Value Engineering in Quantity Surveying

Value engineering is used to solve problems and identify and eliminate unnecessary costs in a project. It also improves the performance and quality of your projects. The purpose of value engineering is to meet the performance requirements of the building with the lowest possible cost and increase the value of the project. A common misconception in the construction industry is that value engineering means sacrificing project quality to save money, when in reality the same quality can be achieved using cheaper products.

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Value Engineering

When considering a value engineering proposal, it is important to analyze the availability of materials, existing construction methods, transportation issues, site restrictions and limitations, planning and organization, costs, benefits, etc. Quantity surveyors play a vital role in value engineering, and in many ways this process is probably the best way they can prove their skills to clients. Architects design buildings with little or no cost in mind. They often specify the most expensive product, assuming it is the best fit for the project. We specify these because they are familiar or because these products are often commercially available.

A quantity surveyor can suggest cost-effective alternatives, such as a different brand of carpet, or alternative construction methods, such as changing from a rebar strip foundation to a plain concrete trench foundation. These are considerations that architects do not pay attention to and do not compromise the quality of the project, but they can reduce the cost of the client’s project.

Value engineering should start at the beginning of the project where the greatest benefits can be obtained. This also means that design costs are kept to a minimum. If this can be done early in the design phase, architects and structural engineers will not have to prepare multiple designs for value engineering changes. However, value engineering is considered in the post-tender phase of a project, after the bid return is received, and the project is often too expensive for the client.

The lowest bid is usually asked to determine the discounted invoice price created by the customer’s QS. Bill of Reduction includes the client’s QS to remove, reduce, or change the specification of items on the bill to reduce project costs without affecting the client’s project objectives. Alternatively, the client can ask the lowest bidder to provide a value engineering proposal for the project.

It is important that clients agree to these value engineering changes before the contract and write them into the design information to avoid heavy contract penalties imposed by the contractor. If the employer changes the plan after the contract is signed, the contractor may be charged an exorbitant amount to implement the new plan and claim the schedule delay fee. Therefore, it becomes more valuable to the customer than engineering.

The main features of value engineering are:

• Identify possible changes in your project.
• Analyze the performance of those elements.
• We develop alternative solutions to provide cost-saving features to our customers without compromising quality.
• Evaluate alternative solutions and choose the best one for your client.
• We provide customers with the cost of alternative solutions compared to existing solutions.
• We provide our clients with expert advice on the best course of action to take.

The Value Engineering Consists Of The Following Steps:

1. Information Gathering: The project team gathers relevant data and information about the project, including requirements, constraints, goals, and stakeholder needs.

2. Functional Analysis: Functional and functional requirements of the project are analyzed and clearly defined. At this stage, you break down your project into its component parts and understand the purpose and interrelationship of each component.

3. Creativity and Idea Generation: Different brainstorming techniques are used to generate different ideas and alternatives that can potentially increase the value of the project. This stage encourages innovative thinking and challenges traditional approaches.

4. Evaluation and Selection: Generated ideas and options are evaluated based on their potential to improve value. This evaluation considers factors such as cost savings, improved performance, reduced risk, improved aesthetics, and other relevant criteria. The most promising options are selected for further development.

5. Development and Analysis: Selected ideas and options are further developed and analyzed in detail. This includes conducting cost-benefit analyses, feasibility studies, and risk assessments to determine the feasibility and potential impact of each option.

6. Recommendation and Implementation: The most beneficial option is recommended to the project team and stakeholders. Recommendations are based on a comprehensive evaluation of alternatives, taking into account project objectives, constraints and priorities. After approval, proposals are implemented in the project.. Once approved, the recommendations are implemented in the project.

7. Continuous Monitoring and Improvement: The progress and performance of the implemented changes will be monitored and evaluated over time. This step ensures that expected benefits are realized and additional opportunities to improve value are identified.

Value engineering can be applied to many types of projects, including construction, engineering, product design, and manufacturing processes. Our goal is to optimize the value proposition by striking the right balance between cost, performance, quality and aesthetics, which ultimately improves project outcomes.

The Importance of Value of Engineering

A company’s systematic effort to analyze the performance of a particular material or machine and find suitable alternatives can benefit the business in many ways. Its importance to modern business cannot be understated, especially as more companies seek to adopt lean structures. Here are some of the many reasons why value analysis is so important.

It helps to establish the core function of a product or service

Value analysis helps companies identify the main features of a particular product or service. Value analysis is very detailed and managers often try to explain the performance of each item or resource. They use this data to find suitable alternatives without significantly reducing the performance of the item. Because departments and projects often share resources, companies can better understand common costly resources and suitable alternatives.

It helps businesses identify high-cost areas

Value analysis is important because it helps companies identify key areas of high cost during the product development and maintenance process. The value engineer then looks for suitable alternatives and takes a systematic approach to reducing costs. Not only does this allow companies to save a lot of money on specific products, but it also allows them to replicate results into other sectors.

It helps establish a lean and adaptable business structure

Conducting a value analysis can help you create a lean and consistent business structure. It helps companies to expand their material and human resources while also saving costs. As a result, companies can adapt to external market factors more quickly and actively.

It helps simplify basic processes

An important part of value analysis also focuses on streamlining business processes to save costs. Value engineers look for simpler ways to do the same thing. This not only improves overall reliability but also reduces maintenance costs. Regular value analysis helps companies reduce overhead and simplify process mapping.

