part 2
Function, FAST, function-cost
CAS INTERAMERICA 5403 WANETA RD BETHESDA MD 20816 casinteramerica@verizon.net 301-229-0351
Introduction
A user purchases an item or service because it
will provide certain functions at a cost he is
willing to pay.
If something does not do what it is intended to
do, it is of no use to the user and no amount of
cost reduction will improve its value.
Actions that sacrifice needed utility of an item
actually reduce its value to the user. On the
other hand, expenditures to increase the
functional capability of an item beyond that which
is needed also are of little value to the user.
Thus, anything less than the necessary functional
capability is unacceptable; anything more is
unnecessary and wasteful.
To achieve optimum value, functions must be
carefully defined so that their associated costs
may be determined and properly assigned.
The VE approach requires the development of valid
and complete answers for the following six
questions:
What is it?
What does it do?
What is it worth?
What does it cost?
What else would work?
What does that cost?
CAS – Part 2.1
Evaluation of When it has been decided that a VE study will be
conducted on an item or system, the initial effort
function
must be directed toward determining the user's
actual needs.
The user's needs are those explicit performance
qualities, traits, or characteristics that justify
the existence of an item, that is, the
characteristics that must be possessed if the
system or item is to be useful or efficient.
They define what the item must be able to do in
relation to overall goals, or what it must be able
to do in relation to the whole of which It is a
part.
The manner in which the user's needs are expressed
may imply a method of satisfying them, but it is
the designer's Job to make the method tangible and
explicit.
Therefore, the user's needs are the objectives; the
design specifies the means by which the objectives
are satisfied.
The definition of the user's needs in explicit
quantitative terms is a difficult task.
Many times there is a temptation to look at an item
and say that the function it performs is the
required function.
But this is not always true.
By defining the function, one learns precisely
which characteristics of the design are really
required.
CAS – Part 2.2
Determining
function
In VE, function is normally expressed using two
words -- a verb and its noun object:
a. The verb answers the question, "What does it
do?" The verb defines the item's required
action (it may generate, control, pump, emit,
protect, transmit, etc.)
b. The noun answers the question, "What does it
do it to?" The noun tells what is acted upon,
(electricity, temperature, liquids, light,
surfaces, sound, etc.).
c. This noun must be measurable or at least
understood in measurable 'terms, since a
specific value must be assigned to it during
the later evaluation process, that of relating
cost to function.
d. For example: The function of a water service
line to a building could be defined as
"provides service." "Service," not being
readily measurable, does not enable us to seek
alternatives intelligently. On the other hand,
if we define the function of the line
"transports water," the noun in the definition
is measurable, and acceptable alternatives,
being dependent upon the quantity of water
being transported, can be determined.
e. The system of defining a function in two
words, a verb and a noun, is known as two-word
abridgement. This abridgement represents a
skeletal presentation with retention of
relative completeness. Advantages of this
system are that it:
(1) Forces conciseness.
(2) Avoids combining functions and attempting
to define more than one simple function at
a time.
(3) Aids in achieving the broadest level of
disassociation from specifics.
CAS – Part 2.3
Identifying
function
Proper identification of function involves a point
of view and consideration of the application of the
item.
a. A function should be identified so as not to
limit the ways in which it could be performed.
For example, consider a buildings management
operation of fastening a simple nameplate on a
piece of equipment.
b. Rather than the specific instruction "screw
nameplate," the function would be better
identified as "label equipment," since
attaching a nameplate with screws is only one
of many ways of identifying equipment -- the
desired end.
c. Nameplates can be riveted, welded, hung,
cemented or wired in place. The name may be
etched, stenciled, or stamped on the
equipment, thus entirely eliminating the
nameplate.
d. Identification of function should concern
itself with how something is used, not just
what it Is. For example, the function of an
electric wire could be "conduct current,"
"fasten part," or "transfer force" depending
on application. The function of a door could
be "provide access" or "close opening"
depending on the designer's intent.
e. Identifying function in broadest possible
terms provides the greatest potential for
value improvement because it gives greater
freedom in creativity developing alternatives.
Further, it tends to overcome any preconceived
ideas of the manner by which the function is
to be accomplished.
