The Saybrook Value Management process seeks to optimize your investment by ensuring that the highest value - not just lowest cost
- results from your investment. Because the capital cost component of a project is usually the smallest over the design life-cycle,
our approach to Value Analysis focuses on Total Costs and Life-cycle costs in comparing 'apparent savings' with 'real savings'.
We believe that Value is defined by Output or Benefit per Unit of Cost - rather than Cost per Unit of Input. Value decisions that
are good for the project might not be so for the Program or long-term interests of the owner. As such while a Value analysis might
lead to savings by eliminating unneeded components or processes, it might equally demonstrate options for greater overall return
through increased initial costs. Our role helps ensure that Value is maintained or increased and that savings are not the result
of compromised or decreased project functionality.
Our Approach:
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Establish a value hierarchy for the project as well as for the Program or Corporation.
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Identify processes and components that are critical to the functionality and benefits promised by the Project business case.
Always distinguish between Value and Cost.
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Examine current work processes and identify opportunities for improvement.
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Identify scope or processes that are overpriced for the value they provide.
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Identify opportunities for achieving greater Value at the same - or even at higher costs.
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Focus upon optimization of life cycle costs - not only one time costs.
A major metals producer planned an expansion to its manufacturing facility, basing its budget upon industry benchmarking data.
The company awarded a design-build contract to a firm whose estimate exceeded the project budget by more than $3.6MM.
We were asked to help reduce the project's cost without compromising operations, while maintaining an acceptable amount of
contingency costs.
Our team implemented a value management solution that:
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Included all stakeholders
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Established a value hierarchy for the project as well as the owner
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Identified critical processes and components (gotta-haves vs. wanna-haves)
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Evaluated costs of all "what-if" scenarios
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Assessed processes as well as components
By improving the phases of work, we were able to reduce down time in the operating plant, saving more money than the entire budget
overrun. Reallocating expenses even allowed our client to improve industrial controls that promised greater operating productivity
through the economic life of the expansion.
We were able to help them save money, improve processes, and complete the project one month sooner than planned.
Although the project cost was 9% more than the initial budget, by increasing value, the client reduced net costs by 12%.
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