Value engineering is usually mistakenly considered as a process that reduces the overall cost of a specific project by decreasing the quality of the materials used. When it comes to the construction industry, value engineering is utilized to provide a comprehensive and precise analysis of how best to fulfill the project’s objectives.
When used with cost estimating, this process provides an independent review of the overall construction project. This review procedure focuses on achieving one common goal of providing the highest value at the lowest possible cost. Nonetheless, this doesn’t mean that value engineering is all about reducing costs.
What Is Value Engineering?
In construction, value engineering VE is a systematic approach your project team can use to enhance your project’s value through careful examination of each element’s function and associated costs. By analyzing the cost/benefit ratio, your project team can suggest improvements in construction delivery methods, materials used, or designs that improve your project’s value.
Again, it’s worth noting that improving your project’s value doesn’t necessarily mean reducing its cost. It refers to the optimization of your project’s elements by analyzing all factors, including cost, weathering, upkeep, aesthetic value, and more. To maximize the value of engineering, your general contractors and design teams must first understand your vision and goals for your project.
Cost reduction can be a motivating part of going through the value engineering process. Your VE team can put forward ideas related to less expensive systems or materials for your consideration. It may include finding a similar fixture which is less costly or coming up with an alternative for an unnecessary feature.
Quality is one of the most significant components to be considered during value engineering. It may include the quality of the environment you wish to create, the quality of the products built up in that environment, and the quality of the team you select for generating that environment.
While some design elements or equipment may cost you more initially, their enhanced quality can sometimes justify their increased costs.
A simple example of evaluating long term maintenance costs vs higher end product selections during construction is with the selection of floor finishes. While you want to save some money on low-cost flooring, it can double your expenses in the long run when you have to replace it twice as regularly as a higher-cost flooring option. Nonetheless, if saving that amount upfront can help you get your project off the ground, then a lower-cost flooring would be a good option.
Value Engineering During The Project Planning Stage
In many cases, your project’s planning phase is the best time for value engineering. This will help your project team lower the costs of implementing proposed changes without affecting your project schedule. During this stage, your VE team will mainly focus on your vision and goals for your project.
The information obtained from this activity will help your VE team offer suitable alternatives for your project and implement them into your project plan. With more preparation right from the start, you can avoid high-priced change orders that would otherwise push back your project’s schedule later.
Value Engineering During The Project Design Stage
Traditionally, the value engineering VE process happens during the design phase. During this process, you can work with an architect to produce construction documents. These documents are then used by the contractors to make estimates. In the case of higher estimates, your project team can start looking for alternatives to save you some money.
It’s vital to note that the VE process shouldn’t only be restricted to lowering overall project costs. Your VE team must look at long-term costs, the project’s total value, and develop proper suggestions that align with your objectives. The biggest downside of conducting VE during the design stage is that you may incur redesign costs down the road.
Value Engineering During The Construction Stage
Your project team can still value engineer your project with suggestions from contractors when the work is already in place. However, any new changes to the original plan can be costly and disrupt your project schedule. It’s vital to partner with your general contractors to understand the full impact that changes can have on your project.
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