CAS – Part 2.4
Classifying
functions
Functions of items or systems may be divided into
two types, basic and secondary.
a. Basic function defines a performance feature
that must be attained. It reflects the
primary reason for an item or system. In the
case of the screwdriver, "transfer torque"
would normally, but not necessarily, be the
basic function.
b. For example, if the desired application was
to pry open lids of paint cans, the function
would be defined in terms of the transfer of
a linear force rather than a rotational force
such as "transfer force." Thus, a clear
understanding of the user's need is necessary
if an adequate definition of the basic
function is to be developed.
c. An item may possess more than one basic
function. This would be true In the case of
one product, which provides several required
functions. The camper's hand ax with a flat
head for driving tent stakes and a sharp
blade for cutting firewood is an example of
an item providing two basic functions.
d. A basic function answers the question, "What
must it do?"
e. Secondary function defines performance
features of a system or item other than those
that must be accomplished.
(1) A secondary function answers the question,
"What else does it do?" For example, the
basic function of exterior paint is
"protect surface." Then a secondary
function is "improve appearance."
(2) Secondary functions often result from the
design configuration chosen to satisfy a
basic function. For example, a valve on a
radiator "restricts flow" and is necessary
only because a hot water heating design
was chosen. Then, the presence of a
secondary function is incidental to the
method chosen to achieve a basic function.
CAS – Part 2.5
For systems, it is common practice to describe
Functional
relationships them:
(1)
in terms of their function and
relationship within the next larger
assembly,
(2)
in terms of their own components or
subparts, or
(3)
in terms of their indivisibility or
uniqueness. The relative position that a
system or item occupies in the scheme of
the total assembly is called its "level
of indenture."
a. In value engineering, the significance of
level of indenture is that the designation of
functions as basic or secondary depends upon
the indenture level.
A function, which exists to support the method
of performing the basic function, is a
secondary function. But when considered by
itself and with respect to itself, it is a
basic function.
b. Systems and items may have many levels of
indenture. The rule for functional evaluation
is to work from the top down, and to consider
the project under study as the top assembly.
If the function of the top assembly is
dependent upon the function of the indentured
item, the function of the indentured item is
basic. Consider the following example:
Figure 1. Levels of indenture
(1)
Figure 1 illustrates the first three
levels of indenture for a manually
operated fire alarm system.
(2)
Figure 1 also illustrates the functional
relationship between these levels of
indenture.
CAS – Part 2.6
(3)
Observe that the system, as defined, must
perform two basic functions. Rather than
choosing the restrictive function of
"ring bell," the broader term "make
noise" was selected to permit greater
freedom in developing alternative ways of
making noise; i.e., horn, explosive
charge, siren, etc.
(4)
Both items in the second level of
indenture have functions that are basic
because the function of the system is
dependent upon them.
(5)
All other functions of items in the
second level of indenture are secondary
because they only exist to support the
method or design selected to achieve the
basic functions.
(6)
Similarly, in the third level of
indenture, only the bells perform a basic
function.
CAS – Part 2.7
Evaluation of The second step in functional analysis is to
establish a dollar value of worth for each
worth
function. It is done after all functions have been
identified and classified.
It is perhaps the most difficult step in VE, but it
is an indispensable step. It is a highly creative
endeavor because worth is relative to subjective
rather than absolute or objective measure.
Skill, knowledge and judgment play a major role in
determining the quantitative aspect of worth in
terms of dollars.
The worth of a basic function is usually determined
by comparing the present design for performing the
function with other methods of performing
essentially the same function. Questions that might
be asked during the evaluation include the
following:
a. What is the cost of achieving the basic
function as the item is presently designed?
b. Do you think the performance of the basic
function should cost that much?
c. If not, what do you consider would be a
reasonable amount to pay for the performance
of the basic function (assuming for the moment
that the function is actually required) if you
were to pay for it out of your own pocket?
d. What is the cost of achieving this function
if some other known item is used?
e. Is this a common, easily accomplished
function or one that is rare and difficult to
achieve?
f. What is the price of some item that will
almost, but not quite, performs the function?
