The work environment is constantly facing several problems, challenges, and difficulties, the most important of which is the desire and needs of customers that change with the change of the external environment. This requires flexibility and adaptation to these rapid and continuous changes, as companies must increase the accuracy and predictive ability of these changes in quantity and quality, as required by the circumstances and the service, commercial or industrial activity they practice in a way that increases the sustainability of these companies and changes them with the change of those circumstances. To obtain a large competitive volume and fit with that volatile environment in search of the lead in achieving customer satisfaction to ensure a privileged location and a higher market position in the way that leads to customers dealing with it. Companies are actively seeking to obtain their resources and their share of customers, forms of financing, and their position in the market.

To achieve this, the companies needed to set the foundations and standards, the modern, advanced, and renewable strategies, not to neglect the non-financial aspects, and to take into account the proper methods of measuring them because of their importance in this aforementioned environment. Among those non-financial concepts are quality, customer satisfaction, timely delivery, after-sales services, and others which achieve a balance between financial and non-financial indicators and all that the company's situation requires. 

Hence, the researcher used some modern systems, including value engineering, to achieve efficiency and effectiveness through measurement before and after the use of value engineering.

• Research problem: It is summarized by the loss or difficulty of obtaining a competitive advantage due to the failure to use value engineering and measurement by the balanced scorecard to eliminate activities that do not add value, as required by circumstances

• Objective of the research: The research aims to give visualization and a theoretical idea about value engineering and the balanced scorecard, as well as the use of value engineering and the accompanying changes in the form and type of products, and measuring that using the balanced scorecard method

• Importance of research: It is summarized by giving a theoretical framework that examines the relationship and reflection of value engineering and the balanced scorecard, and then applying that to the research sample to infer practically this relationship

Research Hypothesis

 The research is based on the following two hypotheses:

• The possibility of using value engineering in the sample under study and the possibility of measuring it using the balanced scorecard

• The use of value engineering will eliminate activities that do not add value, and as a result reduce costs and achieve a competitive advantage

Data collection sources

• Various Arabic and foreign books and periodicals are available in libraries as well as published on the Internet

• The official documents of the research sample company [1]

• The financial statements, documents, and accounting records of the Kufa Cement Factory

• Field visits and personal interviews with stakeholders inside the Kufa Cement Factory

Literature Review

Value Engineering: The emergence of Value Engineering: During World War II, many industrialists were forced to use alternative materials and designs as a result of severe material shortages. Finding that many substitutes performed as well or better at a lower cost, General Electric made an extraordinary effort (in 1947) to improve product efficiency through the deliberate and systematic development of lower-cost substitutes. Lawrence Miles, a staff engineer at GE, led this effort, combining several ideas and techniques to develop a successful methodical system for ensuring value in a product. The concept quickly caught on in the private sector where the potential for significant returns from relatively modest investments was recognized. This methodology was originally called value analysis or value control. In 1957, the Navy's Bureau of Ships became the first Department of Defense organization to establish a formal military radicalization program. Lawrence Miles and another GE employee, Raymond Fountain, created the Ship Bureau program to help reduce the cost of building ships. At the end of World War II, the Office of Ships requested that this technology be called "Value Engineering" and provided the Office with specialized engineers in this regard [2]. In 1959, the Value Engineering program was approved for use as part of the Armed Services. In 1962, the Department of Defense was directed to use the Value Engineering Program as a mandatory program for both the Department and its contractors. In 1988, the value engineering program was expanded to include other organizations as needed, although there were some gaps in it [2]. In 1996, the Value Engineering Program was given further support by US President Clinton, This requires each executive agency of government to establish and maintain cost-effective emergency procedures and processes [3]. Since its inception, the concept of value engineering has proven so successful that today it is practiced all over the world by many organizations concerned with its use and promotion [3].

