What is Value Engineering?
The concept of value engineering first emerged during World War II at General Electric. In the midst of the war, purchasing engineers at General Electric sought out material and component substitutes since there was such a large shortage of required materials. These substitutes usually ended up performing better and costing less than the original materials. Today, value engineering is commonly used in the construction industry and refers to the systematic and organized approach for providing all necessary functions of a project at the lowest possible cost. Through a group investigation, project value is improved by researching alternative design concepts, materials, and methods without compromising the quality and objectives of the project.
While value engineering can be utilized at any point in a construction project, it’s best to evaluate value engineering opportunities early for a higher return on the time and effort invested. There are three different stages of value engineering, including:
During the planning stage of development, value engineering can have multiple benefits. In this early stage, any changes to the project have very little effect on the schedule and cost, and the project can be developed with fewer changes and redesigns. At this time a team can conduct a functional analysis of the facility, define key objectives, review utility options, offer alternative solutions, and verify if the budget is adequate for the project plan.
Most value engineers get involved during the design phase of a project. For some projects, value engineers conduct a workshop to bring the design team and client together to discuss the proposed design, cost estimate, schedule, and ways to get the best value for the money spent. The definition of “best value” is unique to each project and client.
Methodology and Approach
There is a five-step job plan for proper value engineering:
- Information Phase: At the beginning of the value engineering study, engineers work to understand the decisions that influenced the design, analyze key functional issues of the project and their cost impacts, define owner objectives, and define the owner’s definition of “value.”
- Speculation Phase: This phase involves listing the creative ideas. The team will think of as many ways possible to provide the necessary functions of the project at a lesser cost and greater value to the client. At this point the team is looking for quantity and association of ideas.
- Evaluation Phase: During this phase of the project the team defines the criteria to use for evaluation and analyses the ideas from the creative session.
- Development Phase: At this time, many of the best ideas are expanded into workable solutions. The development consists of a description of the design change, evaluation of the advantages and disadvantages of the recommendation, cost evaluations, design calculations.
- Presentation Phase: During the last phase of the value engineering study, the team presents their recommendations, the summary of cost impacts, and provides the opportunity to explore all possible alternatives to add value to the project.
During the construction phase of the project, it’s still possible to implement value engineering through Value Engineering Change Proposals. Sometimes contractors can be provided monetary incentives for providing solutions that enhance value for the owner. The evaluation of a Value Engineering Change Proposal is treated as any other change order during construction to consider schedule and productivity impacts and the possible cost savings.
In the final analysis of the project, value engineering is found to be essential to improving the functionality of the project and producing substantial savings. The architect and engineers take a second look at the design to guarantee that all possible alternatives have been explored and cost estimates have been checked thoroughly. At MEC, we understand that increasing the value of your construction project is a top priority. As your Melbourne commercial builders and engineers, we’re proud to offer professional engineering services to ensure a streamlined and cost efficient design and build process. Our 40-plus years of experience delivering reputable design and build services throughout central Florida allows us to provide our clients with a unique and cost effective outlook to the development and construction process.
To learn more about our engineering services and how MEC can help increase the value of your next commercial construction project, contact us today to schedule a complimentary consultation.