What Is Value Engineering?

So, what is value engineering and what are the benefits to you?

In broad terms it is the difference between an improvement to the project and the cost you incur to achieve it. It is a balance whereby the outputs (the improvement) need to be more than the inputs (your costs).

Value Engineering or VE developed from a need in the manufacturing industry in the USA where materials were in short supply during World War II. In searching for alternative solutions to this shortage, new materials and designs were explored and it was found that the same product could be manufactured with a better performance and at reduced costs.

The concept of Value Analysis was born, and this has evolved to what we know today as engineering VE.

You benefit from a set of value engineering procedures designed to achieve the lowest cost on essential functions of the project. It focuses on increasing the project value by increasing the function whilst reducing costs (or at least the cost is proportionally less to the function), but this is not to be confused with a cost cutting exercise.

It is so easy to replicate what has gone before, but through creative thinking and challenging pre-conceived ideas, our skilled project team can offer you an opportunity to create more value.

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Planning

The value engineering procedure commences with a comprehensive review of your project and you will soon discover that our team is passionate about achieving a good return on any investment opportunity for our clients.

As an independent project team, we can undertake an in-depth review of the principles of your project to verify the objectives which you are aiming to achieve. We ensure that we have fully understood your definition of ‘best value’ enabling us to look creatively at any changes that will enhance your value and reduce your costs.

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Design

Offering alternatives and reviewing changes to the program at this stage will have little impact on the overall project schedule and helps to eliminate changes and re-designs later in the project timeline.

Early consideration of the design assists with buildability and maintainability during the project management phase.

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Methodology And Approach

There are 5 well-established steps which give value engineering guidelines to our team’s approach.

• Information
• Creativity
• Evaluation
• Development
• Presentation

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Step 1 – Information

Understanding your concepts for the project and some of the decisions that have influenced the initial design phase are key pieces of information that enable the value engineering procedure to commence.

Functions on a project can be split into two categories: main functions which cannot be altered as they are integral to the concept or required to discharge planning conditions and secondary functions which have an optional element. Once these have been identified the significance of each one can be determined allowing the functions to be further assessed as to where they fall on a high to low priority scale.

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Step 2 – Creativity

At this point it is about identifying different solutions from the team for the initial and life cycle costs of the project with the aim to give improved value and a maximum performance for the finance that is being invested.

It is about challenging cost assumptions, identifying risks and sharing ideas in a creative environment. Thought processes are expressed and developed allowing a flow of ideas and solutions, with no judgement at this stage as to the viability as this will be undertaken in the evaluation step.

Step 3 – Evaluation

Evaluation of each idea is the next part of the value engineering procedure. Some solutions can easily be eliminated in the early stages of evaluation as they are clearly incompatible on grounds of feasibility or cost.

The remaining solutions will then be assessed in more detail, anticipating obstacles, and researching alternatives so that those with the most potential for value enhancement and cost savings are included on the shortlist. If some values are considered more important, then the final analysis can be weighted in their favour.

Step 4 – Development

Now the objective is to develop the shortlisted ideas into workable solutions. Details of the design changes are recorded, and costs are calculated.

Each solution can be tested and comparisons between options are reviewed against the ‘best value’ criteria established in the Planning stage.

Step 5 – Presentation

This written report details the assessment of costs, highlighting the options for the best value on the project for the required outcomes and ‘best value’ criteria and recommending the preferred option(s).

Construction

Undertaking the 5 steps in the value engineering procedure gives confidence and reassurance that decisions have been made to improve the return on the venture. This does not mean though that value engineering is completely halted.

It is still possible to look at alternative solutions during the construction phase that will offer an enhanced value. However, project management teams are not using this to keep the project on budget but to suggest proposals to ensure that true value is kept throughout the build process.

Conclusion

Value engineering in construction enables you to understand your choices and the full range of impacts on function and cost on any design changes.

You benefit by:

• Being open to alternatives
• Anticipating potential issues
• Maintaining quality
• Saving time later
• Influencing the costs at project commencement
• Creating an opportunity to re-evaluate selections
• Getting the very best results

You are identifying and removing unnecessary steps in each construction activity reducing cost and improving quality. Invest in value engineering to improve your financial return.

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