit of the
Company.
General comments A Value Engineering incentive clause is now included in all
To obtain the above figures many new ideas on how to attack the merchant ship contracts. One owner has accepted this clause and
problem of reducing costs and increasing the profitability of is benefiting.
Fairfields were tried out by the value engineering department Example: Proposals submitted by Fairfields
before settling down to the present system. 75 per cent saving to Fairfields
In the early days Value Engineering was introduced to managerial 25 per cent saving to owners
personnel by giving talks, showing films and examples. Full Proposals submitted by owners
support for the Value Engineering programme came from board 75 per cent saving to owners
level. 25 per cent saving to Fairfields
Fairfields talk about revenue investment and a return on this The percentage saving is based on the figure remaining after
investment for the first year of activities should be in the region deductions of investigation costs.
of £10 return for every £1 spent.
Facilities to train owners' personnel in the Value Engineering
The present system is built on a sound foundation because the techniques is also included in the clause.

Value Engineering, February 1970 203

Projects tackled by area. This analysis showed that there were three distinct
Examples functional areas:
1. Insulate tags
Estimated 2. Locate on assembly jig
Costs annual 3. Space from bank
No. Description Present Proposed saving Savings
These functional areas are shown in Figure 6. Resulting from this
£ s. d. £ s. d. £ % analysis, it was possible to redesign the shape to allow a scrapless
1. Plastic facings/panels 1 9 1 54 3500 17 tool. (Figure 7).
2. Pipe connection 4 in.
Nom Bore 3 14 4 2 11 3 9213 31
3. | in. Tubing
Chromed C U . 3 6 2 3 530 36*
4. Chisels 18 8 9 4 989 50*
5. Shell jigs 85 14 0 41 12 0 4240 52*
6. Hilti gun - elec. 4 0 1 8 895 57*
7. Pipe hangers stool
and clip 6 9 2 4 8598 65
8. Bulkhead doors clip
assy. 7 0 0 2 3 0 2684 69*
9. Hilti gun - Joiners 2 0 0 7 834 71
10. Stapling machine 0 3 0 oi 5172 84*

* Denotes proposals implemented on certain contracts, and remainder

are being implemented.
Fig. 5 Old Insulator and Blancking Layout.
Future projects - Long term
There are many proposals still in the pipeline, but the following
are being investigated with the future requirements of ship-
building in mind:
Engine room systems.
Cable trays and clips - electrical.
Paint - primers and finishing coats.
PVC valves and piping.
Conclusion 2 - Locates on
Decision to attack quick financial return projects has been
assembly fixture
successful.
3 - Spaces from bank
Value Engineering is becoming a 'Way of Life' within Fairfields
and further training courses will ensure that everyone is made 4 - No function
cost-conscious. Fig. 6 Old Insulator—Functional Areas.
Projects have been implemented within six months of Value
Engineering activities commencing. Normal time is between 12
and 18 months, based on information to date.
With the introduction of value task force teams early on in the
year a cross-fertilisation of ideas, suggestions and good human Forms complementary
relations has taken place.
Value Engineering can be applied to shipbuilding, but preferably
at the design stage where the greatest savings can be recorded.
In many instances it is too late when it arrives on the shop floor.
The success of Value Engineering at Fairfields is entirely due to scrapless tool
two factors:
Full support from the board of directors, and Fig. 7 New Insulator.
the excellent co-operation given by all company, owners, and
suppliers' representatives.
In addition to the change of shape, the material was changed from
Finally, Fairfields have been building ships on the River Clyde phenol fibre to PVC. The change to PVC then meant that the
for over 100 years and have a world-wide reputation for ship material could be fed in rolls rather than strip.
design and construction. Value Engineering is helping to maintain
this reputation. All these changes met with G.P.O. approval.
Savings
6.2. The Plessey Company Ltd. Material costs (annual)
£
Plessey Telecommunications Group designs and manufacturers
Old design with phenol fibre 8500
telephone exchange equipments and subscribers apparatus for
New design with PVC 3000
telephone administrations and private companies throughout the
world. Much of its equipment goes to the British Post Office
Savings .. £5500
which controls the design of equipment from suppliers.
In this example, the part selected for study is simple and is used in Additional savings arise from the use of roll material rather than
large quantities. Its function is as a spacer and insulator between strip and from the reduction of breakages. (Replacement of a
rows of tags on a switch bank. rear bank insulator is a difficult and expensive business.)
Rear bank insulator Introduction costs
Figure 5 shows the old form of rear bank insulator made from Because of the large quantities of this item, duplicate tools and
0 016 in. phenol fibre. Since poor material utilisation resulted roll feeds were necessary.
from the awkward shape for blanking, this shape was analysed Total cost: £2000

204 Value Engineering, February 1970

6.3. Cochran and Co. Annan, Ltd. The design shown in Figure 9 is much simpler. It consists of a ' Y'
Cochran and Co., who are boilermakers and engineers, instituted piece and two taper bore pads. The venturi nozzle is cast and
an extensive staff-training programme in Value Analysis in 1966. externally machined to the same bore as the pad and inserted in
The case study gives details of two examples subsequently the pad. No screwing or locking device is necessary. In addition,
obtained from V.A. work. welding and fabrication work is considerably reduced.

Cochran ''Clansman^ boiler mixing device The application of Value Analysis principles to this component of
In hot water systems, water is returned to the boiler through a of the Cochran 'Clansman' boiler has greatly improved the design
large diameter pipe which branches into two pipes at the boiler. and effected a total saving in cost of approximately £57 per unit.
These pipes lead to venturi nozzles.
Cochran spheriod boiler
Figure 8 shows the original design. The ' Y' piece was fabricated Figure 10 shows the shell, tubeplates and furnace of a Cochran
from pipes and welded into the nozzle cover. Note also that a oil-fired spheroid boiler before Value Analysis principles were
plate has to be welded in position, machined, bored and screwed applied.
to receive the venturi portion, which itself had to be cast, screwed,
and locked in position. The furnace was fabricated from two pressed hemispheres and
two half cones, while the two tubeplates were of different depth
and shape and necessitated different pressing blocks.

Figure 11 shows the construction evolved as result of the Value

;
Analysis functional approach. The front and back tubeplates are
now identical and are pressed from the same block, reducing
setting up and press time.

The furnace is fabricated from one pressed hemisphere and one

shaped pressing, which is then cut into two parts and welded to
form the conical section. The reduction in length of welded seam
required, together with the reduced number of components gives
substantial savings in labour and material.

The total saving from this exercise is approximately £90 per

boiler.

Back tubeplate Front tubeplate

2 long welds

Conical part of furnace

knifed up in two parts 2 circ. welds

Fig. 8
1 hemispherical pressing
1 hemispherical pressing

Fig. 10

Back tubeplate Front tubeplate

2 long, welds
1 circ. weld
1 conical pressing

1 hemispherical pressing

Fig. 9 Fig. 11

Value Engineering, February 1970 205

6.4. Barfords of Belton, British Leyland Motor Cost after Value Analysis 123 0 pence
Corporation, Construction Division Saving after Value Analysis on the Check Chain Assembly 55 per
Example (7) Check chain assembly cent of original cost.
Before Value Analysis the check chain assembly consisted of
three components and labour assembly time. Example (2) Spring collar
Before Value Analysis the Spring Collar shown in the sketch
was machined from 2 in. dia. M.S. bar.
% in-high tensile chain

Standard shackle

Fig. 12

Cost of Assembly: Chain 188 0 pence

Shackle 42 0 pence
Eyebolt 310 pence
Labour Assembly Time .. 10 0 pence Jin.

Total cost .. 2710 pence

1 in.
After Value Analysis the check chain assembly was bought in
complete as shown below.
Fig. 14

After Value Analysis a change of material was made and as a

consequence the Purchasing Department obtained the item ready
Equal strength to
3/ in.H.T.steel chain
for use as a Casting at 5 0 pence each.
8

Saving on the Spring Collar 85 per cent.

U ^ i n . MS.chain
Example (3) Starting handle guide
Before Value Analysis two different types of starting handle guide
were required depending on the choice of engine specified by the
customer.
Standard eye bolt forged
direct on to chain The sketch shows the two different types of starting handle guide
and the single type evolved after Value Analysis which is suitable
Fig. 13 for both types of engine:

Figure 15. Starting handle guide.

206 Value Engineering, February 1970

The costs before Value Analysis were: Sixteen Case Studies in Value Analysis. British Productivity
Guide for Petter engine 192 0 pence Council (1965).
Guide for Lister engine . . .. .. . . 1 0 8 0 pence D . R . TAYLOR, A. E. DILLARD and J. W . MOON, Value Engineer-
After Value Analysis only on standard component was required ing and Value Analysis. Society of Automotive Engineers (1965).
at a cost of 75 0 pence. W . D . FALCON, Value Analysis! Value Engineering. The Implica-
Thus showing a saving on the lister engine of 30 per cent and a tions for Managers. American Management Association (1964).
saving on the Petter engine of 60 per cent. P. BAILY and O. FARMER, Purchasing Problems. Purchasing
Other savings made were a large reduction in paperwork, reduc- Officers Association (1967).
tion stores space required, less drawings, planning sheets, W . L. GAGE, Value Analysis. McGraw-Hill (1967).
requisitions, batch tickets, clerical time, etc. J. W . BLYTH and R . G. WOODWARD, Application of Value
Number of pieces of paper in use before V.A 123 Analysis/Engineering Skills. Argyle (1967).
Number of pieces of paper in use after V.A 19 J. C. H . ROBERTS, Design Engineering Guide - Value Engineering.
Product Journals (1968).
BIBLIOGRAPHY W . B. ENGLAND, Procurement. Irwin (1962).
L. D . MILES, Techniques of Value Analysis and Engineering. Value Engineering in Manufacturing. American Society of Tool
McGraw-Hill (1961) and Manufacturing Engineers ( F . WILSON, ed.). Prentice-Hall
Applied Value Analysis (includes articles on how to analyse (1967) .
values in production tools, electrical equipment, materials Engineering Materials. Selection and Value Analysis (H. J.
handling, etc., and case studies on same). Purchasing (8th June' SHARP, ed.). Hey wood (1966)
1959). Whole issue. L. J. DEROSE, Negotiated Purchasing. Materials Management
Value Analysis Case Histories. Special issue. Purchasing. 52, 35¬ Institute (1962).
415 (23rd April 1962). D . FISHLOCK, The New Materials. John Murray (1967).
H. J. WOODS, Applying Value Analysis to Office Purchasing. J. F . GIBSON, Value Analysis - The Rewarding Infection. Pergamon
Office. 55, p. 169, 315-323 (January 1962). (1968) .

MISCELLANY

Value Engineering Association change ingrained habits and attitudes. Long-term forecasting of
Annual Conference 1969 the supply of labour in relation to demand is a risky statistical
The second Annual Conference of the Value Engineering exercise, and the more particularised, the more uncertain.
Association was held in London from 8th to the 10th May 1969. Obviously the ultimate source of skilled labour lies in the schools
The conference was attended by 38 delegates including one from where education must be sufficiently technical to supply our
Norway. Six papers were presented during the conference by material needs, sufficiently liberal to supply our cultural needs,
Bruce D . Whitwell, F. Bowyer, W. H . Mayall, D . F. Spear, and above all, sufficiently creative to supply a built-in flexibility
P. L. McLeod and D. Hunt. The time allowed for discussion after and resourcefulness to meet the unforeseeable challenges of a
the papers was fully occupied and could easily have been doubled. world of accelerating change. Looking further ahead, some see
The proceedings of the conference are being printed by the the computer as eventually affording a complete release from the
Association and will be sold to members and non-members when need for mass-employed manpower.'
available. Further details of the conference proceedings, and the
Association and future activities can be obtained from: The
Secretary, The Value Engineering Association, c/o Glyn Mills & * H . J. Habakkuk, American and British Technology in the
Co., Bankers, 25 Millbank, London, S.W.1. Nineteenth Century: the Search for Labour-Saving Inventions
(1962), very carefully analyses the cross-currents in entrepre-
neurial policy regarding skilled and unskilled manpower. T.
* % * Brassey, in dealing with 'Work and Wages' nearly a century ago
(1872) examined in chapter five, the economics of high wages and
embodies his conclusion in the title: Dear Labour Stimulates
Labour Supply Shortages Invention.
Mr Glyn Davies of the University of Strathclyde writes in The
Journal of Economic Studies (Vol. 3, No. 1, pp. 25-53) that, 'The * * *
recent intense shortage of skilled labour has five main causes: a
basic natural trend, on which are super-imposed a population
explosion, a technological revolution, an ability to achieve and Indirect taxation - A n extremelty blunt w e a p o n
maintain full employment, and finally, related to the latter, an It is a pleasure to meet a new and detailed piece of mathematical
inability to prevent the regular recurrence of excessive demand of enconomics that claims to throw hard light on a key part of
crisis proportions.' current British economic policy. It is an equation for fluctuations
He concludes that, 'It would appear clear that long-standing in personal savings as a proportion of after-tax income.
fundamental pressures of demand are likely to perpetuate the The relationship is set out by Brian Reading, of the Conservative
current shortage of skilled labour in Britain and over much of the Party Research Department, and David Lomax, an economist
rest of the world for many years to come. It follows that no with the National Westminster Bank, in the latest issue of the
complete "cure" is possible, or even desirable. Were such a cure National Westminster Quarterly Review.
possible it would remove one of the most important agents * * *
making for innovation and invention. As Habakkuk has recently Their equation has the advantage that it leads to a rational
demonstrated, this was the key factor influencing the rate of explanation of why the personal savings ratio fluctuates so widely.
development of British and particularly American technology in The equation is: S = - 12-87 + 29-8 Log Y + 0-3066DY
the 19th century. *Deflation deals with the symptoms of labour where S is the personal savings ratio: Y is personal after-tax
shortage rather than doing anything positive to increase the income (in billions of pounds at constant 1958 prices); and D Y
supply: if repeated, its depressing effect on the actual rate of is the percentage by which actual after-tax income in any quarter
growth may lead also to a reduction in the potential long-term trend deviates from the long-term upward trend. The period covered
of growth. For partial cures, training and re-training offer the most is from 1955 to the third quarter of 1964.
immediately available avenues, but even here it is necessary to
* * *
Value Engineering, February, 1970 207
For the non-numerate, the first, negative, part of the equation One suggestion is that the mind, by analogy with a computer, is
simply means that at low income levels there is a heavy drawing 'reprogrammed' during dreaming. In this case patients recover-
down of savings to maintain an accustomed level of living. ing from brain damage might be expected to need more repro-
The interesting part of the equation is the last term: it implies gramming of the mind and to spend longer in dreaming.
that, in the face of a sudden cut in after-tax income, people are To test this inference, R. Greenberg and E. M . Dewan at Boston
prepared to reduce their savings so as to make up for as much as Veterans' Administration Hospital have recorded the dreaming
50 per cent of the income drop. periods of patients recovering from aphasia, a speech difficulty
* * * that ensues after damage to certain areas of the brain. The time
The authors' work related to the ten years up to 1964. But they spent in dreaming was recorded automatically by a device which
have applied their calculation to 1968, the year of the unprece- monitors rapid movements of the eyeballs.
dentedly tough post-devaluation Budget, and the year when Patients who had made no improvement were found to spend an
consumer spending continued to run so far ahead of all the eighth of the night in dreaming sleep whereas patients with
expert and Treasury forecasts. significant improvement devoted a fifth of their sleeping hours to
Treasury forecasting assumes that the marginal rate of saving is dreaming. The definite association between improvement and
about 20 per cent, so that for any £100 increase in taxation dreaming time confirms that the dreaming period may be involved
people cut back their spending by £80. The Reading-Lomax in recovery, although a separate correlation between dreaming
equation assumes that this marginal rate is nearer 50 per cent. time and the severity of the brain damage may explain part of the
The equation, even projected forward from 1964 to 1968, would association.
have predicted a substantial rise in consumer spending, compared
with the 1968 Budget forecasts of a clear drop.
* * * * •
The implications of this thesis go right to the heart of any
Chancellor's economic strategy. Indirect taxation becomes an
extremely blunt weapon for keeping consumer demand in check. The Good Old D a y s ?
By extension, the effect of higher indirect taxes in cutting con- The following rules were issued in 1852 by afirmof merchants and
sumer demand for imports and in improving the balance of ship chandlers:
trade becomes marginal. The authors calculate that the £592m. Rules for Clerical Staff
increase in indirect taxation for 1968/69 would have reduced 1. Godliness, Cleanliness and Punctuality are the necessities of
imports to only £45m. below what they otherwise would have a good business.
been. 2. On the recommendations of the Management, this firm has
But higher domestic prices because of the extra taxation would reduced the hours of work, and the Clerical staff will now
have reduced the competitiveness of British exports and increased only have to be present between the hours of 7 a.m. and 6
that of foreign imports, together perhaps to the tune of £15m.- p.m. on weekdays. The Sabbath is for worship, but should
£20m. on the wrong side of the balance of payments - reducing any man-of-war or other vessel require victualling the
the net improvement in the balance of payments to £25m. Clerical staff will work on the Sabbath.
3. Daily Prayers will be held each morning in the Main Office.
The Clerical staff will be present.
Even then, as the authors rightly point out, the assumed effect on
4. Clothing must be of a sober nature. The Clerical staff will
consumer demand will begin to wear off, while the reduction in
not disport themselves in raiment of bright colours, nor will
British industry's cost competitiveness will remain.
they wear hose, unless in good repair.
* * *
5. Overshoes and topcoats may not be worn in the office but
The final implication of these findings is that far more attention Neck Scarves and Headgear may be worn in inclement
should be paid directly to saving. Saving tends to be regarded as a weather.
residual after income, tax, and consumer spending levels have 6. A stove is provided for the benefit of the Clerical staff. Coal
been worked through. But personal saving is, of course, only the and wood must be kept in the locker. It is recommended that
other side of the coin to consumer spending. In Britain, company each member of the Clerical staff bring four pounds of coal
saving (undistributed profits) and public sector saving (the each day during the cold weather.
surplus of current revenue over current expenditure) are at about 7. No member of the Clerical staff may leave the room without
the level in comparable countries. permission from Mr Ryder. The calls of nature are permitted
* * * and the Clerical staff may use the garden below the second
It is in the personal sector that, historically, we lag in the league gate. This area must be kept in good order.
tables. It increasingly looks as if only through higher personal 8. No talking is allowed during business hours.
savings rates will the resources be made available for a lasting 9. The craving for tobacco, wines or spirits is a human weakness
improvement in the balance of trade, a proper level of industrial and, as such, is forbidden to all members of the Clerical staff.
investment, and the higher levels of public expenditure that are 10. Now that the hours of business have been drastically reduced
inevitable. the partaking of food is allowed between 11.30 a.m. and
noon, but work will not on any account cease.
• * 11. Members of the Clerical staff will provide their own pens. A
new sharpener is available on application to Mr Ryder.
12. M r Ryder will nominate a senior clerk to be responsible for
Dreams may reprogramme the mind the Cleanliness of the Main Office and the Private Office, and
The dreaming periods of sleep may be necessary for adding new all boys and juniors will report to him 40 minutes before
information to existing stores and reorganising the long-term Prayers and will remain after closing hours for similar work.
function of the brain. Tests on patients recovering from brain Brushes, brooms, scrubbers and soap are provided by the
injury have lent a modicum of support to this suggestion. Owners.
Physiologists have learnt to distinguish two phases of sleep, one 13. The new increased weekly wages are as hereunder detailed:
of which is characterised by rapid eyeball movements (R.E.M.s) Junior boys (to 11 years) Is.
of the sleeping subject. R.E.M.-sleep, as it is known, seems to be Boys (to 14 years) 2s.
the phase in which all or most dreaming occurs, as judged by the Juniors 4s. 9d.
subject's ability to recount a dream when woken up. Much Junior Clerks 8s. 7d.
ingenuity has gone into guessing the purpose of R.E.M.-sleep Senior Clerks (after 15 years with the Owners) 21s.
and dreaming. Most hypotheses start from the suggestive finding The Owners hereby recognise the generosity of the new Labour
that subjects woken up when they start to dream suffer as badly Laws, but will expect a great rise in output of work to compensate
as if they had had no sleep at all. for these near Utopian conditions.

208 Value Engineering, February 1970

Reprint No. 2:4:3

Purchasing—Basic Concepts

Cost-per-pound Formula Helps

Procurement 'Pound' Costs
by F. P. Lalonde*

Mr Lalonde asks whether the design represents good There is a very useful worksheet showing how to apply
value to the customer, and then sets down how to apply seven techniques of cost analysis to reducing the cost of a
the technique of Value Engineering to the work of the product.
buyer.

In the past, many designers were told to design a product to ful-

fill a specific need and relatively small emphasis was placed on the
cost of the outcome. The attitude then was to design the product,
Cost per lb.
produce it and put it on the market with all possible haste regard-
less of cost. ('The cost of the product plus overhead and profit
equals the price the consumer will pay for it.') How many times
has this philosophy been expressed and is still being expressed?
And so the product was developed and probably sold quite
readily since it satisfied a need and was the only one of its kind on
the market. However, within a short period, some 'ingenious'
competitor recognised the potential of the product and decided
that he could make it for less, thereby capturing a substantial
portion of the existing market. When the competitive product hit
the market many consumers naturally bought and sales volume of
the original design suddenly dropped. The reaction of the original
manufacturer was quite natural since he realised he must remove
some of the existent quality from his product in order to sell at a
lower price to compete with the new inferior item. Hence the
battle was on and the price reduction was became a part of
'modern business'.

Now what is ' M r Consumer's' reaction to this state of affairs?

He is now faced with the choice of two products, neither of which
contain the quality of the original design. He, no doubt, will
select one or the other and in either case probably ends up with a
two year roptacement cost which, in the long term, costs him
several times the price of the original high quality item. Did
either the original design - or do the existing designs - represent
good value to the consumer? Probably not!
And this is precisely the situation in our society today. We are all
interested in - and many of us concentrate on - value or 'obtain-
ing the most worth for our money' but how many are actually
doing something about it? Hasn't the time arrived for us to
concentrate on value in our products before countries other than
our own flood the home market with products incorporating the
best balance between performance, reliability and cost ? By then
it will be too late!

* AuthorF. P. Lalonde follows up here with a second

article to that which appeared in Canadian
Purchasor, July 1967 and which he calls 'The
Philosophy and Technique of Value Engineering'.
He is pictured taking a 'sharp pencil' look at a One of the most successful methods of achieving value that has
bracket assembly which came out with a 'high' been developed to date is known as Value Engineering.
rating in comparison with everyday items. What he
says here may convince others to have 10% of time Value Engineering is an organised, creative approach to providing
reap 70% of benefits. Mr Lalonde was Value the function with the essential performance and reliability at the
Engineering Supervisor at Canadair Ltd. He is now lowest cost. The key word in this definition is 'function' since the
President of The Frank P. Lalonde Ltd., 131A Value Engineer concentrates on 'What the component or
Hymus Blvd., Pointe Claire, Quebec, Canada. assembly does' and not 'how can we make the same thing
cheaper?'

Value Engineering, February 1970 209

 Name John Smith
Team no. 12 _ S h e e t ^ ^ of /
S U P P O R T S P R O P O S A L N o . (S)

TECHNIQUES QUANTITY
5|COST, 6 COST 7
OF COST
-LOT SIZE
ANALYSIS s 178-31 DIM PRO
EACH X IOOO ANNUAL USAGE
DESCRIPTION
J MATERIAL
Control '((10-3l) 62 % Tot. % Av. WEIGHT DIM PROP
assembly 136 #
LABOR
DRAWING s 16-38 9 % Tot. % Av

*X7947590 OVERHEAD 51 • 62;.. 29 % Tot. % Av

Incremental Incremental Incremental IncremenJCumulat

Material labor overhead tal . ive
ITEM cost of cost of
OPERATION $ $ $ operation I Item
$ l S
Bracket '4000) 1-91 910 5/0/
Control 2700) ,2700
Base 15-42 0-25 0-61 16-28
^ 0 2 ,
Ends (2) 4 92 0-34 0-82 UOin^ 1
608 6,080
031
Sides (2J' 672 0-15 0-36 723 7,230
0-24 0-12
Gussets (4) 294 0/3 0-31 338 \20inV
3,380 034 OI6
Cover 4-26 0-28 0-64 5/8 80/n?
5,180
0-26 007\
Seal strip

Seal(2)
(2) 0-82 0-82 820 w 0-2I
8 f p
0-/0
5-79 579 5,790 w 0-75
Bolts(/6f 0-64 0-64 640 w 0/6
Washers (16) 032 0 32 320 w 016
Nuts (16) 048 0 48 480 w 0/6
Assemble 4-20 1240 l6-60\ 6,600
Assembled unit 140-81 140,810 136)
104
Mask paint I 00 I 00 300 5-00, 5, OOO
Painted unit 7
145-81 145,810 W 107,

Completed
Test

unit 110-31
8-12

16-38
24-38

51-62
3250

J783I
IE
•2500

178,310 1-31

For this reason it is not merely another cost reduction technique The gathering of this information is usually very time consum-
whereby cheaper materials are used, tooling is changed, opera- ing and often roadblocks are met that must be overcome.
tional speed is increased, etc. It is a systematic organised method
However, it is the most important phase of the Value Engi-
of finding the most economical means of providing the function.
neer's Job Plan because during this phase the groundwork is
This is the functional approach!
laid which determines the success or failure of the mission.
The basic questions confronting any Value Engineer exercising Obtaining the right information from the right sources is not
the functional approach are as follows: easy and each supposed fact received must be studied to deter-
(1) What is it? mine whether it logically fits into the overall picture. Obviously
(2) What does it do? accurate information regarding latest drawings and process
(3) What does it cost? sheets, specifications and manufacturing methods, annual or
(4) What else will do the job? contract quantities, weights, physical properties, applied
(5) What does that cost? stresses and costing data is absolutely essential. Providing all
of these facts are correct and have been obtained from the
These five questions effectively define the philosophy of Value most reliable sources the Value Engineer can now begin to
Engineering and the techniques used to fulfill this philosophy apply the techniques of Value Engineering.
are explained in detail hereunder.
1. Information Phase: Techniques of C o s t Analysis
During this phase, the first three philosophical questions are The seven techniques of Cost Analysis are aptly demonstrated
answered: What the part is, what it does, and what it costs. on a form developed by Value Programs for Industry Inc., of
210
Value Engineering, February 1970
 Schenectady, N.Y. as is illustrated. A product or an assembly preferable. The technique is quite simple but very effective.
consisting of several sub-assemblies or components is selected The name of the item is inscribed at the top of the page, the
and each part is itemised with accurate costing data filled in basis for comparison is listed next, then the comparison'and
under the appropriate heading. Cost per pound of each com- finally each comparison is evaluated. In this manner, it can
ponent and of the overall product or assembly is calculated, readily be seen how high - or low - the cost of the item being
entered and the high cost items are identified. Many times compared appears to be.
10 % of the items represent 90 % of the cost which immediately
indicates that a concentration of effort should be made on 3. Planning and Execution Phase
these items.
This is the final phase in the job plan. A l l of the previous
2. Speculative and Analytical Phases effort will be rewarded / / the proposal becomes implemented
During these two consecutive phases, Questions 4 and 5 - and actual savings accrue. Here the value engineer becomes a
'What else will do the job?' and 'What does that cost?' can be salesman since he must now sell his proposal to those res-
answered. At this point, the Value Engineer must be creative ponsible for implementation of it. One of the best ways to do
and then blast and refine alternative proposals providing the this is through a factual report which shows all of the advan-
same function until the one satisfying all Value requirements tages of the Value Engineered alternative, coupled with a
can be selected. The best techniques to meet this end are those tactful and honest presentation.
of Function Evaluation.
Value Engineering in procurement
Techniques of Function Evaluation , While the techniques of Cost Analysis and Function Evaluation
A. Evaluate Function are the two main tools used in solving 'hardware' projects, few
Here the function is identified by a verb-noun combination buyers can afford the time to use these techniques on even a small
such as conduct current, support weight, etc., and is then percentage of the items they must purchase. However, they are
evaluated. A realistic value is attached to the functions and is the logical individuals to identify high cost areas and refer
compared with the present cost. Not only does this technique them to the value engineer for his action.
highlight a considerable difference between the value and cost
of the function, but it also indicates that many other secondary The value engineer, on the other hand, can be of great assistance
functions are adding to the overall cost. The cost of perform- to buyers by establishing Value Standards for their use in price
ing the function may represent a mere 10 % of the overall cost! comparisons and further negotiations. The aforementioned
techniques and those of Cost Targetting and Value Control
B. Evaluate Functional Areas enable one to set Value Standards which have accuracy and
Every component contributing to an assembly can be cate- meaning. Properly set, the become a sound basis for the buyer to
gorised into a functional area. These areas may be structural, judge the value of the item to be procured and to compare it with
electrical, mechanical, aerodynamic, etc. The procedure here is prices received from potential suppliers.
to list all components in an assembly, group them into their
functional areas, evaluate these areas and compare the evalua-
tion with the actual costs which are similarly grouped. In4his Log-log Planning
manner the areas having the greatest difference between Value Another very valuable tool that buyers can use in their everyday
and Cost are highlighted so that emphasis can be attached to activity is that of log-log plotting. This technique, explained in
areas where the benefits are likely to be greatest. the Canadian Purchasor, July 1967 highlights items of high cost,
thus indicating to the buyer that designer and supplier must
C. Evaluate the Basic Function communicate to lower the cost.
Again all components contributing to an assembly are listed
and grouped as basic or secondary functions. The basic The development of Procurement Urgency Catalogues and a
function of the assembly is also noted so that all components system of A.B.C. analysis is of prime importance to a successful
which have the same basic function as the assembly can be Value Program within the Procurement Department. These can
readily recognised. The basic function is then evaluated and be developed both from historical data and by an analysis of
compared with the present cost of the assembly. future trends. Once the high cost areas are known in their order
This comparison usually indicates that a small percentage of of magnitude, then concentration of effect can be made on those
the overall cost is contained in the basic function (the function areas that will return maximum savings for time invested. The
for which the part was designed) while the larger percentage Golden Triangle approach where 10% of time reaps 70% of the
can be attributed to secondary functions, i.e. functions that benefits (and not the reverse) is the key to successful Value
are required only to make the present design concept work or Program Management.
sell.
D. Evaluate by Comparison S o What
Truly, when we wish to determine the value of an item we The cost of living is up, prices on industrial and consumer goods
purchase or produce, we like to compare its characteristics to are continually rising, former luxuries have now become necessi-
other existing products on the market. ties, and we wonder how much longer Mr Consumer can con-
tinue to bear with this inflationary trend. Don't you think the
And so the technique 'Evaluate by Comparison' helps the time has come to reduce costs without detriment to performance
Value Engineering to determine the value of the item being or reliability? Don't you think we need value in the products we
compared with similar products. This similarity may be in the buy or sell ? I f you do, one of the most effective ways we know of
form of size, weight, appearance, volume, density, etc., and for is the application of the techniques of Value Engineering and
best comparisons a good cross-section of characteristics is good Value Program Management.

