What is Value Engineering?

According to The National Institute of Building Sciences, value engineering is a conscious, clear set of disciplined procedures designed to seek out optimum value for both initial and long-term investments. In other words, value engineering promotes the substitution of materials and methods with less expensive alternatives, without sacrificing functionality.

In the construction world, the ‘value’ is measured owner/client standards. Through an investigative system that analyzes the project at the planning, design, and approach stages, value engineers improve both value and owner requirements by one of the following:

Eliminating or modifying elements not essential to required functions.
Adding elements that achieve required functions that have not as yet been attained.
Changing elements to improve quality or performance to meet desired levels established by the owner/user.

The investigative system used in value engineering is represented in the job plan. This is an organized plan of action for performing a value engineering analysis and guaranteeing the implementation of the recommendations.

Methods used for any value engineering analysis should follow these widely recognized problem-solving procedure guidelines constructed by SAVE International (The Society of American Value Engineers.) SAVE International breaks down a value engineering job plan into seven phases:

Information/Investigation Phase: gathering information about the project including important details about the owners’ objectives, key criteria, and definition of value.
Function Analysis Phase: analyzing functions, worth, cost, performance, and quality of the project.
Creative Phase: generating ideas to accomplish required functions that improve the project’s performance, enhance its quality and lower overall costs.
Evaluation Phase: evaluating the best and lowest lifecycle cost alternatives.
Development Phase: developing selected alternatives to fully supported recommendations.
Presentation Phase: presenting value engineering recommendations for review, approval, reporting, and implementation.
Resolution Phase: implementing and evaluating the outcomes of the approved recommendations.

Value engineering can be applied at any stage of the project; although projects who implement it earlier in the process have a higher success rate. If the value engineering job plan procedure is initiated at the planning stage, little to no impact is made on the final project schedule and redesign costs.

Although value engineering began as a cost-saving measure, it is becoming a valued project management technique that addresses all aspects of the building lifecycle. Value engineering often improves the functionality of a project as well as producing tremendous savings, on both initial building costs and lifecycle costs. It also provides reassurance that all reasonable alternatives have been evaluated and that the best value will be obtained. Value engineering is not only beneficial but essential to your construction project.

Value Engineering in Action

The MRG Construction Corp team integrates value engineering into each project, finding resolutions specific to every client. “During the pre-construction stage of a recent project for Salon Lofts, we evaluated material selections in the plumbing design” explains Project Manager, Jin Yoo. “Our proposed plan was to install PVC pipe material in lieu of cast iron, which was approved by the City of Chicago as part of a pilot program. As a result of this extra effort, we have put our clients in a position to save about $20k from their original budget. What worked for this situation is not necessarily going to be applicable to the next so it’s important to complete each phase of the value engineering process for every project in order to provide the best solution.”