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The Methodology Of Value Engineering In Construction

Speculation phase

During this phase, the engineering team identifies the value of alternative designs for critical elements. These designs are not influenced by the purpose or expected quality of the components. These alternative designs may be minor adjustments to the original design. In addition to the similar example of air conditioning systems, various industrial systems control the heating and ventilation of buildings, such as all air systems, all water systems, etc.

Evaluation

The engineering team compares the value of each alternative design in this evaluation phase. All alternative design ideas are carefully evaluated to avoid deviating from the original performance. The best solution to implement is chosen based on logic. To elaborate on the same HVAC system example, there are many things to compare between HVAC systems, cooling capacity, energy consumption, and maintenance costs are just a few. However, by comparing these features, VE teams can determine the best HVAC system for price and quality.

Development phase

During the development phase, the value engineering team develops the selected alternatives to achieve the objectives and expected values ​​of the elements. Some small changes are added to reduce initial and maintenance costs and ensure that the alternative design can fully achieve its performance, similar to the original design.

Presentation phase

At this stage, the design team meets with the value engineering team and reports their suggestions and recommendations to the design team. The value of the recommended ideas must be deliberately communicated to the design team to convince them.

Audit phase

At this stage, the design team is conducting an audit of the recommended implementation value engineering options. We then report progress and issues to the value engineering team.

The Benefits of Value Engineering

Since value engineering is essentially about identifying areas where costs can be reduced without compromising project quality, construction projects can benefit from:

• Cost reduction: Reduce costs by identifying ways to reduce overhead and make smart purchasing decisions.
• Streamlined Estimating Process: By considering factors such as project location, structural integrity, and safety measures, value engineering expedites the estimating process and eliminates unnecessary costs.
• Improved quality: By evaluating available materials and components, value engineering helps ensure the highest quality construction projects while eliminating potential delays caused by material defects.
• Risk Reduction: Provides ways to reduce risk by minimizing costly mistakes and helping to plan for foreseeable problems.
• Data-driven decisions: Accurate analysis of current market trends allows contractors to select cost-effective materials and equipment.
• Increased productivity: Using real-world data, value engineering enables contractors to save time in the long run, making quick and accurate decisions.

The Goals of Value Engineering

To achieve the overall goal of value engineering, you must consider five key objectives:

• Maximizing value: The primary goal is to find ways to reduce costs while meeting or exceeding all project quality requirements.
• Minimizing costs: Value engineering design reduces costs by finding ways to reduce material and labor costs.
• Improving efficiency: Value engineering also helps improve efficiency by identifying additional processes and areas for improvement in project execution.
• Maintaining quality: It is essential to maintain the highest possible quality standards while maximizing value and minimizing costs.
• Developing alternatives: By examining alternative solutions, value engineering helps project teams find the most cost-effective option for a construction project.

These objectives provide a comprehensive approach to help project teams make informed decisions and achieve maximum value at minimum cost.

Implementing Value Engineering in Practice

Value engineering can be successfully implemented through the five-step process outlined above. In practice, the implementation of value engineering can be supported by a variety of professional services such as mapping, engineering, architecture, legal and technical. This collaborative approach ensures that the best solution is identified and implemented while saving time and money.

When implementing value engineering, it is important to consider the balance between potential savings and the costs of implementing changes related to the project phase. The sooner you implement VE, the easier it is to agree and implement cost savings, while slower implementation of value engineering can lead to limited results and higher costs for change.

Case Study

In several projects, we often encounter projects with limited budgets. Last year, we were awarded RIBA Stage 2 housing development for a £12m housing development, which aims to reduce construction costs by £2m. After the initial project review, we applied the methodology outlined in the RICS Value Management and Value Engineering Guidance Document Edition 1. We produced several factored cost plans for different construction methods and provided an alternative approach to project strategy, reducing shell and core costs by £1.5 million.

More savings were achieved through careful selection of external and internal finishing materials. For example, using reclaimed stone cladding is a more cost-effective option than natural stone without affecting the overall performance of the building.

Finally, we used various methods to optimize the project delivery process using value engineering workshops to ensure that key stakeholders are involved in the decision-making process.

Overall, our value engineering approach resulted in a successful project that achieved desirable cost savings. The project was completed on time and within budget, and the completed development is an asset to the community.

Sustainability integration

Value engineering can further strengthen the sustainability credibility of construction projects. By incorporating sustainable elements into the value engineering process, surveyors can create sustainable solutions that are cost-effective and beneficial to the future performance of the project. For example, choosing sustainable materials that are long-lasting and energy-efficient can reduce operating costs in the long run and help reduce your carbon footprint. In addition, researchers can assess the life cycle cost of the product to ensure that the most cost-effective and sustainable solution is chosen. Integrating sustainability considerations into the value engineering process is key to achieving sustainable and successful construction projects.

Digital technologies in Value Engineering

In today’s world, digital technologies play an important role in streamlining value engineering processes. Using electronic design and cost templates, professional teams can evaluate the impact of design improvements on construction costs much faster and more efficiently than ever before. Further integration of digital design and cost accounting systems can make value engineering a simpler part of the project development process. Such technology helps teams quickly evaluate and identify the most cost-effective and value-added solutions for a project, leading to quality improvements and cost savings.

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