Value Engineering, February 1970

211
 MISCELLANY

Speed Reading—The value engineer's 3-4,000 w . p . m .

Time-Saver After a little practice, you'll notice your speed for adequate
Reading experts say the average businessman wades through comprehension begins to improve. Incidentally, at the higher
simple material at about 350 words per minute, or not much practice speeds, it is okay to brush under every other line if
faster then he talks. necessary to cover the required amount of reading matter in the
They claim he ought to be zipping along at about 1,500 words per allotted time.
minute. The exercise just described is one of many. There are others using
Impossible? Not if you're willing to expend a few weeks of more sophisticated hand motions, which encourage the reader to
practice, perseverence and patience. see several lines at once and to read material from right to left as
A number of courses are available - some good and others not so well as from left to right.
good - to help improve reading speed without loss of compre- These exercises, plus special techniques for improving compre-
hension. They can be found in high schools, colleges, and hension, have enabled many persons to read simple material in the
specialised adult-education schools. 3,000-4,000 w.p.m. range.
At these speeds, incidentally, much depends upon the material
being read and the purpose for reading it. A lawyer who must
The Wood Method study a legal contract very carefully might have to slow down to
One of the largest and most successful speed-reading schools is 500 w.p.m. whereas he can accelerate to 2,500 w.p.m. for news-
the Evelyn Wood Reading Dynamics Institute, with classes in paper reading and 3,500 w.p.m. for a light novel.
more than 100 cities in the United States and Europe. Rapid reading is particularly helpful to the businessman who
Founded by a schoolteacher from Salt Lake City, the Wood must become an instant expert on a subject about which much
method involves reading from left to right and from right to left, has been written.
diagonally down the page, using the hand as a pacer.
Other courses prefer machines or special devices instead of the
hand for pacing job, but they all have the same objective - to keep Time - the stuff life's made of
the eye moving steadily forward at a rapid rate without dancing In the fiercely competitive business world, speed-reading execu-
back and forth across the page, as it normally does. tives read not only routine reports, but have time to sail through
trade publications and general literature as well as background
material on a pet project.
Trying Your Hand He has a decided advantage over his competitor, who muddles
If you want to try your hand (no pun intended) at boosting your along at 350 w.p.m. and hardly has time to keep up with his own
reading speed, here is the trick: correspondence.
Hold your right hand in front of you, palm facing you. Form an It all boils down to the essence of good management - the
'O' with thumb and forefinger, leaving the other fingers extended effective utilisation of time. Everyone begins with an equal
and joined. You now have a reading 'brush'. amount of time - 24 hours a day. What distinguishes one person
Place your hand on the page, palm up, so that the long middle from another is how well he uses that time. And in this regard,
finger is directly under the line you are reading. Now brush the the speed reader keeps a step ahead of the pack.
hand under each line, from left to right, as you read. Like a
car on an open freeway, neither traffic lights nor sharp curves to O F PISA Optimisation*
slow it down, your eye will move steadily through the material as OF PISA is a memory device which helps us to recall that the
the hand 'pulls' it along. creative process can be advantageously described as a cybernetic
Evelyn Wood instructors tell students at the first lesson: 'From 'feed back' system which includes six phases called 'Objective-
this moment until you are lowered into the grave, always use the Finding', Factor-Finding', 'Problem-Finding', 7dea-Finding',
hand for everything you read.' 'Solution-Finding' and 'Acceptance-Finding'.
Once you learn to brush the lines, the next step is to build up OF PISA is not a sequence of 'how we think'. We have not the
speed. foggiest idea how the brain works. Further, and people really
over-look this, we do not have the know how the brain works or
Picking up speed 'how we think' to improve creative behavior. We see creative
It helps to have a one-minute timing device. A kitchen timer will products. We see the behavior, both verbal and'non-verbal, that
do. Or if you have a tape recorder, you can 'bleep' sound at one- creates those products. We can make changes, verbal changes
minute intervals on the tape. Or have friend or wife hold a watch and environmental changes and watch their impact upon the
with a second hand to time you. product. Thus, on a trial and error, empirical research basis we
Now you're ready to begin. can clarify and improve the creative processes. The creative clue
Place a paper clip at the beginning of a book and read for one here, of course, when solving problems is to ask 'How might some
minute at a speed sufficient for adequate comprehension. When perceptual, visual behavior help this verbal problem ?'
the minute is up, place another clip opposite the point at which
you stopped reading. * Quoted from 'Creative Clues', No. 2, May 1969.
Material between the two clips constitutes Section 1. Now take
another clip and mark off a second section equal in length to Persistence
Section 1. Then read through both sections in one minute. This Persistence can be defined as the continuation of responses after
won't be easy, for you will be going twice as fast as before and reinforcement of those responses has ceased.
you will have a strong urge to slow down to get good comprehen- Assume you have two cigarette lighters, one in each hand.
sion. But for the exercise to do any good, you must make it to the Assume one reinforces you continuously everytime you try to
last clip within the minute, no matter how little the comprehen- light it. Assume the other reinforces you at random, that is it
hension. lights on the third, fifth, first or nth time at random.
Now mark off a third section and practice all three sections in one Now assume both run out of fluid at the same time without you
minute. Since this will be triple your reading rate, expect little, if knowing it. Which one would you persist in trying to light the
any, comprehension. But don't let this bother you. Just be sure greater number of times ?
you make it to the end of the third section in the minute's time. Naturally you would persist trying the lighter which had provided
The exercise can be very frustrating at first, particularly when the random reinforcement. It had conditioned you to expect some
practicing at double and triple speeds. But it is this very technique, failure. When reinforced continuously, failure immediately warns
forcing yourself to read faster and faster, that is basic to improv- you something is wrong.
ing reading speed. Bert J. Decker

212 Value Engineering, February 1970

Reprint No. 2:4:4

Psychology - Education - Training

Behavioral Science in Management

by Cameron Fincher*

Behavioral science is, of course, of intense interest to and outlines an interesting investigation currently pro-
value engineers and the author who is an educationist ceeding on the R.O.I, from university education. The State
speaks of efficiency in education — of getting value for of Michigan is calculated to get a 75 per cent return and
money spent. He describes 'Institutional Research' (a way the Federal Government a 35 per cent return on their
of bringing the methods and concepts of behavioral investment in the Univeristy of Michigan.
science to bear on the problems of higher education) Dr Fincher outlines two different approaches to training.

When I was invited to come to Miami for this Conference, I This, of course, assumed that you had more applicants than you
wasn't exactly sure why I was being invited because, as a psycholo- did openings, and that you were in a position to select. But I think
gist, I immediately jumped to the conclusion that this was an some developments during World War I I began to cast a different
engineering conference, and I read that at one time we psycholo- light on this sort of thing. We found out that despite all of our
gists and engineers were not supposed to have a great deal in studies of individual differences we began to reach certain limita-
common. tions to the extent to which we could select personnel to meet
certain job demands. I am thinking particularly of flying an air-
Human S y s t e m is Non-Linear craft. The engineers designed the aircraft to fly faster and faster,
One reason for this is that there is a basic difference supposedly and we psychologists kept looking around for people with the
between engineering and psychology. I f you have a 200-pound perceptual acuity and the motor skills to fly these aircraft. But it
object poised over a 100-foot drop, the engineer has the advan- became evident that there had to be some kind of compromise,
tage of being able to calculate the pressure that must be applied and the compromise resulted in what has been referred to as
on the end of the lever in order to dislodge the rock and make it 'human engineering'. This began primarily with the reading of
drop. The engineer also can calculate the impact a rock of that certain dials in the cockpit and the manipulation of certain
weight will make falling that distance. controls. We wanted the flier to rely on certain tactile or
cutaneous cues because we didn't want to put the ejection button
In psychology we can produce the same impact - we take a 200- next to some other vital control because the pilot might, of course,
pound man and a 100-foot drop and we can't calculate the be ejecting himself whenhe meant to accelerate. So there had to
impact it will take to dislodge the man and produce the same be some changes in design to fit human capacities. We had to
impact, because it takes only a hatpin, or a needle, or just a slight select people with those capacities, but we also had to redesign
nudge in the ribs. the equipment - the engineers and the psychologists had to get
We try to explain to engineers that the reason for this is that the together whether they liked it or not.
human system is not a linear system, and while the engineer is
used to dealing with input-output ratios, we just can't calculate Different Approaches to Training
such thingsin psychology because we are not aware of the internal This had led, I think, in industry and business, to two different
mechanisms within this very interesting object that we call a approaches to industrial training: There still is a group of
human being. psychologists that have taken the approach that you select the
T want to review how we psychologists approach the engineers personnel that you need and that you select them on the basis of
and vice versa. The more I hear at this Conference, the more I human capacities.
read the literature, the more I am convinced that there is a con- There have been engineers, or engineering psychologists, if you
vergence of thought between Value Engineering, industrial want to call them that, who have taken the approach that you
design, and what we call behavioral science. reorganise the job demands to conform to the human capacities.
I think you will recall that we psychologists got into industry and I f you look over the industrial history of this country you can
business by means of psychological tests. There was success with see that maybe the latter has been more successful. You
testing during World War I , and afterwards many psychologists immediately think of mass production, the assembly line.
decided to apply similar techniques in industry and business in I like to think of automatic transmissions as one of the best
the selection of personnel. I think it is an interesting fact that examples, both of an engineering innovation, and also as the
psychological tests were sold to industry and business on the item that produced a technological problem from a human view-
basis that they could reduce training costs by selecting more point. The perfection of automatic transmissions put many
suitable personnel for the jobs that were open. people behind the steering wheel of an automobile that would not
ordinarily have been there. We are all aware that there are many
women who just cannot coordinate hand and mouth. Of course,
automatic transmissions eliminated the coordination of hand
* Dr Fincher received his Ph.D. in psychology from
and foot so that the other things could go on. So let's think of
Ohio State. He is Associate Director of the Institute
automatic transmissions as something that has produced the
of Higher Education at the University of Georgia,
problem. Now, we have to look at some of the other problems
U.S.A. and author of the textbook 'Preface to
that have been produced, and use some of the same kind of
Psychology'. This paper was presented at the 10th
ingenuity in solving these problems. (Atlanta is one of those cities
Anniversary Conference of Value Analysis Inc. and
in the country that is committed to living with the problem, rather
is reproduced with their kind permission.
than solving it. It recently voted down rapid transit.)

Value Engineering, February 1970 213

 What we really are concerned with from a behavioral scientist's many reasons; one of which is a person called a state legislator.
viewpoint is behavior. Let's agree on a broad definition of He is asked to appropriate funds each time he meets with his
behavior. There was a time when psychologists meant by fellow legislators. Somebody always gets up and asks for more
behavior overt actions, and overt actions alone. We have matured money for higher education. Well, a lot of these people don't
a little since then, and are willing to readmit subjective experience 'understand', so they are asking questions: 'Well, what results
into psychology. We have regained our minds, so to speak; we can you show from the funds that we have appropriated each
are well aware that there is a lot that goes on within the central year, and how do you account for the high salaries that these
nervous system of a human being when he is playing chess or college professors are now getting when we all know that they're
poker, regardless of the contemplate expression on his face. I n off in Washington consulting, or if they're not in Washington
behavioral science we have developed certain methods of they are attending conferences, or they're off consulting with
inquiry into the problems of people. These techniques have been industry and business management.' These are some of the
applied more and more to the problems of industry and business. embarrassing questions that are being asked institutions of
We have also been flattered in many cases by the readiness with higher learning.
which some of our fellow psychologists - 1 mean, our fellow
behavioral scientists-I am speaking as a psychologist, have Other groups are beginning to apply the techniques of systems
borrowed some of the techniques we have developed, especially analysis to higher education. We are hearing a lot more about
some of the statistical and experimental techniques. No longer do Program Evaluation and Review Techniques (PERT). We used
we find the industrial psychologist exclusively concerned with to be able to submit a research proposal to Washington and have
selection, training, and performance evaluation. We find psycho- it funded by the good graces of the Federal government on the
logists and other behavioral scientists trying more and more to reputation of the principal investigator, but now some people
help solve some of these problems. Of course, our entrance into are trying to PERT the research proposal and try to find out if it
certain areas has been resented because we rushed in like a bull. is really worth the money that the research proposer says it is.
In other cases, we were resented because we didn't take the time
Say 'planning and program budgeting systems' out loud in a
to really explain properly what we were going to try to do and,
group of college educators and you'll get a startled response from
of course, we did not explain our limitations. For example, we
all of them. Why? Because they are afraid that sooner or later
have often been accused of not having a body of knowledge
they must get around to evaluating what they do solely on the
which is coherent, based on sound theory, and easily applied to
basis of their programs. I f money is allocated on the basis of
the problems of industry and business. I want to argue this. I will
programs, and not given to the people who 'deserve' it, such as
say, however, that we have more to offer than we often have been
departmental chairmen, academic deans, and vice-presidents,
given credit for. I think your behavioral scientists are a fairly
without too much question about how it is going to be spent and
versatile group. I think they have done some ingenious things. I
what results it is going to produce, then you can readily see the
think that sometimes they have gone unnoticed because people
difficulty that we are in.
didn't know that there were psychologists or sociologists or
economists or even anthropologists doing this particular kind of
work in industry and business. Institutional Research
Let's recap and say that institutional research is a way of looking
'People Problems' Within Industry at the internal processes of higher education. As I discuss this, I
believe you will see the parallel between this and other kind of
Recently, behavioral scientists have turned their attention to a organisations.
number of 'people problems' within industry and business. I t
is people problems that remain one of the most challenging set of First, in institutional research, we are asked to demonstrate
problems to be solved in industry and business today. When we results. What can we show in the way of behavioral change as
look at organisational behavior, we run into some extremely a result of a youngster going to college for four years ? We all can
difficult problems. I will use as an example one type of organisa- read college catalogs and we know the glowing ideals. I don't
tion in which we have people problems, and in which we have know of any college that doesn't hope to produce desirable social
been most reluctant to apply the principles, the concepts, and the and personal characteristics in their students, to teach them the
methods of behavioral science to help solve these problems. traits of good citizenship, and to help them think critically. Very
nice! The only trouble is that these terms are hard to translate
The type of organisation that I am referring to is higher educa- into behavioral terms.
tion. We have more than 2,000 institutions of higher education in
this country, and have had an extremely rapid increase in the And when you ask, 'What does the instructor contribute to the
number of students going to college. learning of the student?' you run into two problems. First, you
are 'tampering with academic freedom' i f you plan to evaluate
All this you have heard time and again, but what I think might anything an instructor does, because when he goes into a class-
be news is something that began to occur around 1960. For a room and shuts the door he is protected by academic freedom in
while we regarded education as so important and as such a good capital letters. I f you are a college dean or departmental chair-
thing that our colleges and universities thought that what they man, you have no business sticking your nose in that door! I
were doing was so sanctified as to be above question. But as guess college teaching is the only profession in which we permit
always there is someone who begins to nose around and ask a man to evaluate his own efforts by whatever methods he
embarrassing questions, and this began to happen to higher chooses. We say that doctors bury their mistakes; the lawyers'
education. Out of this has grown something called institutional mistakes go to jail where they don't cause too much trouble
research. And like so many terms we use this one might be a little unless there's a prison riot. Even so, we do have some methods
ambiguous. I t is hard to define because people who are doing of evaluating their performances, by their records. I f you were
institutional research can't agree on a definition themselves, at asked to go and see a certain physician and knew what his
least one that 51 per cent will agree to. mortality rate was, you might choose another. I f you knew a
Institutional research is, in my opinion, a way of trying to bring lawyer had not won a case in ten years, I doubt if you would ask
the concepts and methods of behavioral science to bear on the him to represent you. Yet this is what we have done for many
problems of higher education. Many interesting things are going years in higher education. First, we run into the embarrassing
on in this area. problem of 'tampering' with academic freedom; then we run into
the problem of evaluating the actual change in behavior that
First, it takes a lot of fortitude for an organisation to look at its takes place in the student as a result of his educational experience.
internal processes and to evaluate them. It takes something to look There have been efforts toward evaluation, and some have been
at your own behavior and to question your own decisions. fairly good. But many lack adequate methods of measurement,
People and organisations who can do this are not in great just like in the evaluation of performance on the job in industry
abundance today. Yet more and more I see this as a necessity for and business. We are still in search of a good criterion.

214 Value Engineenng, February 1970

 What is it that we are looking for if we are going to evaluate or he, along with many others, are beginning to show that education
assess the effectiveness of something? We have a problem of does provide a high rate of investment.
measuring. But when we look at the changes in student behavior,
we don't get a very flattering picture of what takes place during This is one good example of what economists can do, and I think
four years of college. For example, as early as 1957 a man named it indicates some of the convergence between behavioral science,
Jacobs wrote a book questioning the change in values of students Value Engineering, and industrial design, because we are all
as a result of going to college. The general idea was that the interested in cost reduction.
student does not really change his value system as a result of
attending college four years. In other words, if he is a liberal Efficiency in Education
democrat when he goes in college, he is likely to be one when he Keep in mind that the one institution in this country, the one
comes out; if he is conservative in his approach to economics, he organisation that did not accept or was not supposed to accept a
is likely to be so when he comes out; if he's a Southern Baptist criterion of efficiency, has been education. 'Education is not
when he goes in, he's too much inclined to still be one when he supposed to be efficient.' But there are many people saying that it
comes out. It is hard, therefore, to indicate what has taken place needs to be more efficient, and I think this is something that we
during the four years, and whether or not it was worthwhile. Enter all agree on. In view of the technological revolution in education,
the economists. we are aware that if an instructor stands before a class and
simply transmits information to students he is doing something
They show that the person who goes to college commands a that a motion picture projector or a tape recorder or programed
higher salary; so something good must have happened to him or • ^ learning devices can do much better. In fact, the old-fashioned
industry and business wouldn't pay him more than they pay the textbook can do it much better than he can, if the students can
high school graduate. Of course, there were some embarrassing read. (We always assume a certain level of reading ability by the
studies made some years ago showing that the college graduate time they get to college.) Let's say that we have many examples of
will make more initially, but pick them up 20 or 25 years later, and this in higher education.
they sort of merge. In summary, let's say that the economists
have come to the support of the psychologists by trying to We also have sociologists looking at our institutions of higher
demonstrate that education is an investment. Today many people education as a social organisation. They are interested in the
are interested in this concept. dynamics of the institutions of higher education. The anthropolo-
gists are beginning to look at our colleges and universities as a
cultural complex. A lot of people are sticking their noses into
Human Capital Formation
higher education and beginning to ask questions about this
This sometimes is called 'human resources development'. We are so-called 'community of scholars'. I think that is one phrase that
looking at the development of human resources in somewhat the should be laid to rest. We see the institutions of higher education,
same way as we once looked at the development of material not so much as a community of scholars, but as a complex of
resources. Gary Becker has called this 'human capital formation'. communities. In fact, I have referred to a university as the most
In educating people we are forming human capital. Theodore utilitarian institution ever devised by man. There is more to be
Schutz is the economist that really kicked off the idea that gotten out of a university by more different people for more
education gives a high rate of return, and if you want to make a different people for more different purposes than any other kind
good investment then invest in education for the coming genera- of institution. Think of a typical state university and how many
tion.
people look upon that state university and what they get from it.
College presidents used to say there were really only three
Nearing publication is a paper by a young man at the University problems: one was parking for the faculty; one was sex and
of Michigan who did a daring thing. He took the assumptions of the students; and another~one that I forget. But think of all the
economists such as Schutz, then put them together, taking the different people that come onto a university campus. A football
salary differentials, we'll say, between college graduates and high game is an example: there are alumni who come to the campus
school graduates, estimating the cost that it takes for the in high spirits. They're not satisfied to win, they want a slaughter,
University of Michigan to turn out a Ph.D or an M.A. or a and it's got to be in the right direction, of course.
Bachelor's, estimating how much they will pay in the way of
taxes, how much they will spend for goods and services, trying The University of Georgia in 1967 received a large increase in its
to take into consideration out-migration of the graduates of the allocation of State funds, and this went to higher education. One
University of Michigan, the in-migration from other States; reason for it was that we couldn't elect a governor in '66, so this
taking into consideration as many of these things as he could and left the out-going governor with a couple of trumps to play. He
basing them on the assumptions that economists have used- could ask for the blue sky and if the legislature did not give it to
assumptions concerning such things as forfeited income, because him, he could always come back. He is a young man with a
if you go to college for four years you are not going to be making future. He could always come back and say, 'When I left office I
as much money as if you were employed full time. DeLong put requested such-and-such funds for education,' if they turned him
all this together and came up with the conclusion that the State of down. I f it went through, as it did, he could always come back
Michigan received a 75 per cent return on its investment in the and say, 'That was my budget request that the State legislature
University of Michigan. You must, of course, keep in mind the approved.' This makes sense from a political viewpoint. But
assumptions on which he based his conclusion, but still it's someone raised a nasty point in a private conversation that the
encouraging to see someone justifying investment in higher year before Georgia Tech and the University of Georgia both had
education in terms that a state legislator can understand. a 9-1 record in football and both went to a bowl. They asked the
question, 'have you ever thought what this means to certain State
Then DeLong did something that was quite mischievous. He legislators; two football teams ranked in the top ten, two of them
tried to calculate the rate of return to the Federal government, in post-season bowl games?' To the person who says, 'I'm
and he came out with an estimate that the Federal government opposed to big time athletics, they have no place in an institution
received a 350 per cent return on their investment in the Univer- of higher education.' You should hear this person expound. He
sity of Michigan. says, 'I'm all for it.' Believe me, if that football team is winning
it means something to the State legislators who come forth with
Whether his conclusions are valid or not, I can't say. I can only the funds. I guess the moral is if you're not getting the money
say that given his assumptions and following his line of reasoning you need, start winning.

Value Engineering, February 1970

215
 MISCELLANY

Extrusions are Cost-Savers # Comers, for instance, should be slightly rounded by small
radii which will vary depending on section thickness.
Aluminium extrusions
Aluminium extrusions have been used commercially for about 40 # Uniform section thickness in various limbs and symmetry of
years, but during the past 15 years the growth in applications has shape can improve surface finish and avoid excessive tool wear.
been remarkable. This is mainly due to the increasing apprecia-
tion of the potentialities of the extrusion process by the manu- # Aluminium extrusions can be produced to close general
facturing and process industries. A wide variety of shapes can be tolerances such as those specified in British Standard 1476.
produced by extrusion to meet the metal component requirements % Surface finish on aluminium extrusions is generally of a high
of almost every manufacturing industry. standard which is adequate for most applications. However,
In essence an aluminium extrusion is a shape produced by forcing mechanical, chemical, electro-chemical and organic finishes can
heated metal in billet form through a hole in a steel die. The all be used to give texture, lustre and colour to the surface.
shape of the hole determines the cross-sectional shape of the Anodising gives a thicker, more uniform and more durable
extrusion, which is uniform along the length. protective oxide film than the natural film, and this can be dyed
It is a simple and flexible process which can produce an almost to produce a wide range of colours without impairing the
infinite variety of shapes, from simple rods to complex hollow natural metallic lustre. Prepainted extrusions are becoming
sections. increasingly available as the industry develops production lines,
and these are likely to become widely adopted by large-quantity
Extrusions are produced on a hydraulic press. The dimensions of users.
any extrusion are limited only by the size of the billet container
which a particular press can accommodate. The size of a particu-
lar shape which can be extruded is determined by relating the Recent applications
diameter of the minimum circumscribing circle into which the Recent examples of aluminium extrusions solving difficult design
shape will fit to the container size. and assembly problems are a half-inch section trim for a record
player, and a 4 in., one-piece hollow section body for a range of
Advantages from extruded parts industrial electric motors.
Maximum advantage from using extruded parts can be gained by
considering their use during the initial stages in component design
which can often lead to considerable savings in time and money. ^ ^ ^
(1) In some cases the use of extrusions can eliminate complete
fabricating operations. For instance, a simple one-piece alumi-
W h a t w e don't k n o w about the men at the top
nium extrusion can often replace a method requiring the joining
As society and the institutions within it are being daily subjected
of several rolled structural shapes.
to enormous pressures for change, there are important reasons
(2) Similarly, a traditional technique employing small castings, today for trying to understand the men at the helm of large
forgings or parts separately machined from bar stock, can be corporations.
replaced by a one-piece extrusion which cuts down or eliminates
machining. The fact is we don't know very much about them. And the few
things we do know are primarily drawn from research dated
(3) Extrusions can be designed to fit together by sliding, snapping enough to be suspect in this highly mobile age.
or hooking to simplify assembly. Since they are regular in shape
along the length, they fit perfectly in such applications. Alumi- At least, this is the premise of two recently published studies
nium-framed double glazing units are typical examples of trying to fill the gap. I n different ways, they take apart the top
extrusions as good mating fits. manager of the business corporation to see what makes him tick.
One of these studies is The Corporate Oligarch (Simon &
Relatively l o w cost of extrusions Schuster) by publicist David Finn, co-founder and chairman of
The cost of producing extrusion dies is relatively low compared the Manhattan public relations firm of Ruder & Finn. The second
with other tooling costs, and in addition the major suppliers of book, Motivating Economic Achievement (Free Press), is by
aluminium usually have extensive stocks of standard extrusion David McClelland, an M I T professor, in collaboration with
tools offering a wide variety of shapes and sizes. Although David G. Winter. McClelland has made a career of studying the
extrusion economies are maximised on long production runs, the motivations of the men who reach the top of the corporate ladder.
process also lends itself to the economic production of prototype The Finn book is at least as interesting for what it does not
components, such as parts for new models of domestic appliances. contain as for what it does. I t does not pretend to be a scholarly
Such components are often expensive to produce by conventional study. The author says its purpose is to determine 'whether or
means. This often entails high labour charges for machining and not the man I call the corporate oligarch has the necessary
forming and these can be eliminated by extrusion, often with personal motivation and the conceptual frame of reference to
improvement in overall prototype tooling costs. identify the interests of the corporation with the interests of the
community.'
Can it be extruded ? The McClelland book, on the other hand, holds out some
A simple formula is used as a guide to whether a shape is extrud- promise that the future may produce better and more useful
able in a particular alloy. The circumscribing circle diameter of information. McClelland argues that we now know enough about
the shape is related to the thickness of the section to give a factor the compulsive drive to achieve that we can teach it to men and
to determine extrudability. This varies with the hardness of the women untouched by such drives and urges.
metal, hard alloys have a maximum factor of 30:1 and soft alloys
a maximum factor of 80:1. Ratios below these levels indicate McClelland, a proponent of the so-called 'biographical inventory'
that the shape can be extruded readily. practiced by Standard Oil of New Jersey, among others, argues,
that it is possible to tell more useful things about a man's need
A f e w guidelines for achievement from his 'track record' than from all the
In designing extruded shapes there are few limiting factors to psychological tests in the world. One day, he says, it may be
impose restrictions, and in general almost any shape can be routinely considered more important for management to know
produced. However, a few simple guidelines are worth remember- whether or not a man joined the Boy Scouts as a youth than to
ing. learn what he sees in an ink blot.

216 Value Engineering, February 1970

Reprint No. 2:4:5

Operations research - Linear programming

The Interaction of Linear Programming and

Value Analysis
by Shaul P. Ladany*

Both Value Analysis and Linear Programming, Dr 'Why is Linear Programming held to be a science while
Ladany points out, are optimising techniques for the Value Analysis is considered only a skill!'
allocation of resources. Linear Programming first builds 'Value Analysis'—the author holds — is also a method
a model to describe a system, then considers the required for finding the required decision parameters in order to
values of the decision variables, and finally applies the" optimise a desired objective function, given certain
results obtained for the model to the real-life situation. "' restrictions on the availability and use of the pertinent
Value Analysis adopts a similar approach. resources.' He concludes this very thought-provoking
However, both Value Analysis and Linear Programming article on the concept of Value Analysis by echoing what
are liable to the risk of suboptimisation. Mr C. W. Churchman has to say about Linear Programming:
'Why', asks the author, 'is Value Analysis so often held it is not a screw-driver which has to be used whenever its
in contempt while Linear Programming is respected!' owner encounters a screw.'

Introduction variables are determined in such a way that the desired measure
Both Linear Programming and Value Analysis are recently of effectiveness of the system described by the model will be at
developed tools that aid managements in pursuing their ob- its optimum. Having obtained the results of the mathematical
jectives in the most effective way. Both are optimisation tools analysis, the remaining stages consist of the interpretation of the
and methods and both deal with the same aspects of the or- results obtained for the model (which are stated in the same
ganisations where they are used. These are: how to allocate terms of abstraction of the real world as for the model itself)
the funds available to the organisation in the most useful manner, in the real world context, and finally their implementation in
how to increase the contribution of existing funds to the ob- action.
jectives of the organisation, how to utilise the resources most
efficiently and how to improve its position as measured on the The Value Analysis Approach
scale of effectiveness by which the organisation acts and is judged
and evaluated. The approach of Value Analysis-towards these same managerial
objectives of the organisation is no different in principle. I n
order to be able to cope with any problem of the organisation
The Linear Programming Approach the value analyst reduces it in concept (though of course not in
Linear Programming attempts to approach these objectives by reality) to a size which can be dealt with. Thus, when analysing
treating the organisation or part of it as a system which is any real problem he mainly views its dependence on near and
described by a model. The simplification of reality brought closely related subjects, without trying to uncover all the complex
about by construction of the model involves a significant amount interrelationships that distant, seemingly less related subjects
of neglect, which in unusual or extreme situations may have might bring to bear on it. This unconscious conceptual reduction
serious effects. Nevertheless, the model is usually an acceptable in size of the problem is more or less equivalent to the system
representation of the important facts influencing the organisation definition and model building utilised by Linear Programming.
as a whole. The main risk involved in the use of the model is
that by defining the more important facts and relationships It has the same advantages of being convenient and of facili-
while at the same time neglecting some of the seemingly un- tating further treatment and analysis. However, it may also have
important facts, a system slightly different from the real one may certain disadvantages which may result in producing a sub-
be described by the model. At a later stage this inaccurate defi- system that suboptimises the objectives of the organisation.
nition of the system may lead to misinterpretation of the policies
required to achieve the best possible value for the desired measure This risk is much less here, since the model is defined conceptu-
of effectiveness. Thus, treating a model which describes a sub- ally and is not limited by requirements of mathematical
system instead of the real system may cause suboptimisation. definition as is the case with Linear Programming.
Again, this is only the first stage. The next steps are directed toward
Building the model is only the first step - the definition of the finding the solution for attaining the seemingly highest value of
system describing the problem. The next step and the one with the organisation's objective, as rated by its measure of effective-
which people dealing with Linear Programming are mainly ness. This does not require any mathematical manipulation. On
concerned and see as their primary responsibility, is the mathe- the other hand value analysts are not only concerned with this
matical manipulation of the model. This consists of the mathe- and the following stages but also, and maybe even more, with
matical treatment by which the required values of the decision the precise and comprehensive definition of all aspects of the
model. The last steps, as before, consist of the interpretation of
the results and the follow up of their implementation.