The Concept of Value Engineering

The researchers differed in defining the concept of value engineering, some of them described it as a program, some said it was a system, others said it was a technique, and some of them said otherwise. In any case, we can review the definitions mentioned by the researchers through the following table:

In light of the foregoing, value engineering can be defined as the process of determining the course of the interrelationship between function, cost, and quality, according to the available resources to achieve customer satisfaction.

Value Engineering Objectives

We will set main headings that represent the objectives, including the expected benefits from the application of value engineering, as follows:

• Determination and selection: By it we mean selecting the best designs and service by determining what that function is worth, generating alternatives through creative thinking, providing the desired functionality, Providing the required jobs necessary to achieve the original objective of the project, Reliability, and lowest life-cycle cost without sacrificing project requirements for safety, quality, operations, maintenance, and the environment

• Reduction: By it, we mean reducing costs to the lowest possible   level   while   reducing   the    size   of potential risks at the same time in line with the set objectives and reducing potential defects or errors

• Improvement: Improvement is represented by improving quality, improving organizational performance, and improving the work schedule of the project or the operating company [8]

• Satisfaction: Customer satisfaction with the product is represented by tracking customers' desires and adapting the product according to that desire, which leads to customer satisfaction and acceptance of the company's products [9]

• Speed: This method aims to enable the economic unit to carry out its work at a high speed by providing the information required for decision-making and facilitating the process of obtaining it [4]

• Plenty: It is saving time and effort and not wasting them on activities that do not add value to the project and focusing on activities that add value to it [8]

Table 1: Definitions of Value Engineering

Prepared by: the researcher based on proven sources

Reasons for applying Value Engineering

To know the reasons for applying value engineering, one should know what value is, and by it, we mean the increase in two things: (the investment required to implement any changes, and the resistance to those changes).

In other words, the value is the utility or benefit. As for how the project has a high “value”, this requires focusing on the meaning of value, as it has different meanings for the producing company, the owner, the user, or the designer. For example, the construction company is trying to finish the building at the lowest cost to obtain a high profit, while the owner wants to obtain the largest income from the building, As for the user, he wants to be able to perform his work easily, while the designer gives more importance to the aesthetics of the design or the functionality of his creativity [8]. In addition, if we want to distinguish the teamwork between the specialized team from the individual work, then the value represents the opportunity to bridge the gap that may occur in the usual design process that exists because of the individual work of each discipline separately. To put the highest level of safety and efficiency factors, And the functional reasons for this [9]: 

• Lack of information

• Temporary emergency circumstances

• Having few or wrong thoughts

• Wrong habits and traditions

• Accelerated change in technology

• A change in the requirements of the beneficiaries

Value Engineering Application Stages

We will address the general perception that should be present in the mind to implement value engineering, whereby managers should distinguish between the costs of activities that add value and the costs of activities that do not add value. The cost of value-adding activities is the cost that, if eliminated, would reduce the actual or perceived value or benefit that customers experience from using the product or service. Specific features and attributes of the product must be available in the costs of activities that add value according to the customers' vision, such as reliability, sufficient memory, pre-configured download programs, and immediate customer service. A non-value-adding cost is a cost that, if eliminated, would not reduce the actual or perceived value or benefit that customers gain from using the product or service. Examples of costs that do not add value are the costs of defective products and machinery breakdowns. Firms seek to minimize the costs of non-value-added activities because they do not provide benefits to customers [5]. The value team leader usually develops the action plan. It is performed in eight consecutive stages (which may overlap in practice) as follows:

• Orientation Phase: Refine the problem statement and prepare for the value study

• Information Phase: Finalize the scope of issues to be addressed, improvement objectives, and evaluation factors while building cohesion among team members

• Job Analysis Phase: Determine the most useful areas of study

• The creative Phase: the development of a large number of ideas for alternative ways to perform each function selected for further study

• Evaluation Phase: Refining and selecting the best ideas for development into specific recommendations for value improvement 

• Development phase: Determining the "best" alternatives to present them to the decision maker

