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AS 4183—2007

Value Management
Australian Standard®
AS 4183—2007
 This Australian Standard® was prepared by Committee OB-006, Value Management. It was
approved on behalf of the Council of Standards Australia on 13 November 2006.
This Standard was published on 14 February 2007.

The following are represented on Committee OB-006:

• Australian Health Industry Inc

• Australian Institute of Project Management
• Australian Institute of Quantity Surveyors
• The Institution of Engineers Australia
• The Institute of Value Management, Australia
• The Royal Australian Institute of Architects
• University of Canberra

This Standard was issued in draft form for comment as DR 04443.

Standards Australia wishes to acknowledge the participation of the expert individuals that
contributed to the development of this Standard through their representation on the
Committee and through public comment period.

Keeping Standards up-

up-to-
to- date
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Australian Standards® are living documents that reflect progress in science, technology and
systems. To maintain their currency, all Standards are periodically reviewed, and new editions
are published. Between editions, amendments may be issued.

Standards may also be withdrawn. It is important that readers assure themselves they are
using a current Standard, which should include any amendments that may have been
published since the Standard was published.

Detailed information about Australian Standards, drafts, amendments and new projects can
be found by visiting www.standards.org.au

Standards Australia welcomes suggestions for improvements, and encourages readers to

notify us immediately of any apparent inaccuracies or ambiguities. Contact us via email at
mail@standards.org.au,
mail@standards.org.au or write to Standards Australia, GPO Box 476, Sydney, NSW 2001.
 AS 4183—2007

Australian Standard®

Value Management

Originated as AS/NZS 4183:1994.

Revised and designated as AS 4183—2007.
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COPYRIGHT
© Standards Australia
All rights are reserved. No part of this work may be reproduced or copied in any form or by
any means, electronic or mechanical, including photocopying, without the written
permission of the publisher.
Published by Standards Australia, GPO Box 476, Sydney, NSW 2001, Australia
ISBN 0 7337 8026 1
 AS 4183—2007 ii

Preface
This Standard was prepared by the Standards Australia Committee
OB-006, Value Management to supersede AS/NZS 4183:1994.
The objective of this Standard is to provide guidelines for the
application of Value Management to products, processes, services,
systems and organizations.
This Standard defines terms, establishes the essential elements of
Value Management and clarifies roles and responsibilities, but is not
specifically intended to be a handbook or training manual. A Value
Management Application Guide is being prepared for this purpose.
Where a Value Management Study is to be carried out in accordance
with this Standard, such a Study should be carried out by multi-
disciplinary groups with an independent Value Management Study
Facilitator. This Standard can however also be applied by individuals
in the normal course of their work.
NOTE: This Standard distinguishes between the terms 'Value Management'
and 'Value Management Study'.
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 iii AS 4183—2007

Contents
Page

Foreword.................................................................................iv

1 Scope and definitions

1.1 Scope............................................................................ 1
1.2 Definitions ..................................................................... 1
1.3 Applications of value management................................ 3
1.4 Links to other systems and processes .......................... 5

2 Guiding principles ................................................................... 6

3 Value management studies

3.1 Introduction ................................................................. 11
3.2 Prescribed work plan................................................... 11
3.3 Appropriate mix and commitment of group members .. 16
3.4 Management of value management studies................ 17
3.5 Senior management commitment and support ............ 17
3.6 Effective facilitation ..................................................... 17

4 Value analysts
4.1 Application .................................................................. 18
4.2 Prescribed work plan................................................... 18
4.3 Activities...................................................................... 19
4.4 Interface with value management studies ................... 20
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5 Embedding value management

5.1 Organizational culture and processes ......................... 21
5.2 Enhancing value management culture ........................ 21
5.3 Building on existing practices ...................................... 21
 AS 4183—2007 iv

Foreword
Value Management is a structured and analytical process in which a
prescribed Work Plan is followed to achieve best value and, where
appropriate, best value for money in products, processes, services,
systems and organizations. The process may be applied to
management decision-making at any level of an organization and is
equally appropriate for public and private sector applications.
Both public and private sector organizations require value for money
to be achieved in delivery of services. By way of example, the
Commonwealth Procurement Guidelines state that value for money
is the core principle underpinning Australian Government
procurement.1
While Value Management can be applied in project and general
management within any organization to achieve best value or best
value for money, it is also a powerful process that may be used to
develop agreement, understanding and commitment when applied to
the resolution or optimisation of particular issues and situations.
Value Management Studies are centred upon a participatory
workshop involving a multidisciplinary, representative group of
people who work together and follow a prescribed work plan to
achieve best value or, where appropriate, best value for money. Five
essential elements in Value Management Studies have been
identified and addressed in this Standard. These elements comprise:
• a prescribed Work Plan;
• an appropriate mix and commitment of group members;
• management of Value Management Studies;
• senior management commitment and support; and
• effective facilitation.
The Standard also provides a prescribed structure and Work Plan for
individuals when using Value Management in day-to-day work.
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This Standard recognizes international practice in adopting the Miles2

'Job Plan' approach (but expanded and called the 'Work Plan' in this
Standard). The term 'Value Analysis' was used when Miles originally
developed the methodology in the design and procurement of
existing products and processes. The term 'Value Engineering' then
became widely used as the application spread into engineering
fields, particularly in the early conceptual and design stages.

1
Commonwealth Procurement Guidelines are issued by the Minister for Finance and
Administration under Regulation 7 of the Financial Management and Accountability
Regulations 1997, which includes in Section 4 of Financial Management Guidance
No 1 issued January 2005, 'The Principle of Value for Money'.
2
Value Analysis concepts were developed during World War II as a result of the
forced adoption of alternative materials and methods, often with better value. After
that war, General Electric assigned Lawrence D. Miles to develop a methodology
that would again produce the same result.
 v AS 4183—2007

While the terms 'Value Analysis' and 'Value Engineering' are still in
use, this Standard uses the term 'Value Management' for the
application of the 'Work Plan' at all levels.
This Standard recognizes the technical and cost-reducing focus of
traditional Value Analysis and Value Engineering and also
recognizes the more collaborative, inclusive focus on establishing
core values and commitment to agreed outcomes.
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AS 4183—2007
vi

NOTES
 1 AS 4183—2007

1 Scope and definitions

1.1 Scope
This Standard sets requirements for the use of Value Management
independent of the specific industry or economic sector in which it is
applied. The application of Value Management will be influenced by
the varying needs of an organization, its particular objectives, its
products and services and the specific processes and systems
employed.
This Standard may be applied at any point in the life of a product,
process, service, system or organization but the maximum benefit is
usually obtained by applying Value Management as early as
possible. Often, a number of discrete Value Management Studies
are carried out at different points in the life cycle.

1.2 Definitions
For the purpose of this Standard, the definitions below apply.
NOTE: Where defined terms appear in the text, they are italicized.

1.2.1 Basic function

See essential function.

1.2.2 Entity
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That product, process, service, system or organization (or part

thereof) to which Value Management is applied.

1.2.3 Essential function

What an entity must do.
NOTE: This is sometimes referred to as a basic function or primary purpose.

1.2.4 Function
What an entity does.

1.2.5 Function analysis

A structured process that identifies, describes and analyses
functions, their interrelationships and, where appropriate, total costs
or total resources used.

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 AS 4183-2007 Value Management
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