*Dr Shaul P. Ladany of the Leon Recanati

Graduate School of Business Administration at the Difference in S t a t u s
Tel-Aviv University, Israel, has kindly forwarded Thus both Value Analysis and Linear Programming deal with
this Working Paper 54/69 dated September 1969. the same kind of problems and have the same measure of
effectiveness; both attack these problems with similar approaches

Value Engineering, February 1970 217

based on the same principal stages and both are liable to mis- This mathematical problem which describes the real problem
interpretation and suboptimisation. The question therefore of the organisation in a nutshell by objective function and by
arises: Why is there such a big difference in the status awarded n restrictions, can be solved by a technique called the Simplex
these two management tools? Why are workers, managements, Technique. This is an algorithm, which finds the values of the
organisational hierachies as well as society in general so much different x s which satisfy all the restrictions and also supply
r

more appreciative of one method and its practitioners than of the the optimal value to the outcome of the objective function. The
other? Why is a man dealing with Linear Programming con- user need not prove the technique or even understand its back-
sidered a scientist while a man dealing with the same kind of ground. He has only to follow certain simple rules and the
problem with a Value Analysis approach is regarded as a tech- solution is arrived at automatically. The Simplex procedure can
nician? Why is the position of the value analyst in the organisa- either be done by manual calculation or may be adapted to
tional hierarchy so much lower than that of his linear program- computers, thus speeding up the solution time.
mer counterpart? Why is Value Analysis so often held in
contempt while Linear Programming is respected? Why is Thus, the solution of the mathematical problem is simple. I f
Linear Programming held to be a science while Value Analysis manual calculations are used the necessary skills can be acquired
is considered only a skill? very quickly, and i f canned Linear Programming Simplex
computer programs are used even less skill is needed. This skill
An immediate answer to these questions may be found in the consists of the ability and knowledge required for the reading
difference between the techniques used by the two methods for of printed computer outputs. Therefore the only real skill
achieving the same objectives as well as in the difference in the needed by those using Linear Programming is the ability to
layman's understanding of these techniques. analyse the problem to be dealt with and to state it in mathe-
matical terms-which most highischool graduates should be
able to do.
The Techniques of Linear Programming
Linear Programming is a method for finding the required Laymen do not usually understand the procedures involved
decision parameters in order to optimise a desired objective in Linear Programming. However they do know that most of
function, given certain restrictions on the availability or range the people they meet in this field have a Master's or Doctor's
of use of the various resources that influence the outcome of degree in Operations research, Mathematics, Statistics or
1
the objective function . Both the restrictions and the objective Business Administration. They also know that these people
function assume equal influence on each additional unit of the build mathematical models and manipulate figures and algebraic
resource and because of this postulation of linear behaviour the formulas - activities which are usually outside their own range
method is called Linear Programming. Where this assumption of knowledge and understanding. They therefore tend to respect
is not valid Non-Linear Programming methods like Quadratic the profession and its practitioners, regarding the former as a
or Cubic Programming are used, these differing only in the science and the latter as scientists.
mathematical techniques employed.

The building of the Linear Programming model starts with The Techniques of Value Analysis
the definition of the measure of effectiveness by which the
Value Analysis is also a method for finding the required decision
problem treated will be evaluated. This is usually the profit (to
parameters in order to optimise a desired objective function,
be maximised) or the cost (to be minimised). The next step is to
find the various resources which influence the outcome of the given certain restrictions on the availability and use of the
measure of effectiveness per unit of resource. Addition of the pertinent resources. This technique makes no assumptions about
influences of all the relevant resources is the mathematical linear relationships, neither does it attempt to express in mathe-
definition of the objective function which will be stated as: matical terms the complex relations existing in the area under-
n lying the problem.
c x
Optimise (0) = ^ j j (1) The whole method is centred around the Value Analysis Job
2
7= 1 Plan . The stages of model construction form part of it, the rest
where Xj is the number of units of resource j, Cj is the contribution of it consisting of solution procedure and interpretation. This
of unit of resource j to the measure of effectiveness 0, and n is plan is followed throughout the whole analysis, when the
the number of relevant resources. measure of effectiveness is not a choice variable, but rather a
built-in criterion determined in advance by the method. It is
The third step is the definition of the constraints. It involves the value of the item, resource or procedure analysed which
knowledge of the sources from which the various resources can has to be maximised. In this context value is defined as the ratio
be derived, of the amount of the source used up by a unit of between the theoretically possible minimum cost for achieving
resource, and finally of the restrictions on the availability of the the main function, and the actual cost.
various sources. The mathematical definition of these con-
straints is as follows: The model building stages of the Value Analysis Job Plan are the
n Information and Creativity Phases. In the Information Phase the
analyst attempts to define the problem clearly by determining
2 ayxj sS bi ; i = l,..,m (2) the functions to be performed by the item, resource or procedure
7= 1 analysed, and by determining the hierarchy of the functions
where Xj is the number of units of resource j, b is the restriction
t
according to their relative importance. He tries to discover all
on the availability of a source from which some or all of the the relevant and seemingly irrelevant facts pertaining to cost;
resources can be derived, ay is the amount of source i used up by the actual cost; the various complex technological, economic
a unit of resource j, and m is the number of restrictions on the and behavioural constraints; and the influence of these factors
sources. on the cost.
Thus the problem of Linear Programming can be stated as:
n Incorporated into this model building is the Creative Phase, in
Optimise (0) = ^ j j c x which the analyst states all the alternative methods which occur
to him for performing the needed functions. Since the Infor-
7= 1 mation Phase has already supplied the necessary facts pertaining
(3) to the various restrictions, the analyst now possesses a model
n constructed from a set of solution alternatives for the per-
a
Subject to: ^ u j ^ °i'•>*'=!,- -,m
: x
formance of the required functions of the problem, together with
h=l their economic, technological and behavioural requirements.

218 Value Engineering, February 1970

It is at this point that the solution procedure - the Evaluation suboptimisation damage when the solution of the model is
Phase in Value Analysis terminology - begins. With the aid of implemented.
cost data supplied by the Information Phase, the analyst
expresses the various solution alternatives in monetary terms, With Value Analysis the situation is the opposite. In the early
and judges their feasability. The last stage - the Recommendation stages of model construction all the pertinent relationships,
Phase - consists of choosing from among the feasible alter- variables and restrictions have been investigated systematically,
natives the solution with the lowest cost (which is also the one and have been taken into account. On the other hand in the
with the highest value) and recommending it for implementation. Creativity Phase not all the possible alternatives have necessarily
been considered, since their number and scope depends on the
It is clear to the Value Analyst that his approach to the creative and imaginative ability of the analyst. Therefore the
problem of optimising an organisational measure of effectiveness selection procedure among the solution alternatives does not
is not a science. It is no more than an organised and systematic necessarily arrive at the solution with the highest value, since
approach (a very effective one, however, which contributes this alternative might not be among those suggested.
significant amounts to the profits of organisations) which
consists only of the efficient application of intelligence and Both Linear Programming and Value Analysis have their own
commonsense. The practice of Value Analysis requires no merits in their individual, independent use, and they can be
specialised skill or schooling, but rather a good general know- utilised with significant results in improving the value of the
ledge, an open and logical mind and the ability to deal with measure of effectiveness by which organisations are evaluated.
people. But due to their deficiencies, as shown above, they are not really
methods that optimise but rather methods that improve. They
The work of the value analyst brings him into close contact with' must be used selectively, and as Churchman stated about linear
most of the people working inside and connected with the Programming, they are not screw-drivers which have to be used
organisation. The nature of his task is such that he disturbs them whenever the owner of the screw-driver encounters a screw . 3

in their regular work and bothers them with strange questions

which do not conform to accepted standards and ideas, as well It seems that both methods make their best contribution to an
as asking for various data. All this often brings him into conflict organisation when used together. In the model building stage
with various employees, who seeing how Value Analysis works Value Analysis techniques should be used in order to find all
and realising that it is only an organised commonsense approach the relevant variables, constraints, and optimal coefficients; but
are inclined to think that had they been less busy they could have at the same time a proper Linear Programming model should be
done the same thinking and achieved the same results themselves. built so that the abstraction will not distort the reality and will
Therefore they have no special appreciation either for the not cause sub-optimisation. On the other hand the problem of
practitioners of Value Analysis or for the profession. This seems selecting from among the enormously large number of solution
to be the reason for the lower status of the value analyst in the alternatives provided by the model should be solved by the
organisation as compared to the linear programmer. Linear Programming Simplex technique if the optimal solution
is to be obtained.

The Need for Combining the Use of Value Analysis Conclusions

and Linear Programming
The incorporation of Value Analysis in the model building stage
From the previous discussion of the techniques by which the of Linear Programming and the subsequent use of the Linear
Linear Programming and Value Analysis methods try to achieve Programming solution procedure, may provide an optimal
the optimal solution to a problem in accordance with the measure solution to a problem, a solution which will be almost unbiased
of effectiveness of the organisation, it emerges that there are by the usual neglect caused, by the mathematical description of
deficiencies and disadvantages to both methods. reality. Such a procedure will help not only in preventing
In Linear Programming the solution procedure permits the neglect and errors in optimisation procedures, but may also
optimal and efficient calculation of the mathematical problem confer on Value Analysis the status which it merits.
stated by the model. On the other hand the model does not have
a firm and stable foundation. No serious check is undertaken to Bibliography
decide whether all the relevant variables have been incorporated 1. MICHEL SIMONNARD, Linear Programming. Prentice Hall,
into the model. No check is made on the possible existence of Englewood Cliffs, N J . (1965).
alternative sources, additional or looser restrictions on the 2. LAWRENCE D . MILES, Techniques of Value Analysis and
sources, and different and preferred coefficients in the objective Engineering, 2nd ed., McGraw-Hill, New York (1965).
function and in the inequations (constraints). Such neglect may 3. C. W. CHURCHMAN, R. L. ACKOFF and E. L. ARNOFF (eds.),
lead to serious distortions in the picture of the real problem as Introduction to Operations Research. John Wiley, New York
described by the model and may cause significant and severe (1957).

MISCELLANY
Professor Skinner Teaching machines
The Behaviourist and t h e Pigeons Teaching machines are designed to exploit the same phenomenon
Once we know what is 'reinforcing' to an organism, we can in humans. The student is presented with some information,
exploit this to mould behaviour further. This is shown most followed by a question. A correct 'response' is rewarded im-
rigorously in the famous experiments with pigeons which Profes- mediately (for well-motivated students, it is sufficient reward
sor B. F. Skinner has conducted for many years. Professor simply to be told 'correct'). To ask if the student 'understands'
Skinner puts a hungry pigeon in a box and waits, for example, until the material is to revert to 'mentalism': what matters is whether
it raises its head above a certain level. I t is rewarded immediately he responds appropriately in various situations.
with a food pellet. Soon it is raising its head more often. It may Similar techniques are now being used in psychotherapy, and in
then be rewarded only when it raises its head and moves it mental homes and institutions for delinquents. In one of these,
towards a disc in the wall. Quite soon its behaviour can be near Washington, D . C , the boys are rewarded instantly with
'moulded' so that it pecks at a complicated sequence of discs poker chips for behaviour desired by the authorities. They can
before getting a food pellet. Professor Skinner's Harvard use the chips to buy various privileges - for instance, a seat at a
laboratory is full of pigeons enmeshed in intricate electronically table in the dining hall where better food is served. 'Some boys,'
controlled training arrangements. Professor Skinner says, 'become capitalists overnight.' The

Value Engineering, February 1970 219

regime, it is claimed, by replacing punishment with reward, has many engineering components will be produced by highly
transformed the atmosphere of the place in a short time. sophisticated automated MACHINING operations as demon-
strated by Molins System 24 and others.
'Walden II'
Similarly the ability of the metal to provide PRECISION
A few years ago Professor Skinner wrote a novel, "Walden IP, in CASTINGS from high pressure casting equipment is bound to be
which the techniques of behavioural engineering form the exploited more and more as we move away from the high labour
foundation of a Utopian community. By elaborating the methods content of the old iron foundries and as internal combustion
used to mould pigeon behaviour, citizens grow up to lives of engines continue to develop towards higher power to weight ratios.
unflawed contentment. Outraged critics of the book produced Now let us turn and consider other trends. One of which may
all the obvious objections; what is desirable behaviour and who loosely be called DOWNWARD INTEGRATION of the
determines it? Suppose contentment conflicts with survival or an industry. It is a world wide pattern in the aluminium industry that
individual threatens to destroy the community? Professor primary metal production is profitable but that semi-fabricated
Skinner's basic response is simply pragmatic: we already control products are in general not so.
and are controlled, he says, but the results are erratic and often
disastrous. A scientifically designed system could not be worse One of the results of this situation has been a trend to control
and might be better. So why not try it? products further down the line. In the first place semi-fabrication
is taken further by pre-painting, anodising, or sometimes forming
and drilling. Secondly, the semi-fabricators have moved in to
Scientific values
control their distribution and stockholding outlets and finally,
Instead of traditional values like justice and freedom, Professor there is a tendency for investment by the semi-fabricators in user
Skinner would substitute the scientific values of controlled industries. Control and rationalisation of distributors has also
experiment. A scientifically run society would recognise its been made the more necessary by the increasing size of produc-
mistakes and try something else. Where there was ignorance, it tion units and the need to plan production most economically.
would simply guess - but since science would define alternative
policies more closely, 'we would guess more effectively'. At the same time, the stockholding facilities are broadening and
improving from the customers viewpoint and access to new
Apart from the ethical implications of all this, it seems doubtful markets is being obtained through the stockists. For example,
whether Professor Skinner's concepts of human nature are in fact ranges of commonly used architectural sections are now available
adequate for the job he intends. It is not much good attempting to builders and architects ex-stock whereas in the past such
to mend a watch scientifically if you are equipped only with a sections were only obtainable from the mills after a prolonged
hammer and chisel. On this point, there is some fierce academic hunt through catalogues.
argument. Many students of animal behaviour hold that it cannot
always be convincingly explained purely in terms of 'stimulus'
% >N •
and 'response' (which Professor Skinner argues are all that is
observable and hence admissible to science). It is often necessary
to imagine some complex intervening processes going on 'inside' The commercial advantages of computer aided
the organism. design
Management in the engineering industry needs to be made more
Introspection and language aware of the commercial advantages of computer-aided design
In man, this argument acquires a further dimension, since his techniques. This is one of the recommendations in the first
inner life is uniquely accessible to himself, through introspection, annual report of the Ministry of Technology's Computer Aided
and to others, through language. We can only guess at what it Design Committee.*
feels like to be a pigeon, but we have immediate experience of At present, it is in the pipework engineering field that a computer-
what it is like to be ourselves. We may reasonably assume that aided system offers one of the best prospects of immediate sav-
others have similar experiences, and we use language to com- ings; but the Committee found that the Civil Engineering and
municate about them. Furthermore, we may feel that the world structural design of chemical and petroleum plants also provides
we observe through language and introspection is not easily wide scope for new applications.
reduced to chains of 'stimulus and response'. The Report draws attention to a statement by users that the cost
Not that Professor Skinner accepts this. of producing piping drawings can be cut by about two-thirds.
Other stated advantages are that the time spent on design can be
sfc % ^; cut by up to 75 per cent, that modifications can be dealt with more
rapidly and that final drawings can be prepared at a later stage
Future U.K. Trends in Aluminium and therefore be more accurate.
The markedly faster rate of growth of the extruded and drawn Effective computer programs are available for pipework detailing
products as compared with the rolled products or cast products. but the Committee feels that they should be more widely known
In fact, the rate of growth of the extruded and drawn is nearly throughout the chemical contracting industry. Also, in existence,
double the rate of the rolled products. is a comprehensive suite of programs for pipework stress calcula-
tions ; this is available as part of a bureau service.
EXTRUDED SECTIONS by their very nature are prefabricated
components or in other words they can be substituted for built up The Committee recognises the demands likely to be made on
parts in other materials which have a high labour content. communications facilities as a result of developments in com-
Therefore, the more labour rates rise the more incentive there is to puter-aided design and thinks it is possible that investment in
use extruded sections. The ease with which aluminium alloys can communications systems may well exceed that required in
be extruded is in itself a very positive advantage over competing computers if the new design techniques are to become widely
structural materials. available.
A novel idea, recommended by the Committee, is that some form
The most important factor which must limit the use of any
of program broker service is required which would put the engi-
material is obviously the PRICE and while aluminium may be
neering designer in touch with an organisation that had a pro-
regarded as a relatively expensive material as compared to steel or
gram to suit his needs, in much the same way as an insurance
timber it has the virtue of relative price stability as compared with
broker operates in his field.
other metals. Because aluminium is a relatively expensive material
its consumption per capita in any country is roughly proportional
to the standard of living in that country. * The computer Aided Design Committee was set up in July
1967, under the chairmanship of Mr F. D . Penny, Director of the
Aluminium alloys can be machined at vastly higher speeds than National Engineering Laboratory, to advise the Minister on the
steel or cast iron and there is no doubt that in the future very best means of making use of the computer as a design tool.

220 Value Engineering, February 1970

Reprint No. 2:4:6

Checklist - New Products

New Product Development

The problems of d e v e l o p i n g n e w p r o d u c t s may be considered under the f o l l o w i n g h e a d i n g s :
A. General considerations for Favourable D e v e l o p m e n t of N e w Products.
B. Sources of N e w Product Ideas.
C. Considerations in Selecting a N e w Product.
D. Costing Checklist.
E. Checklist of N e w Product Considerations Relative t o M a n u f a c t u r i n g t h e Product.
F. M a r k e t Research and Sales Checklist.

Each q u e s t i o n posed can be of considerable importance t o the success of the e n d e a v o u r ; hence, d o not a t t e m p t t o answer
it until y o u have t h o u g h t at length a b o u t it. W h e r e questions are posed, they are so phrased that 'yes' answers f a v o u r
t h e i n t r o d u c t i o n of the product. Do not answer 'yes' if y o u have the slightest d o u b t a b o u t it being the proper answer.
Finally, the questions are not posed in any particular order of importance - almost any o n e of t h e m c o u l d be a major
'road b l o c k ' I

A. G E N E R A L C O N S I D E R A T I O N S FOR F A V O U R A B L E D E V E L O P M E N T O F N E W P R O D U C T S
1. Is executive experience broad enough to cope with new product lines ?
2. Are sufficient funds available to finance new products ?
3. If funds are not now available, can and will they be procured?
4. Is the Board of Directors favourable to the introduction of new product lines ?
5. Are product development goals or objectives well defined?
6. Does the management group understand the objectives, and do they agree with them ?
7. Is the company properly organised for product development ?
8. Does the company possess sufficient engineering talent to generally attempt development of new products ?
9. Do management and the directors really understand the problems involved?
70. Will those directly concerned with product development have the necessary freedom to do a good job ?
11. Do the Board of Directors and the management group really understand how long it takes to find, develop, engineer,
produce and sell a new product ? (This can easily require three to five years.)
12. Are the plants operating efficiently and competitively and not inefficiently because they have enjoyed a 'protected'
product and market ?
13. Would the present products generally be insensitive to new products ?
14. Would the stockholders generally react favourably to new product introduction ?

B. S O U R C E S O F N E W P R O D U C T I D E A S
1. Research and engineering staffs.
2. Sales staff.
3. Market research staff.
4. Sales reports.
5. Customer complaints.
5. Service department records.
7. Purchasing department staff, especially the buyers.
8. Sales department personnel.
9. Wholesalers
10. Jobbers.
11. Distributors.
12. Manufacturing engineering sales representatives.
13. Foreign products.
14. Field survey of existing customers.
15. Advertising agencies.
16. Trade magazine writers and editors.
17. Brokers, general and business.
18. Investment bankers.
19. Foreign product exhibits and trade shows.
20. Expired patents that can be further developed so as to attain a salable state.
21. Venture-capital organisations.
22. Development commissions and/or committees.
23. Patent attorneys representing clients.
24. Commercial bankers financing new-product ventures.
25. Consulting engineers as individuals and in a professional capacity for a principal.
26. 'Make buy' decisions in your company.
27. The result of research projects - almost any research project turns up developments not actively being sought.
Also, often the development company isn't interested in exploiting any of them.
28. Acquisition of companies or portions of companies.
29. Trade associations.

Value Engineering, February 1970 221

 C. C O N S I D E R A T I O N S IN S E L E C T I N G A N E W P R O D U C T
1. Does it make possible the utilisation of excess facilities ?
2. Can the present company organisation absorb the additional work ?
3. If new and specialised personnel are required, can you secure them when needed?
4. Has the company the financial strength to develop, manufacture and market the product ?
5. Does a sufficiently large market exist to make the new product a probably financial success ?
6. Is the market one presently being sold by the company ? (This is a very important question !)
7. Does it complement existing products ?
8. Will it offset seasonality of present products ?
9. Does it utilise waste products of your plants ?
10. Will it be essentially free of competing products at the time of its introduction ?
11. Are expected profits sufficient to justify the expense of development and introduction ?
12. Will you have patent protection ?
13. Can your present service organisation absorb the product, or won't one be required?
14. Is it unlikely that competition will appear on the scene for the first two or three years after the product's introduc-
tion ?
15. If competing products are already on the market, will your product have a significant price advantage ?
16. If product will have no price advantage over competitors, can it be sold successfully because of other advantages
at the same price with an adequate profit ?
17. Will your company's name and reputation be of advantage in selling the product ?
18. Will the life of the product and related profits justify the expenditure required to develop, manufacture, sell and
service the product ?
19. Is the history of similar products favourable ?
20. Will the introduction of the product tend to cement relations with existing customers, rather than alienate them ?
21. Will it be difficult for competition to establish itself because of technology, facility cost, market peculiarities, etc. ?
22. Will it require production facilities similar to those now operated by the company ?
23. Does the engineering department generally have specific experience in the technical areas involved, even though
sufficient numbers do not presently exist ?
24. Will you have sufficient time to develop the product before its market value begins to decrease ?

D. C O S T I N G C H E C K L I S T
Use it to make sure you haven't missed an important direct element of cost regarding each new product being considered.
Eliminate those cost elements which are considered as overhead in your cost structure and when they are ot such magnitude
that separate consideration is not required.
1. Facilities, equipment and tools that must be purchased to accomplish each of the following:
(a) Research.
(b) Basic engineering.
(c) Production engineering.
2. Necessary salaries of (a) scientists, (b) engineers, (c) technicians, and (d) model makers in
(a) The research phase.
(b) The basic engineering phase.
(c) The production engineering phase.
3. Fees of consultants and specialists needed in accomplishing the research and engineering projects. Examples
of these are:
(a) Research institutes.
(b) Independent specialists.
(c) Library researchers.
4. Drafting labor required for both research and engineering.
5. Material (raw, semi-finished and finished) needed by research and engineering.
6. Charges from internal consulting groups participating in the research and engineering projects. Examples of
these could be (for an electronic project):
(a) Chemical engineering.
(b) Mechanical engineering.
(c) Metallurgical engineering.
7. Specification engineering.
8. Travel expenses for research and engineering personnel.
9. Subcontracted and/or consulting engineering.
10. Procurement and transportation costs on research and engineering material, facilities and equipment.
11. Overhead on research and engineering labor.
12. Other overhead account applications on direct research and engineering labor.
13. Engineering required to support the production effort.
14. Production facilities, tools, test equipment, jigs, fixtures, etc. required to manufacture the product at required
rates.
15. Purchased material cost.
16. Anticipated losses in material due to:
(a) Scrap.
(b) Overbuys.
(c) Pilferage.
(d) Breakage.
(e) Unauthorised usage.
( f ) Destructive tests.

222 Value Engineering, February 1970

 77. Transportation costs on material.
18. Procurement expense.
19. Expense of material control activity (if considered a separate cost element in your plant).
20. Direct labor cost to make pilot run to prove out tools, equipment, processes, etc.
21. Cost to train direct labor operators.
22. Cost of production delays.
23. Cost of repair and I or rework.
24. Excess direct labor due to necessity to make extra units because of scrap and/or destructive tests.
25. Overhead on all direct labor.
26. Market research expense.
27. Selling expense.
28. Advertising expense.
29. General and administrative expense.
30. Patent and licensing expense.
31. Special taxes.

E. C H E C K L I S T O F NEW P R O D U C T C O N S I D E R A T I O N S R E L A T I V E T O M A N U F A C T U R I N G T H E P R O D U C T
7. Will it utilise excess plant space? • .J
2. Will it utilise excess manufacturing facility capacity ?
3. Are the excess plant space and the manufacturing facilities located so that they can be advantageously used to
produce the new product ?
4. Is the necessary labor supply available in the plant area ?
5. Is trained supervision available ?
6. Do the plants have substantial experience in producing similar products ?
7. Are no radically new techniques or facilities needed to produce the product ?
8. Can a substantial number of parts be manufactured more economically than purchased?
9. If the product is highly competitive, is the manufacturing organisation now successfully producing highly com-
petitive products ?
10. Does the necessary quality control organisation exist in the factory?
11. Does the factory have the right specialists now on their staff to successfully manufacture the product?
12. Has the factory produced a satisfactory and realistic estimate of the plant, facility, tools, etc. that will be needed?
13. Has the factory realistically estimated their start-up and labor cost for the various anticipated run rates - and
have the factory estimates been used in analysing the potentialities of the product ?
14. Will future foremen and supervisors be used to help manufacture the prototypes ?
15. Does manufacturing generally agree that the design concepts are practical and do they see no major barriers to
successful production ?
16. Will the new product manufacturing activity exploit existing plant waste products ?
17. Is the proposed manufacturing plant suitably located near raw material sources ?
18. Is the plant suitably located near necessary subcontractors ?
19. Will the introduction of the product lower the costs to produce existing products ?

F. M A R K E T R E S E A R C H A N D S A L E S C H E C K L I S T
These items can affect the success or failure of a new product and should be considered and evaluated as a cooperative
market research and sales project - in conjunction with other concerned functions of the business enterprise. As before,
questions are so phrased that 'yes answers are in favour of the introduction of the product.
1. Is the product salable to present customers ?
2. Does the existing sales distribution system serve the potential customers ?
3. Is the existing sales and distribution system of adequate size and capacity to handle the introduction of
the product (assuming that it presently reaches and serves the potential customers) ?
4. Does the product supplement or complement the existing product lines ?
5. Will the introduction of the new product likely have a desirable effect on sales of existing products ? (An adverse
effect is usually a major hindrance.)
6. Will the sales of the new product tend to offset the seasonality of existing product sales ? (A new company with
no products starting up with a highly seasonal product has a major obstacle to overcome.)
7. Is the expected life of the product of considerable length ?
8. Does the product fill a well-established need?
9. Can it be sold at a price that assures a reasonable return on the required investment ?
10. Will the expected profits recover the development and special tooling costs in a reasonable period of time?
(Make sure this isn't longer than the anticipated life of the product.)
11. Can the product be sold without changing mass buying habits ?
12. Have the necessary advertising and sales promotion expenses been determined?
13. Have the selling expenses, including the necessary establishment of a sales force, been determined?
14. Will the anticipated returns from the sale of the product recover the advertising, sales promotion and sales expense
as well as development engineering and special tooling costs ?
15. Will the market for the product be a stable one - not greatly affected by general economic trends, war, technological
change, etc. ?
16. Is it unlikely that substitute products will appear on the market?
17. Is it unlikely that some company will introduce the same or a substitute product at a price that will 'kill' your new
product ?
18. Does the company have a national or international reputation to the concerned classes of customers that will aid
in selling the new product ?

Value Engineering, February 1970 223

 19. Is the product such that there will be no need for a field installation and/or repair organisation ?
20. If a field installation and I or repair organisation is required, can one of the company's existing organisations doing
this work absorb the load and will the problems be similar in skill requirements to those now being handled?
21. Will the required number of styles or varieties of the product be sufficiently limited as to pose no major problem ?
22. Will customers order in relatively large quantities ?
23. Can the product be successfully sold without resorting to field warehousing ?
24. Will it be possible to successfully sell the product without carrying large inventories ?
25. Can the sales of the product be built up to a satisfactory level in a reasonably short time ?
26. Will there be a satisfactorily large domestic market without the necessity of supplementing it with foreign sales ?
27. Have the engineering department's statements regarding the advantages offered by the new product been actually
checked with a sufficiently large sample of prospective customers ?
28. Can the customer ties to existing competitors be broken in a sufficiently large number of cases ?
29. Can the product be offered under the same terms as the customers are used to receiving from competitors and/or
from suppliers of similar products ?
30. Is the market history of similar products desirable ?
31. Has a detailed and objective survey of competitors been completed to determine what actual and/'or potential
competition will likely be encountered, and did it disclose an answer favourable to the introduction of the product?
32. Will the new product not compete with, imitate, or injure present customers ?
33. Will the product be introduced at the optimum time ?
34. If one or more competitive products exist, will the new product be competitive in the following areas ?
(a) Price.
(b) Utility.
(c) Quality.
(d) Reliability.
(e) Operating cost.
( f ) Size.
(g) Appearance.
(h) Service-free life.
(i) Installation cost,
( j ) Safety.
(k) Health.
35. Has the product been designed to offer just the right number of special features, quality, etc., and not over- or
or underdesigned?
36. Have the proper and necessary customer use and service instructions been determined, and will they be available
when the product is introduced ?