CAS – Part 2.8
Determining
worth
The above guidelines for evaluating worth must be
applied against the following rules for determining
worth for a specific VE analysis:
a. The worth of all secondary functions is zero
for VE purposes.
b. A dollar figure for the value of worth must
be established for each basic function.
c. Worth is associated with necessary function
or functions and not with the present design
of the item.
d. There must be no discrimination between a
function that is definitely required and the
consequences of failure to achieve that
function.
e. For example, if a bolt supporting a steel
beam in a building fails, the building may
collapse. Nevertheless, the worth of the bolt
is the lowest cost necessary to provide a
reliable fastening.
Worth is not, therefore, affected by the
consequence of failure.
CAS – Part 2.9
Evaluation of The consideration of cost is the third step in
functional analysis.
cost
In this application, it is the cost of the method
chosen to perform the function that is considered,
whereas before, worth applied to function.
Evaluation of cost serves several purposes:
a. Identifying high cost elements is useful in
determining the priority of individual VE
studies to be undertaken.
b. Cost visibility is given to functional
performance where normally such costs are
buried in unit or system estimates.
c. The validity of the claimed savings at the
conclusion of a VE project depends upon the
accuracy of the cost figures for the present
design and the realism of cost estimates of
the proposed design.
Thus the cost figures obtained must be factual
and realistic.
CAS – Part 2.10
Determining
cost
The cost of the present design of a system, item or
operation should be determined in as great detail
as possible. However, in conducting functional
analysis the following rules will always govern:
a. Where an item serves but one function, the
cost of the item is equal to the cost of the
function.
b. Where an item serves more than one function,
cost of the item should be prorated to each
function.
c. For example, the cost of acoustical tile with
a flame spread rating of 25 or less might be
$0.50 per square foot.
d. An appropriate break down of this cost on a
functional basis might be:
Item
Acoustic tile
Function
Absorb sound B
Cover ceiling S
Protect ceiling S
Cost per Sq.Ft.
0.35
0.05
0.10
CAS – Part 2.11
Evaluation of This is the fourth step in the functional analysis
process. The term value is used in many different
value
ways, and has several meanings.
It is frequently confused with the monetary price
or cost of an item. The value of a given item may
differ according to whether it is viewed from the
standpoint of the seller, the buyer, or the user.
Different concepts of value may exist between
individual users, depending on the time, place,
situation, or availability of substitute items. As
an example, the value of a compass to a navigator
is vastly different from its value to a housewife.
Perhaps a more meaningful way to express value is
to break it down into the four general categories
of: (1) cost value, (2) use value, (3) esteem
value, and (4) exchange value. From this one can
see that:
a. The sum of the dollar measures of the values
offered by an article must be close to the
price of the article (viz., cost value) for
the purchaser to say, "This is a fair price."
b. Buyer and seller may disagree on the worth of
the values present in any article.
c. Value is relative to both cost and price but
use value, which is the value normally
considered by the Government, may not be
relative to either.
d. The value of an end item approaches its
maximum if its cost is made up solely of
features that contribute to its use and do
hot include any factors that contribute cost
towards unnecessary esteem value.
e. A VE goal is the maximization of end item
value through the control of use value, cost
value, and the elimination of costs
associated with any other value not related
to performance of basic function.
CAS – Part 2.12
Determining
value
Value can be quantitatively expressed through the
use of a value index that is the relationship
between cost and worth.
Remembering that cost and worth are related to
functions rather than items, the index serves to:
a. Assist in determining whether to proceed with
the study.
b. The study should proceed only if poor value,
indicated when the value index is greater
than one, exists.
c. Good value is indicated when the index is
one.
d. Locate areas where the cost/worth ratio is
greatest.
e. Generally these areas will have the greatest
VE potential and is useful in selecting
projects for VE study.
f. Provide a factor for measuring the
effectiveness of VE efforts. (Did the
cost/worth ratio after VE approach unity?)
CAS – Part 2.13
Summary
As noted previously the VE discipline deals with
the functions of items.
Function is used here to mean the purpose or use of
an item.
The VE approach first concerns itself with
determining, "What does it do?" -- only afterwards
with the item itself.
This is a radical departure from traditional cost
reduction efforts where the question is, "What is
it?", and then concentrates on making the same item
less expensive.
Figure 3 summarizes the relationship between
function, cost, worth and value index.
Application of these fundamentals during a VE study
while utilizing the VE job plan will be discussed.
