Over the past half-century, value engineering (VE) has proven to be an effective tool to manage time, costs, and quality with an aim to maximize value.
It has also been shown to be a highly effective approach for evaluating current construction projects.
However, the application of value engineering in the construction industry is inconsistent and frequently devolves to simply cost cutting. Value engineering is not about redesigning the project, cost-cutting or scope change/reduction - it’s about getting the full functionality of the project.
And, applying VE to construction projects can lead to numerous benefits for not only the building owner, but also the contractor.
What is value engineering?
Before one considers applying value engineering, it may be helpful to understand more what it is. According to the U.S. General Services Administration, “Value engineering can be defined as an organized effort directed at analyzing designed building features, systems, equipment, and material selections for the purpose of achieving essential functions at the lowest life cycle cost consistent with required performance, quality, reliability, and safety…Properly applied value engineering considers alternative design solutions to optimize the expected cost/worth ratio of projects at completion…and elicits ideas on ways of maintaining or enhancing results while reducing life cycle costs.” Value engineering is about creating value by striking a balance between improving features and improving costs to deliver what the customer needs. Customers don’t buy things, they buy what the solution does for them.