MISCELLANY
VALUE ENGINEER/ANALYST Magnesium
Rivalry
Magnesium is 40 % lighter than aluminum but more costly. Just
Our large, well established and expanding company
a moderate drop in its price relative to aluminum could open up
requires a man with the following qualifications and new large-tonnage markets at aluminum's expense. U.S. auto
abilities: makers, for example, have been waiting years for magnesium's
price - and supply - to become competitive.
A minimum of five years experience in a manufacturing
The auto industry is still using only about 1 lb of magnesium per
organisation producing light mechanical/electro-mechani- car, which adds up to 10,000 tons a year. But in Germany, where
cal or electronic equipment, where Value Analysis is magnesium (most of it from Norway) comes cheaper, Volkswagen
practised and implemented. puts 36 lb to 42 lb into a car. That much magnesium in U.S. cars
would eat up 400,000 tons a year - almost four times the current
The ability to appreciate the importance of Cost and Value increase in U.S. production capacity.
in design plus an understanding of modern materials and
manufacturing processes. A high standard of personal
Price games
performance and a keen awareness of human relationships
Magnesium will be a threat for aluminum makers only if its
relative price declines. Three factors complicate the outlook:
is necessary to ensure full co-operation.
• While all of the new magnesium plants are described as more
The successful applicant will possess the initiative and efficient than existing ones, actual operating costs won't be
drive necessary to originate and carry out cost reduction known for several years.
plans and be dogmatic enough to overcome all negative • Despite the emergence of new producers, the industry will
attitudes he may encounter. continue to be dominated by one. And Dow has never let
increased production efficiency beguile it into price-cutting on
Apply to Box No. V.E.618 Production Dept., Pergamon
magnesium.
Press Ltd., Pergamon House, 348/350 Gray's Inn Road, • Even if the magnesium price holds, the price of aluminum
London WC1. (which is about 40 % cheaper than magnesium on a weight basis)
may well climb. Its producers, plagued by overproduction in the
early 1960s, may try to use growing demand to re-establish
sound profit margins.

224 Value Engineering, February 1970

Reprint No. 2:4:7

Human Relations — Training

Sensitivity Training
by L K. McLaughlin*

Dr McLaughlin discusses High and Low Level Visibility You can, he holds, divert energy from level 1 to level 2 and
in relation to Output and Morale. In any group, level 1 is the he considers his role as that of a catalyst, and concludes
logical, rational level - the head level. Level 2 is the with this advice - 'If I were interested in launching a Value
emotional, psychological level. It has to do with feelings. Analysis programme in a company I would want to make
He also talks about Sensitivity Training and organising to sure that the people that are going to be directly involved
get the job done. Value Analysis he thinks of as a very have developed the kind of relations that they need to
effective tool in the solution of logical, rational problems.' have to get the job done.'

I've been asked to make a distinction between the kind of consult-

ing work I do, which is primarily in the people area, and the kind
of consulting work Value Analysis, Inc. does, which is primarily
LEVEL I
in processes, method and problem-solving techniques. I am going
to make the distinctions and after that I am going to build the Logical Output
Rational Productivity
bridges between the two. Head
(thoughts)
High and L o w Visibility
I was thinking about this last night and I have pulled out of my
repertoire of frames of reference that I use for diagnostic pur-
poses several frames of reference which may be useful in looking
at the kind of consulting work I do, as opposed to the kind of
consulting work that is involved in Value Engineering. One of
the ways of thinking about this is in terms of the two levels that
exist in any organisation, in any group. Level One (Figure 1) is
the logical, rational level. It's the head level. It has relatively high
visibility because it is primarily verbal, and it is related to output
and productivity. It is the level where the work gets done. ENERGY
of
Level Two is the emotional, the psychological, the gut level. It has GROUP
to do with feelings; it has relatively low visibility because it is
primarily non-verbal. It has to do with the morale and satisfaction
of people.
I am going to over-simplify in trying to bring Value Analysis as a
method, and my method, together. Primarily, you fellows who
work in the Value Analysis field are working basically at Level
One. You have developed a useful and valuable method to help
people confront one another in terms of Level One's kind of
problems. I tend to work at Level Two. I am concerned with the
feelings, what is going on, not in the head, but behind the navel.
It might be helpful to tell you what it is I do, the conditions I
create for training as opposed to the conditions that are created
LEVEL II
for Value Analysis training. I create, for training purposes, a Morale
condition of absence. When I bring a group of people together, Emotional
Psychological Satisfaction
we first 'absent' them from the back-home context. They are out Gut (feelings)
of the work situation, they seldom bring their wife. Things that
govern some of their behavior is absented. We usually go to a
Fig. 1

* Dr McLaughlin, Consultant to Management, San resort. Then they are assigned to a group. In this group there is
Bernardino, California, received his MA and no leader, no boss as such; there is no prescribed task or agenda.
Doctorate from UCLA, and has been affiliated with There is no structured organisation.
the University of California, Ford Foundation, San
Bernardino Valley College, and the U.S. State There is no time pressure, because we have plenty of time, 30 or
Department. Since 1960 he has been a consultant 40 hours. I n the 'stranger' groups I run there are no past relation-
in human relations. His paper at the 10th Anniver- ships. You may be sitting there with 12 other men you have never
sary Conference of Value Analysis Inc. is reprinted seen before from 12 other companies. In other words, it is a
with their permission. purposely created condition of absence. In effect, it is a kind of an
ink blot. A kind of vacuum is created, and people start filling this

Value Engineering, February 1970 225

 vacuum with their behavior. The theory is that the kind of educate the head. We get little help at Level Two. This is where
behavior we get in this purposely created situation gives us some the revolution in education is going to occur. This is what some
indication as to the way they really are. of the campus rioting is about. It's really, 'Look we need to be
Because I submit if we watch one another in our work context' trained, but we need to also be involved at some other level than
our behavior would be subject to a particular supervisor we may just the head level.'
be working for, or a particular task we may be working on, or a
particular structure in which we are working, or particular time Organising to get the J o b Done
pressures. Let me give you another frame of reference. People who analyse
study groups say that one concern is with internal acceptance.
We purposely absent all of these, and the reactions that people One kind of modal concern is with the exchange of facts and
have in this vacuum, the thing they project, is maybe more purely feelings, the data flow that is going on; another kind of concern
them than if we were to watch them back home. is with goal setting. What is the group here for? The fourth
During the week we have an opportunity to give one another concern is how should we organise, how should we structure our-
reactions to the kind of behavior we see generated in this situa- selves to get the job done?
tion. For a few days we generate behavior that we then take a The important thing is that we are discovering that this modal
look at. You have an opportunity perhaps for the first time in concern, if left unresolved, is going to have an adverse effect. For
your life, to get a straight, undistorted feedback about the way example if you don't trust your boss, don't accept him, have no
people see you. regard for him, don't have an inter-personal relationship of true
acceptance, what facts and feelings do you give him? The facts he
Sensitivity Training wants to hear. No negative feelings,! The communications with
You create a classical set of conditions for sensitivity training of him is going to be distorted. Or if you don't trust the guy next to
individuals, and the things that are on people's minds get brought you or the guy below you, if there is a lack of inter-personal
out during the sessions. A man who has a time psychosis, he's acceptance, if there are unresolved problems at the personal level,
the one who is looking at his watch; or the man that has a real you are going to have a distorted communication problem.
need for leadership and authority, he's the one who is saying, I disagree with some persons who say our whole problem is a lack
'Well, who is going to lead this thing?' You get some insight into of communication. Lack of communication isn't a problem, it's
yourself in terms of the things that bug you inside of that created, a symptom. It's a symptom of lack of relationship. Because once
ink-blot vacuum. people are in relation, in honest-to-God-for-real-gut-level
relationship, they understand each other. They understand each
In such a situation people can project themselves. What we are
other without talking. The guys you feel comfortable with in
really after is the guy's behavior; not what he says he does, but
your work situation are not spending your time in long involved
how we sense him at the non-verbal level, at the visceral level.
arguments. When you get married, you don't have to be knock-
(You know the guy who says at one level, 'We're going to be
ing yourself out all the time, you're in communication. The pre-
democratic around here, or else.'
requisite to communication is the establishment of some kind of
We all do a tremendous amount of talking about what we do, but a relationship, getting a feel for the other guy, and being able to
in this kind of context we get some feedback about our behavior. relax and not having to keep up your defense barriers.
Well, this, as you can see, is one way of talking about the process.
There are consultants running around saying, 'What this com-
I submit that Value Analysis brings about a confrontation pany needs is a goal setting program!' You can run a goal
between and among people in an organisation that should have setting program in a company until you're blue in the face, but if
been brought about at the head level in relation to some of the the people don't trust each other what good is that going to do ?
problems they have. When I come into an organisation, I bring Or, 'We'll reorganise the company.' But if you reorganise people
about a confrontation that ought to take place at the gut level who don't trust each other, you haven't really done a damn thing.
that is maybe overdue. Where is the problem? What kind of diagnosis do you make
when your group is not as productive as you would like it to be?
Intellectually, all we are doing is talking about two levels - at 'Well,' you say, 'they don't understand, so I'll tell them.' Or, 'A
some point these things converge. My consulting tends to lack of communication. Let's talk about listening and all that
progress as follows: I may be one week running a 'stranger' junk.' If I really want to hear somebody I'll listen. If I have some
group; the next week I may be running an in-company program reason to feel that that person is trying to help me, that he is not
with a group of guys who actually work together. In the third trying to get me, that he is really trying to help me, I'll hear him.
week I may be running a program where the guys are actually I don't need a course in listening; I listen to those people that for
doing work, they are using the techniques of Value Analysis, but some reason or another, at the gut level, I feel have something
I am also helping them take a look at what is happening at the useful for me. I think we have been overdoing this examination
visceral level at the same time that they are working. I think that of the communication process. That's not the problem. The
Dusty and Wayne and some others are discovering in this field problem is: what kind of a relationship exists? I f you find your-
that you really can't have one without the other, because really self turning off some guy, you've got a problem. If he's a guy you
all we have in an organisation are people. have to work with, you have to say, 'Why am I turning him off?'
If you really look at the problem, you will discover that somehow
I have had enough experience, for example, to know that in this
you don't feel as though you can quite trust him, or you don't
room right now at least 10 or 15 of your guys aren't really all that
respect him. This is sometimes called sensitivity training. I f you
turned on about what you are doing. You have some hang-ups
really want to use the sensitivity you have at the visceral level, you
with your boss; you have some hang-ups with the guys you work
know when a guy has turned you off; don't you? His eyes go
with; you have some hang-ups about yourself. For the most part
blank. We don't want to admit it sometimes, so we just go right
you don't know what to do with these things. It usually grinds
on talking.
down to a point where you either get out or get fired, and you
go on to the next situation.
Did you ever see two guys talking, talking, talking and talking.
My work is really involved in keeping key people working in such But because they know they're not listening to each other, they
a way that they stay turned on, that they develop the kind of keep on talking. There is no communication going on.' Just
relationships with people where communications really do flow, because people are talking doesn't mean there is communication.
where the company doesn't lose good people primarily because In my opinion, inter-personal experience is a Level Two issue,
they have been unable to resolve their problems. The interesting and the exchange of facts, goal structure, and organisation are
thing is that most of you have developed your head at the Level One issues. As a result of our schooling we have our heads
expense of the visceral. Our whole school system is set up to in good shape. Most of you were hired into your companies
226
Value Engineering, February 1970
 because you had developed something that the company needed, If you turn Bob Blake's grid around, he is really talking about
and it usually had to do with your ability to solve problems - Level One is a concern with productivity; Level Two is a concern
your well-educated head. But then at some point you are put in with people.
charge of people and you start having to work with people and
you discover that a lot of the problems of getting work done do Having said all this, is this a useful way to think about the kind
not occur at Level One. of emphasis I have on my side of the street, and Value Analysis
emphasis ?
I spend a lot of time on the West Coast in electronics firms where
I encounter whole rooms full of Ph.D's who are at the crossroads Energy Diversion
where they're going from their technical specialty into manage-
A group always has available to it a certain amount of energy.
ment. Some of them are in charge of 60 or 70 people.
You can divert this energy to Level One or Level Two. I f the
group makes the right kind of diagnosis as to where its hang-ups
The Discipline of Value Analysis are, it will divert the energy to where it ought to be directed. For
To solve logical, rational problems, the kind of discipline that example, groups bog down, people don't know why, people
Value Analysis represents is a tremendous tool. But these Value aren't working. The diagnostician says Level One problem: you
Analysis teams, even when they are in training, are having to deal have to give them the goals, or maybe they don't understand - or
with Level Two problems: You know how people feel about what maybe we restructure the group. So he diverts a lot of energy. He
they're doing, who they're doing it with, where they're doing it. makes an assumption it is a Level One problem. He doesn't get
It all has to do with what goes on at Level Two. You really can't what he thought he wanted, so then he goes back and he says,
expect productivity and output from people who have been' . 'Lousy diagnosis. Maybe it's a Level Two problem. Let me find
reduced to ashes, or are miserable. They are going to get out. out how people are feeling, not what they think. Let's find out
What we are really talking about is people versus productivity. how people are feeling.' He discovers people are miserable,
You cannot have one without the other, but we tend to verify they've really got some hang-ups. After he discovers that by
one another in terms of how much importance each of us gives paying attention to it, diverting some energy to it, he gets that
to people and productivity. In a conference like this you could put problem resolved. The group becomes productive and moves on.
us all on a scale - there would be people that have a high concern That's over-simplified, but the notion is that we don't always
for people and a low concern for productivity; and there would divert the energy to where the problem is because most of us are
be people who have a high concern for productivity and a low inexperienced at dealing with problems.
concern for people. Bob Blake, who originated this way of
thinking, tends to plot management teams on a graph (Figure 2). I get two kinds of focuses in my training work. One of the
A management team that has a high concern for people and a low focuses is on the relationship the guy has with himself: the intra-
concern for productivity is a kind of a country club management personal relationship, the relationship you have with your
team; everybody is happy, all the inter-personal relationships are feelings, how much in touch you are with yourself, how much
good. It's a great place. We play a lot of golf, have a lot of fun, understanding do you have with yourself. How able are you to
but the company goes out of business because there is nothing manage your own feelings, let alone other people's. I think most
moving out the back door. of us who have had our heads developed at the expense of our
feelings tend to do the traditional things; we tend to board over
Country Club the feeling area. It is an unfortunate thing in the United States
that our culture tends to encourage this - you know, the man
ideal in the United States is Gary Cooper: 'Yep. Nope. Giddyup.'
Never show your feelings. To be subjective is a lousy thing. Well,
that's a lot of nonsense.

Converting Energy into Productivity

PEOPLE What is motivational? Actually, there is one man in this field
5-5 that has theorised there are satisfiers and motivators. You can
level have a certain amount of light and you can increase it, but
without it people are going to be a little unsatisfied.
Without a certain level of money you may have some dissatis-
faction, which may be demotivational. But if you double the
Things salary he isn't going to work that much harder, so at some point
there is satisfaction.
1 PRODUCTIVITY 9
I am discovering that the motivational level of people is Level
Fig. 2 Two. We have been hung-up because we have tended to dope it
out on the local rational level. 'It's really obvious, just give
At the other extreme, management thinks that people have a high people more money and they're going to work harder, you
L

concern for productivity, really thinks of people as things. I f the know,' is often heard. That's nonsense. Motivation is primarily a
guy doesn't work, just unscrew him, throw him away, and get Level Two problem, yet we try to get at it at Level One.
another guy and screw him in. They really think of human beings
as things. In the short range they may get high productivity, but, My bachelor's degree was in cost accounting, so I also went
unfortunately, people begin to leave. Most of us are wandering through the process of having my head developed at the expense
of my feeling until I got out in the real world and discovered it
around in the 5-5 area (Figure 2).
isn't like that.
When people are concerned about their welfare, then productivity The things that make people happy don't necessarily make them
begins to slip. The boss then begins to move it back to a concern unhappy; and the things that make people unhappy don't
for productivity and we have tension and swing. I f we pay
necessarily make them happy.
attention to the need to integrate these two levels, we can have
both. You are asking, from the time you walk into the room, to take
inter-personal risks, which are far riskier than first supposed.
Bob Blake's contention, and I share it, is that we can get a lot What is being risked? Your own feelings are being risked, your
more productivity and satisfaction out of our work. We tend to own notions about how people will see you, and what will
set lower expectations than we should. I think some of you may happen to you if you do take these risks, become an issue. In
have been part of a group that was really productive and really psychology there is the phrase, 'a self-fulfilling prophecy'. We
satisfied and you have never been more turned on; right? tend to prophesy all kinds of horrible things.

Value Engineering, February 1970

227
I just finished working with a company before I came here. I had Two so these guys weren't draining off psychic energy into the
16 men for two and a half days. They were nervous when we went Level One area. They were able to work at Level One but if
into this program because they began to prophesy what was going problems began to arise at Level Two while they were working,
to happen. None of that happened. The guys were able to relax, they knew enough to resolve them. That is a beautiful way to
drop the act, drop their defenses, really sit down and talk to one operate, really. We went through the whole company that way.
another and find out how they really felt about one another.
If you have established a win-win type of environment, is it
Gordon Walker is here and he's been through one of my groups. characterised in the first place by almost total absence of self-
I had four telephone calls from that company the day after I got fulfilling prophecy? Isn't it characterised by generalised feelings
here because of all the things that have been churned up. In a of trust, and then you can say that you have taken Level One and
sense I am really not a consultant. A consultant is a person who Level Two and made them into a synchronistic proposition ?
goes in and he's got some content to deliver that isn't present in
the situation. This is saying that if you have in effect achieved a kind of win-
win climate and atmosphere in a company, haven't you in effect
then created the two levels ?
Role of a Catalytic Agent
I think my role is as a catalytic agent. I ' m really creating the Yes, I would say that's correct. One of the things I am sure about
conditions, legitimately testing the conditions that those inside is that nobody is perfect, and you are never going to get it made
can't do. I don't want you to leave this room and go back and perfectly. One of the things that you learn is that sometimes you
get the four or five guys you work with and say, 'Well, now, let's are going to blow it, and that in itself is important. You are able
tell each other how we really think,' because you're going to to keep each other honest, but also forgive each other when, for
blow it. various reasons, you get locked into.jvin-loss.
You need somebody like me from the outside to sit down, create The Times in W h i c h w e Live
the conditions, create the right kind of climate, and guide it so we
don't get a lot of useless confrontations. When you are in a period of a high rate of technology develop-
ment, isn't that usually when there is more emphasis on Level
I think you are all familiar with the scheme in inter-personal One, and the reaction comes on the Level Two. And if you don't
relations. There are three things that can happen. bring it into paper perspective, do you create the kind of chaos
we have in society today? Feelings of uncertainty on the part of
We have an interreaction, Gordon and I . It could be a short one young people ? Isn't this really what is taking place throughout the
or a long one. As a result, he could win or I can win. As a result country, not only in the schools, but in other groups ?
of the interreaction he wins and I lose. I suppose most of us are
more win-loss players than we are willing to admit, and this is The black-white problem is primarily a Level Two problem, and
one of the things that we examine. most of the explosions that are occurring for example, the
generation gap, is mainly a Level Two problem. Yet we try to
You say that you're not a win-loss player when you have 12 guys resolve these problems on Level One. 'You kids shouldn't riot.
telling you what to do. It is as though in the sensitivity training It isn't logical to tear up our campus.' That isn't the point. What
we set up a group of 12 mirrors, and you can look in those 12 is going on inside and why are they doing this ?
mirrors and you may be surprised at what you see. In effect, by
definition, it's really revealing some of the blind spots you have Along that line, I've been experimenting over the last couple
about yourself. of years with non-verbal techniques. I don't use them too much
with businessmen, but I will as I go along because the kind of
Another kind of thing can happen: the inter-personal interaction learning that is involved is primarily non-verbal, and we try to
that is brought about by the kind of confrontation where both get at it verbally. I have become more and more impressed with
parties lose, lose respect for each other, lose emotional feel for how quickly some of these non-verbal techniques get you in
one another . . . the loss-loss. You're on your way to a divorce, touch with your feelings, and get those feelings in touch with
really, with the boss. other people's feelings.
In the win-loss situation let's say that my opponent wins and I I used to be in business with a couple of guys in a consulting firm,
lose; doesn't that motivate me to go back and try to find addi- but one of them went to work for a living as vice-president of
tional resources so I can go back on the same issue and reverse Syntex, and the other guy is still on his own. I work primarily as
that situation so that I become the winner next time? an individual, and I pick and choose the kind of thing I want to
My motivation is to become more able, the longer I live, to make do. I run a couple of management laboratories every year where
sure every confrontation I have results in a win-win. I do sensitivity training, and I'm beginning to experiment with
some of these things.
In one company I worked with, we have more internal, personal
confrontations than the company has with its competitors. Com- The second thing I do is opposite to the stranger laboratory,
panies have built-in conflicts; sales with manufacturing; manu- where strangers sit down together and are there for their indivi-
facturing with quality control-you know what they are. The dual experience. In contrast, I ' l l take a group of people in a
men are expending more psychic energy fighting one another company who actually work with each other and put them
than they are fighting the competition. through this kind of experience.

This is often the situation that exists, and when Value Analysis The third thing I want to get into is where I get with people as
people come in they create a condition in which these guys can they are working on a problem and do this kind of thing. This is
really talk, and they are given a method of problem-solving. In what happened at TRW on the West Coast. There is a consultant
the process, either directly or indirectly, some of these problems like myself who works right with the group as it is working,
get resolved. This is why I feel akin to what Value Analysis, Inc. and he helps the group identify where the problem is and helps
is doing, because we kind of see each other on different sides of them resolve it. But with my kind of consulting, I am trying to
the street. But you in Value Analysis, Inc. are more manifestly work myself out of a job as fast as possible. I want to join the
working at Level One and I am more manifestly working at Level firm, create the conditions so the problems can be solved, leave
Two (Figure 1). them in terms of how it can be resolved in the future, and leave
the firm. I think I'm most successful when I am able to be in
With Bob Blake we went through a finance company right from there, get the job done, and get out. Because you can't have a
top to bottom. I came in and put the top executives through a guy like me hanging around your company all the time to do
week of sensitivity training. Then Bob came in with two or three what you are able to do. I find that most of you fellows who have
days where they actually sat down and did business, worked on achieved the levels that you have achieved in your companies
Level One problems. I cleared away all the underbrush at Level have a better than average insight into people, or you wouldn't

228 Value-Engineering, February 1970

be where you are. Whether you want to admit it or not, your the feelings begin to develop and a lot of the energy of the group
feelings are more involved than you realise in the decisions you begins to get diverted to Level Two. (Stage 2, Figure 3). They
make. I don't know what this cast is in the American culture that have to begin to resolve some of these feelings they have. They
says that the objective level is more desirable, which I don't think have to resolve some of the internal problems they may
is being objective. have, so that ideally at Stage 3 (Figure 3) they're at the point
where energy can be diverted to either level as appropriate,
Level Two is where it's at, folks, this is where we live. The
depending on where the problem is.
women here understand what I am talking about. They can know
in advance a lot of things are going to happen because they are If I were interested in launching a Value Analysis program in a
operating at the visceral level most of the time. For instance, a company I would want to make sure that the people that are going
woman doesn't ask you what you think, she says, 'How do you to be directly involved have developed the kind of relations that
feel ?' So we can learn to do this. You've got really the greatest they need to have to get the job done.
consultant in the house if you'll use her. I know when I'm all
jammed up and I sit down with Ellen and we start talking, she It is amazing to me to find that inside on-going companies that
says, 'How do you feel?' She doesn't really care what I think, but people can work together for five, six, seven, ten years and really
how I feel. not know one another. I have this experience every week of my
life, going into a company where guys have made all kinds of
assumptions about knowing one another.
Learning V . A . in a Company
One of the initial things that should happen is some training at " In one company I was in, out of the 16 guys, 8 of them were
Level Two before you head blindly into the process of Value' Ph.D's and the others were M.B.A.'s from Harvard or Stanford.
Analysis. You would think that a group with an educational background
like that would be aware, at least, of their technical backgrounds.
When you are trying to get a program of Value Analysis estab- It is a relatively new company and it's grown very rapidly. They
lished in a company you are taking a group through a process. really weren't aware of one another as people, but one interesting
Studies have demonstrated, for example, that people start out at aspect is they weren't even aware of all the things that one another
the head level because they're not involved with each other too had to offer in the technical field!
much. Things that are said are pretty much at the hear level
(Stage 1, Figure 3). But as they get involved with one another
Increasing Sensitivity in Others
When a man walks into the room most of us say, 'What does he
do ?' What information does that give you ? My daughter came
up to me and said, 'Who are you? I ' l l give you three answers.'
Think about that. That's a neat question. After I really thought it
through, you know, things like a consultant, Irishman, American,
these things are really way down the list. First of all, I'm a human

\ t/ being; secondly, I'm a man; thirdly, I'm a husband, then I'm a

father . . . in terms of primary things. And the fact that I'm white,
for example, is far down the list. We tend to get hung up on
secondary issues.
When we see another person, let's get in back of the label. What
kind of a guy is this guy? Get a feel for him as a person, try to
find yourself in that person, and you will find yourself in that
STAGE 1 person at Level Two.
Let me tell you the story of the old sales manager. He hires a
young salesman and he puts him on the road. When he comes
back from the trip, what do you suppose he asks him ? He doesn't
ask him how much he sold, he asks him how many friends he
made.
The serious point of this is that you men are trying to develop a
new program inside a company. Anything new, anything that is a
change, is going to threaten somebody. The first thing to do is to
sit down and figure out who are the people you have to establish
a good working relationship with. I am talking about an inter-
personal relationship, and a good working relationship. Who are
those people? Make a list of the persons that you are going to
have to establish a good working relationship with to succeed.
Go over that list and ask yourself how do I feel about each of
these guys ? Honestly. Do I think he's a dum-dum or is he pretty
smart, or do I really know him? Have I made any effort to really
get to know this guy?
Then you might ask yourself at this stage, how do I think this
guy sees me? Each person on the list.
At this point, I would make a list of the most critical to the least
critical in terms of getting this job done, and I'd spend my time
going around developing the right kind of relationship. This may
not mean talking about Value Analysis. This may just mean
investing some time. This is what we don't do really enough of
because we don't think it's important enough. For example, if
STAGE 3 you learn to type you can type through the hunt-and-peck
method. (Figure 4). You sit down at a typewriter and you type
Fig. 3 out a word. You've got some words per minute the first time you

Value Engineering, February 1970 229

 Of course I am talking in generalities. I f I were in your specific
company my diagnosis would be in specifics. All I am urging you
to do is recognise that if the problem is Level Two, go to work at
/ it at Level Two. Don't continue to try to solve it at Level One.
/ You've got to have open, trusting relationships with people.
If you know you have difficulty in inter-personal relations, that
you don't do as well as you like, come to one of my management
labs. We'll help you develop the skills.
Let's talk about setting a 'climate'. The most threatening place to
talk to a guy is in his own office. The worst thing we do is not to
take enough time. We have hang-ups and misfires and loss-loss
situations occurring because we try to resolve something with a
guy that really takes more time than we allocate. That is another
condition.
Time The psychological problem is that you have to get people
psychologically to focus. John Hollar reported he's got a room
Fig. 4 that is allocated to Value Analysis. Great psychological technique.
Psychologically, this conference may be on its way home right
now, because it's near the end. j.
sat down and your learning curve starts. You get a little faster at
it all the time. But at some point it levels off in terms of words Psychologically, as long as we are able to stay focused we may
per minute because you have to keep looking at the keyboard. continue to be in danger of learning something. But psychologi-
Now you learn to touch type, and you invest some time in finding cally, as soon as we begin to leave we're not available to each
out where the keys are without looking. Then you find yourself other any more. First, you sense this in your navel, in your
writing the word without looking, and it isn't very much, but it's viscera, in your gut. Is this the time to talk to this guy? A lot of
some productivity. But at some point, when you really get it down misfires occur because we are not sensitive enough to what it is
pat, there is no end to how productive you can be. What I think we are really trying to bring about.
most of us do in the 'people business' is hunt-and-peck work. We To focus on long overdue problems and hang-ups you may need
really don't think it is important to go around investing our time major surgery; you literally must take the guys out of the context
in establishing relationships with people in order to get the inter- for a week, 300 miles away so that they can be psychologically
personal underbrush cleared away. available to focus on those problems. I t is just that there is
Go to a guy and say, 'Look, I've got a job to do. I'm very aware nothing more therapeutic than getting yourself out of the context
that for it to succeed I've got to have your help, support and in order to get a good look at it. You've got to get outside of
reassurance. I ' d like to talk about how you see me.' your culture to understand this. My first experience overseas was
in India and I was there 18 months. I learned a lot about our own
Do you think I'm the kind of guy who ought to be doing this ? country in India because it was the first time I had been out of it.