CAS – Part 2.14
Item,
system,
Operation
Basic
function
Cost
Functional
comparative
Worth of
comparative
Value
index
Tie clip
Hold tie
$2.50@
Paper clip
$0.01@
250
Ball point
pen
Make marks
$0.98@
Nail
$0.01@
98
Fire alarm
box
Break
circuit
$45.00@
Light
switch
$3.00@
15
Door latch
set
Retain door
$8.00@
Magnet
$0.50@
16
Wax floors
Protect
surface
$0.10/sf
Kraft
Paper
$0.02/sf
5
Window
Provide
ventilation
$50.00@
Hole &
damper
$5.00@
10
Reporting
system
Transmit
information
$500/week
Telephone
call
$5.00/week
100
Figure 3. Function-Cost-Worth-Value Index illustrations
CAS – Part 2.15
Level of
Indenture
1
Component
Functions
Classification
B = Basic
S = Secondary
Fire alarm system
Make noise
Detect fire
Protect building
B
B
S
Person
Detect fire
Pull lever
B
S
Equipment
Make noise
Transfer signals
B
S
Pull boxes
Break circuit
S
Bells
Make noise
B
Panels
Provide power
Control circuits
S
S
Conduit & wire
Transmit signal
Transmit power
S
S
2
3
Figure 1 – Levels of indenture
CAS – Part 2.16
Figure 27 – Functional Analysis System Technique, FAST
CAS – Part 2.17
Figure 27.1 – FAST Diagram of a mouse trap
CAS – Part 2.18
FUNCTION
ANALYSIS
SYSTEM
TECHNIQUE
(FAST
DIAGRAMING)
The next step in the Function Evaluation
of a product would be the use of the
Function Analysis System Technique
(FAST).
FAST is a diagramming technique that
shows specifically the relationships and
interrelationships of all the known
essential functions of a system.
Charles Bytheway of Sperry-Rand, Univac
Division, introduced FAST Diagramming at
the 1965 Society of American Value
Engineers, SAVE, Convention.
It
to
in
to
is first used in the Information phase
help identify functions, then later,
the creativity –or Speculation- phase
help generate VE ideas.
It is a diagramming technique, which at
first glance, appears to be similar to
PERT diagramming or flow-charting.
However, the basic difference between
FAST diagramming and these other
diagramming techniques is that FAST
diagramming is not time oriented, but is
function oriented.
We are basically trying to show
pictorially the relationships of the
functions as a product or service does
the work it was designed to do, not what
we would like it to do, but what is
actually happening now.
We describe this work by using the verbnoun functions defined earlier and
arrange the function logically into a
diagram following these guidelines:
1. Show the scope of the problem under
study by two vertical dashed lines,
one to the extreme left and one to the
extreme right of the diagram. (See
Figure 27).
CAS – Part 2.19
Everything that lies between the two
scope lines is defined as the problem
under study.
2. Every FAST diagram will have a
"critical path of functions" going
from left to right across the scope
lines.
3. On that critical path, we will find
only required secondary functions, the
basic function(s), and the Higher
Order function.
4. The Higher Order function will lie to
the immediate left of the left scope
line.
5. The basic function(s) will always lie
to the immediate right of the left
scope line.
6. All other functions on the critical
path will lie to the right of the
basic function and will be required
secondary functions (not normally
aesthetic or unwanted secondary
functions).
7. All other secondary functions which
the product or service performs will
lie either above or below the critical
path of functions.
These functions can be required
secondary functions, aesthetic
functions or unwanted functions.
8. If the function "happens
time" and/or "are caused
function on the critical
place the function below
path function.
at the same
by" some
path, we
that critical
CAS – Part 2.20
9. If the function happens "all the time"
the product is doing its work, such as
an aesthetic function, we place it
above the critical path function to
the extreme right of the diagram.
10. If we have specific "design
objectives" we wish to keep in mind as
we construct the FAST diagram, we
place them above the basic function
and show them as dotted boxes.
11. To determine whether we have the
proper arrangement and relationships
of the functions, we have two basic
logic test questions that must be met:
How? Why?
12. Using the “How” test, we ask the
question of any function, "How do I
(verb) (noun)?"
The function answer should lie to the
immediate right.
Every function which has a function to
its immediate right should logically
answer the "How" test.
If it does not, we have either
described the function improperly or
have a function in the wrong place.