• Presentation Phase: Obtaining a commitment to pursue a course of action to initiate an alternative

• Implementation phase: obtaining final approval of the proposal and facilitating its implementation

Value Engineering Application Objectives:

Based on the foregoing, value engineering has several goals that can be summarized as follows: [4] and [5]

• It radically changes the product: The task of broader concern is the issue of planning and design to improve the product in a way that makes the product more responsive to the needs of customers

• Cost Reduction: The method of value engineering aims to reduce costs in a way that makes the product agile to the extent that it can be of the same quality before the reduction or higher than it

• Eliminate wastage: This method seeks to eliminate waste in all its forms, making the product more economical

• Quality: All of the aforementioned goals can be reduced to the most important goal and improving the quality of the product so that the product becomes more attractive and gains customer satisfaction, Creating a competitive value for the product to acquire a larger market share and continue to do so [11]

The Objectives of the Balanced Scorecard

The goals that the balanced scorecard seeks are goals that it seeks to achieve according to the company's strategy. These goals are [22-23,15,12].

• Drawing and clarifying the company's approach and strategy

• Integration, communication, and linking of financial and non-financial goals and measures

• Establishing non-financial measures and indicators that indirectly indicate the maintenance of financial performance in the long term

• One of the goals is to pay attention to intangible factors, including intangible assets

• Promote strategy, feedback, and learning

• Balance between the company's short-term goals and those that are long-term

• Publishing performance indicators for all levels of the company

• It is a control tool that links control with its short-term and long-term (strategic) operational dimension to future development

• Focusing on the company's growth and financial stability while maintaining its market position

Perspectives of Balanced Scorecard

The balanced scorecard has four perspectives or dimensions, which are as follows: 

Financial Perspective

This perspective assesses the company's strategic profitability and shareholder value creation. Since the company's main strategic initiatives are cost reduction compared to competitors' costs and sales growth, the financial perspective focuses on revenue growth and how much operating income will result from cost reduction and more unit sales.

Customer Perspective

This perspective identifies target customers and market segments and measures the company's success in these segments to monitor customer objectives. Company managers use:

• Market research, such as surveys and interviews, to determine market share in the telecom networking sector

• Information about the number of new customers and customer satisfaction ratings from customer management systems

Internal Business Process Perspective

This perspective focuses on the internal processes that create value for customers, which in turn helps achieve financial performance. Managers set goals for improving internal operations after benchmarking with their major competitors. Benchmarking involves obtaining information about competitors from published financial data, prevailing prices, customers, suppliers, former employees, industry experts, and financial analysts. The internal operations perspective consists of three sub-processes:

After-sales Service Process

Providing service and support to the customer after selling the product or service. The chipset monitors how quickly and accurately it responds to customer service requests.

Process Processing

Producing and delivering existing products and services that meet customer needs. The strategic objectives for this are:

• Improve manufacturing quality and productivity

• Reduce delivery time to customers

• Commitment to set delivery dates, so return and order delivery time and on-time delivery are measured

Innovation Process

Creating products, services, and processes that meet customer needs. This is an important process for companies pursuing a product differentiation strategy and must constantly design and develop innovative new products to remain competitive in the market. The company focuses on improving its manufacturing capacity and process controls to reduce costs and improve manufacturing quality. The group of innovations is measured by the number of improvements in manufacturing processes and the percentage of processes with advanced controls.

Learning and Growth Perspective

This perspective identifies the people and information capabilities needed for a company to learn, improve, and grow.

