Page 209 - Design for Six Sigma for Service (Six SIGMA Operational Methods)

180 Chapter Seven

7.8 Value-Engineering Case Studies

7.8.1 Automobile Dealership Construction

This case study is from Park (1999). A large real-estate company built and
maintained many automobile dealership facilities all over the country. One
major problem faced by this company was the long duration required from
dealership project authorization to dealer occupancy. History showed that
this long duration in construction cycle would cause a tremendous dollar
amount in lost sales, so the company wanted to use value-engineering
techniques to shorten this cycle.

At the start of this project, it was found that the average duration from site
selection and land purchasing to construction and leasing was 502 days, or
1
about 1 − years. A review of the project process flowchart identified the
2
activities that were eating up these 502 days. They included selecting and
obtaining the options on the land, topographical surveys, soil borings,
facility layouts, bid estimates and analysis, budget reviews, design, con-
struction, and many others.

In this value-engineering project, a FAST diagram was developed, as
illustrated in Fig. 7.18. The twenty or so functions illustrated consumed
these 502 days. Out of these 30 functions, three functions, “resolve
restrictions,” “obtain data,” and “construct facility,” took 85 percent of the
time. This evaluation was obtained by using time, instead of cost, as a
measure in the FAST diagram.

As a result of project recommendations, the project process procedure
was revised to make it possible to conduct several of the long-term
activities in parallel with other activities. For example, approval for early
site work was obtained from property owners before ownership was
transferred so that topographic surveys and soil boring could be made as
soon as possible. Standard designs were developed for several parts of the
facility to reduce overall design and development time, and a single source
contracting procedure was developed to reduce contractor project
interface.

The result of these recommendations was a potential average saving of
262 days, or a 47 percent average saving in time per project. Based on the
average annual construction program the yearly benefit in increased rent
would be over $1,250,000 per year. The additional increased vehicle sales
were not included in the benefit.