13. The second test of "Why" works in the
same way, but in the opposite
direction.
We ask the question "Why do I (verb)
(noun)?" The answer should be in the
function to the immediate left and
should read, "So that I can (verb)
(noun)."
The answer must make sense and be
logical.
CAS – Part 2.21
14. We are normally only concerned with
"essential functions" when
constructing a FAST diagram.
15. All functions that lie on the critical
path must take place to accomplish the
basic function.
All other functions on the FAST
diagram are subordinated to the
critical path function and may or may
not have to take place to accomplish
the basic functions.
The best way to learn the FAST
diagramming technique is, of course, to
try and apply it several times on simple
items such as an electric toaster, a
mouse trap, etc.
A FAST diagram on the mouse trap assembly
may look like Figure 28.
You will find that depending upon your
understanding of the problem, your FAST
diagram on the same item may be slightly
different than the one shown.
It really makes little difference so long
as we agree on the essential functions on
the critical path and their approximate
relationship.
You will also find that as your
understanding deepens about the problem,
you will change some of the verbs and
nouns defining the functions.
You may also find that as you try to
construct a FAST diagram, you may have
either left out a function or have two
functions that mean the same thing.
In summary, the FAST diagram is a
powerful VA technique which:
CAS – Part 2.22
1. Shows the specific relationships of
all functions with respect to each
other.
2. Tests the validity of the functions
under study.
3. Broadens your understanding of the
problem to be solved, and
4. Aids in the generation of ideas during
the Speculation Phase.
CAS – Part 2.23
TYPES OF
FAST
DIAGRAMING
There are two major types of FAST diagrams
that are typically used. The “Technical
FAST” and “Customer FAST”.
They are similar but differ in the way they
handle supporting functions and activity
functions.
Functions should be evaluated regarding
their worth and cost (value).
To avoid getting caught up in dollar details
which may inhibit the understanding of the
value determination effort, percentages of
the total cost are used. Users of the Value
Method should also avoid getting caught up
in generating a complete, complex FAST that
includes all the detailed activity type
functions.
While they assist in the exercise of
determining the functional worth and costs,
they are the details; necessary, but not
where the big effort and expertise should be
directed.
Accordingly, the only concentrated effort
for the activity functions in the FAST
should be to examine functions with larger
costs and the supporting functions
containing a special kind of problem called
a potential “value-mismatch.”
TECHNICAL
FAST
In constructing the FAST, if I continue to
generate answers to “how?” questions,
eventually I will come to functions that are
activities such as “write description” and
“draw diagram”.
These are activities of “causative”
functions. Activity functions can be easily
correlated to the component features used to
generate cost estimates. In the Technical
FAST nomenclature, another scope line is
placed just before activity functions (to
their left) so that their special activity
functions status es more readily recognized.
CAS – Part 2.24
functions status es more readily recognized.
In the Technical FAST each function that
occurs “as result of,” “at the same time
as,” and “due to” a function are called
supporting functions. It is required as a
result of the selection of the function it
supports. It may be critical to the
successful performance of the function that
is on the critical path, but it is not
considered critical to the performance of
the HOF. If I choose another functional
method for the function in the critical
path, I would not need that supporting
function. The purpose of the activity is to
achieve the basic function. It was done
using the functions on the critical path.
The supporting functions only support the
choices and are not the activity purpose.
Any function not on the critical path is
considered to have little worth. Therefore,
little cost should be associated with their
performance.
For instance, in a Technical FAST for the
course, I need to “describe decisionmaking.” This functional need is “because
of” the choice to show comparisons. If the
cost for depicting decision-making was high,
it would be best to rethink use of that
comparison, or the technique of showing
comparisons, ti achieve the why of
“describing the job plan.”
CUSTOMER
FAST
In the customer FAST the critical path
technical activity functions are placed in a
technical section related to the producing
aspects. Development of activities is never
brought out to the point where an activity
scope lines is needed. That is considered to
be too detailed and a waste of value study
effort and resources.
With exception of the supporting functions,
the rules for a customer FAST are very
similar to the technical FAST.