These capabilities help achieve high-quality internal processes that, in turn, create value for customers and shareholders. The company's learning and growth perspective focuses on three capabilities:

• Employee motivation to achieve organizational goals, as measured by employee satisfaction, and empowerment, as measured by the percentage of manufacturing and sales employees (also called line workers) authorized to manage operations

• B. Employee capabilities for the operations assigned to them, as measured by the percentage of employees trained in process and quality management

• Information system capabilities, measured in percentage of manufacturing processes with real-time feedback

Apply value engineering and measure the balanced scorecard

The benefit is that the research sample is the Kufa Cement Factory an introductory brief about the laboratory: The Kufa Cement Factory is one of the formations of the Iraqi General Cement Company. It joined the company in 1995, despite its old establishment. The Kufa Cement Factory is located in Najaf Governorate - Kufa District - Al-Barakiyah. It was established in 1977 at a cost of (63,233,500) dinars (sixty-three million two hundred and thirty-three thousand and five hundred dinars approximately). It was implemented by the Danish company F.L.S. The number of production lines in the plant is four lines, and the design capacity is 1,781,000 tons per cement annually. The plant adopts the wet method in the manufacture of cement. The design capacity of clinker kilns is 1,728,000 tons annually. The produced cement conforms to Iraqi specifications / 5 of 1984, in addition to the requirements of the Ministry of Industry and Minerals.

Cement Manufacturing Stages in the Factory

Because the laboratory will apply value engineering, so one of its priorities is the application of modern methods, so the dry method, which is newer than the wet method, will be applied, as follows: Dry method: This method is modern and goes through the following stages:

• Preheating with Movable Iron Bricks Known As (Great Preheater): This method began in 1928 in Germany by the technician (Lepol) in the German company Polysius, and the idea was used in production and it was called semi-wet or semi-dry. It has been developed to remove moisture from the prepared materials and make them in the form of pieces or sticks of putty with a moisture content of 17-20%. Or using dry materials to which water is added to form small balls (Nodulization) and placed on a movable perforated iron brick similar to the iron brick used in the existing clinker cooler

• Preheating by Hanging Preheater: According to this quality, the materials are heated after drying them in the mill, so that the moisture is less than 1%, and there are two methods for the heater

• A Heater In the Form of A Vertical Cylinder: In it, the materials move against the direction of the hot gases, and it is called the Shaft Preheater, where the heat exchange takes place for the period that it takes for free fall as a result of the effect of gravity on the materials entering from the top of the cylinder and descending to the bottom of the cylinder, which is connected to the entrance to the furnace. It does not have any controlled conditions but rather depends on the conditions inside the cylinder

• Heaters in the form of Cyclones: The method was invented in 1962, as the materials are heated by the preheater of the oven, which consists of 4, 5, or 6 stages of cyclones, and is equipped with one, two, or three branches of cyclones. Figure 1 shows the cement manufacturing process according to the dry method

Figure 1: Shows the Steps for Manufacturing Cement By the Dry Method

Source: Prepared By the Two Researchers Based On the Production Department in the Factory

Performance Measurement According To the Balanced Scorecard

To measure performance before and after applying value engineering, the Balanced Scorecard perspectives will be relied upon, as shown below:

Table 2: The balanced scorecard Define the Balanced Scorecard

The Financial Perspective

Accordingly, the proportions of the financial perspective will be measured in the laboratory, the research sample, before and after the application of value engineering, as shown in Table (3).

Table 3: Product Data

Source: Prepared by the researchers based on laboratory data

Customer Perspective

Here, the percentages of customers' perspectives will be measured by four measures: sales growth rate, retention rate with customer acquisition rate, the growth rate in advertising expenses, And the percentage of customers’ contribution to the operating income in the factory, the research sample, before and after the application of value engineering, as shown in Table (4)

Table 4: Changes That Occurred Before and After Applying Value Engineering

Source: Prepared by the researchers based on laboratory data
 

Figure 2: Cement Manufacturing Steps

Source: Prepared By the Two Researchers Based On the Production Department in the Factory

Table 5: Ratios of the financial perspective before and after the application of value engineering

Source: Prepared by the researchers based on laboratory data

Internal Operations Perspective

Here, two basic measures will be addressed, which are the daily performance of workers and the rate of maintenance services, as shown in Tables (6) and (7) of my agencies:

Table 6: Percentages of Customer Perspective before and After Applying Value Engineering

Source: Prepared by the researchers based on laboratory data

Table 7: Average Daily Performance of Employees Before and After Applying Value Engineering

Source: Prepared by the researchers based on the records of the production department

The daily performance of the workers: This indicator is extracted by dividing the production in tons by the number of days in the actual year for the worker as follows

Table (7) shows an increase in the average daily performance of workers after the application of value engineering compared to what it was before the application of value engineering, as it changed and became 4229.74 tons / day, after it was 2957.86 tons / day. 

