If there’s room for improvement, you have to be aware of it. At least that’s our ethos. To be meticulous in your project’s development, applying techniques such as Value Engineering is crucial because it’s a way of guaranteeing the best version of the project to your client and users. For this reason, we want to share with you our unique VE vision. In this post, we will offer you a simple 160-character definition that tackles the essential aspects of VE. And then, if you want to dig deeper, you will find a thorough explanation of the concept plus real-life examples.
The 160-character definition of Value Engineering
Value Engineering is a methodology used to
identify opportunities that increase the project’s
value by maximizing its functionality at an optimal cost.
Breaking down the concept of Value Engineering
It’s simple, VE is a systematic way of improving a project. Nevertheless, there are two essential ideas that differentiate VE from any other problem-solving method: methodology and value. For a more precise understanding, we will break down the concept into these two ideas.
How is Value Engineering a methodology?
Value engineering is a methodology, meaning that it’s a structural approach that follows a Job Plan. Following a method allows the interdisciplinary team in charge to produce consistent and better results in any discipline or trade of a project. Whether you are in a situation where the challenge is to substitute one material, equipment, and/or system for another or to limit environmental impact, applying the VE method will lead you to a different but accurate solution for each situation.
Said Job Plan follows these phases:
- Information phase: The team seeks relevant information about the project, including owners’ objectives (basis of design), key criteria, and definition of value.
- Function analysis: The goal here is to identify and understand the needs of the project, product or service, (what does it do, what must it do).
- Creative phase: This is the brainstorming phase. Here the interdisciplinary team studies the information gathered in phase 1 and focuses on defining possible VE ideas that can bring tangible benefits (based on phase 2 functions) to the project.
- Evaluation phase: The team evaluates each produced idea during the brainstorming session, some are kept and others discarded.
- Development phase: The team develops the kept VE ideas into workable and technically feasible proposals, each one accompanied by a list of pros and cons, along with cost comparisons.
- Presentation phase: The team makes a formal written presentation of their findings accompanied by an oral presentation to clients, users, and designers. In this final stage, the client can determine which value proposals will be incorporated into the project.
You can use this process in any phase of the project’s life cycle, that being the pre-construction, design, or construction phase. Although, VE proposals done during the pre-construction phase are the most cost-effective ones.
How does Value Engineering provide Value?
As stated in the 160-concept, the goal of Value Engineering is to increase the project’s value. Value is linked to its functionality in the first place, and costs second. Therefore, VE should NOT be mistaken as a technique to avoid being over budget or solely to reduce costs. The true goal is to maximize function and performance while seeking cost-effective solutions. It can be summarized in the succeeding formula:
To determine the function (see phase 2 of the methodology), you need to ask questions like the following:
- How long will those materials or equipment last? What is their performance? Can it be improved?
- What type of maintenance will they need in the future?
- Will they work more efficiently and cost less to operate?
- The best place to start is to ask yourself: what is/are the most important part(s) of the project and what performance do you want the project to achieve?
In the end, functionality is determined by the owner’s and user’s goals.
Value Engineering Examples
The following example will briefly describe the process of VE done in the pre-construction phase, before delivering a cost strategy to the client.
- Step 1. The interdisciplinary team reviewed the project’s information, RFP, and conceptual blueprints to fabricate an accurate cost strategy for the client.
- Step 2. When working on the proposal, the team and the electrical expert identified that changing the location of some transformers would result in saving in low voltage feeders given the distribution that the client required.
- Step 3. The team proceeded to evaluate and develop the solution that didn´t compromise the facility’s quality and operativity.
- Step 4. The team presented this solution as an alternative and explained the advantages to the client.
- Step 5. After the meeting, the client validated the solution with its technical team and accepted the proposal. In the end, this VE solution was cost-effective and improved the facility’s functionality.
You can also check out this case study of a bridge construction where approximately $43,000,000 and 12 months were saved in total thanks to VE works. This saving provided the builder company a 6% financial saving and a 17% work time reduction.
Value Engineering is about developing ideas that generate value while seeking to optimize performance and costs in a systematic way. Remember, what sets it apart is that its central goal is the enhancement of the project’s functionality.
This practice is fundamental to any contractor that strives for continuous improvement. It’s a way of being certain that you are being efficient in every step of the project’s life-cycle. As a result, contractors, clients, and users will be positive that the facility built is its best version possible.
For this reason, the VE process is part of our DNA. We are committed to delivering the highest quality projects to our clients and partners. This method adds up to our internal watermark: Forward Thinking, a framework we created as an internal guideline that allows us to keep our promises to you on budget, time, and quality.