CAS – Part 2.25
All supporting functions are grouped into
four special categories: “Assure
Convenience,” “Assure Dependability,”
“Satisfy OUS,” and “Attract OUS.” Some
special supporting functions can have a high
worth to the consumer and be a basis for the
purchase by the cunsumer. While they have
little value to the producer, they may have
high value to the consumer. The Customer
FAST allows for these features to be more
easily shown. Using the functional
descriptors discussed previously for the
Value Method, a Customer FAST generated to
illustrate this FAST and the functional
purposes for each job plan step is shown in
the next page.
Fig. Course-FAST Diagram (partial)
To perform the same consumer match-up in the
Technical FAST, two Technical FAST may need
to be produced; one for the producer, and
the other for the consumer. Then a matching
of the two FAST diagrams would be done. This
procedure would be used to assure the
producer FAST functions have a sufficient
match to the FAST for the consumer. While
the Customer FAST generates less clarity
about some of these issues and the related
mismatch, it removes much of the rigorous
aspects of the two Technical FAST technique.
CAS – Part 2.26
LIFE CYCLE
COST (LCC)
The concept of economic analysis, which is
used in LCC, requires that comparisons be
made between things similar in nature.
Life cycle cost analysis (LCCA) is defined
as a cost-centered engineering economic
analysis whose objective is to
systematically determine the costs
attributable to each of one or more
alternative courses of action over a
specified period of time.
It is a method used to compare and evaluate
the total costs of competing alternatives
for satisfying identical functions based on
the anticipated life of the facility or
product to be acquired.
The key elements of such an analysis are
those that affect the manner in which the
analysis will be conducted and, therefore,
the effectiveness of its results in a
particular situation.
This approach determines the least costly of
several alternatives; however, the selected
alternative may only represent the best of
several poor value candidates.
VE should be used to develop additional
worthy alternatives to consider when life
cycle cost studies are being performed.
LCC emphasizes cost visibility, VE seeks
value optimization. The two disciplines are
complementary because LCC is required to
achieve VE.
A decision concerning each key element must
be made before the LCCA can be performed.
In particular, the definition of the LCCA
suggests six questions that must be
answered:
1. What analysis approach is to be used?
Part 2.27
2. What is a realistic discount rate for
use in the analysis?
3. How are the effects of inflation and
increases in individual costs to be
taken into account?
4. Over what specific period of time are
the total costs of ownership to be
determined?
5. When is that time period to begin?
6. What type of costs are to be included
in the analysis and what costs (if
any) may be ignored?
Life cycle cost analysis requires the
knowledge of several economic concepts.
One of these is the concept of equivalent
costs to deal with time frame.
Equating
using an
variable
develops
all costs to a common baseline
interest rate to adjust for
expenditure years typically
equivalent costs.
One must also hold the economic conditions
constant while the cost consequences of each
alternative are being developed.
That is, the same economic factors are
applied to each alternative using a uniform
methodology.
The two most frequent methodologies used to
calculate LCC are:
1. Present worth costs
2. Annualized costs, and
Both methods account for the time value of
money, and therefore are interchangeable as
measures of life cycle cost.
Part 2.28
The present worth method allows conversion
Present
worth method of all present and future costs to a single
point in time, usually at or around the time
of the first expenditure.
In the present worth approach, the
equivalent cost baseline would be present
day values.
All ownership costs would be recalculated to
present day values – discounted for the cost
of money.
Annual cost would be calculated at the
present worth of a periodic payment over the
specified life cycle.
Single Present Worth formula:
PW = ____1____
(1 + i)n
where:
PW: Single Present Worth
i: interest rate per period
n: number of interest periods
and
P = F x PW
Where:
P: Present Amount
F: Future Amount
Part 2.29
Annualized
method
The annualized method is also used to
convert costs expended over various points
in time to an equivalent cost.
Rather than being expressed as a one-time
present worth cost, this method converts all
costs to an equivalent uniform annual cost.
Using this method, all costs incurred are
converted to equivalent annual costs using a
baseline and a specified life span.
Initial costs would be amortized over the
life cycle (such as home mortgage payments)
and include principal and interest.
Replacement costs at various points during
the life cycle would also be converted to
equivalent annual cost.
Present Worth of Annuity formula:
PWA = (1 + i)n -1
i(1 + i)n
where:
PWA: Present Worth of Annuity
i: interest rate per period
n: number of interest periods
and
P = A x PWA
Where:
P: Present Amount
A: Uniform sum of money in each period
Part 2.30