Maintenance Services Rate

This indicator measures the maintenance costs spent per ton by dividing the total maintenance costs by the total production per ton.

From Table (8), it is noted that the indicator decreased after applying value engineering from (1.419 dinars / ton) to (0.496 dinars / ton), Because of the reduction in maintenance costs and the increase in actual production per ton, which is in good condition

Table 8: Rate of Maintenance Services

Source: Prepared by researchers based on the records of the Production Department (amounts in thousands)

Learning and Growth Perspective: 

This perspective will be measured by indicators represented in research and development expenses, activity-related dispatch expenses, training and study wages, as follows:

R&D Expense Rate

It is an indicator of the extent to which the research sample seeks to develop work, products, and workers. The amounts spent on research, development, and consulting are an indication of that, as shown in the following table (9):

Table 9: R&D Expenditure Rate after Applying Value Engineering

Source: prepared by the researchers based on the records of the production department (amounts in thousands)

The indicator has become after the application of value engineering 63.455% after it was before the application of value engineering  56.60% As a result of the high expenses and within the plan allowed in the planning budget to help in learning, growth, product development, workers and work.

The Rate of Scholarship Expenses Related to Activity and Study

This indicator is one of the indicators of learning and growth, as it shows the interest of the research sample in sending its employees for activity and study to develop and develop capacities. Table (10) shows that:

Table 10: The Rate of Scholarship Expenses Related To Activity and Study Before and After the Application of Value Engineering

Source: prepared by the researchers based on the records of the production department (amounts in thousands)

After the application of value engineering, these expenses were increased within the planning budget in a way that serves the perspective of learning and growth, As the index after applying value engineering became (996.6%) after it was before applying value engineering (998.3%), meaning that the increase is approximately 3%.

Training and Study Wage Rate

The wages spent on training and study are a very important indicator from the perspective of learning and growth. This indicator can be clarified in the following table (11):

Table11: Average Wages for Training and Study Before and After Applying Value Engineering

Source: prepared by the researchers based on the records of the production department (amounts in thousands)

It appears from the previous table (11) that there is a relatively large increase in these expenses due to the great importance of this indicator from the perspective of learning and growth. As training and study are influential factors in developing the capabilities and competence of workers to qualify them to increase production in quantity and quality, the indicator after applying value engineering became (778.77%) after it was (36.74%) before applying value engineering.

The Balanced Scorecard is one of the most important modern methods that originated using four perspectives (financial, customers, internal operations, learning, and growth). There is an integration relationship between the balanced scorecard with its four perspectives that express the vision and strategy of the company and value engineering. The reflection of the application of these on the perspectives of the balanced scorecard is to achieve a balance between financial and non-financial indicators on the one hand, and between internal and external operations on the other hand, and the perspectives of the balanced scorecard on the third hand.

In addition to the lack of realization of the owners of the research sample (Kufa Cement Factory), even at the level of senior management, the importance of modern tools, including (value engineering, balanced scorecard), This was confirmed when interviewing a group of department heads, accountants and administrators.

Not strengthening the relationship between the workers and the company or the workers and their superiors by paying attention to the environmental and social aspects to provide occupational and health safety and a good living condition to make the workers a good degree of satisfaction, which will reflect positively on the quality, quantity, and marketing of the product. Focusing on the use of the balanced scorecard to evaluate performance in companies by adding environmental and social perspectives to other perspectives (financial, customers, learning and growth, internal operations).

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