Construction Value Engineering (VE): A review by KHS Engineering Topics

What is Value Engineering?

VALUE ENGINEERING (VE) is one of the value techniques (Figure 01) practices commonly in building construction industry. It is a methodology used to analyze the function of the goods and services to obtain the required functions of the user at the lowest total cost without compromising the necessary & the expected quality of performance.

In other words, VE is a management technique that pursues the best functional equilibrium between COST, RELIABILITY & PERFORMANCES of a product, project, process or service. VE is a multidisciplinary decision-making procedure based on a systematic and structured process concentrating on Value Discovery, Realization & Optimization (Figure 02).

It is very significant to understand that VE is not about:

                Cost Cutting

                Scope reduction

                Compromising the quality

                           Forced redesign

Why VE?

The concept of VE is known as a powerful problem-solving tool/technique that can reduce costs OR provides best solution to invested cost while upholding OR improving the performance & quality requirements. VE is used to solve problems, recognize & eliminate unwanted costs, while improving function and quality. The objective is to uplift the product value, satisfying the product’s enactment requirements at the lowest possible cost.

Following analyzations are generally involve when it moves to Construction (Building) Value Engineering.

    §  Availability of Materials

    §  Methods of Construction

    §  Issues & barriers relevant with transportation

    §  Site limitations & restrictions

    §  Planning & organization

    §  Costs & Profits

    §  Life Cycle costs

    §  Environmental impacts

    §  Quality & Standards

How VE is used in Construction Projects (in terms of MEP services)?

In construction industry, VE is being applied and practiced at various stages of a project in order to obtain best possible outcome in the terms of cost to resources, budgets, scheduling and completion. However, implementation & practicing of VE concepts at pre-construction (even prior to final design) delivers the most advantages.

The application of VE concepts following in-depth & comprehensive manner, ensure minimizing of issues arisen during the various phases of a project. This is applicable for any nature of project, irrespective of size & scope. Following are the few of such key situations can be avoided/controlled:

    §  Last minute design & scope changes which create delays & contractual obligations between project team

    §  Stress on various contractors to build/complete the project within the pre-agreed budget

    §  Increased Project variation works management: time, cost & resources

Where to start?

Application of VE concepts/methodology play a strategic role in improving the design & layout of MEP systems. In order to obtain the best outcome, the VE strategies should be applied in “design phase” of MEP systems.

Why at Design Stage?

Design phase is the best platform at which it offers the utmost prospect for productivity gains & cost savings when designing projects with “built-in-value”. VE strategy at project MEP design phase can be applied as four principles (Figure 03).

         ·         Evaluation of design calculation, prior to finalize/confirm the calculated capacities of plant & equipment (in order to avoid over capacity systems) much essential for systems with variable loads (ex: HVAC system).

         ·         Selection of systems with latest or upgrade technology: save operation & maintenance cost, availability of support & spares throughout the life cycle.

         ·         In new era of computer-aided design (CAD) technology, various comprehensive software facilities (Ex: Tekla structure, Autodesk Revit, AutoCAD) are available to include critical design information as part of graphics layout. This enables the engineering analysis procedures with the help of calculated values/outputs to obtain an optimum project design.

         ·         In-depth & detail evaluation for design & project budget with coordination among multi-disciplinary team. Selection of ideal design. 

Which projects are benefit most?

Application of VE concepts are not practical on every project. Higher effective results can be obtained by applying on below nature of projects.

·             High Cost Projects – VE generally results in cost margin of 5-10%, therefore applying to high cost projects is always cost effective

·            Technically complex projects – a VE study affords an opportunity to get expert second opinions. Therefore in technically complex projects getting a second opinion from an independent expert (apart from original design team) is exceptional

·             Repetitive type construction projects – application of VE is usually very cost effective in this kind of projects as cost reduction concepts can be incorporated in each of the latter project of same type/scope

·             Unique projects with few precedents or with new technology elements

·             Projects with very restricted construction budgets

·             Projects with compressed design programs

·             High visibility projects