Miscellany
Up against t h e Peter Principle eat ice cream (which they much prefer to liquor), and to hear
The Peter Principle - Why Things Always Go Wrong (Morrow) is songs recorded by Mabel Mercer, who, like their other idol W. C.
already a best-seller, even at 179 pages. One week alone it sold Fields, 'has had the sense to stay at her own level of competence
12,000 copies. I t is also a minor cultural phenomenon and its and not try to be more than she is.'
title phrase, like Parkinson's Law, is certain to enter the language. The Peters are an idyllically and quite atypically happy pair. It is
The Principle in question, modestly billed as 'the key to an she, not he, who drives their 1966 Falcon. ' I know how to,' the
understanding of the whole structure of civilisation', asserts that professor explains, 'but I'm not good at it, and she is.'
'in a Hierarchy Every Employee Tends to Rise to His Level of
Incompetence' - in other words, as cream rises to the top, it
sours. % % %

The book abounds with cautionary episodes from famous and

sometimes apocryphal careers. Miss T. Totland, the gifted Key Techniques of V . E .
primary teacher, was woefully miscast when she became a super- Use the organised approach - the job plan
visor. The 'consummate politician' A. Hitler rose to his 'level of Get all information and facts
incompetence as a generalissimo'. Socrates should have remained Employ creative thinking
'an incomparable teacher' and not tried his luck as 'a defense Put a $ on main ideas
attorney'. Evaluate by comparison
So it is with hierarchies all around us. 'In every thriving organi- Evaluate function
sation,' Dr Peter says, 'there is a considerable accumulation of Blast and then refine
dead wood at the executive level'. And since most buyers of Overcome roadblocks
books owe their livelihood to some 'thriving organisation' or Use accurate costs
other, The Peter Principle has struck a throbbing public nerve. Use specialty suppliers, products, materials, processes
Dr Peter, who wrote the book with the help of a fellow Canadian Work on specifics
named Raymond Hull, lives true to his own Principle. Three years Use good human relations
ago he deliberately forsook what friends say was a lavish and Put a S on each tolerance
prosperous household in British Columbia. He moved with his Use your judgment
new second wife to a nondescript section of Los Angeles and Spend company money as your own
took a job at the School of Education at the University of Use company services
Southern California. He and Irene have graduate students over to Use industrial standards

230 Value Engineering, February 1970

Reprint No. 2:4:8

Communication — Quality Control

The Suicide Club

by J . Douglas Cole*

Writing under such titles as 'Control by Crisis' and 'The reduce, instead of increase, the problems of effective
Suicide Club' the author effectively communicates his communication; to open a few doors and remove a few
thoughts on the Services, Quality and Value management blind-folds, by an amalgamation of the know/edge and
functions in business. He conceives the problem of these discipline of the three Secret Societies (Service, Quality
three sections of business to be largely one of establishing Control and Value Engineering) which have self¬
effective communication — of convincing operators and - destruction as their ultimate aim.' This is the author's
i

management. 'Let us, therefore, attempt to reduce,' "' panacea.

instead of increase, the number of Secret Societies; to

When man first decided to leave the trees and become a man he thought, the Enemy was the Unknown beyond the Frontier,
found for himself a warm, dry, secure cave which was easy to to be attacked and subdued in order that he might pay tribute.
defend. Any animal outside that cave was an enemy to be feared,
destroyed or killed for food. Let us now turn our thoughts to the basic tribe. It must have
contained one man who knew the secret of fire, one who could
After centuries of conditioning we usually assume that this cave trap and kill large animals, another who could out-run and kill
also contained a woman and children, as a cosy family unit, but the antelope, and so on. Each could compensate for the fact that
it is more logical to suppose that the basic unit was One Man, he was subject to the Chief by the knowledge that without his
One Cave. When this man scented a woman he left his safe skill the tribe would suffer and die. Although subject, he was a
environment to fight other men for the privilege of her favours vital member of the tribe, and in his own opinion more important
and if successful retreated to the cave, where he fed and protected than the Chief who merely gave the orders.
the woman until their offspring could fend for himself; woman
and child were then banished outside to the tender mercies of When one tribe joined forces with another this state of equi-
Mastadons and Brontosauri whilst Man returned to his lonely librium no longer existed because the new larger unit contained
existence. two or more men of similar talents. After several such specialists
had realised too late that they were no longer indispensable, the
The centuries of conditioning have crept in again already. Man remainder held a meeting in a dark corner of the cave and -
was not lonely; he was self-sufficient and unreasoning, so that impelled only by the instinct of self-preservation - agreed that
he did not realise that he had anything to be lonely about. their knowledge must be kept strictly to themselves and that they
The first man to discover that the flesh of an animal roasted in a would in future act as a group and not as individuals.
forest fire was more tasty and palatable than the raw flesh of a We have therefore established: (a) that lack of communication
freshly killed animal did not immediately run around to tell all is the greatest obstacle to progress, and (b) that the members of
his friends. He had no friends and no doubt the secret, passed any group are mainly motivated by an instinctive fear of those
on from father to son, was not generally known for centuries. outside the narrow confines of the group.
After many years, it occurred to a man more powerful than his
Despite the marvels and complexities of the 20th Century these
contemporaries that if he were to subdue other men, instead of
two basic obstacles still apply and their effect upon progress is
killing them, these subjects could venture outside for food and
incalculable. Young children take delight in secret jokes, losing
water whilst he remained in the comparative security of the cave.
interest as soon as the joke is appreciated by anyone outside the
This apparently idyllic existence soon palled, and so women were
intimate circle. They invent words and phrases known only to
permitted to enter the cave as companions rather than mere
themselves in order to fool parents and outsiders. They build
breeding machines. Thus, the tribe (and the Cosmetics Industry!)
tree-houses and hideaways, entry to which is dependent upon a
came into existence. By similar slow processes, the City-State
complicated pass-word known only to a few. As soon as one
and eventually the Nation evolved. Always, without conscious
pass-word is accidentally debased, another even more compli-
cated one is invented. The list is endless.

Adults, too, have their Sects, Clubs, Secret Societies, Fraternities,

"Mr Douglas Cole is Group Deputy Quality Control Guilds, Unions, and Professional Associations.
and Service Manager, Cam Gears Limited, 45
Nations sign pacts and treaties and join organisations having a
Wilbury Way, Hitchin, Herts., England. He is well-
proliferation of initials such as U.N., N.A.T.O., and E.E.C.
known for the arresting thought and turn of phrase.
He has a deep interest in Value Engineering as well The smaller and more esoteric the Association the better, so that
as in Quality Engineering where his particular if a man is permitted to join the Guild of Bottom-Knockers
current endeavours are very much concerned with Mates - 1-5/16" diameter Brass Division which has only fourteen
safety assurance matters. Among his many other members in the entire world, he is as happy as a king.
activities Mr Cole is extremely interested in
strengthening the ties between value engineers By definition, only those of like mind are permitted to join a
all over the world. Secret Society so that the larger proportion of available effort
is squandered on the mouthing of platitudes with which all agree

Value Engineering, February 1970 231

except the occasional "rogue" who is the only source of progress. 3. Value Engineering
Contemporary rapid advances in all fields of knowledge, The result of any Value Engineering exercise should be a
coupled with the torrent of fact and opinion hurled at us via product or service design to perform the intended function at
modern methods of mass communication mean that we are lowest absolute cost. This absolute cost to take into con-
quite literally learning more and more about less and less. We sideration length of useful life, servicing and repair costs.
struggle to keep abreast of developments in our own particular
We have already eliminated the Service Department. When, by
sphere of activity, but our efforts are stultified by a lack of
education and example, Quality Control and Value Engineering
effective communication, by an inability to listen effectively
achieve the ultimate, every design, machine tool and operator
because the mind is occupied with other matters and for the
same reason, by an inability to sort the wheat from the chaff will be perfect whilst every product and service will function as
in the bushells of information offered to, and thrown at, us. cheaply as possible.

We find ourselves in the storm-centre of a complex situation * * *

where, on a National and International scale we are bombarded
with a mass of information, much of it useless, whilst at a more
personal level information is withheld or grudgingly disseminated When we reach this stage of human development, Quality
because of the Caveman mentality. Control and Value Engineering will also be extinct.
Amongst the vast proliferation of Secret Societies which exist The question was recently asked, 'Are trained value engineers,
under hundreds of pseudonyms in the world today, three are who are in such short supply, being effectively utilised?' Over
unique: half of the value engineers replying reckoned that their expertise
1. Service was not being fully utilised. It appears that this feeling is most
2. Quality Control pronounced in selection of actual products for these value
3. Value Engineering engineers to analyse.
They are unique because they are all ultimately self-destroying, The value engineer whose opinions were sought had earlier
hence the title of this article. stated, 'They derive job satisfaction from being able to speak
Let us give detailed consideration to their functions. directly to management'. I f these two statements are taken at
face value they imply a virtual total lack of effective communi-
1. The Service Department cation. Walter Wiesman, in the Summer 1969 edition of Defense
To feed back to Quality Control and Value Engineering all Management Journal wrote, ' I f we could only remember at all
details of product performance. When this feed-back process times that the purpose of every communicative effort is to reach
is 100 per cent efficient and the necessary modifications are another human being's mind, we might understand a little better
introduced with 100 per cent efficiency, then Service problems why the results will always be somewhat uncertain'. True, but
cease to exist, and the Service Department becomes extinct. defeatist - 'Always' is a very long time.
This Utopian dream is unlikely to be fulfilled for some hundreds Despite the advances in the theory and practice of Quality
of years, but already Service Departments are becoming inte- Control, many managers are still compelled to operate 'Control
grated with Quality Control Departments in order that the
by Crisis', owing chiefly to an inability to communicate.
usefulness of the feed-back information may be enhanced.
We are therefore left with Quality Control and Value Engineering, Communication in this context may be defined in three stages.
disciplines which are neither compatible nor complementary- 1. Discover problem.
they are synonymous. 2. Provide solution.
2. Quality Control 3. Convince Management.
Quality Control has advanced from the Fire-Brigade tech- Let us,, therefore, attempt to reduce, instead of increase, the
nique of Control by Crisis towards Total Quality Control number of Secret Societies; to reduce, instead of increase, the
with involvement right back to Design and Development problems of effective communication; to open a few doors and
and, through Zero D and similar programmes, forward to remove a few blind-folds, by an amalgamation of the knowledge
Setters and Machine Operators. The aim of every Quality and disciplines of the three Secret Societies which have self
Control Manager should not be to build himself an empire, destruction as their ultimate aim.
but to permit his department to be decimated because of the
education and improved efficiency of every other department By this mean, we may achieve our object in two hundred years
from Design to Despatch. instead of a probable two thousand!

Mis
Square Pegs in Round Holes* the layout, form and bibliographical presentation of conference
A book by this title directs attention to the vitally important proceedings.
question: 'What do you want most from life?' It outlines the 'A conference may be identified by reference either to the name
broad categories of careers available and the aptitudes required of the body whose members were meeting (e.g. 3rd Annual
for them. Symposium of the Society of Dyers and Colourists of Australia),
The author advises assessing yourself against the job's demands to a phrase indicative of the continuing purpose of those attend-
and indicates where advice may be obtained. ing (e.g. 14th International Congress of Applied Psychology) or
Training for adults and financial aid whilst taking courses is to a phrase indicative of the specific and unique purpose or theme
explained and a list of useful addresses provided. of the meeting (e.g. Institute on Diagnostic Problems in Mental
'Most people', considers the author, 'fail in their chosen career Retardation).'
because of inability to find satisfaction in it than because of The Title Page shall contain - Conveyer, Editor, Place held, Date
failure to do it well. Job happiness usually means job success.' held, Series of conferences, and Imprint (i.e. publisher and year of
publication). Additional information may include expansions of
* By J. L. Owens in the Take Home Book series (Pergamon). abbreviations, availability of proceedings and contents list.
sK * * Individual papers should begin on a fresh page and discussions
should, where possible, immediately follow the paper or group of
A B . S . for Conference Proceedings* papers to which they refer.
Over forty Government departments, libraries, and professional
associations cooperated in the preparation of a standard covering * British Standard 4446:1969 (British Standards Institution).

232 Value Engineering, February 1970

Reprint No. 2:4:9

Basic concepts

Value Engineering—Not Valve Engineering

by Joseph Sherry*

The author stresses the importance to the newcomer to selection of products upon which to spend time should be
Value Engineering following the Job Plan, and not considerably influenced by their potential pay-off abilities.
proceeding along the lines of his previous specialty The article will be of considerable value to those newly
whether it be design, manufacturing or purchasing. come into Value Engineering for it is the crystallisation of
Mr Sherry also contends that the approach to Value much practical experience and by heeding it the new-
Engineering should also be Value-Engineered. The •• comer will save himself much wasted effort on false starts.

We are often prisoners of our experience equally well. Most likely, the difference centers on the utilisation
It seems that in many cases when you bring men from other of their time. Where do they spend their maximum effort? The
disciplines into Value Engineering, for the first few years a good salesman, the successful salesman, the one making $50,000
peculiar situation exists. I f the fellow used to be a designer and a year and up-(that number could be $150,000 or $200,000 a
now is a value engineer, the first thing he wants to do is re-design year just as well), these men sit down and determine first what
the hardware project that he is working on, without any regard to kind of customer they are going to go after. Second, they will
the Job Plan. I f the value engineer happened to come into the determine the area within this customer mix which is going to
project as an analyst of one sort or another, he seems to attack bring them the maximum commission.
the project from a different angle, again without much attention Using insurance salesman as an example, a highly successful
to the Job Plan. I f the value engineer previously was an industrial insurance salesman probably spends less time doing his job than
engineer, he will probably look on it as a processing problem the unsuccessful insurance salesman. The highly successful
that has to be solved. He may not clearly decide what that prob- insurance salesman will spend over 90 per cent of his time selling
lem is, but will go into the project looking at the production cycle to the wealthiest people. He will shoot at the top 10 per cent, or
for the most part and the labor involved in producing the part. thereabouts, of the income level, in order to maximise his business
That is the portion which he will tend to emphasise and where he in that area. His decision is to spend most of his effort on that level
will use most of his time. I t seems to me that you can take men of clientele, those who need and get the largest insurance policies.
from any number of disciplines, who are now value engineers, He will be maximising his own returns, his own commissions, his
and you will find that they don't really pay too much attention to own income. He will do this by finding out what it takes to sell
the Job Plan. They will approach a project and spend the these people; what it takes to deal on that level or what it takes
majority of their time on that project with emphasis on only one to do that job; and then he will go ahead and do the job on that
aspect of it. level.
It is my feeling that they have lost the whole idea; and maybe Spending as much effort as a lesser paid salesman, and in some
these people, who make a mistake that is often made outside of cases spending less effort and less time, he will get much more
our profession, have indirectly called themselves valve engineers income from it. He might spend the same amount of time selling a
instead of value engineers. I am sure many of you have gotten businessman a particular type of business insurance, but he sells
letter with that title added to your name or have gotten literature it in the area of millions of dollars; whereas the lesser salesman
for valve engineers and from companies producing valves. I t is an sells it in the area of thousands, even possibly hundreds of
easy error for one not familiar with the profession. thousands of dollars (which still isn't near the top).
There seems to be a lesson here that we can learn. The proper
Our o w n approach should be Value-Engineered value engineer, the professional value engineer who brings the
Maybe the mis-titling is deserved. We are not valve engineers - most return, will be the one who approaches the project with the
we are value engineers. We must not only get maximum value, intent of the Job Plan in mind, and then uses the Job Plan. He
we must use maximum value in obtaining maximum value. I n will sit down and gather all of the information and costs. He will
this area you can make a comparison with a top salesman in a analyse the sub-portions of his project or sub-assemblies of the
particular portion of the sales profession. I f you take the man piece of hardware and will spend his maximum effort and most of
who is making $50,000 a year, and compare him to the salesman his time on the items (or sub-assemblies or sub-portions) that are
who is making $10,000 a year, you will find that they probably costing the most money or are the largest percentage of the over-
spend an equal amount of time working at their profession. Well all cost of that item - and won't stop there. He will then deter-
then, what difference causes the fact that one man earns only mine how many of those items are being built.
$10,000 a year? We will make the supposition here that, as far as
being a good salesman, they are relatively the same in that they If, while putting the project together, he immediately sees that the
are both able to complete their production or service contracts total cost is not significant in relation to the time it is going to take
him to accomplish a savings, then he'll drop it and go somewhere
else to another project. Or, if there is a large dollar project but he
doesn't think he can save a large dollar amount, relatively
Mr Joseph J. Sherry is Supervisor of Value Engi- speaking, he will also decide to drop that project. A good value
neering at Interstate Electronics, 707 E. Vermont engineer will only go ahead with the Job Plan when he has deter-
Avenue, Anaheim, California, 92803, U.S.A. He mined that there is enough money in the project to warrant the
takes a close interest in the activities of the Society effort expenditure. He will then go through the Job Plan methodi-
of American Value Engineers. cally, whether everything falls into place or not. The effective

Value Engineering, February 1970 233

value engineer will complete some sort of a Job Plan form to The discipline of Value Engineering evolved because people
organise his thinking, to organise the information, to organise the weren't approaching these areas in an organised manner. By
effort of the project for maximum results. using the Job Plan, most of the effort is spent on the highest cost
areas. Effort is not wasted on areas that don't cost too much to
By using the Job Plan, he will divide the piece of hardware into do anyway. The value engineer must evaluate in an organised
sub-components, sub-assemblies, or sub-portions (as you may manner. We must ask ourselves questions, no matter how
wish to call them). Looking at the highest cost portion of the total obvious the answer may appear. We must ask ourselves all the
project, he will concentrate his efforts on the function of that appropriate questions. And we must go all the way down to the
highest cost portion, knowing that a lower cost portion won't save end of the Job Plan before we are satisfied that we have completed
as much money, therefore why waste time on it. Why spend effort the project.
on it inefficiently? Granted, there are exceptions, e.g., where an
item doesn't cost much but it is immediately apparent that you In many cases we will have two or three sub-assemblies in a
can eliminate it. I am speaking, however, in general terms. project that are high dollar items. But we will start concentrating
our effort on the highest dollar items and then i f the second and
third dollar items are still very high, we will spend some effort on
The fundamental question: are you using good those. Once we have accumulated all the information on a pro-
value ? ject, we may feel it worth our while to spend a little bit of effort on
the lower dollar items in the hardware. But the fact remains that a
So the question arises: 'Are you using good value as a "value"
good value engineer will make that determination as well. Time
engineer, or should you be mis-named as a "valve" engineer, just
is money!
to set the record straight ?' I f you are a good value engineer you
will first determine the total costs, not only the cost of the particu- The question arises, and you should wonder about this: When
lar piece of hardware of the project and precede to make a you find yourself wasting time on a project that suits your fancy,
determination whether it is worthwhile to spend your effort on but may not be the highest dollar items on which you should
that project. Because, as we all know, there are many, many other spend your time; or when you are working on an item that is a
projects (many fish in the sea) that are available to work on. He high dollar item but are only going through it the way a young
will then precede to another project that has more potential and is boy goes through the fields (whichever way he pleases, whichever
worth the expenditure of the company's money on it. His work way it suits his fancy at the moment); i f you go through it in a
on the project will continue in a methodical manner using the disorganised manner, you must ask yourself this question - Are
Job Plan (because this is an organised approach). you a 'value' engineer or a 'valve' engineer ?

MISCELLANY
Prospects for Power Value nuclear power as the most economic proposition and would kill
The absolute economics of nuclear power, in the field of electricity the coal industry by shattering the morale of the miners.
generation rather than in propulsion, are by no means simple to
state, mainly because they are relative to the availability and cost C o s t s per unit
of competing fuels and because nuclear power has not yet Broadly speaking, nuclear power stations are significantly more
attained its optimum operating efficiency. expensive to build than fossil-fuelled ones, and have not yet
reached the stage where they can generate electricity at a cost
What can be said with certainty is that of the four main fuel comparable with the best performance from coal. But it is
systems for power generation - nuclear, coal, oil and gas - estimated that nuclear capital costs will fall dramatically beyond
nuclear has by far the greatest potential for technological 1975, and that generating costs from stations now under con-
improvement and thus the biggest scope for future cost reduction. struction will fall to a level below coal's best performance and to
The advent of nuclear power generation internationally has one comparable with untaxed oil. Oil is taxed at the rate of 2d. a
resulted in a retaliation by the fossil fuels (coal, oil and natural gallon to provide some protection for coal.
gas) to preserve their share of the market through cost reductions.
The C.E.G.B.'s latest estimates of the base load (normal generat-
In the United States, the United Kingdom, France and Germany
ing load without peak demands) cost a unit of electricity from
this has made them far more competitive, but their scope for
two nuclear, three coal-fired and one oil-fired stations, show two
further reduction appears to be limited.
nuclear advanced gas-cooled reactor power stations, due to be
commissioned in 1972, as producing electricity more cheaply than
Prospects after 1975 one of the latest coal-fired stations, Drax, in Yorkshire, due to be
No world study of the comparative economics of fuel systems commissioned in 1971. Oil and coal-fired stations have a notional
appears to have been made. I n Britain the nearest approach to a life of 30 years, which helps spread and so lower their generating
definite study was the 1967 fuel policy White Paper, though some costs.
of its figures are now outdated and its findings are questioned in Coal's best generating cost is 0-55d. a kilowatt in the case of the
fuel circles. Ratcliffe station, commissioned in 1968. I f the fluidised-bed
system of coal combustion that the National Coal Board is
In particular, the coal industry in Britain is pressing for a com- experimenting with proves successful, then coal ought, it is
plete reappraisal of national fuel policy, claiming that nuclear claimed, to be able to get down to 0-5d. a unit.
power has not lived up to expectations, either in the construction
costs of power stations or the cost at which they can produce Nuclear's estimated generation costs at the Hinkley Point B
electricity (generating costs). The Minister of Power made it clear station are 0-52d. a unit, which is better than anything coal has
recently, however, that he does not intend to bow to such yet achieved and better than the estimated cost of 0-59d. a unit
pressures, including those from the Commons Select Committee for the Pembroke oil-fired station due for commission in 1970
on science and technology, for an independent inquiry into com- (though this would be 0-48d. if oil were not taxed). Furthermore,
parative fuel costings. the Ministry of Power thinks it reasonable to assume that by
about 1980 advanced gas-cooled reactor generation costs will
He said the original purpose of the nuclear reactor programme in have fallen at least 20 per cent on their present levels, making
Britain - to establish a new, low-cost fuel source - had already them fully competitive with even untaxed oil. So far, however,
been attained and that any independent inquiry would reveal nuclear has not got much below 0-7d. a unit.

234 Value Engineering, February 1970

 Reprint No. 2:4:10

Materials

Rolled Shaped Wire and the Value

Engineer
by B. W. Cordon*

There is considerable scope for the use of rolled shaped • having a pre-shaped starting material
wire in Value Engineering. This product lends itself to • having maximum strength in plane of highest stress
material saving, increased tensile strength, improved • having suitable shapes at economic prices.
surface finish and close tolerancing. The possibilities of using shaped wire extend to valve
Among the advantages from using shaped wire are: collets and ball races.

Introduction As mentioned earlier, we believe that rolled shaped wire has been
The purpose of this paper is to illustrate the contribution that sadly neglected among the designers choice of materials and to
rolled shaped wire can make through Value Analysis, to the illustrate this we would like to show examples of how particular
reduction of costs. attributes of shaped wire are being increasingly used in various
industries. We would also like to indicate areas where the
Shaped wire is a field that we believe has been much neglected advantages we claim have yet to be taken benefit of and to
when the designer has been searching for the best and cheapest stimulate thought as to other uses where shaped wire has not
method of manufacture of a particular component, and we would erstwhile even been considered.
like to bring to the attention of the value engineer the more
complex sections now available for design considerations when
either reappraising current designs or formulating new ones. Advantages of Shaped Wire
Before looking at specific examples of ways in which rolled Before quoting specific examples of the uses of shaped wire the
shaped wire can be beneficially used by the value engineer, it inherent advantages of rolled material must be enumerated.
would not be out of order first to review the objects of Value (1) By having a Pre-Shaped Starting Material, the component
Analysis. manufacturers can considerably reduce and even eliminate
costly material losses.
Value Analysis (2) Metallurgically, the inherent variation of Grain flow in the
With modern high volume production techniques, combined with rolled material can be taken advantage of to give the
the never-ending quest for higher productivity, it is inevitable that maximum strength in the plane of highest stress. Despite
the proportion of material costs of any particular component will good design, this is not always possible with components
steadily increase at the expense of the labour costs involved. manufactured for example from machined bar or drawn
tube.
Thus, whereas the value of the scrap loss on a machined part was
once a small percentage of the overall cost, it may now represent (3) High Strength may also be achieved by using wire in the
a not inconsiderable portion of the total cost of the part. cold rolled condition thereby eliminating a heat treatment
process. Again the grain structure of the cold rolled wire
For example, the average loss of material and machined com- may give greater toughness than would be achieved with a
ponents in this country is 66 per cent. When the material costs hardened and tempered material.
themselves represent 80 per cent of the cost price, it can be seen
that considerable savings can be made i f the material losses can (4) Shaped wire can be rolled to Close Tolerances.
be reduced.
(5) The Good Surface Finish obtainable can eliminate extra
It also follows that if the machining operation is eliminated not finishing costs.
only will material savings be made but also the whole cost of the
machining operation: labour, tools, cutting oils, etc. (6) With an increasing trend towards automation the manu-
facturer is always on the look out for methods of achieving
The value engineer will also be looking at the strength/weight Longer Machine Runs - with coils up to two tons in weight,
ratio of his component and how this can be achieved at a mini- uniform in size and composition, greater efficiencies are
mum cost. With the advent of new materials he may find the inevitable.
cheapest method ten years ago is not the case today. New shapes
available for use in assemblies may produce considerable sim- (7) In some instances Improvements in Design can be made by
plifications in the original design. using a section which could not economically be obtained
in any other way and thus offers itself as a sales advantage
over other products.

' Mr B. W. Cordon, A.I.M., is the Technical Rolled shaped wire is capable of being produced with sharp
Manager of British Ropes Limited, Retford, angular projections and indentations. This may assist the
England. This paper was presented at the Shaped designer by enabling him to combine one or more simpler
Wire Technical Press Seminar held on 29th May components or by giving him the opportunity to use a
1968. shape not previously obtainable by any other economical
production method.

(<//«<' Engineering, February 1970 235

Existing Examples of the Use of the Above
Attributes of Rolled Shaped Wire
1. Material Savings
A typical example is the spacer section:

Since the cost tends to increase with decrease in size of the

sintered part, rolled shaped wire becomes more of an advantage.
4. Close Tolerance
All shaped wire is capable of being rolled to close tolerances and
one section rolled to particularly close tolerances will be dis-
cussed in greater detail in the subsequent paper dealing with the
pierce-nut section.
48 per cent material saving.
5. Surface Finish
Not only is the machining operation eliminated and the material Complimentary to the close tolerances available on rolled shaped
saving of 48 per cent achieved, but the wire can be supplied in wire is its excellent surface finish and these benefits can be used
coils suitable for continuous feeding into an automatic forming to the best advantage where special finishing operations can be
machine. eliminated.

The particular advantages of rolling as opposed to drawing this Window wiper blade arms for cars are made directly from an as-
section are also illustrated here, since to draw this particular rolled stainless steel wire which only require a final light buffing
section would require a much larger stock size for its manu- operation to achieve the desired finish.
facture, so that even if it were obtainable it would probably be 6. Large Coil Weights
much costlier to produce, since it would require several (possibly
up to ten) alternate drawing and heat treatment operations. This is mentioned as an advantage in its own right because rolling
is the only means available by which shaped wire can be produced
Consistent tolerances throughout the coils are also achieved by in large continuous lengths. Even with a simple rectangular or
rolling, which may not be the case if there was any die wear in tapered section, drawn wire suffers from the susceptability of dies
drawing. pulling out and then rolling offers the only practical solution.
2. Grain Flow For example wire of an equivalent round section of 0125 in
A recent improvement made by one customer, has been in the diameter is now available in coils up to two tons in weight
wheel retaining section used on tractors: producing lengths of over 100,000 ft and sizes in the region of
0 042 in. diameter are available in 6cwt cheeses producing
lengths of up to 157,000 ft.
In addition, the coils are traverse would producing a very com-
pact coil compared with the normal block would coil. This
enables trouble free decoiling to be achieved even in the annealed
state.
7. Production of Angular Sections
In the past, the production of shaped wire has been limited by its
inability to produce very angular sections. This is because the very
sharpness of the corners leads to lubrication breakdown in the
These components are used to fit round a shaft on tractor wheels die with resultant damage to the wire. This has inevitably led the
and were at one time manufactured by cutting rings from a round designer to believe that very angular designs and complicated
tube which were case-hardened and subsequently cut and ground sections are not possible in steel wire. With rolling, however, one
to the desired shape. Since the grain flow in a tube is along its of its particular attributes is that of enabling such sections to be
length, when cut into sections it is directly at right angles to the consistently produced to tight tolerances and such a case is the
applied bending stress. By manufacturing this component from KEP nut section which would not have been possible to manu-
rolled wire, failure on fitting, which was not uncommon, has been facture by any other method.
eliminated.
Besides this, costs have been saved on the expensive grinding
operation and waste has also been reduced.
3. Tensile Strength
Rolled shaped wire may be obtained in tensile strengths up to 130
2
tons/m , i.e. equal or greater than that which could be obtained
by hardening and tempering and therefore offers the opportunity
8. Decorative, Indented and Miscellaneous Shaped Wire
not only to eliminate the heat treatment operation itself, but it is
Shaped wire has found applications purely as a decorative effect
possible to produce material of high strength which could not be
achieved in any other way. with ensuing greater sales appeal for door handles, trim sections,
etc.
One application is in conduit wire, manufactured in the tensile
2 The availability of indented wire has saved machining costs on
range of 120-130 tons/in which enables it to be formed into
one particular application and the 'carding section' for manu-
continuous lengths of flexible casing for control cables and coated
facture of toothed wire has made possible an entirely new process
with plastic in one operation.
of manufacturing cloth.
Sintering has been introduced in recent years to produce small
shaped components and thereby eliminate machining costs.
However, the best sintered component cannot match for strength
a component made from solid steel. The pawl ratchet section is
available which has the advantages but none of the disadvantages
of the sintered component.

236 Value Engineering, February 1970

A locking spring for flexible couplings is another example of the B. Ball Races
new uses to which rolled shaped wire has been put to save costs. This well illustrates the field where reappraisal of a traditional
design has been carried out and where the use of rolled shaped
wire has revolutionised the design producing substantial cost
savings.
A recent patent described how a shaped wire is formed into a
circle and joined to form the ball race.
It is claimed in the patent that:
(a) 'The expensive and time-consuming step of machining to
form the groove defining the race-way is eliminated.'
9. New Products (6) 'The production of scrap metal during this step is elimi-
In some instances completely new designs can be drawn up which nated.'
offer a distinct advantage when it comes to marketing the parti-
cular article. A good example of this is the Ski-Edge section: (c) 'The necessity to store different sizes of tubes or bars for
different diameter rings, or to accept scrap production
necessitated by machining different diameter rings from
one size of tube or bar is eliminated.'
(d) Rings made by this method 'have a greater surface fatigue
IX life in operation' than do rings made by the conventional
method.
Originally the ski's were edged with a plain rectangular section. In addition to the patent described above further designs have
By providing a shaped wire of the desired strength, together with been drawn up for split-ring bearings using rolled shaped wire
its special undercut section it enables a new design to be manu- which have reduced costs by as much as 50 per cent.
factured which is acknowledged to be the best yet developed.
Recognition of S e c t i o n s Available from Rolled
Future Uses of Shaped Wire Shaped W i r e
All the examples so far quoted have been of sections at present in The attributes of shaped wire have been illustrated with a few
production, but these and other sections now being used hardly examples taken from current production, and a number of
touch the fringe of the areas where their use would be of greatest sections which are being suggested for manufacture in the near
future. Taking advantage of these attributes however, depends to
advantage to the value engineer.
a considerable extent on the ability of the value engineer to
Although the Americans are probably ahead of us in taking recognise just which components can be most economically
advantage of shaped wire's potential, the following indicate manufactured from shaped wire. This is not as easy as at first
examples of designs which are starting to exploit the possibilities. sight might appear.
A. The Valve Collet Such items as valve collets, etc. take on a new significance once
the connection between its shape and that of the wire in coil form
is realised. This requires thinking 'three dimensionally' but, like
an optical illusion, once the alternatives have been seen, it is
relatively easy to see the possibilities in other cases.

