Army wins big in cost savings through Value Engineering program

REDSTONE ARSENAL, Ala. -- The Army received all seven possible Department of Defense Value Engineering Achievement Awards for fiscal year 2016, thanks to the efforts of engineers and technicians throughout the Army Materiel Command enterprise. The past year's VE efforts resulted in a cost savings of more than $450 million.

The VE awards are presented annually by the DoD Under Secretary of Defense for Acquisition, Technology and Logistics. The VE program is intended to improve products, systems and processes, with a focus on reduced cost, increased reliability and resolution of identified issues.

"The Army Value Engineering Program, which is mandated by both federal law and DoD, is about operationalizing readiness throughout the Army," said Todd Hutto, who coordinates the Army-wide Value Engineering Program. Hutto is AMC's Value Engineering manager in the Headquarters AMC Deputy Chief of Staff for Operations and Logistics, G-3/4., Redstone Arsenal, Ala.

"The Value Engineering Program is an organized and systematic approach that analyzes the primary function of military equipment, and improves the design, usability and sustainment of that equipment through functional improvements," he said. "Value engineering makes Army equipment more capable, reliable, safer, and less expensive."

The Army and the Missile Defense Agency are the only two DoD organizations that received awards in all seven possible Value Engineering categories. Other DoD agencies that received awards include the Navy, Air Force, Defense Logistics Agency and Defense Threat Reduction Agency. Together, these organizations saved $600 million for DoD through VE projects in fiscal year 2016. The 10-year total for DoD VE savings from fiscal year 2001 to 2011 was more than $21 billion, with $11 billion of those savings coming from the Army. Since fiscal year 2012, the Army has contributed $3.2 billion in VE cost savings.

The awards were presented at the Pentagon on July 18. Of the Army awards, five were won by AMC organizations, while the other two were won by Army organizations that work closely with AMC major subordinate commands. The awards, by category, went to:

• Program/Product -- Project Manager, Combat Ammunition Systems, Program Executive Office for Ammunition, Picatinny Arsenal, New Jersey; VE effort involved initiating a recapitalization program for M825A1 projectiles for a three-year cost savings of $21 million.

• Individual -- William Huntzinger, Program Manager, Continuous Process Improvement, Blue Grass Army Depot, Richmond, Kentucky (Joint Munitions Command); VE effort to increase employee involvement in VE programs, resulting in an increase in VE projects that exceeded the depot's fiscal year 2016 goal of $1.7 million by $4.4 million for a total of $6.1 million in cost savings.

• Team Engineering -- Dr. Clinton Holder and the Tobyhanna Army Depot Value Study Team, Pennsylvania (Communications-Electronics Command); VE effort involved enhancing sensor capabilities for a three-year cost savings of $12 million.

• Organization -- Aviation and Missile Command, Redstone Arsenal, Alabama; VE effort involved 106 product improvements for a cost savings of $163 million and assisted with 12 VE projects at multiple tenant and offsite organizations for a cost savings of $141 million, totaling 118 VE projects at a savings of $304 million.

• Special -- John Hedderich III, Director, Armament, Research, Development and Engineering Center, Picatinny Arsenal (Research, Development and Engineering Command); VE effort involved designing a re-use capability for 155mm M483A1 projectile metal parts for production of the M1123 and M1124 illuminating projects for a cost savings of $32 million.

• Special -- Tank and Automotive Command, Watervliet Arsenal, New York; VE effort involved reducing maintenance and repair requirements through a new process for the M284, M256 and M776 gun tube preforms, increasing throughput by 33 percent and providing a cost savings of $843,000.

• Special -- Alivio Mangieri, Product Manager, Aviation Air Traffic Control, Program Executive Office for Aviation, Redstone Arsenal; VE effort involved the use of government-owned software instead of an obsolete commercial derivative for a cost savings of $36.9 million.

"Value Engineering is about looking at a product and determining how it can be improved to do a better job as a lower cost," Hutto said. "The Army VE program involves all agencies within the Army, but is principally focused on the AMC community -- the materiel sustainment world -- and the acquisition, technology and logistics community -- the procurement world."

The DoD VE program is one of the oldest government improvement programs. It began during World War II when strategic materials like precious metals and lubricants were in short supply. Value engineering was invented as engineers worked to find other solutions for material shortages.

"Value Engineering is very much focused on addressing and resolving a problem," Hutto said.

"As part of the VE program approach, an organization forms a team of subject matter experts. Team members include those who design it, produce it, use it, maintain it or support those processes. The heart of VE is function analysis. These teams look abstractly at the function of the object they want to improve."

The Aviation and Missile Command, which has won the VE Organization award several times, has an aggressive VE program that includes training engineers in the principals of VE, and then seeking out VE programs that can lead to tremendous cost savings in the maintenance and sustainment of missile and aviation systems.

"Commodity commands like AMCOM, CECOM, TACOM and JMC have a lot of opportunity to develop VE programs," Hutto said. "Commands that acquire equipment and maintain equipment are ideal for this program because it is focused on making a better product."

These commands manage aviation and missile systems, communications and electronics, ammunition, simulators and trainers, and tanks and vehicles, all of which are targets of opportunity for VE. Any equipment that is expensive, complex, has multiple uses, and/or is facing obsolescence or inadequate sources of supply, can benefit by going through the VE process, Hutto said.

Each year, Hutto leads an Army panel of VE engineers to review the 15 to 40 nominations they receive for the VE awards. The top nominations are then submitted to a DoD-level review board for final award approval.

Although participation in the VE program is mandated by DoD, Hutto said most Army engineers are highly motivated to work on VE projects because they can assist in career advancement, and because they come with a high rate of job satisfaction.

"Engineers are all about fixing things, and making things better, and making things better translates into job satisfaction for them," Hutto said. "For most Army engineers, improving a product that is used by Soldiers, satisfying a pressing need to meet Army readiness goals, and knowing you are helping Soldiers in the field, makes this all worthwhile."