Summary
To summarise therefore, we believe that there is considerable
potential scope for the value engineer to implement the particular
advantages of rolled shaped wire. Viz. material saving, tensile
strength, grain flow, surface finish and close tolerances and by
having quoted particular examples now in production, together
This component can be manufactured in a variety of shapes to
with some of the applications which will shortly be coming into
suit the individual designer, but admirably illustrates how the
use, we hope we have stimulated his thoughts in this direction.
benefits of material saving and consistent size can be achieved at
minimum cost. No one in this era offiercecompetition can afford one penny more
on his production costs than are absolutely necessary, and we
Although this wire has been available on the American market for hope that the recent technical advances in the production of
a number of years, it is only just being introduced in the auto- shaped wire can contribute towards the higher productivity for
mobile trade in this country. which all British manufacturers are searching. I f this afternoon's
Previously it has been manufactured by machining from bar and talk has sown the seeds of thought so that the next time a diesel
slitting or cutting from short straight lengths of bench drawn engine or a spring is reappraised, shaped wire will be considered
material or pressing from strip followed by machining. as a means of reducing costs, then we shall be satisfied.

Value Engineering, February 1970 237

 new from *
pergamon #
From Project tO A
- Brichta and P. E. M. Sharpe
Production Both the systematic analysis and the management techniques of engineering
in w h i c h design forms an integral part are covered in this book. In order to indicate
* o. r maximum financial return, methods for project and design evaluation before and
JU4 pages OOS/OUS during development are discussed.

Technology Steven R. Rivkin

Unbound—Transferring The book is a study of the prospects in the U.S. for conversion of America's
Scientific and Engineering scientific resources from defence to peace-time applications. The report
Resources from Defense concentrates on describing in broad terms the scale of current involvement of
to Civilian Purposes scientists and engineers in defence w o r k , identifying their distribution in the U.S.
196 pages *25s/40s by industries, and geographical communities.

Productivity J . Butterworth
Now The theme of this provocative book is that much can be done to improve Britain's
productivity performance immediately and that the failure of the economists to
provide short term proposals is due to their ignorance of the real-life situation.
Conclusions are drawn from a series of case studies, problems are exposed
1 6 0 pages *21s/30s and suggestions made for substantial short term improvements in productivity.

Productivity N. Stettner
Bargaining and Attention is focused on the basic factors of productivity bargaining w h i c h determine
Industrial Change the future shape of industrial relations in Britain and the w e l l - b e i n g of the
economy. The author suggests ways in w h i c h changes of attitude on the part of
management, employer associations, workers and trade unions, allied to
productivity bargaining in a programme coping w i t h industrial change, can
2 0 4 pages *21s/35s contribute to economic g r o w t h .

Workshop Wage S. W. Lerner, S . P. Gupta and J . R. Cable

Determination Wage determination at both industrial and plant level and w a g e structural problems
in the context of plant, firm and industry are considered. Each study is
presented as a separate entity and then drawn together in both the introduction
306 pages *35s/45s and conclusions.

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write t o : College Sales Dept.,
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Value Engineering, February 1970

 Reprint No. 2:4:11

Creativity - Basic concepts - Implementation

How to Sell Ideas

by Bill Gove*

This is perhaps at first sight an unusual type of article for V.E.C.P.'s accepted.
this journal to publish. But if every value engineer could The author puts in a memorable way what many people
master the technique of selling his ideas to his colleagues, have heard many times before. His 'Value-Added' system
to management, to people on the shop floor, and to for selling; his offer to share an idea; and his 'l-know-how-
suppliers there would be less 'leak time' and more you-feel' approach could be followed by value engineers.

H o w about Irving L o s e r ? I would like to share them with you. Immediately after hearing
I would like to share something with you that is meaningful to of 'Value Added', I thought of my older daughter, Nancy, who
me. I used to think that 'persuasion', or 'selling', was something married a former football player from Maine - goes about 280,
you did to people. I f you attended a sales meeting, the words has to clench his fists to keep from walking on his fingers . . .
used certainly suggest conflict. 'Go out and get 'em kid!' half man and half ape, and he went into the printing business.
'They've got your money in their pocket.' When I was selling I don't know whether you know it or not, but printers tradi-
vacuum cleaners in 1929 and '30, we used war-like terms, and we tionally eat their young. This is one of the toughest, most
used to march around the table at 7.30 in the morning. This was competitive markets, and he didn't help things.
high level motivation. We marched around the table singing:
'Rise, ye men of Hoover,' and, 'It beats, it sweeps, it cleans.' All he said was, 'Do you want to buy any printing?' The buyer
Then the boss had a discipline. He said, 'Did the Wright Brothers would say, 'How much is it?'
quit'? We'd all yell, 'No'! He'd say, 'Did Eli Whitney quit'? He'd say, 'Don't louse me up. Do you want to buy any printing?'
We'd all say, 'No'. He'd yell, 'Did Alexander Graham Bell
quit'? And we'd all yell 'No'! He'd say, 'How about Irving We built a story around it. Then when he went in, he said,
Loser'? And someone would always say, ' I never heard of 'My name is Jim Lensell with Addison Press. I know you're
Irving Loser'. 'Because he quit, that's why'! buying from someone else and I know they do good work, but
from time to time I'd like to drop in and pass along some ideas.
The value-added reason These are ideas I pick up from the trade journals; these are ideas
I pick up from other salesmen; these are ideas I pick up by just
But things happen over the years that change you, and this is
staying awake, staying aware. Now, if these ideas work, and if
what happened to me. I spoke at the American Supply and
you sell more of your product, you'll use more printing, and if
Machinery Convention a couple of years ago in Chicago, and
you use more printing, all I want is a crack at this extra business.
the late Keith Phillippe was chairing a panel called, 'Value
Give me a chance to earn some of your business.
Added'. I had never seen those two words in combination
before, but I had the feeling when I left the room that something
had changed; that I would never be quite the same again in my I go w i t h it
relationships with my family, with my wife, in the boss-employee
The panel also talked about an appliance dealer who sold
relationship, in the seller-buyer relationship.
refrigerators, laundry equipment, and freezers. People would
They just asked this group of sophisticated marketing people come into his shop and take down the model numbers, then go
one question: 'What do you have to give in these relationships? to the discount house to get the clergyman's discount. But he
What do you have to give besides your product and/or service? figures out a good defense. He said, 'Thanks for coming in here
What is your second reason for being in business?' first. I know you're going to shop around and I don't blame
you, but before you make your final big decision, will you come
We know that the first reason is to market a product or service back here and see me once more ?'
and sell it at a profit. And you can talk all you want about
human relations, but if you don't make a profit you aren't 'Here's why. You see, you can buy this refrigerator any place
going to have any humans to have any relations with. else in the world, but if you buy it some place else you won't
get me with it. See, you can't take anything out of here without
But what is your second reason? The second reasons were taking me wrapped up in the package. I go with it.
called Value Addeds.
'My promise, my integrity, my word goes with the package,
but,' he said, 'go ahead and shop around and to show you my
" Bill Gove was formerly sales development mana- appreciation for your coming in here first, we have a little gift
ger of3M Co. Now he is Sales Consultant to the AC for you'.
Division of GM, U.S. Steel, Braniff Airways, and And he goes into the back room to a freezer and he gets a half
others. In 1954 he received the highest award given a gallon of ice cream, and he says to the guy, ' I want you to have
to a salesman when the Sales and Marketing this'.
Executive International named him 'Salesman of
the Year.' Mr Gove's address was presented at the Now, how much shopping around are you going to do with a
10th Anniversary Conference of Value Analysis half gallon of ice cream in the back of you car?
Incorporated and permission to reproduce it is
gratefully acknowledged. Somebody said isn't Value Added a sales promotion tool like
giving a pencil, or a calendar. ?

Value Engineering, February 1970 239

We say, no. We tell our people there is only one guy that can Pontiac you have to take Hank Kendler as part of the package.
give Value Added, and that's you. You are a unique kind of Two bucks a week,' he says, 'to have me in the driver's seat with
Value Added. you all through your warranty period'.
When we get our salesmen together we say, 'When is the last We ask our salesmen, when is the last time you were able to
time you said and meant, 'Because you get me, for what that's say, ' I f you buy from me, whatever that's worth - good or bad,
worth, you get me wrapped up in the package?' you get me and if I can't make the difference then maybe you
ought to go to someone else'.
'Now, if I can't make the difference, then maybe you ought to
buy from someone else. We used to think that if you had a I have an idea I w a n t to share w i t h you
good sales story, and if you had the right words, that was all
I remember at 3M we used to have to say - 1 mean, we'd rather
that was needed. You know, 'This is our new product, sir, this
will warm the cockles of your heart—as a matter of fact, it's a have a man go in without any pants on than without saying,
cockle warmer manufactured by Jules Cockle'. 'My name is Bill Gove. I have an idea I want to share with you'.
He would carry a little commitment. You can't go around as
'This is our new perfume, 'Seven Nights on a Troop Train'. a salesman all day telling people you have ideas, unless you have
Yes, I know its' expensive, but you get a nickel back on the them. I want to tell you the story about my stuttering friend.
bottle'. It was my job to observe salesmen's behavior around the country.
My boss once said, ' I want you to go and work with Van Alten
You ask, 'Are these liver pills effective? John Cockswain of in New Orleans'.
Indiana used these for only fifty-nine and a half days. John
passed away recently, but yesterday we had to beat his liver to Now, I had heard about Van. They used to call him Stuttering
death with a broom'. Van. He was a legend in the business. As a matter of fact, he was
with 3M when they were a struggling abrasive company, no
We figured that if you've got the words that this was all there was Scotch tape, just struggling like number three in the industry.
to it. Now we say: ' I hope this is meaningful'.
My boss said, 'You got to handle him with kid gloves. He hates
We say to our salesmen, 'After you make a call on someone, s.o.b.'s from the home office. He thinks when you go into his
whether you sell them or not, if you can honestly say to your- territory you're trying to spy on him. He'll give you no time at
self, 'Because I was there I feel that the other person looks a all. He's a hard guy to handle. He never sends in any reports.
little better in his own eyes; because I was there he looks a little We never know where he is. The back of his car is a mess.
better to himself, and I look a little better to myself, and we both He's a slob'.
came out of this looking a little better, then I think we've added
value'. I said, 'Why don't you fire him?' He said, 'Hell, he's our best
man'.
People don't like to buy cars He said, 'To soften him up a little, give him a $50-a-month
I have been shopping among automobile dealers. It's been a raise'. So I went down and sure enough he picked me up at the
devastating experience. I am sure that if it weren't for the unique- airport. I had just come in from Los Angeles and missed a
ness of the trade-in, that Detroit would find another way to night's sleep, and I took this cat as long as I could take him and
market automobiles. Why? Because all the studies tell us without I said, 'Wait a minute. You want to know the truth? I ' d rather
any shadow of doubt that people don't like to buy cars. They be home with my family. I need this trip like the Pope needs a
like to own them, but they don't like to have to go through Shrine pin.
what they have to go through to buy them. It's wild. When I
'Now, I want to pick your brains to find out how you do it and,
go into a dealership, they don't know who I am and it's kind of
listen, wise guy, maybe you don't have all the answers. Maybe I
fun. They start off by saying, 'What are you driving?' That's a got an answer that will make your job easier and more im-
great opening! I t establishes a grown-up relationship. They portant'.
never say, 'How many in your family?' They never say, ' M r
Decker, haven't we met?' They say, 'What are you driving?' And I said, 'Incidentally, Chuck gave me permission to give
you a $50 raise'.
I say a 1933 Essex. You think that would stop the guy, right?
He says, 'Yeah, but what color?' And he said, 'D-D-D-Don't worry, I-I-I-I'm j-j-j-just as a-a-a-
ashamed of it as you are'.
I say, 'Burnt orange'. You know what he says ?
In those days we were selling Scotch tape against string for
"You're in luck.' I say, 'How come I'm in luck?'
packaging. Scotch tape costs a buck twenty for a certain size,
He says, 'You're in luck because just yesterday there was a guy versus all the string you could carry away for two bits, so we
in here, a little short guy with a beard looking for a 1933 burnt had to sell convenience and speed.
orange Essex, and because we can move it right out, we're in a
beautiful position to deal'. I'd walk in and listen to Van sell and he'd give the guy a pretty
good pitch, but as likely as not the dealer would say, 'Oh,
Then they have a religious exercise called, 'The Laying on of the that's pretty good, but I've been using string a long time. I
Hand'. This is non-verbal. think I ' l l still use string'.
'Now it's you and me against the house. We can talk to my boss, Van would say, 'W-W-W-What's the matter? Y-Y-Y-You
Mr. Decker, a very mean man. He had all the salesmen over to stupid?' He said, 'Wh-Wh-Wh-When your wife w-w-w-washes
his house the other night for a beer party and he locked the her clothes, d-d-d-does she t-t-t-take them down to the r-r-r-
bathroom door'. river and beat the hell out of them?'
I say it doesn't have to be like that. Hank Kendler in Sioux Then the store owner would say, 'You seem to be pretty sold on
Falls, South Dakota sells more Pontiacs by mistake than anybody this. I think maybe I ' l l give it a try. How much do you think
else around the country sells on purpose. He says, ' I t might cost I need?'
you a hundred dollars more to buy from us, but I want to show
you what I've got', and he's got a baby blue-eyed service manager And I'll never forget Van's words: 'D-D-D-Don't worry, Dad,
who says, 'When you buy your car and come back in here, we I - I - I - r i l take care of au-au-au-all the details. Th-Th-Th-This
treat it just like our own'. is the order form r-r-r-right here. You sign it and I ' l l fill in the top'.
Van was the kind of guy who would walk on his hands and
And then in the closing room he says, ' I f this isn't worth a knees over broken glass at 3 o'clock in the morning to replace
hundred bucks more, see, when you buy a car from Kendler the little 15-cent cutter blades that we had on the dispensers.

240 Value Engineering, February 1970

He had service built in, like pants pockets on a suit of clothes. Teach customer-relations not ticketing
But before you say, 'Wait a minute, service is not Value Added,' I've tried to pitch one of the airlines on 'understanding'. I
service is something we pay for. Here is how he was adding believe that I understand the life of the traveler. I travel a
value. This was in the early days of the food revolution. Most quarter of a million miles a year, and not because I want to.
of Van's customers were "Papa and Mama" stores where people I live in the world of canceled flights, lost luggage, crew changes.
would wait on you. But we could hear the rumblings of the I paid the airlines 121,000 last year. I found out that Eastern
supermarket coming in. He was going to his customers and brings in their ticket salesmen - they're the only ones in the
showing them how they could still hold their customers by airlines, outside of the stewardesses, that work in close contact
going self-service. He'd say to the guy, 'Y-Y-Y-You still want to with people - for 30 days of training. For 29 days they teach
keep your p-p-p-pickles and your c-c-c-crackers in a barrel in them how to ticket; for one day they get a thing called 'customer
the middle of the floor, go ahead. I'm only here to help. I-I-I-Fll relations'.
be back in 90 days and wh-wh-wh-who will I talk with when
you're not here?' Beautiful! I said, 'We'll change it. I've got an eight-year-old
granddaughter, Paula, who will teach them how to ticket in a
So I came out of this really believing that maybe the amount day, and I guarantee it'. The rest of the time we'll talk about
of persuasion we used in any relationship - parent-child, just the way it is, and if they get sick of listening to me, I ' l l
husband-wife, boss-subordinate, seller-buyer - tends to be in walk out of the terminal, grab the first guy I see whose heels
direct proportion to the amount of value we add. are turned over, looks like he's a salesman, and he'll tell them
We know that most of our salesmen don't go far enough. We the way it is if they get sick of me.
kriow that engineers don't go far at all. They can tell the story, • I went to Cincinnati a short time ago and arrived at 5 a.m. We
but to get them to say, 'Mr Customer, if you can convince had been delayed all along the way and they had lost my luggage
yourself that this would solve the problem, would you have any again. The senior night agent came out. He looked like he was
objection to getting started n-n-n-now?' in charge of Oven No. 3, been sleeping, so I said, 'Did anybody
I didn't say, ' I f I could convince you'; I didn't say, 'Don't forget find a piece of luggage with the initials B.G. ?' He said, 'What's
that freight car loadings are up 8 per cent', which only means the matter? Did you lose it?' I felt like saying, 'Not really, but
that more people are getting loaded than freight cars; ' I f you this is the way I start every conversation at 5 a.m.
could convince yourself that this would solve the problem,
I said, T got a problem. The gal in Louisville pulled my ticket
could we get going right now?' That's when I have found out
and she pulled the luggage check by mistake'. I thought he was
that our engineers stop.
going to do something about it - be a little sympathetic - instead
My experience tells me over the years that the amount of he said, 'What was the number?' I said, ' I usually have it
persuasion you use might very well be in direct proportion to tattooed on my navel'.
the value we add. Dr. Fred Hirschberg had been doing some work
with Larry Wilson in Minneapolis. Dr Hirschberg told me I don't want Eastern to fly when the pigeons aren't flying, but
something that shook me up. He said that a selling relationship when I say I lost my luggage, I don't want them to say, 'What
that gets optimum results, whether a person buys or not, is love else is new?' I think for §21,000 a year I deserve better. I want
oriented'. Of course, he uses words to give an operational just one little word of understanding. I want them to cry with me,
definition of love, which kind of jars you when you hear the just $21,000 worth, that's all.
word, 'love'. In a business group we seem to stay away from this I think we should put the word, 'understanding', on the board
word. But the operational word he uses, 'love', seems to be in and we can talk about it all day. I remember when I was selling
existence when there is understanding and acceptance and a product at 3M called butcher tape. It was the only product in
involvement. I f we tend to love people we can come close to the history of marketing where more came back than we sold.
deeper understanding. We tend to love people when we accept We sold it to every butcher shop in America, and all the locker
them, I tell my son, 'You know, I love you, Billy, not because, plants, but what happened is that it wasn't sticking. When
if, or when; I love you because you are, and there's nothing you'd go back, if they hadn't sent it back to their distributor
you can do to keep me from loving you'. already, they'd throw it at you. I remember what we used to
It seems to me 'Value Added' is close to involvement. I play say to get us out of some sticky situations: ' I know how you
golf each summer with a chap 77 years old and two or three feel. Every butcher in America has had the same problem'.
times a summer he'll shoot his age. He has told me 'I've never But after they showed them how, they had no problem.
taken a sales training course in my life, but I have taken a lot
of courses in purchasing'. He also says, ' I don't think people I know h o w you feel
buy from me because they like me, because I've outlived three Isn't it tough to say, ' I know how you feel', to your kids? We
or four purchasing agents. I'm calling on their sons in a lot of ought to know something about the way he feels, because we
cases. once were kids. I visited a high school recently. I looked in on
' I don't think they buy from me because of my products. Steel a classroom-I could hear this guy shouting-and I noticed
is steel. But I get the feeling they buy from me because they that he had ' A + B = 3 x C on the blackboard, which is about
believe that I understand them'. the only thing I remember about algebra. He was saying, ' I
1 have been making presentations at funeral directors' meetings, don't know why you guys can't get this. What does anybody
and something hit me at one in Illinois. In all the times I've have to do? Those who don't get it are slowing everybody
worked with these people I have never heard one funeral director down'. And I wanted to run and grab him and say, 'Did you
refer to one of his contemporaries as a good embalmer, a fair always know this? When you first started out when you were
embalmer or a bad embalmer. Yet this is what they go to school two years old, did you say ' A + B = 3 x C ? How did you come
to learn. When they take the state board, it's on embalming. into this?'
Hut when they talk about it, they use different words. They How many teachers do you remember? I remember A l Noyes,
say so-and-so is real good at this because, well, he lost some and he used to say, 'Be creative, Bill. Be creative in everything
loved ones himself and he understands. Also, he does so many but one thing. Don't be creative with the multiplication tables.'
other things that don't have anything to do with it. I f you're Nine times nine is eighty-one. Don't mess around with it.
recommending a funeral director, you don't say, I'm going to Seven times seven is forty-nine. Let it alone.
send you to an embalmer. This guy is a hell of an embalmer; he
does hem-stitching, you'll like his work. And if he doesn't do He also said something like this because algebra gave me a fit.
a good job, he'll have to answer to me'. They don't say things He said, ' I know what you're going through'. He said 'What
like that. They say it with feeling. Unscientific, but they verify happens, Bill, is you live in a world of numbers for eight years in
il. He feels, he understands, he gets involved. school, then all of a sudden they hit you with X's and Y's and

Value Engineering, February 1970 241

 Z's. This must be tough. But it can be fun. You know, you say teen-ager. We don't know a damn thing about this, but if we
2 + X =4. Just like a puzzle, you got to find out what is X ' . But work together, try to understand each other, we might come out
it was an almost. ' I know how you feel'. I know that this is of this pretty good. I f we don't, it's going to be murder.
over-simplifying and uncsientific. But let me honestly say that I
am trying to get a little better at what I do all the time, maybe 'You saw what happened to Angie down the street, when she
in my family relationships, maybe having more capacity for love got to be 16. It seems like a wall went down between her and her
and understanding. It is a lot easier for me to say to Billy, folks. Let's not have this happen'.
' I know how you feel', than it was to either Nancy or Harriett. I hope as I go along, even though I don't fully understand what
I had good-looking girls and give you fits. We had to say, it means to understand, I hope I will increase my ability to say,
'Nancy, this is the first time you've ever been a teen-ager, but ' I know how you feel. I know what you're going through'.
don't forget this is the first time we've ever been parents to a I hope I ' l l be able to do this with audiences.

MISCELLANY
1 a n d 2
Creative Value * The verifiable assumption applied here is that any achieveable,
The question 'What is value?' is not a creative question, it is a public, human objective can be reached only if a set of verifiable
verbal booby trap. functions is provided, i.e. something objective and specific must
Value is a word that can mean anything we want it to mean. We happen to something objective and specific to reach any objective,
forget that man invented both words and their meanings. That happening is observable.
No words can be advantageously defined until we first determine Naturally, in many cases, that set of verifiable functions is
the purpose of that definition. provided on an intuitive, subconscious basis. That does not
The purpose of every definition is to solve some specific problem negate the assumption.
or many similar problems. Words provide information concern- 2
For those reasons, Value is advantageously defined as a set of
ing some type of problem or guides for creative action. 2
verifiable functions over costs and symbolised as V = f/${c).
Lately, the word 'value' has been semantically clarified in a 2
The power of that Value definition is that it is applicable to any
manner that provides more precise creative guides concerning human objective, social, educational or industrial. It's promise is
many problems. that it gives us not only a scientific method for reaching human
1
Value (see issue 1 of Creative Clues) has been defined as desire objectives once specified but it also gives us an opportunity to
per objective. It is highly relative since desire for any objective optimise creative behavior on an empirical research basis.
varies with time, place, and persons. That does not negate the To optimise the creative process, we must first do two things.
usefulness of the definition. The purpose of the definition is to First, we must ascertain verifiable steps which can be varied in a
establish human objectives and place priorities on those objec- verifiable manner in the process. Second, we must ascertain the
tives. The definition clarifies this. It's an over-simplification, but degree to which we can vary each step and how that variance
such over-simplifications can be extremely helpful when desire is varies the result of the process. The result is the creative product.
equated with price in dollars, and objective is indicated by We have semantically clarified the creative product. It is advan-
1
'f', we can write, V = %{p)lf. tageously defined as a unique set of verifiable functions which
2
2
Value has another purpose. It is concerned with achieving an increases Value . The advantages of that definition is its universa-
1
objective {established and specified in detail by Value problem- lity. It fits all inventions whether a dance, a scientific formula, or
solving) for the least cost. an industrial product.
1 2
The creative advantages of this clarification of Value and Value Now the task is to ascertain the steps in the creative process which
are: .if changed, change the value of the product. To do this, the
1. It allows us to creatively divide and conquer two different complete creative process must be described.
1
types of problems, the Value problem which cannot be
2
solved scientifically and the Value problem which is a * Extract from 'Creative Clues',No. 2, May 1969. Available from
scientific problem. Hayes A, Sunyab, Buffalo, New York 14214, U.S.A.
2. It allows us to record and creatively review when we are
burdened with desire and when we are not. Optimisation Techniques
3. It provides a helpful 'feed back' system, diagramed as Many organisations which have succeeded in quantifying a
follows, which allow us to record and evaluate the impact of particular aspect of their operations - cost of distributing
desire decisions, i.e. changes to objectives, upon costs. products, efficiency of a processing plant, or response of a
control system-are then faced with the task of finding the
values of each of the parameters under their control which will
best achieve their overall objective, i.e. the highest efficiency or
Value' Value2
the lowest cost.
Problem Problem
Solving Solving In practice there is only limited freedom of choice for the values
of these parameters - certain pressures and temperatures may
not be exceeded, volume of stocks held is limited by warehouse
Unfortunately, too few people fail to separate these two value space or their value by the maximum bank overdraft, etc. In these
problems. They try to solve both, usually 'in their heads', at the circumstances the latest optimisation techniques can reduce time
same time. Rarely can it be done. Most such problems are two and money spent in searching for the optimum solution.
1
complex. The unscientific Value confusion clutters up the The Numerical Optimisation Centre, based on The Hatfield
2
scientific Value problem. We must divide them to conquer each Polytechnic, and supported by Mintech and other organisations
separately. We must keep the desire variable a constant by using the centre's services, offers a service to industry and
keeping the objective's specifications a constant while working on research for tackling problems of this nature. Computeralgo-
2
the Value problem. rithms are being collected, developed and applied. These
2
Some people do not grasp why Value is a scientific problem. They algorithms are likely to be of particular interest to operational
associate an objective with goals, wants and desires. They fail to research departments. However, other groups and departments,
grasp significance of semantic assumptions and scientific simplifi- are invited to contact the centre. Services are normally charged
cations. Science is not merely a matter of notation. I t is based on a consultancy basis. More information: The Numerical
upon assumptions defined in verifiables and specific, objective Optimisation Centre, The Hatfield Polytechnic, Hatfield, Herts.,
behavior consistent with those verifiable assumptions. England.

242 Value Engineering, February 1970

 Reprint No. 2:4:12

The Value Engineer's

Bookshelf
Pro captu lectoris habent sua fata libelli.
The fate of books depends on the capacity of the r e a d e r — Maurus.

The objectives of these book reviews are to keep value One star (*) against the review indicates that—although
engineers up-to-date and well-informed on the literature, important—the information deals with a subject on the
of their own subject, and to provide them with easy fringe of a value engineer's interests; two stars (**) that
reference to other published information concerning cost the book is very useful; and three stars (***) that it is
reduction. It is hoped that value engineers will be able to particularly significant for value engineers.
apply the experience and thinking of others to the solution The number in parenthesis ( ) refers to the publisher's
of their own problems. name and address given on the inside of the back cover.

Work study In the short space available to the reviewer it is impossible to do

justice to this important book which advances our knowledge of
^Glossary of Terms used in Work the properties of systems. But, taking one of the articles, 'The
Study Road to 1977' (M. Ways), it may be seen that a new dimension is
being added to our way of life - a new type of planning, problem
British Standards Institution, 1969 44 pages 14/- solving and choosing.
(190)
This new style of dealing with the future has various names -
B.S. 3138:1969 revises, after ten years, the terms met with in systems analysis or planning, and cost-benefit or cost-effective-
Work Study. These terms have been placed under three headings ness analysis.
-General Terms (Part 1); Method Study Terms (Part 2); and
Work Measurement Terms (Part 3). David Bell - Chairman of the Commission on the Year 2000 -
says:
Recording in Method Study includes charts for indicating
process sequence, charts using a time-scale, and movement 'Not only is there the awareness that we live in an era of social
diagrams. change, but we begin to realise that it is possible to direct some
of that change consciously, that we need to consider the
How 'Value Analysis' can be defined without reference to and anticipated consequence of change, and we need to seek to
explanation of 'function' is a matter of amazement to this control some of the anticipated effects.'
reviewer:
'By 1977 it may be clearer that we are not just pursuing a
'Value Analysis: A systematic interdisciplinary examination of material "move"; that what matters to us is how we formulate
design and other factors affecting the cost of a product or our goals and how well we pursue them; that in wordly progress
service in order to devise means of achieving the specific the destination is inseparably bound up with the way.'
purpose most economically at the required standard of quality G.C.
and reliability.'
The inclusion of such terms of 'cybernetics' and 'ergonomics'
indicate the width of the subject, but the exclusion of any refer- Management techniques
ence to M T M , WOFAC, PSD and measured Daywork (while at
the same time mentioning PMTS) seems inconsistent. *Students' Guide to Principles of
T.W.I.
Management
Denyer, J. C.
The Zeus Press, 1968 136 pages 15/- (191)
Systems analysis 'Management as a subject', the author rightly comments, 'has
become of increasing interest in all spheres of public life' . . .
^Systems Thinking and value engineers share this upsurge of interest.
Emery, F.
Basing the plan of the book upon Fayol's classic work, the author
Penguin, 1969 398 pages 10/- (135) deals successively with Forecasting, Organisation, and Control.
One of the problems of today's world is bigness. He provides a clear introduction - a first reader - to the subject
of management.
Systems thinking is a way of looking at a complex whole and
analysing it. D r Emery, Chairman of the Human Resources About 'Value Analysis' Mr Denyer has this to say:
Centre at the Tavistock Institute, has eighteen selected papers 'This (Value Analysis) has been called a "psychological dis-
which will introduce the reader to a new way of looking at the cipline" of cost reduction. Its method is, quite simply, to form
realities of human organisation. a committee of management from supervisors upwards, who

Value Engineering, February 1970 243

 assess the product, its design, its manufacture, and then The triad is simply a 'grouping of threes' to achieve a dramatic
discuss generally and ask for suggestions for improvements. effect. The effectiveness of the triad can be judged by these
It places emphasis on function, i.e. if a cardboard box is needed, extracts:
can its design be simplified, or can it be made in one operation
'Never in the field of human conflict was so much owed by
instead of two, and so on. It is the use of common sense in the
so many to so few.' (Churchill)
approach to technical problems - problems which, are not
always solved because he cannot see the wood for the trees. '. . . we cannot dedicate . . .
we cannot consecrate . . .
It is a quantitiative aspect of management, because it deals we cannot hallow . . .
with the costs of materials (can alternative materials be used?), this ground.' (Lincoln)
with the costs of production, and with design.
It can be said to consist of simplification and standardisation, It is well worth the effort, says the author, to develop traids in
but it is unique in that it gives consideration to any person in your speech.
the business who may wish to assess the possibilities and make Mr Welsh recommended a basic library for speech writers and
suggestions for improvements.' provides a list of forty-five sources of information on subjects
The 'technical man' may have something to say about his short- from Aerospace to Wood. S.C.T.
sightedness, and although this is a better explanation of 'Value
Analysis' than many one comes across it will be felt by value
engineers to be rather inadequate. For all that the book will
provide a good introductory coverage of the principles of manage-
ment. G.F.M.
Management techniques

*Fayol on Administration
Brodie, M. B.
Creativity - Communications Lyon, Grant & Green, 1967 46pages 10/6 (193)
**Setup 2000 The Monograph presents to English readers the ideas of Henri
Fayol (1841 -1925), businessman and philsopher, who was
STC/Hornsey Research Group (192)
interested in the problems of administration. He was insistent
In 1966 and 1967 a group of STC development engineers met that if his ideas on business administration were valid they should
with the Advanced Studies Group of Hornsey College of Art to be spread to all fields in which they had application. Fayol
discuss in terms of products being developed the probable trend wanted administration to be approached in a spirit of scientific
of events up until 2000 A.D. enquiry. This would lead to the development of 'principles of
management' which included inter alia the principles of
This work led to a one-day seminar of which SETUP 2000 (Social, division of labour
Economic, Technical and Urban Planning to 2000 A.D.) is the authority and responsibility
collection of papers presented. Those responsible for the intro- discipline
duction and papers were Messrs H . H . Shelton, D . S. Ridler, unity of direction
G. King, W. D . Merbitz, Tom Nairn, D . Piper and J. Rae. unity of command
In 'Electronic Communications' M r King set forth a form of subordination of private interests
common measurement of information - a bit - and he showed staff remuneration
that Sounds, Words and Vision had at present a total output of centralisation
over 3^ million bits a second. orderliness
equity
Messrs T. Nairn and D . Warren Piper discussed 'Communica- stability of tenure
tions and Society', and M r W. D . Merbitz gave the statistical initiative
background to what he termed 'The Communications Revolu- unity
tion'. I n 2000 A.D. he considered that the U.S.A., Japan, Canada
and the Scandinavian countries would lead in average income Fayol consistently advanced the idea that people should be
per head of their populations, the United Kingdom would be trained for management. Those who are interested in executive
below U.S.S.R., Common Market countries, Switzerland, Israel, development will find in this book a good deal of background
Poland, East Germany, Czechoslovakia and Australia. information on the subject. F.W.

'The Urban Environment' by Mr J. C. Rae preceded a stimulating

discussion period reported after the papers. Value engineers
wishing to know about the environment in which they will be
working will find much food for thought in this interesting
booklet. H . McR. Costing - Value standards

**Operations Cost Control

Anthony, R. N. and Hekmian, J. S.
Irwin, 1967 142 pages (136)
Public speaking
This book contains advice on the use of cost information for
*The Speech Writing Guide control and decision-making. It commences with a description of
Welsh, J. J. where accounting data fits into the management control process,
Wiley, 1968 128 pages 60/- (125) then goes on to examine the cost-accounting function, the role
and structure of a standard cost system, and the purpose of
This book, in the Wiley series on Human Communication, is for budgeting.
the business executive.
For those who are unfamiliar with accounting theory the authors
The prospective speech writer should analyse his audience in have put in diagrammatic illustrations of the flow of costs, etc.,
advance and make up a speech outline. The advice also given is to and have included an easy-to-follow explanation of the double-
'write a lean speech' and to avoid 'nothing sentences'. entry accounting process.

244 Value Engineering, February 1970

 A simple diagram of a system of standard costing assists the The principles of engineering design, the author says, are of three
reader to follow through a case history of the application of different types - specialised techniques, general rules, and
standard costs to a company manufacturing water meters. This universal principles. Very often the problem of design is to dis-
leads on to using cost information for control. The difference cover what the problem is - to clarify the objective in such a way
between actual and standard profit is usually attributable to some as to make the solution easier. You are very unlikely to put a
or all of the following factors-(1) Non-comparable data, target if you cannot see it or if you are looking at a different one.
(2) inherent product characteristics, (3) price per unit of output, Mr Glegg refers to Mr A. V. Roe's preoccupation with the flight
(4) quantity of input, (5) volume, (6) mix, (7) revenue per unit of of seagulls over the cliff top - it enabled him to pioneer the
output, (8) quantity of output, (9) the measuring stick itself. AVRO aeroplane. The secret of inventiveness is to fill the mind
These factors are explained in detail, and their influences on and imagination with the context of the problem.
Labour Rate variance, Labour usage variance, Material Price
variance, Overhead volume variance, Mix variance, Sales revenue According to the author of this book history has shown that
price variance, Sales Quantity variance, and Efficiency variance many inventions were not invention at all, but re-inventions. The
shown. idea was not new but the determination to press through with it
was. A summary of the principles which underlie the production
Budgets for planning and control are described; the solution of of economically viable inventions he gives are:
'alternative choice problems' using cost information is outlined. Think logically.
The authors conclude with this sound advice.
Remember money is valuable.
'Cost calculations alone rarely provide the answer to any ••• Avoid technical snobbery.
business problem, but they facilitate comparisons and narrow • Design for predictable life.
the area within which judgement must be applied.' Arrange for quick replacement of wearable parts.
Protect with safety devices.
The book would be very helpful to the value engineer seeking to
understand accountancy conventions. A.H.B. Watch for disguised assumptions.
Beware of unwise commercial pressure.
Beware of intrinsic impossibilities.
Beware of pseudo-technical terms.
Define problems in figures or in configurations.
Human relations
These must sound very familiar to the value engineer.
^Changing Man's Behaviour A.L.
Penguin, 1969 282 pages 81- (135)
We are familar with parents' attempts to control the behaviour
of their children by punishments and rewards, or by the threat of Marketing
them.
^Selling Industrial Products
Pavolv was able to show in his experiments that new learning Rowe, D. and Alexander, I.
could be lost by simply removing the rewarding aspects of the Hutchinson, 1968 160 pages 45/- (121)
situation. He was able to show that while a conditioned salivary
response to a bell could fairly quickly and easily be established, This book suggests a plan for industrial selling. It defines the
unless the proper and appropriate stimulus (food) was also given industrial selling situation, the industrial selling job, and the
in conjunction with the bell from time to time then the reaction to future trends in industrial selling. It has been written by two men
the bell alone would disappear. with a practical background of the problems of selling industrial
products.
It is the contention of behaviour therapists that many psychologi-
cal abnormalities, especially those of neurotic persons, are indeed It was Adam Smith in his book The Wealth of Nations who drew
conditioned responses. It must, therefore, follow from what has attention to the importance of 'owning a market' - 'Consumption',
been said that such conditioned responses are preserved because he wrote, 'is the sole end and purpose of all production.'
they are in some way rewarding. This may appear strange. How
can a crippling handicap of social embarrassment be rewarding? Reference is made to Value Analysis as a way of formalising the
The behaviourist holds that reward in this case arise out of interaction between purchasing, design, production and market-
escape from (or avoidance of) the activities which cause the ing departments. Attention is drawn to the remarkable results
discomfort. obtained from V.A. by Rubery Owen, A.E.I., Dunlop, Lucas,
Holman Bros. S.T.C. and others.
This and other ideas the author explores and then concludes:
Many sales engineers will endorse the authors' final sentence:
' The case for behaviour therapy has not been established beyond
any reasonable doubt.' He contends that this important line of 'Probably the single most effective step that most companies
investigation should be encouraged when only one research making products for industry could take to improve their
centre with a small staff might well contribute important advances performance would be to recognise the importance of their
lo understanding and treatment of psychological disturbance. salesmen, raise their selection sights, and be prepared to pay
K.K. to extra cost.''
J.W.

Design - Creativity Training - Textile industry - Norway

*The Design of Design ^Training within the Organisation
Qlegg, G. L. King, D.
Cambridge University Press, 1969 93 pages 30/- Tavistock Publications, 1968 274 pages 16/-
(158) (140)
Mt (ilegg delineates the basic principles which guide the inventor A study of company policy and procedures for training operators
m designing a piece of equipment. I defines the laws which under-
r and supervisors in the clothing industry in Norway and England,
lie all creative effort and the book should therefore be of intense this book provides arrangement with a wealth of information on
practical interest for value engineers. the subject.

I nine Engineering, February 1970 245

What are the skills of a sewing operator? How is a new training development of the transfer machine and the types of such
officer selected? What does the job itself consist of? How does machines - straight-line transfer machines and indexing.
training affect planning?
One of the earliest straight-line transfer machines for boring and
These are but a few of the questions answered in the book. adzing railway sleepers was developed by Greenlee Bros, in
1908 in Rockford, Illinois. Archdales in England claim to have
What is learning? What is skill? How can learning be assisted? constructed the first metalworking transfer machine in 1924;
What are the best conditions for learning? Answers to these it was used to produce gearboxes for the Morris car.
questions give a further understanding of the subject.
Management, when it proposed to manufacture a component in
Is a training policy necessary? What are appropriate training quantities should - the author says - ask itself:
aims? What organisation does training require? Finally-how
effective is training? These questions round off the book which Is the price suitable for processing on a transfer machine?
contains over a hundred references to sources to search for further Are the quantities sufficient to make it profitably ?
What will the transfer machinery cost?
information.
Initially - for depreciation - to install - to maintain - to
Value engineers will find much to help them in their training house etc.
function in this book. Ending on a subtly menacing note:
Straight-line transfer machines may be either (1) pallet transfer,
Any manager who fails to see the importance of this book can (2) non-pallet transfer or (3) walking beam transfer. Indexing
rest assured that his successor will. F.L. machines may be (a) double indexing, (b) banking or (c) free
flowing, (d) transfer types.
Coolant systems and swarf disposaf which also are important
considerations are covered in the book.
Management techniques - Human relations V.H.
^Managerial Thinking
Haire, M., Ghiselli, E. and Porter, L.
Wiley, 1966 298 pages 80/- (125) Operations research - Management techniques
This is the report of a world-wide survey of managerial attitudes.
Three thousand six hundred managers from fourteen countries
^Management Decision-Making
expressed their opinions concerning leadership policies, manage- Bierman, H., Couts, D., Cunningham Green, R.,
ment objectives, and motivations associated with management Morris, W., and Taylor, G.
positions. The questionnaires were translated into Danish, Penguin, 1969 201 pages 6/- (135)
German, Norwegian, Swedish, Flemish, French, Italian, Spanish Edited by Mr G. A. Yewdall the twenty-two papers presented by
and Japanese. five authors cover the subjects:
An unusual map of the world interconnects those countries. Is Management-decision an art of science?
With similar managerial attitudes - the Scandinavian countries, Quantitative Decision-making.
Japan, Germany, Belgium, France, Spain and Italy in one group; Foundations of Investment Decision.
with the Americas and England in another. The authors have The Stock Decision.
attempted to cluster countries according to their attitudes Mathematical and Statistical Forecasting.
towards various management actions.
Aimed at introducing the subject to newcomers as well as re-
Managements contemplating operating in foreign countries will furbishing experienced managers' knowledge, this book succeeds
be interested in the detailed results of particular countries. admirably on both counts.
Countries considering their own management development will When we analyse the decision process we note (1) resort to 'rules
be interested in comparing the attitudes in their own countries of thumb' (the notion that we should keep 30 days' inventory
with those in others. on hand); (2) appeal to a system of categories (the placing of
The apparent espousal of modern management techniques may - decisions into broad classes); (3) suppression of uncertainty;
according to the inquiry - be merely a kind of lip-service to the (4) adoption of a near planning horizon; and (5) spurious resolu-
idea. There is very little difference between the desires of mana- tion of value conflicts - are methods used.
gers across countries - autonomy and self-actualisation (the Quantitative decision-making replaces these methods. It uses
privilege of guiding oneself and of realising one's capacities). mathematical models and decision theory. Profit and loss
The study, say the authors, is 'the merest beginning. I f it points Consequence Tables, Regret Consequence Tables, Exponential
the way to a further collection of information, it will have done Smoothing, and other devices are employed.
its job'. E.T.C. An interesting discussion of the frequency distribution of errors
and of trends precedes the chapter on forecasting.
Value engineers are now showing increasing interest in the
Producibility - Plant layout techniques of O.R. and this is a useful book from which to gain
a knowledge of the subject and its possibilities for them.
^Transfer and Unit Machines H.T.G.
Lloyd, E. D.
The Machinery Publishing Co., 1969 192 pages
60/- (122) Operations research
Transfer machines are those which automatically transfer the
component between a number of tool stations at which metal- **Mathematics in Management
cutting is carried out, and this book will enable value and pro- Battersby, A.
duction engineers to acquire an appreciation of such machines Penguin, 1968 255 pages 7/6 (135)
without having to consult widely dispersed references.
A successful author of books on stock control, network analysis
Over forty machine-tool makers are mentioned by M r Lloyd who and sales forecasting, Mr Battersby explains O.R. with a mini-
speaks from a long experience in the industry. He discussed the mum of mathematical terms and with the aid of simple diagrams.

246 Value Engineering, February 1970

Numeracy now vies in importance with literacy as a business I f so, this book is for you.
requirement. Its techniques of matrix algebra, Laplace Trans-
The purpose of this book is to help people in their use of written
forms, Differential Calculus, Theory of Graphs, Theory of
English as a tool of their trade. Like any tool it must be sharpened
Communication, and Statistics find applications to management.
and then kept sharp.
The progressing of the overhaul of an aircraft (using a network It is wise not to begin to write until you know what you want to
analysis of the project); the planning of the manufacture of say. Sounds elementary, but surprising how many ignore this
tables, chairs, desks and bookcases (using linear-programming to simple first action.
allocate labour and machine-time resources); and the planning
of the work of soaking pits (using a simulation model) are to give The craftsman is careful with his tools, but the man who is
a few examples of the appreciation of O.R. techniques from the working with words is not so careful with his tools. Words have
book. to be very carefully chosen, and (as Swift put it) 'Proper words in
proper places make the true definition of style.'
The things which management needs to know in order to use
computers effectively are very fully covered. A diagram showing I f value engineers would write well then they must follow this
the organisation of a computer in an engineering company counsel of Aristotle:
enables the newcomer to see clearly all the required steps. to speak as the common people do, and
Programming and Systems analysis are also described.
to think as wise men do;
The application of statistical methods to market research,, stock - and then every man (including his boss) shall understand him.
control, quality control and forecasting is explained so the lay- '
man may easily understand how useful this tool can be in If they would have further help, then there is a list of the output
management. of some fifty authors at the end of the book.
S.T.C.
The author concludes with an invitation to managers who like
the look of what they see in his 'shop window' to come inside
and see the whole stock. To mathematicians he suggests that they
get closer together with managers to understand the problem
areas where they may be able to bring their knowledge to bear. Management techniques
O.C.
^Progress of Management
Research
Farrow, N. (ed.)
Statistics
Penguin, 1969 157 pages 4/- (135)
^Problems in Statistics for This volume in the Pelican Library of Business and Management,
reports the progress being made i n :
Economics and Business Analysing Consumer Behaviour
Students Formulating Pricing Policies
Per/man, R. Motivating Buyers Actions
Corporate Planning
Holt, Rinehart a Winston, 1963 130 pages 38/-
Operations Research
(180)
This is a collection of problems, not a teaching book. It contains These, and other subjects of Management Research, are gradu-
exercises on averages, dispersion, probability, distribution and ally being given more attention from British industry through the
correlation. There is a useful standardisation of symbols. Foundation for Management Education. The problem, however,
is not only one of money - it is one of finding suitable people to
The arithmetic mean, median, mode, geometric, harmonic undertake the work.
means, are presented in problem form and in multiple-choice
questions. Range, and quartile and standard deviations; the Management research is useless unless those in Management get
binomial and Poisson distributions; the normal distribution to know its findings so that, where applicable, they can be put to
curve; sampling; unweighted and weighted index numbers; time practical use. Dr Wilson's chapter (p. 138-157) give some excel-
series; and regression analysis and correlation are also covered. lent advice as to how this is and may be done. Respect for
research, he contends, belongs at the sponsorship stage. It was
Six useful data tables - Area of the Normal Probability-Curve, also pointed out that research could be undertaken by internal
Values of t, Summation of Terms of the Poisson Distribution, staff of an organisation.
Chi-Square, Factors for Computing Control Chartlines, and
Transformation of r to z - are appended to the book. A section Operation Research, it was noted, was breaking through new
gives answers to the problems and multiple-choice questions. barriers:
CJ.W. Expressing the whole company in mathematical terms.
Moving into areas of uncertainty as regards decision-making.
Scheduling work in a jobbing shop with all its variables.
These and other such frontiers were being explored with increas-
Report writing ing skill and energy. They were seen to pay-off. TJ
*Plain Words
Qowers, E.
Penguin, 1968 272 pages 4/- (135)
Statistics
How many of my value engineer colleagues could accept
t crvantes advice with profit ? 'Do but take care to express your- **Facts from Figures
self in a plain, easy manner, in well-chosen, significant and decent Moroney, M. J.
terms, and to give a harmonious and pleasing turn to your Penguin, 1968 472 pages 8/6 (135)
thoughts, and set them in the truest light, labouring as much as
possible not to leave them dark nor intricate, but clear and intel- Mr Moroney is rightly proud of the reception given to his book
ligible. which, since first published in 1951, has passed through three

V(tltiv Engineering, February 1970 247

editions and numerous reprints. The reviewer can remember models are offered in this handy form. Since value engineers are
with appreciation his introduction to the author's original work directly interested in costs and prices the subject matter of the
and the help it was to him in gaining an understanding of the book concerns them.
principles of a subject which, up to that time, had remained a
closed book to him. Since then the book has been worn out, or Financial management impinges on all other business functions.
borrowed, or lost at least on three occasions. 'No self-respecting The paper by Messrs Brown and Edwards on the replacement
statistician can afford to be without one,' is a statement the of obsolete plant will be of interest to value engineers faced with
reviewer once heard when discussing the book. re-equipment problems. The section on Pricing problems will also
have much of interest for them as it contains details of several
From 'Statistics Undesirable' the book passes through eighteen widely publicised applications of pricing theories.
chapters to 'Statistics Desirable'. The reader - during this D.L.
conducted tour-has explained to him through well-chosen
analogy, well-remembered chapter headings, and practical
examples the subject matter of statistics. Probability, Correlation,
Standard Deviation, Dispersion, Histogram, Sampling, Time-
series, etc. which were meaningless words have become meaning- Statistics
ful for the reviewer and many students have passed through his
classes. 'This (book)' - as Sophocles' said - 'is the end of
**The Use and Abuse of
tears . . .' H.I. Statistics
Reichmann, W. J.
Penguin, 1968 345 pages &/- (135)
Economics
The author, who is a Fellow of the Royal Statistical Society,
^Problems of the World Economy holds that 'the Age of Statistics is upon us', and refers to Pol-
lock's statement that: ' A new language is a riddle before it is
Bailey, R. conquered, a power in the hand afterwards . . .' This book ably
Penguin, 1967 202 pages 4/6 (135) assists the ordinary man's conquest of the language of statistics.
Businessman, economist and teacher, Mr Bailey, is eminently
The illustration of statistical facts is shown not to be as simple
fitted for the difficult task which he has set himself, i.e. to survey
as just drawing pictures; the average is a convenient though much
the problems of world economy. 'The future of the world
overworked 'shorthand'; and percentages are more meaningful
economy' - it is his contention - 'is going to depend to a very
than absolute figures.
large extent on our ability to devise the means of winning the war
on want . . . The problem of the 1930's was that of poverty in the The dangers inherent in Time-series, probability, normal and
midst of plenty . . . we now have abundance in the midst of other distribution, sampling and populations are clearly ex-
poverty - a paradox which may prove even harder to resolve than plained.
that of the 1930's.'
Appendices and a Glossary of Terms help the reader to more
We are in the process of altering the whole human way of life. clearly understand the important ideas set forth in this book.
Communication advances have shrunken the world. M.N.
The 'intermediate technology' for the developing countries
described by Dr Schumacher is based on low-cost-per workplace
(£100 per worker) as compared with £10,000 per worker in steel
in advanced countries. The small-scale industries produce Plant layout - Maintenance
bicycles, nuts and bolts, shoes, clothes, sewing machines and
agricultural implements. *Plant Location, Layout and
The scale of industry in the future will necessitate the develop- Maintenance
ment of a much better understanding than ever before between Reed, R.
business, industry, commerce and government, with more effec- Richard D. Irwin, 1967 193 pages $2.75 (136)
tive methods of communications in both directions.
Each volume in the Operation Management series treats a special
The author is analysing the economic and political framework of subject - product planning, quality control, purchasing, cost
the future considered population, resources energy, international control, etc. - applying a decision system approach in each case.
organisations, regional groupings and economic planning. His
Agenda for the 1970's summarises the problems which will face Plant location and plant layout are major cost determinants for a
the world. He asks: manufacturing operation so they demand the best possible
evaluative systems. With the many dynamic influences involved
Are our institutions equal to the task? no static optimum solution to plant location and layout problems
Has a multi-racial British Commonwealth a role to play ? is possible. The author, however, hopes that his book will
What part will Russia and China take in the development of stimulate further improvement in 'the state of the art' so that
Africa and Asia? optimum solutions may be found which take real and ever-
This book will help the value engineer to understand the political changing situations fully into account.
and economic circumstances in which he will, in the 1970's be The plant location problem - the determination of that location
working. which when considering all factors will provide minimum
A.B.M. delivered-to-customer cost of the products to be manufactured -
is first dealt with from a theoretical then a practical point of view.
The interaction of the subsystems relating to plant planning is
Finance illustrated by the author who provides a series of criteria against
which a proposed (or existing) location may be evaluated.
**Modern Financial Management The list of physical facilities related to plant layout - materials,
Carsberg, B. St Edey, H. (eds.)
materials handling, plant structures, organisation, plant services,
Penguin, 1969 411 pages 10/- (135)
accounting and costs, personnel, market demand and processes -
Eighteen selected readings dealing with investment, valuation and will indicate the coverage of a plant layout project. Producibility
income; long-range planning; and the use of mathematical study in depth should precede layout planning. Machine and

248 Value Engineering, February 1970

manpower requirements also require careful calculation, and a sation and human relationships. After the Training of Managers
warehousing and transport 'model' can provide the necessary has been described case histories of successfully managed firms
space and carrier data. are used to illustrate the practical application of management
principles.
Probabilistic models used to be constructed in order to arrive at
the machinery and other equipment requirements; the several As well as successes the ingredients of failure are listed - lack of
flow patterns - straight-line, S-shape, t/-shape and convoluted - leadership, middle management support, perspective, adequate
need to be laid down in order to arrive at the optimum arrange- wage policy, and planning.
ment of the selected machines. In assembly the flow pattern may
The book concludes with an imaged dialogue pointing to what
be either comb, tree, dedritic, folding or overhead. Machines
young people (the Managers of the future) are thinking. The
may be arranged in straight-lines, aisles, circular, or odd-angled. manager, the author holds, must see himself as the spearhead in
In order to reach the best possible decision such techniques as the battle against complacency and conservatism.
Monte Carlo method, simulation, dynamic and linear program- G.C.
ming, line balancing, and heuristic analysis; and such systems as
travel charts, distance matrices, and least cost paths are applied
to the analysis.
The author describes these modern methods fully. Computers
In a very useful and extensive bibliography there are twenty-one,
specific references to plant layout which value engineers and
i /"Computer Programming
others who are concerned to establish least cost paths for pro- Cooper, C. D. H.
ducts through their manufacturing and assembly cycles would do John Murray, 1969 80 pages 6/6 (123)
well to follow up. G.C.G. Eighteenth in Murray's worthwhile 'Exploring Mathematics'
series this book ends the search of the value engineer for a simple
description of what programming is and how it works.
Beginning with a section entitled 'Meet Your Computer' the
Statistics author described programmes for playing simple games, for
'writing a rhyming couplet, for composing a chord, and for
*Cases in Management Statistics compiling a concordance.
Enrick, N. L.
Holt. Rinehart & Winston, 1962 159 pages 32/- 'A computer language is easier to learn than an ordinary verbal
language because it is designed to express only a limited number
(180)
of simple commands', and Mr Cooper proved this to be so in the
This book present some useful applications of statistics to case of the reviewer who, after completing each chapter, success-
problems of administration, finance, production and marketing. fully attempted the appended questions.
As the author says the graduate who emerges without a facility in
statistics is poorly equipped for a career in business today. The value engineer, who often could find assistance from data
search and comparison operations, will be able to envisage appli-
The same applies to the value engineer, and in this book he will cations of Sorting. The book will also suggest other applications
find a useful set of worked examples which illustrate the practical to V.E. of computer-programming. L.M.
application of frequency-distribution analysis, control charts for
averages and ranges, standard deviation or significant difference
between two averages, two factor variance analysis, regression
analysis, correlation analysis, sampling, surveys, time-series
analysis and statistical forecasting.
Finally, the importance of visual presentation is mentioned and Communication
the warning is given that statistical problems must be solved with
statistical knowledge. This book is a very useful aid to gaining **The Communicators and
such knowledge and skill. CT. Society
Wilson, D.
Pergamon, 1968 121 pages 10/- (102)
'It is not so much what is said or how it is said, it is how it is
Management techniques heard that counts'. Arthur D . Little, management consultants,
realise this when they always go to such.pains to shape the final
*The Business of Management form which a multi-million dollar management study will take
Falk, R. to the understanding level of the type of person who will be
Penguin. 1967 256 pages 3/6 (135) reading it.
Well-fitted for his task, the author of this book, Mr Falk seeks to As the company expands the boss ceases to be seen on the shop
answer the questions: floor and crises of morale occur since workers feel cut off from
Is Management an art or a craft? their former easy communications with Management. Thus the
What makes a Manager? setting up of a formal communication system within a business
as it grows is a necessity.
Ilcforc Management can be effective OBJECTIVES must be
clearly stated, RESPONSIBILITIES must be defined and We have at the root of many of our industrial problems the
accepted, COMMUNICATION must be two- or even three-way, problem of poor communications and when people search for
,iml the chief operative must always CONTROL and PRO- an answer to these problems they are tardy in seeking advice
GRESS the operation. But these words are meaningless unless a from professional communicators. The book gives reasons for
nrnse of purpose is breathed into them. A business is the reflec- this.
tion of the people within it.
Who are the communicators? The journalist, the public relations
( haptcrs dealing with Management for Whom and What and officer and the advertising man. The media they use includes
'(telling the Best from People' give the author's views on organi- The Press, periodicals, television and radio.

Value Engineering, February 1970 249

 There are other communicators as well - clergymen, politicians environmental factor, is also discussed. Changing patterns of
and teachers-and the vast number of 'occasional communi- industrial conflict are studied to determine the classes of varients.
cators'. It is these latter who normally need assistance in the There is, as one author points out, no evidence that the emerging
preparation and presentation of the message they are seeking countries will follow such paths.
to get across.
Part three illuminates the methods of dispute settlement in
In communication one of the basic problems is vocabulary. Australia, United States and Sweden. The influences surrounding
The average intelligent Englishman uses around 3,000 words; bargaining units are then highlighted and the Fawley Producti-
and a well-read man has a vocabulary of 10,000 words; whereas vity Agreement is outlined.
a scientist is working in a field of 50,000 spenal technical words.
Finally, two papers entitled 'The Politics of Management' and
The author's excursion into the future of communication is 'Management's Frame of Reference' draw the reader's attention
most interesting. Internationalisation of communication is to the practical importance of 'climate of opinion'. Management,
growing rapidly and communicators are having to talk to more while preserving the pretence of control, connives at the exten-
people. 'The worrying feature about mass communications is sion of unilateral regulation by work-groups.
that we do not know what we are achieving...' 'Surely we
ought to start in trying to find out just how communicators Each paper is well-documented and further references (by coun-
really do affect the society in which they are plainly essential'. tries) are provided. Comprehensive indexes to author's and sub-
The reviewer was pleased to see this point so clearly exposed. jects makes reference very efficient. The value engineer, who is
T.C.L. vitally interested iri the labour as well as the material content, of
cost will find much of use in this book. C.T.C.

Creativity

**The Five-Day Course in Producibility - Machining - Production engineering

Thinking **Modern Workshop
De Bono, E.
Pelican, 1967 160 pages 7/6 (194) Technology—Part II
Dr de Bono contends that skill in creative thinking can be taught Machine Tools and Manufacturing
and this book contains problems designed to do this. Being right Processes
is not always important - an error can lead to the right answer. Baker, H. W. (ed.)
The author has developed the L-game which can promote the
Macmillan, 1969 790 pages 90/- (142)
powers of strategic thinking.
This book provides a convenient reference work for non-
Awareness is the first step to correction and improvement in any engineers as well as mechanical engineers who need a compre-
skill. The suggestions in the text are only intended to stimulate the hensive, simply-written, and up-to-date explanation of:
reader's own ideas on thinking. There is no rigid division between
the three different types of thinking - weight-thinking, sequential metal cutting tools
thinking, and strategic thinking. This fact develops out of three boring machines
five days progressive reflection on problems. The author warns drills, broaches and millers
that reading is no substitute for doing, and admits that his screw thread and gear cutting
purpose has been to focus attention on the way the mind tackles grinding
problems. He counsels that 'some people may have had difficulty new techniques of machining
with the problems (in the book) because they were unwilling to machine tool maintenance
let go of the obvious and so became trapped by it. lubrication
D.J. high-rate forming
presswork
inspection
jigs and fixtures
heat treatment.
Chapters on the economics of machining operations, the methods
Human relations - Productivity of numerically controlled machining, automation in grinding, the
advantage of ultrasonic machining, the economics of electric
**Collective Bargaining machining of metals, the automatic and adaptive control of
Flanders, A. (ed.) machine tools; high-rate forming (including explosive forming,
Penguin, 1969 431 pages 10/- (135) underwater electric spark discharge forming, electromagnetic
forming and high-rate forging); sheet metal drawing and press-
Edited by a member of the Commission on Industrial Relations work; inspection standards and ganging equipment; standardisa-
this volume of Modern Management Readings contains select tion; heat treatment equipment; and production engineering will
documents concerned with wages, working hours, redundancy, provide the value engineer with basic information on these sub-
arbitration, restrictive practices, productivity agreement, strikes, jects.
negotiation and trade unions.
A section on intrinsically dangerous mechanisms lists twenty-five
It contains references to both trade union and employers' bodies, groups of dangerous parts of machinery, followed by the
as well as to case histories of companies throughout the world. principal methods of safeguarding - safety by construction by
positioning, and by guarding. Ergonomic considerations are also
The first part of the book analyses and explains the basic facts
mentioned.
underlying industrial conflict and discusses the role of each. In
the next part the strike propensity of different industries is For those who wish to pursue any particular subject more deeply
analysed from the viewpoint of industrial environment, com- there is an excellent bibliography.
munity environment and 'political' environment. Time, as an F.T.
250 Value Engineering, February 1970
Decimalisation A useful aide memorie will be of considerable help to organisa-
tions preparing their own schedules. It covers such matters as
Organising For Decimal pricing, sales literature, payroll, office machines, stationery, and
accounting records.
Currency
Blitz, J. F. Although the book is mainly for accountants those engaged in
Industrial & Commercial Techniques Ltd., 1969 other functions of management including value engineers will
101 pages 50/- (154) find it of great assistance with the problems they will encounter.
K.L.M.
On 15th February, 1971, the U.K. will begin to use decimal
currency. Experience in Australia and New Zealand has clearly
demonstrated that detailed planning and execution are essential
to a smooth transition.
During the calender year of 1970 all businesses in the U.K. will Work study - Value standards - Direct labour
become increasingly involved in the problems of the changeoever;
and there will be few departments in any firm which will not be
*A Manager's guide to Work
affected by the plans for the change and their execution. The
problems will not be confined to accounting procedures. For
Study
instance, the personnel function will be heavily involved in "' Gilbert, O.
producing an acceptable decimalisation of wages and salaries;' " John Wiley & Sons, 1968 147 pages 30/- (125)
and those responsible for marketing and sales will have to This book is in the nature of a general reader on the subject of
ensure not only that products are sensibly priced in the decimal Work Study aimed at giving managers and executive background,
mode but that a smooth transition can occur from the old pricing rather than detailed, knowledge. Readers can then decide if they
to the new. wish to pursue the subject in greater depth. I f so, they have in the
Appendix a comprehensive set of references to relevant books,
Examination is made of the peculiarities of the decimal systems
organisations and journals.
and of the ways in which they can be turned to advantage. The
problem of multiple packing and dual pricing is discussed in Most of those who are engaged in industry would agree with
detail. Operational planning for conversion, including office J. M . Keynes who wrote ' I f our poverty were due to famine or
procedures, internal and external decimalisation, the problem earthquake or w a r - i f we lacked the material things and the
of business machines, and Staff training arrangements are resources to produce them, we could not expect to find the Means
discussed. to Prosperity except in hard work, abstinence, and invention.
In fact, our predicament is notoriously of another kind. I t comes
Special attention is paid to the acute problem of changing price
from some failure in the immaterial devices of the mind, in the
structures into the decimal mode in respect of low value items
working of the motives which should lead to the decisions and
where exact conversion-equivalence does not exist.
acts of will, necessary to put in movement the resources and
CR. technical means we already have.'
The writer of this book is concerned to show managers how 'to
put in movement the resources and technical means we already
have'. He contends that productivity is 3-dimensional - the
method of work, the speed of work, and the utilisation of people
and equipment - and if the efficiency of each dimension can be
increased 20 per cent the 'volume' of the cube increases by 73
Decimalisation - Metrication per cent, not 60 per cent.
*Planning Conversion to The Work Study man's job is described and the benefits accruing
from 'selling' Work Study to the shop floor are outlined.
Decimal Currency—a guide for
It is always interesting to know the origins of things and the
management book contains a history of Work Study from the time of Taylor
Institute of Chartered Accountants in England & and Gilbreth to present day. It also draws attention to the limita-
Wales, 1969 44 pages 15/- (195) tions and future of the technique. B.L.T.
To all who are interested in maintaining and improving the
United Kingdom's competitive position it is-as Lord Fiske
emphasises - necessary to effect a smooth change-over to deci-
malisation in February 1971. This, he points out, 'will be achieved
only as a result of careful study . . . and by making timely
preparations'. This book, the product of four accountancy bodies, Training
provides a most useful guide to planning the conversion to
decimal currancy. ^Programmed Learning and
I he U.K. will change over to decimal currency on 15th February Integrated Industrial Training
IV7I. It will then use the £-new penny system, and five million Shirley-Smith, K.
business machines will be affected. Gower Press, 1968 216 pages 50/- (166)
I he coinage will be changed over prior to this date - 1968 having This book provides practical help for those who wish to under-
wen the new 5p and lOp shilling and florin equivalents and 1969 stand and realise the full potential of programmed learning.
i lie 50p (10/- note) coin and the dropping of the present half- In its three parts it gives the background, the techniques and the
l«cnny. Appendix 11 presents a time-scale of the conversion. applications of this form of training.
Information is given in the book on ways of expressing amounts Although it is now 45 years since (in 1924) D r Pressey con-
ol money in the new decimal system, and about National structed the first teaching machines at Ohio State University -
Insurance contributions, Purchase Tax, etc. Organisation Charts it was not until 1939-45 that the requirement for training large
depict several methods of handling the change-over inside numbers of military personnel gave P.I. a chance to prove its
businesses themselves. worth. This book is, however, only concerned with P.I. in the

Value Engineering, February 1970 251

 U.K. where it began about 1960. In 1962 the Association of lead 4 dearest
Programmed Learning (APL) was formed and now has over nylon 66 5
1,000 members. The Industrial Training Act of 1964 gave a zinc 6
filip to P.I. due partly to the great shortage of instructors. aluminium 8
The advantages of P.I. are— P.V.C. 17
polypropylene 20
1. Saving of training time iron 22
polythene 25
2. Better use of instructors' time
raw rubber 26
3. Improved retention synthetic rubber 31 cheapest
4. Constant flow of trainees ready to start application After dealing with the physical and chemical properties of plastics
in connection with their selection for various uses, there are
5. Standardised training chapters on the manufacture of plastic components - moulding,
6. Decentralised training. machining, thermo forming, and extruding. The extension of the
application of plastics in building; packaging; pipe systems and
There are two main types of programming - linear (based on the motor, electrical, chemical and consumer durable industries
Professor Skinner's work) and branching (Professor Crowder). is described in sufficient detail for this book to become an
This latter type is subdivided into Sub-Branching and Multi- efficient one-source reference for designers who are faced with
level Branching Programmes. Algorithms (a new approach to widely varying problems. It should be in the libraries of most
learning) teach by graphic presentation the 'how' rather than the companies as it can also be read with understanding by those
'why' of a subject. Like P.I. algorithms are 'orderly' sequences who have no strong technical background. C.B.M.
of instruction of solving a problem. These will also form a part
of the new methods of instruction.
Readers who are contemplating the installation of P.L will be
interested in the chapter on costs - £ 1 per hour for product
Visual aids - Statistics
knowledge; £4 10s. Od. to £250 for manual and transistorised
machines; 25/- per programme; 15 days to produce 110 frames
(7/- per frame).
**Diagrams
Lockwood, A.
P.I. is suitable for Aptitude Testing, Employee Induction, Studio Vista, 1969 143 pages 84/- (198)
Hygiene, Safety, Apprentice and Operator training, Commercial
Practice, Management Supervisory and Sales training. Diagrams are being increasingly used in communications and
this book as its dust-cover says is 'a visual dictionary of diagram
A useful list of references, contained in the book, report on the techniques'. It covers statistical diagrams, statistical maps, and
application of P.L in such organisations as the G.P.O., B.I.S.F., explanatory diagrams.
B.E.A. and local government. T.I.G.
'Diagrams', writes the author, 'are not things which happen.
They need to be considered carefully . . . ' . And this is just what
this book proceeds to do commencing with the Line Graph in
its various forms including the logarithmic Graph, Scatter
Graph, and Bar Graph. Block diagrams are then considered
Plastics - Materials - Design followed by Rectangular and Circular (Pie or Cake) Chaffs,
and Pictorial graphs. A n isotype shows the difference between
^Plastics as a Metal Replacement three planes—range, head winds at various heights, horse-power,
payload, full load, crew, etc.
Smith, P. I.
Scientific Publications (G.B.) Ltd., 1968 282 paqes The other sections (Statistical Maps and Explanatory Diagrams)
651- (182) give the value engineer many ideas on how to present information
in an easily understood way. The book contains many useful
Three forces are at work which, acting together, could mean that references for those who wish to extend their detailed knowledge
within the next twenty, years plastics could replace steel as the of methods of visual presentation but the ordinary reader will
dominant industrial materials. These forces are: not need to go outside its covers. J.F.
the growth of the plastics industry itself,
the entry of the major steel producers into the resin supply
industry,
the extension of the use of plastics in the various industries.
Plastics are replacing metal because they promise industry worth- Network analysis
while advantages in price and performance.
Programme and Progress
This book aims at alerting design engineers and others to the Ministry of Public Building and Works
opportunities which plastics offer in streamlining production, H.M.S.O., 1944 8pages 3/6 (105)
restyling product designs, and producing substantial economies
in weight and size of products and components. It also critically Dealing with the preparation of Charts for Civil Engineering
compares plastics with metals pointing out the deficiencies of the and Building Contracts. This small publication shows how
former material. control may be simply exercised. Programming avoids haphazard
methods of execution, progressing ensures that the work is
The author, M r Paul Smith, has been closely associated with the being carried out according to the Programme.
plastics throughout his working life, in finding markets (new
applications) for newly discovered polymers as well as extending Applications to an airfield and a grain silo are shown and the
the market for existing ones. following subjects touched upon—
Flexibility
Value engineers will be interested in seeing where plastics rank in Building up a Programme
the list of materials prices and on a table, excluding the fluctuat- Plotting progress
ing copper, the number of cubic centimetres per penny are as Making the Chart 'Live'
follows:
The Week Indicator. E.M.F.
252
Value Engineering, February 1970
 Network analysis - Critical path programming 'The order was received at 11 o'clock one Tuesday morning and
by 6 p.m. the same day the theatre was being warmed electri-
**Network Analysis cally - Crompton & Co. gained a reputation for installing
Royal Institute of British Architects, et al lighting and heating equipment very quickly!'
H.M.S.O.. 1967 40pages 7/6 (105)
In 1931 Crompton became a Fellow of the Royal Society and an
This guide to the use of Network Analysis in programming and honorary member of each of the three senior Engineering In-
control of the design of construction works has much to interest stitutions. J.T.
value engineers. It covers an explanation of the arrow diagram,
time estimating, an analysis of network (including by a com-
puter), resource allocation, and updating and review. Finally,
Ihe broader issues of network analysis and its implications for
Management are discussed.
Systems analysis
Computer Input (programming) is illustrated and Resource
Allocation touched upon. *The Art of Systems Analysis
The following advantages for network analysis are listed. Rothery, B. (ed.)
•Improved communication and coordination between all Business Books Ltd., 1969 259 pages 160/-
parties. (173)

• Reduces time from start to finish of project. This is one of the best of the spate of books on computers,
systems analysis and programming. It deals with fundamental
• Decreases waste of time. issues. As the introduction says it deals with those matters which
'might be useful to a systems analyst in choosing his methods
•Improves accuracy of forecasting future events. of work'.
• Helps locate the items on which the return is greatest. Together with 'The Practice of Systems Analysis' (also published
'Network Analysis' (the authors say) 'is a management tool and by Business Books) this book provides a full coverage of those
management is concerned with people. It remains essential that subjects included in a sound Systems Analysis Course of training.
Ihe relationship between people be established on a sound
Section 1 covers the systems plan and the constraints met with
footing . . . '
by the Systems Analyst, Section 2 the Systems Methodology.
The book pocket contains— A theory of Systems Analysis is formulated in the last section
• Programming and Progressing (an Advisory leaflet issued of the book.
by Ministry of Public Building and Works). Control, which is stated to be 'the conversion of policy into
• A Plate showing the Activities involved in Briefing, Sketch action' is next dealt with and the book contains appendices on
Plans, Working Drawings and Site Operations. process definitions, data transforms, and decision tables.

This latter illustration could be adapted to use in progressing The chapter on methods of increasing the effectiveness of the
Value Engineering projects. G.M. computer presents a number of very practical ideas; it also goes
into the merits of cards and tapes. There is also a useful checklist
of elements including such elements as customer, employee,
agent, supplier, material, part, product, customer service,
equipment, scrap, work in progress, directory of equivalent
parts, etc. K.F.

Creativity - Inventions

*R.E.B. Crompton—Pioneer Human relations

Electrical Engineer
Bowers, B. **Leadership: Selected Readings
H.M.S.O., 1969 32 pages 2/6 (105) Gibb, C. A. (ed.)
Penguin, 1969. 439 pages 9/- (135)
t his booklet outlines Crompton's contributions to the electrical
industry. Twenty five articles on aspects of leadership have been assembled
by Professor Gibb of the Australian National University. They
Kookes Evelyn Bell Crompton, who died in 1940 at the ripe old have been divided into nine sections including the personal
iige of ninety-five, was a pioneer in mechanical road traction as factors associated with leadership, factors in the selection of
well us electrical engineering. He improved on Davy's and leaders, followers, the part leadership plays in goal achievement,
Scirin's electric arc lamps and set up a factory to manufacture and the ethics of leadership.
I I K - M : as well as electric generators and domestic appliances.
< mmpion pioneered the military searchlight used in the-South 'Any attempt at disciplined thinking about leadership and
MiiCtin war. leading immediately reveals the great variety of different con-
cepts to which the term is applied'. But as Professor Gibb goes
Il*<»e are descriptions of his work in connection with Arc on to say: 'Leading implies a shared direction and common
I«MI|»*. Electric motors and generators, Electric measuring group membership which, in turn, implies common, or at least
••MiMimcnts, and Electric lighting. Illustrations show the Cromp- compatible, goals so related that each member in achieving his
li|tht at Alexandra Palace and the Law Courts. goals assists others to the achievement of their group related
objectives'.
I I * author writes 'It may come as a surprise to the modern
•<M<kr that the country house owner of the 1800's who wanted The nature of the group must be understood i f leadership is to
i.NiK-lhing better than oil lamps had first to choose between be understood and this collection contains a great deal of
••MiMinti a gasworks and building a generating station.' material on this subject.
lite author records another interesting point relative to the Leadership too implies followers, and this type of person is
nmullution of electric heating at the Vaudeville Theatre in 1895: also studied.

1ulue Engineering, February 1970 253

 Some very useful information is contained in the writings capacity and that his statf are continually disrupted in their
stressing the significance of the situation in leadership. The routine through having to wait to use the machine. The work
situation, it is pointed out, is liable to change by the entrance study department performed a series of 100 random spot
of new members into the group which alter possibilities of checks with the following results:
foal attainment.
Number of people queueing 0 1 2 3 4 5
Leadership, the editor writes 'is the performance of those acts
which help the group achieve its preferred outcomes'. What he Number of occasions 37 38 16 6 2 1
has collected about the subject will help value engineers to Do these results fit a Poisson distribution?
account for some of their frustrations in delay in getting decision
and in management's oft-times apparent inertia. H.F.M. Telephone calls coming into a switchboard follow a Poisson
distribution with mean 3 per minute. Find the probability that
in a given minute there will be 5 or more calls?
The above three business problems indicate occasions where the
Poisson distribution may be applied. The book concludes with
a useful list of further reading. J.T.C.
Group technology—Colony production

**Mass Production With Batch

Work: Group Technology
Explained
Hollinggum, J. Direct labour
Pergamon, 1968. 25 pages 2/6 (102)
Another of the excellent short descriptions of production
*Job Evaluation
techniques, this booklet traces the development of Group National Board for Prices 8- Income
Technology over the past five years or so. It explains component H.M.S.O., 1969 50 pages 5/6 (105)
coding systems used in G.T. Report No. 83 is the result of the Government's desire that the
Group Technology (also called Family Group Technology or Prices & Incomes Board should look into the effectiveness of
Colony Production) is a technique which allows the production job evaluation schemes. Job evaluation is the comparison of
of components in small batches to approach the economic jobs by the use of formal and systematic procedures in order to
advantages achieved by continuous flow-line production. determine the relative position (or ranking) of one job to another
The basis of the technique is the recognition and grouping of in a wage or salary hierarchy. The report is based on the analysis
components which require similar manufacturing processes. of a selected sample of 100 questionnaires addressed to employers
This is achieved by the application of a system of component all over England.
coding and classification which is capable of defining the Method of job evaluation include—
geometric form and manufacturing requirements in such a • Ranking
way that families of related components can be gathered
together for the utilisation of common manufacturing facilities. • Grading or Classification
The results of the application of G.T.—
• Factory Comparison
• Reduced stock by 44 %
• Time span
•Reduced manufacturing time by 66f % •Points Rating
•Increased machine output by 70%
Some 25 per cent of the employees in the sample were found to
•Reduced setting time by 66%— be covered by job evaluation, although by contrast with the
U.S. it is largely a post-war phenomenon. Its application is
should stimulate the interest of all value engineers to know more increasing rapidly. Of the schemes used 47 per cent were the
about it. H.T. points rating type.
The Report describes the installation of a Job Evaluation Scheme,
and says, 'We attach the highest importance to the participation
of unions in the installation of job evaluation schemes
An eleven section summary these conclusions about job
evaluation are reported:
Statistics
• I t is a valuable instrument from the point of management,
^Problems in Statistics from that of the unions, and from the general point of
Williams, K. view in that it can diminish tension on the shop floor.
Longmans, 1969 69 pages 12/- (159) •The analytical method most commonly used is known as
points rating.
This is one book in what promises to be a most useful collection
of problems. It provides an introduction to Poisson and •Our survey has shown a growing interest and a rapidly
Exponential distributions assuming a knowledge of the calculus expanding application of job evaluation.
and basic statistics and is useful to those engaged in Management
studies. Regular audits of job evaluation schemes are commended, and
the Board concludes that 'while we have looked at national
Two per cent of the products are defective. Calculate the job evaluation schemes in other countries, we do not consider
probability that in an inspection sample of 50 articles there are that at this moment they offer a model relevant to Britain's
5 defectives? need . . . '
An office manager justifies his request for a second copying Further reading is listed at the end of the Report.
machine on the grounds that his present machine is used to J.G.

254 Value Engineering, February 1970

 Reprint No. 2:4:13

Selected Abstracts of Recent

Literature on Value Analysis/
Engineering
Miss C. Maby — Abstracter

'Knowledge is more than equivalent to force.'—Bacon.

These Abstracts are based on a survey of periodicals and The addresses of the publishers of the periodicals contain-
books, supplemented by a selection of abstracts which ing the abstracted articles may be obtained by noting the
have already appeared in other Abstract Journals. number appearing in the round brackets and referring to
Permission to reproduce the latter is gratefully acknow- the addresses on the inside of the back cover.
ledged.

Abstracts [121] to [126]

[121] an unnecessarily expensive product. Both kinds of failure can be
Applications overcome by the right combination of materials and processes.

Kaplan, M. Beginning with the definition of an engineer as 'a man who can
make for a shilling what any fool can make for a pound' the
Value Engineering in Practice article points out that the ability to make things for a shilling
I.R.E. Transactions on Product Engineering and depends largely on the effective utilisation of materials.
Production PEPS April 1961 pp. 36-38 (48)
Condensed from a paper presented at a refresher course given
The application of Value Engineering has resulted in con- at the Institutions of Metallurgists entitled 'The Avoidance of
siderable savings at Loral and Value Engineering is now a Failure in Fabrication and Service' the article contains a number
ivcrmanent part of Engineering Liaison Design program. V.E. of tables which would be of interest to value engineers:
is however a separate department as part of Manufacturing Cost/100 of Components Machined from Bar
I ngineering and is responsible only to top management. Loral's Typical Cost Distribution in Engineering Production
designers are using many V.E. suggestions in new products which Approximate Prices of Materials
is an important part of the exchange of ideas and team concept. Waste of Material in Manufacture
The company produces a Value Engineering Digest and more Cost Build-up for Steel Bar
lhan 50 per cent of all the items printed in it have been used by Approximate Prices of \ \ " Dia. steel bar
the company. Savings Achieved on Steel Shaft
The company is mainly concerned with Printed Wiring, Encap- Savings Achieved with Carbon Manganese Steel
sulation Techniques, Gear packaging, Modular designs and Return on Capital of British and U.S. Firms.
Automation.
There are also a number of useful references to information of
The continuous exchange of ideas could conceivable minimise use to value engineers.
the need for V.E. except for the ever-changing state-of-the-art,
turnover of staff, and the perpetual need for monitoring the
program so as to prevent deviations from original concept.
1 oral estimated having saved $250,000 in its first year of V.E.
Value Engineering is neither a gimmick or a fad, but is as essen- [123]
tial as Quality Control.
Applications

[122] Anon
Materials V.A. team saves £20,000
Target Oct. 1969 p. 7 (63)
Pick, H. J .
A Value Analysis team at Sealed Motor Construction Ltd. in
Value for Money in Component Production Bridgwater, Somerset, by using a tough plastic case with a
The Chartered Mechanical Engineer Nov. 1969 moulded-in mounting bracket saved £20,000 per year on one
pp. 442-446 (62) item. And this on their first V.A. exercise.
f ailure in service usually occurs because we want to make the The team consisted of the Chief Buyer, a designer, the Works
product cheaper or lighter. Such failures can always be avoided Manager and a toolroom representative under the chairmanship
by playing safe but this often leads to another kind of failure - of the Chief Engineer. It meets fortnightly.

Value Engineering, February 1970 255

 [124] forward some interesting views. He talks, for instance, of
Purchasing Planned Value Engineering and gives the various stages through
which Value Engineering passes in his company.
McWhinnie, A. D. It is well worth quoting Sir Henry Royce who (in 1931) said:
'Be Value Consultants' Company Invites its ' I believe that everything made in England is costing too
Customers much for export. Everybody must do more and better work
Target Dec. 1969 pp. 11-12 (63) if we are to keep our present standard of life, or they must
make better use of less money.'
Urging industry to make bigger cost savings from raw materials
substitutions, Mr A. J. Heaton of Plessey Telecommunications 'Making better use of less money' is what Value Engineering
Group in Liverpool suggests that suppliers be invited to become is mainly about.
value consultants. He asks the suppliers when quoting not to
hesitate to offer alternatives including entirely different ways of Mr Crum has set out very clearly how Value Engineering is
achieving the same function. applied in one British Area company and his work fits well
beside an earlier article on the same subject by Mr Ewans who
The invitation includes a value analysis check list-Does the is now with an American company.
item being supplied need all its features ? Is the quantity ordered
economic? And so on.
Plessey has an extensive training programme to make its staff
think about value analysis as a cost reducer, and also to use its
problem-solving methods.
Examples are given of savings in materials usage, in processes,
on dimensions and tolerances. A Bulletin of Cost Saving Ideas
is published by the Group.
Where there's a Plan
there's a Profit*
[125]
Manpower Papers No. 1 - Company Manpower Planning -
Training
issued by the Department of Employment and Productivity
(H.M.S.O. 8/6) contains some pro forma calculations which may
Allen, G. R. and Romani, P. N. be of use to value engineers needing to calculate manpower
Barriers to V.E. Growth requirements in relation to VECPs which they are putting
Defense Management Journal, Vol. 4 No. 4 forward.
Fall 1968 pp. 33-35 (60)
The headings in the booklet include-Why Plan Manpower?
Two academics from The George Washington University Pre-requisites for Effective Planning. Forecasting Manpower
comment that over the twenty years since its inception V.E. Supply and Demand.
techniques have been used very successfully by many companies
but that it has not achieved its full potential. They ask, 'Why?' The use of productivity-measurement in manpower requirement
forecasting is discussed and illustrated with a worked example.
Before this potential is achieved these problems must, they
consider, be overcome - obtaining a single good definition of Manpower is a key economic resource, and a scarce one. The
'Value Engineering', setting up the correct basis for a V.E. key points for successful planning are -
discipline or profession. • Manpower planning must be recognised as an integral part of
A discipline or profession (says the authors) infers: overall business planning. The manpower planner needs to
know the company's objectives in terms of sales, markets and
(a) A requirement for advanced training and education. growth.
(b) A formalised system of rules for orderly conduct and
efficiency. • Top management backing for manpower planning is essential.
(c) A specialised body, of knowledge.
• Manpower planning responsibilities should be centralised in
(d) Acceptance of or submission to a central governing body.
order to co-ordinate consultation between management levels.
(e) A minimum certified standard for admission to the field.
• Personnel and other statistical records must be complete,
Many firms confine their V.E. activities to their own 'internal'
up-to-date, and readily accessible.
organisation only thereby restricting the potential for savings.
Lack of management support is the reason for the time-lag in • The forecast period should be long enough to allow remedial
implementing V.E. proposals. action to be taken.
The future of V.E. depends on the success which V.E. proponents • The forecasting technique selected should be that best suited
have in solving these problems. to the data available and the degree of accuracy required.
• Forecasts should be prepared by skill levels rather than by
aggregates of workers of different skill levels.
[126] • Both the forecasting techniques, and the forecasts themselves
Basic concepts - Aeronautical industry need to be constantly revised and improved in the light of
experience.
Crum, L. W.
Those that are charged with planning the manpower require-
Value Engineering - A Challenge to Management ments of their company will find in this booklet much to assist
Royal Aeronautical Society, Management Studies them.
Group, London, April 1968 p. 19 (64)
Describing the philosophy of the application of Value Engi-
neering in Rolls Royce Ltd., Aero Engine Division, the writer * Director of Publications (P6c), Her Majesty's Stationery 0fBce,
(who is Manager of Design Services for that company) puts Atlantic House, Holborn Viaduct, London, E.C.1.

256 Value Engineering, February 1970

 Publishers' Names and Addresses
Journals 48. I.R.E. Transactions, Institute of Electrical and Electronics Engineers, 345 East 47th
Street, New York, N.Y. 10017, U.S.A.'
60. Defense Management Journal, OASD (I & L), Pentagon, Washington, D.C, 20301,
U.S.A.
62. The Chartered Mechanical Engineer, The Institution of Mechanical Engineers, 1
Birdcage Walk, Westminster, London, S.W.1, England.
63. Target, A. D. Roberts, 16 Prentis Road, London, S.W.16, England.
64. Royal Aeronautical Society, 4 Hamilton Place, London W . 1 , England.

Books 102. Pergamon Press Ltd., Headington Hill Hall, Oxford 0X3 OBW, England.
105. Her Majesty's Stationery Office, 49 High Holborn, London, W.C.1, England.
121. Hutchinson & Co. (Publishers) Ltd., 178 Great Portland Street, London, W . 1 ,
England.
122. The Machinery Publishing Co. Ltd., New England Street, Brighton, Sussex, England.
123. John Murray Ltd., Albemarle Street, London, W . 1 , England.
125. John Wiley & Sons Ltd., Baffins Lane, Chichester, Sussex, England.
135. Penguin Books Ltd., Harmondsworth, Middlesex, England.
136. Richard D. Irwin, Inc., Homewood, Illinois, U.S.A.
140. Tavistock Publications Ltd., 167 Fleet Street, London, E.C.4, England.
142. Macmillan & Co. Ltd., 4 Little Essex Street, London, W.C.2, England.
154. Industrial and Commercial Techniques Ltd., 30 Fleet Street, London, E.C.4, England.
158. Cambridge University Press, Bentley House, Euston Road, London, N.W.1, England.
159. Longmans Green & Co. Ltd., 48 Grosvenor Street, London, WIX OAS, England.
166. Gower Press, 1700 Broadway, Denver, Colorado, U.S.A.
173. Business Publications, Business Book Centre Ltd., Mercury House, Waterloo Road,
London, S.E.1, England.
180. Holt, Rinehart & Winston Ltd., 120 Golden Lane, Barbican, London, E.C.1, England.
182. Scientific Publications (G.B.) Ltd., Brosley, Shropshire, England.
190. British Standards Institution, 2 Park Street, London, W . 1 , England.
191. The Zeus Press Ltd., 171 The Strand, London, W.C.2, England.
192. Standard Telephones & Cables Ltd., Hornsey Research Group, Oakleigh Road,
London, N.11, England.
193. Lyon, Grant & Green Ltd., 22 South Audley Street, London, W . 1 , England.
194. Pelican Books Ltd., Harmondsworth, Middlesex, England.
195. Institute of Chartered Accountants in England and Wales, 55/66 Goswell Road,
London, E.C.1, England.
198. Studio Vista Ltd., Blue Star House, London N.19, England.

Henry Burt & Son Ltd, College Street.. Kempston, Bedford

 Ttie one-sided argument
that convinces
design and production
engineers
Nutsert's the name. From 'With Nutsert, awkward jobs
Avdel, the faster fastening firm. aren't awkward any more. Unskilled
It's a simple pneumatic hand people get the hang of it in no time
tool that you can pick up, at all.
carry around and use to Results are better . And you
place anchor nuts and threaded get them faster.
inserts. In any material, Like we said, it's a one-sided
thick or thin. In next to no ^ argument. All pros and no cons.
time. From one side of the So convince yourself. Send off
work only. Sift
for our systems leaflet.
Now that's quite something. Right away.

m avdel
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•St* packed brochure
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